Exhibit 10.8

THE CIT GROUP/BUSINESS CREDIT, INC.

300 SOUTH GRAND AVENUE, 3RD FLOOR

LOS ANGELES, CA 90071

December 14, 2007

eToys Direct, Inc.

1099 18th Street, Suite 1800

Denver, CO 80202

Attn: Michael Wagner, CEO

 

Re: Credit Facility in favor of eToys Direct, Inc. and its Affiliates

Ladies and Gentlemen:

Reference is made to that certain Amended and Restated Credit Agreement dated as
of October 12, 2007 (the “Credit Agreement”) among eToys Direct, Inc. (“eToys
Direct”), My Twinn, Inc. (“My Twinn”), BabyUniverse, Inc. (“BabyUniverse”),
PoshTots, Inc. (“PoshTots”), and Dreamtime Baby, Inc. (“Dreamtime”, and
collectively with eToys Direct, My Twinn, BabyUniverse and PoshTots, the
“Borrowers”), the other Loan Parties party thereto, The CIT Group/Business
Credit, Inc., in its capacity as the sole “Lender” thereunder (the “Sole
Lender”), and The CIT Group/Business Credit, Inc., in its capacities as the
Administrative Agent and Collateral Agent thereunder (the “Administrative
Agent”). Capitalized terms used herein without definition have the meanings
ascribed to such terms in the Credit Agreement.

1. Section 6.12 of the Credit Agreement.

The Loan Parties have advised the Administrative Agent that as of October 18,
2007 a Trigger Event occurred due to Availability falling below 15% of Gross
Availability as of such date. Pursuant to Section 6.12 of the Credit Agreement,
after the occurrence of Trigger Event and until such time as a Restoration Event
occurs, the Loan Parties are required to meet certain minimum EBITDA thresholds.
The Loan Parties have further advised the Administrative Agent that the Loan
Parties have failed to meet the minimum EBITDA thresholds set forth in
Section 6.12 of the Credit Agreement for (a) the period of four Fiscal Months
ending on or about October 31, 2007 and (b) the period of five Fiscal Months
ending on or about November 30, 2007. On the Waiver Effective Date (as defined
in Section 3 below) and in reliance on the representations and covenants of the
Loan Parties set forth herein, the Sole Lender and the Administrative Agent
hereby waive the Loan Parties’ failure to comply with the minimum EBITDA
thresholds set forth in Section 6.12 of the Credit Agreement for the periods of
four and five Fiscal Months ending October 31, 2007 and November 30, 2007,
respectively. The foregoing waivers shall apply solely to the periods specified
above and nothing herein shall be deemed to constitute a waiver or modification
of the Loan Parties’ obligations to comply with Section 6.12 of the Credit
Agreement for any applicable period after November 30, 2007. In consideration of
the foregoing waivers, the Loan Parties further covenant and agree that (x) at
all times during the period commencing on the Waiver Effective Date and
continuing through February 29, 2008, the Loan Parties shall not permit
Availability to fall below 25% of Gross Availability, and (y) the Administrative
Agent shall be entitled to declare an Event of Default under the Credit
Agreement if, at any time during such period, Availability shall fall below 25%
of Gross Availability.

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eToys Direct, Inc.

December 14, 2007

Page 2

2. Section 5.01 of the Credit Agreement.

The Loan Parties have failed to timely deliver to the Administrative Agent the
financial statements and related information and certificate of the
Administrative Borrower’s Financial Officer for the Fiscal Month ended
October 31, 2007 (the “October Financial Statements”) required to be delivered
by the Loan Parties under Section 5.01(c) and 5.01(d) of the Credit Agreement.
On the Waiver Effective Date and in reliance on the representations and
covenants of the Loan Parties set forth herein, the Sole Lender and the
Administrative Agent hereby waive the Loan Parties’ failure to timely deliver
the October Financial Statements. The foregoing waiver shall apply solely to the
October Financial Statements and nothing herein shall be deemed to constitute a
waiver or modification of the Loan Parties’ obligations to timely deliver
financial statements and other information and certificates for any and all
periods ending after October 31, 2007 in accordance with Section 5.01(c) and
5.01(d) of the Credit Agreement. In consideration of the foregoing waiver, the
Loan Parties further covenant and agree that (x) the Loan Parties shall cause
the October Financial Statements to be delivered to the Administrative Agent no
later than December 17, 2007, and (y) the Administrative Agent shall be entitled
to declare an Event of Default under the Credit Agreement if the October
Financial Statements are not delivered to the Administrative Agent on or before
such date.

3. Waiver Effective Date.

This waiver letter shall be deemed effective on the date (the “Waiver Effective
Date”) that the Administrative Agent shall have received signed counterparts
from each of the parties hereto.

4. Representations and Warranties.

The Loan Parties hereby represent to the Administrative Agent and the Sole
Lender that, after giving effect to the waivers set forth in this waiver letter,
(a) there exists no Default or Event of Default under the Credit Agreement,
(b) all representations and warranties of the Loan Parties set forth in the
Credit Agreement are true and correct in all material respects on and as of the
date hereof, and (c) each of the Loan Documents remains in full force and
effect, and is valid, binding and enforceable against the Loan Parties in
accordance with its terms.

5. Miscellaneous.

This waiver letter shall be governed by, and construed in accordance with, the
laws of the State of New York, without reference to conflict of laws. This
waiver letter may be executed in one or more counterparts, each of which shall
be deemed an original and all of which when taken together shall be one
agreement. Except as otherwise expressly set forth herein, the execution,
delivery and effectiveness of this waiver letter shall not operate as a waiver
of any right, power or remedy of the Administrative Agent or the Lenders under
the Loan Documents. This waiver letter shall be deemed to constitute one of the
“Loan Documents”.

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eToys Direct, Inc.

December 14, 2007

Page 3

IN WITNESS WHEREOF, each of the undersigned has executed this waiver letter as
of the date first set forth above.

 

ADMINISTRATIVE AGENT AND SOLE LENDER: THE CIT GROUP/BUSINESS CREDIT, INC. as
Administrative Agent, Collateral Agent and Sole Lender By:     Name:   Title:  

 

BORROWERS: eTOYS DIRECT, INC. By:   /s/ Michael J. Wagner Name:   Title:  

 

MY TWINN, INC. By:   /s/ Michael J. Wagner Name:   Title:   BABYUNIVERSE, INC.
By:   /s/ Michael J. Wagner Name:   Title:   POSHTOTS, INC. By:   /s/ Michael J.
Wagner Name:   Title:  

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eToys Direct, Inc.

December 14, 2007

Page 4

 

DREAMTIME BABY, INC. By:   /s/ Michael J. Wagner Name:   Title:   LOAN
GUARANTORS: eTOYS DIRECT 1, LLC By:   /s/ Michael J. Wagner Name:   Title:  
eTOYS DIRECT 2, LLC By:   /s/ Michael J. Wagner Name:   Title:   eTOYS DIRECT 3,
LLC By:   /s/ Michael J. Wagner Name:   Title:   GIFT ACQUISITION, L.L.C. By:  
/s/ Michael J. Wagner Name:   Title: