CONSTRUCTION LOAN AGREEMENT

AGREEMENT made this 21^st day of December, 2006, by and between Bank of America, N.A., a national banking association, with an office located at 111 Westminster Street, Providence, Rhode Island (the Lender) and Faith Realty, LLC, a Rhode Island limited liability company with its principal business office located at 582 Great Road, North Smithfield, Rhode Island (the Borrower).

I. DEFINITIONS

1.01. Certain Defined Terms. In addition to the definitions contained in the foregoing recital clause, the following terms shall have the meanings provided below:

Advances means, collectively, Construction Advances and the Refinance Advance.

Agreement means this Agreement, as amended from time to time.

Borrowers Equity shall equal the total Direct Costs of the Improvements, as such project costs are amended and modified from time to time, in excess of the amount of the maximum amount of the proposed Construction Advances.

Borrowers Share shall equal the excess, if any, of the costs of completing the Improvements incurred to the end of the latest Requisition period (net of retained amounts not then due) over the aggregate Construction Advances by the Lender for costs incurred to the end of that period.

Change Order means any change, amendment or modification to the Plans or the Construction Contract.

Collateral Assignment shall mean the Collateral Assignment of Leases and Rents by the Borrower to the Lender dated as of even date.

Completion or Completion of the Improvements shall mean the completion and payment of the Direct Costs and the Indirect Costs of all design, construction, equipping, furnishing and tenant-fixturing of the Improvements, all clearing, landscaping, lighting and paving of the Premises, and procurement of all approvals, licenses and permits necessary to make the same ready for use and occupancy and place the same in operation in order to use or otherwise dispose of the Premises and Improvements, as a whole or in parts, so that the Loan can be repaid or refinanced on or before the maturity date of the Note.

Completion Date shall mean the date of the Completion of the Improvements and issuance of a Certificate of Occupancy by the City of Woonsocket, which shall be no later than June 30, 2007.

Completion Deposit shall mean a deposit with the Lender of cash, certificates of deposit, letters of credit or marketable securities by the Borrower.

Construction Advance or Construction Advances shall mean the advances of funds to the Borrower by the Lender pursuant to this Agreement on a non-revolving basis for construction of the Improvements up to a maximum amount of One Million Four Hundred Sixty-Five Thousand Nine Hundred Dollars ($1,465,900), but not to exceed the sum of the Direct Costs and the Indirect Costs less the amount of Borrowers Equity.

Construction Assignment shall mean the Assignment of Project Contracts by and between the Borrower and the Lender dated even date.

Construction Consultant shall mean an independent qualified engineer or architect, selected by the Lender whose duties shall include analysis of the Plans and Requisitions, monitoring progress on the construction of the Improvements, and other customary services incidental to the foregoing.

Construction Contract shall mean that Standard Form of Design- Build Agreement and General Conditions as modified and amended by Addendum 1 thereto dated June 6, 2006 as further amended and modified by Second Addendum dated October 4, 2006 between the Borrower and the Contractor to provide, or supervise or manage the procurement of, substantially all labor and materials needed for the construction of the Improvements.

Construction Term shall mean the period commencing on the date hereof and ending on the Completion Date.

Contractor shall mean Riggs & Gallagher, Inc.

Default means any of the events specified in Article IX hereof which with the passage of time or giving of notice or both would constitute an Event of Default.

Direct Costs shall mean the aggregate costs of all labor, materials, equipment, fixtures and furnishings necessary for the Completion of the Improvements. The initial projection of the Direct Costs appears on the Initial Project Cost Statement.

Event of Default means an Event of Default described in Article IX hereof.

GAAP means generally accepted accounting principles in the United States.

Governmental Authorities means the United States, the State of Rhode Island and any political subdivisions agency, department, commission, board, bureau or instrumentality of either of them, including any local authorities, which exercise jurisdiction over the Premises or the construction of the Improvements thereon.

Guarantor shall mean Summer Infant, Inc., a Rhode Island corporation.

Guaranty shall mean the Guaranty of the Guarantor dated as of even date.

Hazardous Waste Laws shall mean any federal, state or local law governing the existence, release, generation, storage or disposal of any Hazardous Waste now or hereafter existing.

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Hazardous Waste shall mean any oil, hazardous material, hazardous wastes or hazardous substances as defined in the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. 9601 et seq., as amended, or any similar statute, and the regulations adopted pursuant thereto and shall include without limitation (whether or not included in the definition contained in said laws), petroleum, solvents, asbestos and other chemicals which would be materially dangerous to the environment or to human beings.

Improvements shall mean the construction of an office/warehouse facility to serve as the corporate headquarters of the Guarantor at the Premises in accordance with the Plans.

Indirect Costs shall mean all costs of Completion of the Improvements other than Direct Costs, including but not limited to, architects fees, attorneys fees, interest, real estate taxes, survey costs, accounting fees and title insurance premiums. The initial projection of the Indirect Costs appears on the Initial Project Cost Statement.

Initial Construction Advance shall mean the first Construction Advance to be made hereunder, which may be contemporaneous with or subsequent to the time of the execution and delivery by the Borrower and the Lender of this Agreement.

Initial Project Cost Statement means the projection of, among other things, the Direct Costs and the Indirect Costs.

Loan shall mean the loan of Three Million One Hundred Forty-Five Thousand Dollars ($3,145,000) from the Lender to the Borrower, consisting of the Construction Advances and the Refinance Advance.

Major Subcontracts shall mean the subcontracts of each and every subcontractor or material supplier whose bid represents 10% or more of the total costs of Completion of the Improvements and a sufficient number of subcontractors and material suppliers contracts whose bids collectively represent not less than 70% of the total costs of Completion of the Improvements.

Mortgage shall mean the Open-End Mortgage and Security Agreement by the Borrower to the Lender dated as of even date.

Note shall mean the Borrowers secured promissory note in the form attached hereto as Exhibit A, which Note is hereby incorporated herein by reference and made a part hereof.

Obligations means all obligations and all liabilities of the Borrower under this Agreement, the Note and the Security Documents.

Permitted Encumbrances shall mean those encumbrances, if any, permitted by the Lender on the Premises as set forth in Exhibit B attached hereto and incorporated herein by reference.

Person means and includes an individual, a partnership, a joint venture, a corporation, a limited liability company, a trust, an unincorporated organization and a government or any department or agency thereof.

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Plans means all preliminary and final drawings, plans, specifications and other documents (including but not limited to complete architectural, structural, mechanical, electrical and sprinkler system) prepared by the Contractor and approved by the Lender and the Construction Consultant which describe and show the materials, equipment, fixtures and furnishings necessary for the construction of the Improvements, including all amendments and modifications thereof made by approved Change Orders.

Premises means that certain parcel of land, with all buildings and improvements now or hereafter situated thereon, located at Highland Industrial Park, Woonsocket, Rhode Island, and more particularly described in the Mortgage.

Refinance Advance means an advance of the proceeds of the Loan in the amount of $1,679,100, which Refinance Advance shall be used to repay all existing mortgage liens on the Premises.

Requisition means a statement by the Borrower and, in the case of a Direct Cost requisition, by the Borrower and the Contractor, setting forth the amount of the Construction Advance requested in each instance (Direct Cost requisitions to be on the American Institute of Architects form G-702-G-703; Indirect Cost requisitions to be on the Lenders form of Indirect Cost Budget Requisition; and a summary of the Direct Costs and the Indirect Costs to be on the Lenders form of Summary of Requisition).

Retainage shall mean the retention by the Lender often (10%) percent of the funds to be advanced under a Direct Cost Requisition pending the Completion of the Improvements.

Security Documents means the Mortgage, the Collateral Assignment, the Guaranty, the Construction Assignment and any other agreement or instrument now or hereafter securing the Note.

Site Assessment Report shall mean an environmental site assessment report prepared by a qualified environmental engineer satisfactory to the Lender indicating that no Hazardous Waste is or has been present on the Premises or areas adjacent to the Premises and containing evidence satisfactory to the Lender that no notice of responsibility or other order has been issued by the United States Environmental Protection Agency against the Borrower or the Premises.

1.02. Accounting Terms. All accounting terms not specifically defined herein shall be construed in accordance with GAAP consistent with those applied in the preparation of all financial data submitted pursuant to this Agreement and prepared in accordance with GAAP.

II. GENERAL TERMS

2.01. Loan. The Borrower has applied to the Lender for the Loan and the Lender has agreed to make the Loan to the Borrower subject to all the terms and conditions of this Agreement. The Loan will be disbursed as follows: the Refinance Advance shall be distributed to or on behalf of the Borrower, and shall be used to pay-offal! existing mortgage liens on the Premises; and the Construction Advances shall be disbursed in accordance with the terms of Section 2.05 hereof.

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2.02. Note. The Loan shall be evidenced by the Note.

2.03. Payments. The Borrower shall make payments to the Lender in immediately available funds, as and when required by the Note.

2.04. Security for the Note. The Note shall be secured by the Security Documents and by such additional security as shall be agreed to by the Lender and the Borrower from time to time.

2.05. Construction Advances. (a) Subject to the provisions of this Agreement, the Lender will advance and the Borrower will accept the Construction Advances as follows: After Borrowers expenditure of the Borrowers Equity, the initial Construction Advance will be made upon the satisfaction of the applicable conditions set forth in Article IV hereof relevant thereto, and all subsequent Construction Advances shall be made not more frequently than monthly thereafter, upon the satisfaction of the applicable conditions set forth in Article V hereof, in amounts which shall be equal to the aggregate of the Direct Costs and the Indirect Costs incurred by the Borrower, in excess of the Borrowers Equity, through the end of the period covered by the Requisition less:

(i) The Retainage; and

(ii) The total of the Construction Advances theretofore made by the Lender; and, at the election of the Lender, less any combination of the following further amounts:

(iii) The entire amount by which any Direct Costs or Indirect Costs are (or are estimated by the Lender to be) greater than the amounts set forth on the Initial Project Cost Statement for such costs; provided, however, that the Initial Project Cost Statement may be modified by reallocating funds between and among line items to reflect cost savings and/or cost over runs in one or more line items, subject to verification by Lenders Construction Consultant that such statement as modified is sufficient to complete construction of the Improvements; and/or

(iv) Any costs covered by the Requisition not approved, certified or verified as provided in Section 2.06 below, any Indirect Costs covered by a previous Requisition for which proof of payment has not been received by the Lender, and/or any Direct Costs covered by a previous Requisition for which payment receipts have not been received by the Construction Consultant and/or the Lender; and/or

(v) Any real estate taxes, mechanics liens, security interests, claims or other charges against the Premises or the Improvements and any interest, fees or other costs which the Borrower has failed to pay in accordance with this Agreement, the Note or the Security Documents following written notice thereof given by the Lender to the Borrower.

(b) The Borrowers Share shall be payable by the Borrower out of its own funds (and not out of the proceeds of the Loan).

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