ex10-3tojune302008form10q.htm


    Exhibit
      10.3

     

    Ninth
      Amendment to Amended and Restated Credit Agreement

     

    This
      Ninth Amendment to Amended and Restated Credit Agreement (herein, the “Amendment”) is entered into
      as of August 8, 2008 but effective as of June 30, 2008, by and among Learning
      Curve Brands, Inc. (formerly known as RC2 Brands, Inc.) (“LCB”), Learning Curve
      International, Inc. (“LCI”), The First Years
      Inc.
      (“TFY”), Racing
      Champions Worldwide Limited (“RCWL”; LCB, LCI, TFY, and
      RCWL being referred to herein collectively as the “Borrowers”), Harris N.A., as
      Administrative Agent, and the Lenders party hereto.

     

    Preliminary
      Statements

     

                   
      A.  The Borrowers, the Lenders and the Administrative Agent entered into an
      Amended and Restated Credit Agreement dated as of September 15, 2004, as
      heretofore amended (the “Credit
      Agreement”).  All capitalized terms used herein without
      definition shall have the same meanings herein as such terms have in the Credit
      Agreement.

     

                   
      B.  The Borrowers have requested that the Required Lenders make certain
      other amendments to the Credit Agreement, and the Required Lenders are willing
      to do so under the terms and conditions set forth herein.

     

    NOW,
      THEREFORE, for good and valuable consideration, the receipt and sufficiency
      of
      which is hereby acknowledged, the parties hereto agree as follows:

     

    
      	
              
                Section 1. 
                  Amendments. 

              

            	
               

            


    

     

    Subject
      to the satisfaction of the conditions precedent set forth in Section 2
      below, the Credit Agreement shall be and hereby is amended as
      follows:

     

                   
      1.1.  The definition of “Adjusted EBITDA” appearing
      in Section 5.1 of the Credit Agreement shall be amended and restated in its
      entirety to read as follows:

     

    “Adjusted
      EBITDA” means, with
      reference to any period, the sum of (a) the EBITDA of the Company and its
      Subsidiaries for such period, plus (b) EBITDA of any
      Person and its subsidiaries acquired pursuant to Section 8.9(i) hereof for
      such period plus
(c) adjustments associated
      with any Permitted Acquisition to the
      extent reasonably acceptable to the Administrative Agent, plus (d) non-recurring
      costs
      and extraordinary expenses incurred in connection with the recall of specific
      components from the Thomas and Friends product line in an aggregate amount
      not
      to exceed $28,300,000, plus (e) non-recurring
      costs
      in connection with the settlement of claims with HIT Entertainment in an
      aggregate amount not to exceed $15,000,000.

     

    1.2. 
      Notwithstanding anything contained in the Credit Agreement to the contrary,
      the
      Borrower acknowledges that the Applicable Margin from the date of this Amendment
      through the next Pricing Date shall be at Level IV.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    1.3. 
      Section 8.21 of the Credit Agreement shall be amended and restated in its
      entirety to read as follows:

     

    Section
      8.21.  Minimum
      Adjusted EBITDA.  As of the last day of each fiscal quarter of
      the Company (commencing September 30, 2004), the Company shall maintain an
      Adjusted EBITDA of not less than $72,000,000 for the period of four
      fiscal
      quarters then ended. 

     

    1.3  
      Exhibit E to the Credit Agreement shall be amended and restated as set forth
      on
      Exhibit E attached hereto.

     

    
      	
              
                Section 2. 
                  Conditions Precedent. 

              

            	
               

            


    

     

    The
      effectiveness of this Amendment is subject to the satisfaction of all of the
      following conditions precedent:

     

    2.1.
      The
      Borrowers and the Required Lenders shall have executed and delivered this
      Amendment.

     

    2.2.
      Legal matters incident to the execution and delivery of this Amendment shall
      be
      satisfactory to the Administrative Agent and its counsel.

     

    
      	
              
                Section 3. 
                  Representations. 

              

            	
               

            


    

     

    In
      order
      to induce the Lenders to execute and deliver this Amendment, the Borrowers
      hereby represent to the Lenders that, as of the date hereof, the representations
      and warranties set forth in Section 6 of the Credit Agreement are and shall
      be and remain true and correct (except that the representations contained in
      Section 6.5 shall be deemed to refer to the most recent financial
      statements of the Company delivered to the Lenders) and the Borrowers are in
      compliance with the terms and conditions of the Credit Agreement and no Default
      or Event of Default has occurred and is continuing under the Credit Agreement
      or
      shall result after giving effect to this Amendment.

     

    
      	
              
                Section 4. 
                  Miscellaneous. 

              

            	
               

            


    

     

                   4.1.
      Except as specifically amended herein, the Credit Agreement shall continue
      in
      full force and effect in accordance with its original terms. Reference to this
      specific Amendment need not be made in the Credit Agreement, the Notes, or
      any
      other instrument or document executed in connection therewith, or in any
      certificate, letter or communication issued or made pursuant to or with respect
      to the Credit Agreement, any reference in any of such items to the Credit
      Agreement being sufficient to refer to the Credit Agreement as amended
      hereby.

     

                  
      4.2. This Amendment may be executed in any number of counterparts, and by the
      different parties on different counterpart signature pages, all of which taken
      together shall constitute one and the same agreement. Any of the parties hereto
      may execute this Amendment by signing any such counterpart and each of such
      counterparts shall for all purposes be deemed to be an original. This Amendment
      shall be governed by the internal laws of the State of Illinois.

     


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    This
      Ninth Amendment to Amended and Restated Credit Agreement is entered into as
      of
      the date and year first above written.

     

    
      
        	 	
                LEARNING
                  CURVE BRANDS, INC. (f/k/a RC2 Brands, Inc.)

                LEARNING
                  CURVE INTERNATIONAL, INC.

                THE
                  FIRST YEARS INC., a Massachusetts corporation

                RACING
                  CHAMPIONS WORLDWIDE LIMITED

                
                

              
	 	
                 

                By   
                  /s/
                  Curtis W.
                  Stoelting                                  
                  

                Name: 
                  Curtis W. Stoelting

                Title:   
                  Chief Executive Officer of LCB and

                             LCI,
                  President of TFY and Director

                             of
                  RCWL

              


      

       

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    Accepted
      and agreed to as of the date and year first above written.

     

    
      	
               

            	
              HARRIS
                N.A., in its individual capacity and as 

                 
                Administrative Agent 

            


    

     

    
      	
               

            	
              By  
                /s/ Paul R.
                Feaser                                            
                

            


    

    
      	
               

            	
              Name: 
                Paul R. Feaser 

            


    

    
      	
               

            	
              Title:   
                Vice President  

            


    

    


    
      	
               

            	
              NATIONAL
                CITY BANK 

            


    

     

    
      	
               

            	
              By                                     
                                                          

            


    

    
      	
               

            	
              Its  
                

            


    

    


    
      	
               

            	
              U.S.
                BANK NATIONAL ASSOCIATION

            


    

     

    
      	
               

            	
              By                              
                                                               

            


    

    
      	
               

            	
              Its  
                

            


    

    


    
      	
               

            	
              LASALLE
                BANK NATIONAL ASSOCIATION

            


    

     

    
      	
               

            	
              By                                    
                                                         
                

            


    

    
      	
               

            	
              Its  
                

            


    

    


    
      	
               

            	
              FIFTH
                THIRD BANK (CHICAGO), a Michigan 

                
                Banking Corporation 

            


    

     

    
      	
               

            	
              By   ________________________________
                

            


    

    
      	
               

            	
              Its
                

            


    

    


    
      	
               

            	
              THE
                NORTHERN TRUST COMPANY

            


    

     

    
      	
               

            	
              By                                
                                                             
                

            


    

    
      	
               

            	
              Its  
                

            


    

    



    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    


    
      	
               

            	
              ASSOCIATED
                BANK, N.A.

            


    

     

    
      	
               

            	
              By 
                ________________________________ 

            


    

    
      	
               

            	
              Its
                

            


    

    


    
      	
               

            	
              RBS
                CITIZENS, N.A.

            


    

     

    
      	
               

            	
              By                             
                                                                
                

            


    

    
      	
               

            	
              Its  
                

            


    

     

     

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