exhibit10_1.htm


    Exhibit
10.1


     

    FIRST
AMENDMENT TO CREDIT AGREEMENT

    


    THIS FIRST AMENDMENT TO CREDIT
AGREEMENT ("First Amendment"), made and entered into as of the 8th day of July,
2008, by and among PHYSICIANS FORMULA, INC., a New York corporation (the
"Borrower"), the several banks and other lenders from time to time parties to
such Credit Agreement (the "Lenders"), and UNION BANK OF CALIFORNIA, N.A.
("UBOC"), as administrative agent for the Lenders (in such capacity, the
"Agent"),

     

    W I T N E S S E T H:

     

    WHEREAS,
on November 14, 2006, the Borrower, the Lenders and the Agent entered into a
certain Credit Agreement (the "Credit Agreement") pursuant to which the Lenders
agreed to make available to the Borrower certain credit facilities more
particularly described therein; and

     

    WHEREAS,
the Borrower, the Lenders and the Agent desire to reduce certain of the pricing
provided for in the Credit Agreement, subject, however, to the terms and
conditions set forth in this First Amendment;

     

    NOW,
THEREFORE, for and in consideration of the premises hereof, and other good and
valuable consideration the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:

     

        1.    All capitalized terms
used in this First Amendment shall, unless otherwise defined herein or unless
the context otherwise requires, have the meanings given thereto in the Credit
Agreement.

     

        2.    Clause (x) of Section
2.3(e)(i) of the Credit Agreement is amended to read "1.75% per annum
and".

     

        3.    Section 2.8(a) of the
Credit Agreement is amended to read as follows:

     

            (a)    Each
Revolving Loan shall (i) if a LIBOR Loan, bear interest for each day during
each
Interest Period with respect thereto at a rate per annum equal to the LIBOR
Adjusted Rate plus 1.75% and (ii) if a Base Rate Loan, bear interest at a rate
per annum equal to the Base Rate plus 0.25%.

     

        4.            Section
2.8(b) of the Credit Agreement is amended to read as follows:

     

            (b)           Each
Term Loan shall (i) if a LIBOR Loan, bear interest for each day during each
Interest Period with respect thereto at a rate per annum equal to the LIBOR
Adjusted Rate plus 1.75% and (ii) if a Base Rate Loan, bear interest at a rate
per annum equal to the Base Rate plus 0.25%.

     

        5.    This First Amendment
shall become effective on the earlier of July 1, 2008 or the date on
which the
Agent receives this First Amendment, duly executed by the Borrower and
acknowledged and agreed to by each of the Pledgor and Physicians Formula
Cosmetics, Inc.

     

        6.    Except as expressly
provided herein, the Credit Agreement is unchanged and remains in full
force and effect.

     

    
      
        
        

      

      
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        7.    This First Amendment
shall be governed by and construed in accordance with the laws of the State
of California.

     

        8.    This First Amendment
may be executed in any number of identical counterparts, any set of which
signed by all parties hereto shall be deemed to constitute a complete, executed
original for all purposes.

     

        IN WITNESS
WHEREOF, the Borrower, the Lenders and the Agent have caused this First
Amendment to be executed as of the day and year first above
written.

     

    
      
        	UNION
      BANK OF CALIFORNIA, N.A.	 	 	PHYSICIANS
      FORMULA, INC.	 
	  
      as Agent and sole Lender	 	 	 	 
	 	 	 	 	 	 	 
	
                By:

              	/s/
      Steve Dunne 	 	 	
                By:

              	/s/
      Joseph J. Jaeger 	 
	
                Title:

              	Vice
      President	 	 	
                Title:

              	Chief
      Financial Officer	 


      

    

     

    ACKNOWLEDGED AND AGREED TO

    this 8th day of July, 2008

     

    
      	PHYSICIANS
      FORMULA HOLDINGS, INC.	 	 	 PHYSICIANS
      FORMULA COSMETICS, INC.	 
	 	 	 	 	 
	 	 	 	 	 	 	 
	
              By:

            	/s/
      Joseph J. Jaeger 	 	 	
              By:

            	/s/
      Joseph J. Jaeger 	 
	
              Title:

            	Chief
      Financial Officer	 	 	
              Title:

            	Chief
      Financial Officer	 


    

     

     

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