**EXHIBIT 4.23**

 

FIRST AMENDMENT TO CREDIT AGREEMENT

 

THIS FIRST AMENDMENT TO CREDIT AGREEMENT (as the same may from time totime be amended, restated or otherwise modified, this “Amendment”) ismade as of August 13, 2008, and entered into by and among KIDS LINE, LLC,a Delaware limited liability company (“Kids Line”), SASSY, INC., anIllinois corporation (“Sassy”), LAJOBI, INC., a Delaware corporation (“LaJobi”),I & J HOLDCO, INC., a Delaware corporation (“I & J”), COCALO,INC., a California corporation (“CoCaLo”) (Kids Line, Sassy, LaJobi, I &J and CoCaLo referred to herein collectively as the “Borrowers” andindividually as a “Borrower”), RUSS BERRIE AND COMPANY, INC., a NewJersey corporation, as the Loan Party Representative for the Borrowers (the “LoanParty Representative”), the “Lenders” (as defined in the Credit Agreementreferred to below) party hereto and LASALLE BANK NATIONAL ASSOCIATION (in itsindividual capacity, together with its successors and assigns, “LaSalle”),as administrative agent (in such capacity, together with its successors andassigns, the “Administrative Agent”) for the Lenders party to the CreditAgreement defined below.

 

RECITALS

 

WHEREAS, the Borrowers, Loan Party Representative, the Lenders, certainother financial institutions as Lenders and the Administrative Agent haveentered into the Credit Agreement dated as of April 2, 2008 (as amended,restated or otherwise modified from time to time, the “Credit Agreement”;capitalized terms used in this Amendment and not defined in this Amendmentshall be defined in accordance with the Credit Agreement), pursuant to whichthe Lenders have agreed to make loans and other financial accommodations, allupon the terms and conditions set forth in the Credit Agreement;

 

WHEREAS, the Borrowers have requested that the Administrative Agent andthe Required Lenders amend certain provisions of the Credit Agreement, all onthe terms and subject to the conditions of this Amendment;

 

NOW, THEREFORE, in consideration of the foregoing, the parties agree asfollows:

 

ARTICLEI

 

AMENDMENTS

 

Section 1.1                                      Subjectto the terms and conditions set forth in Article II of thisAmendment, the Credit Agreement is hereby amended as follows:

 

Section 2.1.1                             Amendments to Section 1.1.

 

(a)                                  Section 1.1of the Credit Agreement is hereby amended by replacing the definition of “EBITDA”in its entirety as follows:

 

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EBITDAmeans, for any period, with respect to the Borrowers and their consolidatedSubsidiaries on a consolidated basis, Consolidated Net Income for such period plus(minus), to the extent deducted (added) in determining such Consolidated NetIncome, (i) Interest Expense, (ii) income tax expense, (iii) depreciation,(iv) amortization, (v) other non-cash charges (gains), (vi) ifexpensed, reasonable costs, expenses and fees incurred in connection with thenegotiation, execution and delivery of the Loan Documents and the financingscontemplated thereby, (vii) if expensed, reasonable costs, expenses andfees incurred in connection with the negotiation, execution and delivery of theAcquisition Documents and the transactions contemplated thereby, but not toexceed $5,000,000, in aggregate, (viii) if expensed, the reasonable feesand expenses paid to any Independent Director and incremental auditor’s feesand expenses relating to the preparation of separate audited financialstatements of the Borrowers (distinct from those of the Parent) as requiredpursuant to Section 10.1.1(a) and (ix) non-cash transactionlosses (gains) due solely to fluctuations in currency values, in each case,during such period.  It being agreedhowever that for purposes of calculating the Total Debt to EBITDA Ratios for Section 11.13.2for Fiscal Quarters ending June 30, 2008 through and including December 31,2008, EBITDA of the Borrowers (other than Kids Line and Sassy and their consolidated Subsidiaries on aconsolidated basis for which the following clauses (1) - (3) shallnot apply) shall be calculated as follows: (1) EBITDA for the ComputationPeriod ending June 30, 2008 shall be deemed to equal EBITDA for the FiscalQuarter ended June 30, 2008 multiplied by 4, (2)  EBITDA for theComputation Period ending September 30, 2008 shall be deemed to equalEBITDA for the six (6) month period ending September 30, 2008multiplied by 2, and (3) EBITDA for the Computation Period ending December 31,2008 shall be deemed to equal EBITDA for the nine (9) month period ending December 31,2008 multiplied by 1.33.

 

ARTICLEII  CONDITIONS TO EFFECTIVENESS

 

Section 2.1                                      ConditionsPrecedent.  This Amendment shall becomeeffective (the “Effective Date”) on the date when all of the followingconditions have been satisfied:

 

(a)                                  thisAmendment shall have been signed by the Borrowers, the Loan PartyRepresentative, the Administrative Agent and the Required Lenders;

 

(b)                                 asof the Effective Date, all representations and warranties of the Borrowers setforth herein shall be true and correct, and all representations and warrantiesof the Loan Parties set forth in the Credit Agreement and the other LoanDocuments, in each case, as amended hereby, shall be true and correct in allmaterial respects (or, with respect to those representations and warrantiesexpressly limited by their terms by materiality or material adverse effectqualifications, all respects) and shall be deemed remade on such date, exceptto the extent any such representation and warranty expressly relates to anearlier date, in which case such representation and warranty shall be true andcorrect in all material respects (or, with respect to those representations andwarranties expressly limited by their terms by materiality or material adverseeffect qualifications, all respects) as to the date to which it relates;

 

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(c)                                  allproceedings taken in connection with the transactions contemplated by thisAmendment and all documents, instruments and other legal matters incidentthereto shall be reasonably satisfactory to the Administrative Agent; and

 

(d)                                 theBorrowers shall have provided such other items and shall have satisfied suchother conditions as may be reasonably required by the Administrative Agent.

 

ARTICLEIII  REAFFIRMATION.

 

The Loan Party Representative and each Borrower hereby expresslyreaffirms and assumes all of their obligations and liabilities to theAdministrative Agent and the Lenders as set forth in the Credit Agreement andthe other Loan Documents and agrees to be bound by and abide by and operate andperform under and pursuant to and comply fully with all of the terms,conditions, provisions, agreements, representations, undertakings, warranties,indemnities, grants of security interests and covenants contained in the CreditAgreement and the other Loan Documents, as such obligations and liabilities maybe modified by this Amendment, as though the Credit Agreement and the otherLoan Documents were being re-executed on the date hereof, except to the extentthat such terms expressly relate to an earlier date.  The Loan Party Representative and eachBorrower hereby ratifies, confirms and affirms without condition, all liens andsecurity interests granted to the Administrative Agent pursuant to the CreditAgreement and the other Loan Documents and such liens and security interestsshall continue to secure the Obligations under the Credit Agreement as amendedby this Amendment, and all extensions, renewals, refinancings, amendments ormodifications of any of the foregoing.

 

ARTICLEIV  MISCELLANEOUS

 

Section 4.1                                      Representationsand Warranties.  The Borrowers herebyjointly and severally represent and warrant to the Administrative Agent that:

 

(a)                                  theBorrowers and the Loan Party Representative have the legal power and authorityto execute and deliver this Amendment;

 

(b)                                 theofficers of the Loan Party Representative and each of the Borrowers executing thisAmendment have been duly authorized to execute and deliver the same and bindthe Loan Party Representative and each of the Borrowers with respect to theprovisions hereof;

 

(c)                                  theexecution, delivery and performance by the Loan Party Representative and each Borrower of this Amendment do not and willnot (a) require any consent or approval of any governmental agency orauthority (other than any consent or approval which has been obtained and is infull force and effect, except such as would not have and reasonably could notbe expected to have a Material Adverse Effect), (b) conflict with (i) anyprovision of law, (ii) the charter, by laws or other organizationaldocuments of such Person or (iii) any material agreement, indenture,instrument or other material document, or any judgment, order or decree, whichis binding upon the such Person or any of their respective properties or (c) require,or result in, the creation or imposition of 

 

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any Lien on anyasset of any Loan Party (other than Permitted Liens and Liens in favor of theAdministrative Agent created pursuant to the Collateral Documents).

 

(d)                                 noUnmatured Default or Event of Default exists under the Credit Agreement, norwill any occur immediately after the execution and delivery of this Amendmentor by the performance or observance of any provision hereof;

 

(e)                                  allrepresentations and warranties made by the Loan Parties in the Credit Agreementor any other Loan Document are true and correct in all material respects on andas of the date of this Amendment to the same extent as though made on and as ofsuch date, except to the extent that any thereof expressly relate to an earlierdate;

 

(f)                                    neitherthe Loan Party Representative nor any of the Borrowers is aware of any claim oroffset against, or defense or counterclaim to, the Loan Party Representative’sand each of the Borrowers’ obligations or liabilities under the CreditAgreement or any Loan Document; and

 

(g)                                 thisAmendment and each document executed by the Loan Party Representative and eachof the Borrowers in connection herewith constitute valid and bindingobligations of the Loan Party Representative and the Borrowers, respectively,enforceable in accordance with their terms, except to the extent that theenforceability thereof may be limited by applicable bankruptcy, insolvency,reorganization, moratorium or other similar laws generally affecting creditors’rights and by equitable principles (regardless of whether enforcement is soughtin equity or at law).

 

Section 4.2                                      LoanDocuments Unaffected.  Except asherein otherwise specifically provided, all provisions of the Credit Agreementand the Loan Documents shall remain in full force and effect and are herebyaffirmed, confirmed and ratified in all respects.  As of the Effective Date, all references tothe Credit Agreement in the Credit Agreement or any other Loan Document shallbe deemed to refer to the Credit Agreement as amended hereby.

 

Section 4.3                                      NoCourse of Dealing.  The Loan PartyRepresentative and each of the Borrowers acknowledge and agree that (a) thisAmendment is not intended to, nor shall it, establish any course of dealingbetween the Loan Party Representative, the Borrowers, the Administrative Agentand the Lenders that is inconsistent with the express terms of the CreditAgreement or any other Loan Document, and (b) notwithstanding any courseof dealing between the Loan Party Representative, the Borrowers, theAdministrative Agent and the Lenders prior to the date hereof, except as setforth herein, the Lenders shall not be obligated to make any Loan, except inaccordance with the terms and conditions of this Amendment and the CreditAgreement.

 

Section 4.4                                      Attorney’sFees and Costs.  The borrowers herebyagree to reimburse the Administrative Agent for all of its reasonableout-of-pocket legal fees and expenses incurred in the preparation anddocumentation of this Amendment and related documents.

 

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Section 4.5                                      Survival.  All representations, warranties, covenants,agreements, releases and waivers made by or on behalf of the Loan PartyRepresentative and the Borrowers under this Amendment shall survive theexecution and delivery of this Amendment.

 

Section 4.6                                      NoWaiver of Rights. No waiver shall be deemed to be made by any partyhereunder of any of its rights hereunder unless the same shall be in writingsigned on behalf of such party.

 

Section 4.7                                      GoverningLaw.  THIS AMENDMENT SHALL BE ACONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORKAPPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE,WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.

 

Section 4.8                                      EntireAgreement.  This Amendment sets forththe entire agreement and understanding among the parties as to the subjectmatter hereof and merges and supersedes all prior discussions, agreements, andundertakings of every kind and nature among them with respect to the subjectmatter hereof.

 

Section 4.9                                      Counterparts.  This Amendment may be executed in any numberof counterparts, and by the parties hereto on the same or separate counterpartsand by facsimile signature, and each such counterpart, when executed anddelivered, shall be deemed to be an original, but all such counterparts shalltogether constitute but one and the same Amendment.

 

Section 4.10                                SeverabilityOf Provisions; Captions; Attachments. Wherever possible each provision of this Amendment shall be interpretedin such manner as to be effective and valid under applicable law.  Any provision of this Amendment that isprohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,be ineffective to the extent of such prohibition or unenforceability withoutinvalidating the remaining provisions hereof or affecting the validity orenforceability of such provision in any other jurisdiction. The severalcaptions to Sections and subsections herein are inserted for convenience onlyand shall be ignored in interpreting the provisions of this Amendment.  Each schedule or exhibit attached to thisAmendment shall be incorporated herein and shall be deemed to be a part hereof.

 

Section 4.11                                JURYTRIAL WAIVER.  EACH OF THE PARTIESHERETO WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TOENFORCE OR DEFEND ANY RIGHTS UNDER THIS AMENDMENT AND ANY OTHER INSTRUMENT,DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED INCONNECTION HEREWITH AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BETRIED BEFORE A COURT AND NOT BEFORE A JURY.

 

[Remainder of Page IntentionallyLeft Blank]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Amendment tobe duly executed and delivered by their duly authorized officers as of the datefirst set forth above.

 
| ** ** | **BORROWERS:**                                   |
|------------|--------------------------------------------------|
| ** ** | ** **                                       | ** ** |
| ** ** | **KIDS LINE, LLC**, a Delaware limited liability |
| ** ** | company                                          |
| ** ** |                                             |
| ** ** | ** **                                       | ** ** |
|       | By:                                              | /s/ Bruce Crain |
|       | Name:                                            | Bruce Crain |
|       | Title:                                           | Vice President |
|       |                                             |   |
| ** ** | **SASSY, INC.**, an Illinois corporation         |
| ** ** | ** **                                       | ** ** |
| ** ** | ** **                                       |
|       | By:                                              | /s/ Bruce Crain |
|       | Name:                                            | Bruce Crain |
|       | Title:                                           | Vice President |
|       |                                             |
| ** ** | **LAJOBI, INC.**,                                |
|       | a Delaware corporation                           |
|       |                                             |   |
|       |                                             |   |
|       | By:                                              | /s/ Bruce Crain |
|       | Name:                                            | Bruce Crain |
|       | Title:                                           | Vice President |
|       |                                             |   |
|       |                                             |   |
| ** ** | **I & J HOLDCO, INC.,**                 |
|       | a Delaware corporation                           |
|       |                                             |   |
|       |                                             |   |
|       | By:                                              | /s/ Bruce Crain |
|       | Name:                                            | Bruce Crain |
|       | Title:                                           | Vice President |
|       |                                             |   |
|       |                                             |   |
| ** ** | **COCALO, INC.,**                                |
|       | a California corporation                         |
|       |                                             |   |
|       |                                             |   |
|       | By:                                              | /s/ Bruce Crain |
|       | Name:                                            | Bruce Crain |
|       | Title:                                           | Vice President |
|            |                                                  |  |  |  |  |  |  |

 

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| **RUSS BERRIE AND COMPANY, INC.**, a   New Jersey corporation, as Loan Party   Representative | ** **           |
|-----------------------------------------------------------------------------------------------|----------------------|
| ** **                                                                                    | ** **           |
| ** **                                                                                    | ** **           |
| By:                                                                                           | /s/ Bruce Crain      |   |
| Name:                                                                                         | Bruce Crain          |   |
| Title:                                                                                        |  Vice President |   |
|                                                                                               |                      |  |  |  |

 

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| **ADMINISTRATIVE AGENT:** | **LASALLE BANK NATIONAL   ASSOCIATION,**as  Administrative Agent |
|---------------------------|------------------------------------------------------------------|
| ** **                | ** **                                                       |
| ** **                | ** **                                                       |
|                      | By:                                                              | /s/ Erin M. Frey |
|                      | Name:                                                            | Erin M. Frey |
|                      | Title:                                                           | VP |
|                      |                                                             |   |
| ** **                | ** **                                                       | ** ** |
| **REQUIRED LENDERS:**     | **LASALLE BANK NATIONAL   ASSOCIATION**                          |
| ** **                | ** **                                                       |
| ** **                | ** **                                                       |
|                      | By:                                                              | /s/ Erin M. Frey |
|                      | Name:                                                            | Erin M. Frey |
|                      | Title:                                                           | VP |
|                      |                                                             |   |
| ** **                | ** **                                                       | ** ** |
| ** **                | **SOVEREIGN BANK**                                               |
| ** **                | ** **                                                       |
| ** **                | ** **                                                       |
|                      | By:                                                              | /s/ Christine Gerula |
|                      | Name:                                                            | Christine Gerula |
|                      | Title:                                                           | Senior Vice President |
|                      |                                                             |   |
|                      |                                                             |   |
| ** **                | **WACHOVIA BANK, N.A.**                                          |
| ** **                | ** **                                                       |
| ** **                | ** **                                                       |
|                      | By:                                                              | /s/ James Petronchak |
|                      | Name:                                                            | James Petronchak |
|                      | Title:                                                           | SVP |
|                           |                                                                  |  |  |  |  |  |  |

 

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| ** ** | **JP MORGAN CHASE BANK, N.A.**    |
|------------|-----------------------------------|
| ** ** | ** **                        |
| ** ** | ** **                        |
|       | By:                               | /s/ Stephen Necel |
|       | Name:                             | Stephen Necel |
|       | Title:                            | Vice President |
|       |                              |   |
|       |                              |   |
| ** ** | **TD BANKNORTH, N.A.**            |
| ** ** | ** **                        |
| ** ** | ** **                        |
|       | By:                               | /s/ David Nicholson |
|       | Name:                             | David Nicholson |
|       | Title:                            | VP, Director |
|       |                              |   |
| ** ** | **HSBC BANK USA, N.A.**           |
| ** ** | ** **                        |
| ** ** | ** **                        |
|       | By:                               |   |
|       | Name:                             |   |
|       | Title:                            |   |
|       |                              |   |
| ** ** | **CITIZENS BANK OF PENNSYLVANIA** |
| ** ** | ** **                        |
| ** ** | ** **                        | ** ** |
|       | By:                               | /s/ Frank S Relly |
|       | Name:                             | Frank S. Relly |
|       | Title:                            | SVP |
|       |                              |   |
| ** ** | **BANK OF THE WEST**              |
| ** ** | ** **                        |
| ** ** | ** **                        |
|       | By:                               | /s/ Sidney Jordan |
|       | Name:                             | Sidney Jordan |
|       | Title:                            | Vice President |
|            |                                   |  |  |  |  |  |  |

 

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