EXHIBIT 4.23


 


FIRST AMENDMENT TO CREDIT AGREEMENT


 


THIS FIRST AMENDMENT TO CREDIT AGREEMENT (as the same may from time to
time be amended, restated or otherwise modified, this “Amendment”) is
made as of August 13, 2008, and entered into by and among KIDS LINE, LLC,
a Delaware limited liability company (“Kids Line”), SASSY, INC., an
Illinois 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” and
individually as a “Borrower”), RUSS BERRIE AND COMPANY, INC., a New
Jersey corporation, as the Loan Party Representative for the Borrowers (the “Loan
Party Representative”), the “Lenders” (as defined in the Credit Agreement
referred to below) party hereto and LASALLE BANK NATIONAL ASSOCIATION (in its
individual capacity, together with its successors and assigns, “LaSalle”),
as administrative agent (in such capacity, together with its successors and
assigns, the “Administrative Agent”) for the Lenders party to the Credit
Agreement defined below.


 


RECITALS


 


WHEREAS, the Borrowers, Loan Party Representative, the Lenders, certain
other financial institutions as Lenders and the Administrative Agent have
entered 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 Amendment
shall be defined in accordance with the Credit Agreement), pursuant to which
the Lenders have agreed to make loans and other financial accommodations, all
upon the terms and conditions set forth in the Credit Agreement;


 


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


 


NOW, THEREFORE, in consideration of the foregoing, the parties agree as
follows:


 


ARTICLE
I


 


AMENDMENTS


 


Section 1.1                                      Subject
to the terms and conditions set forth in Article II of this
Amendment, the Credit Agreement is hereby amended as follows:


 


Section 2.1.1                             Amendments to Section 1.1.


 


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


 

















 


EBITDA
means, for any period, with respect to the Borrowers and their consolidated
Subsidiaries on a consolidated basis, Consolidated Net Income for such period plus
(minus), to the extent deducted (added) in determining such Consolidated Net
Income, (i) Interest Expense, (ii) income tax expense, (iii) depreciation,
(iv) amortization, (v) other non-cash charges (gains), (vi) if
expensed, reasonable costs, expenses and fees incurred in connection with the
negotiation, execution and delivery of the Loan Documents and the financings
contemplated thereby, (vii) if expensed, reasonable costs, expenses and
fees incurred in connection with the negotiation, execution and delivery of the
Acquisition Documents and the transactions contemplated thereby, but not to
exceed $5,000,000, in aggregate, (viii) if expensed, the reasonable fees
and expenses paid to any Independent Director and incremental auditor’s fees
and expenses relating to the preparation of separate audited financial
statements of the Borrowers (distinct from those of the Parent) as required
pursuant to Section 10.1.1(a) and (ix) non-cash transaction
losses (gains) due solely to fluctuations in currency values, in each case,
during such period.  It being agreed
however that for purposes of calculating the Total Debt to EBITDA Ratios for Section 11.13.2
for 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 a
consolidated basis for which the following clauses (1) - (3) shall
not apply) shall be calculated as follows: (1) EBITDA for the Computation
Period ending June 30, 2008 shall be deemed to equal EBITDA for the Fiscal
Quarter ended June 30, 2008 multiplied by 4, (2)  EBITDA for the
Computation Period ending September 30, 2008 shall be deemed to equal
EBITDA for the six (6) month period ending September 30, 2008
multiplied 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.


 


ARTICLE
II  CONDITIONS TO EFFECTIVENESS


 


Section 2.1                                      Conditions
Precedent.  This Amendment shall become
effective (the “Effective Date”) on the date when all of the following
conditions have been satisfied:


 


(a)                                  this
Amendment shall have been signed by the Borrowers, the Loan Party
Representative, the Administrative Agent and the Required Lenders;


 


(b)                                 as
of the Effective Date, all representations and warranties of the Borrowers set
forth herein shall be true and correct, and all representations and warranties
of the Loan Parties set forth in the Credit Agreement and the other Loan
Documents, in each case, as amended hereby, shall be true and correct in all
material respects (or, with respect to those representations and warranties
expressly limited by their terms by materiality or material adverse effect
qualifications, all respects) and shall be deemed remade on such date, except
to the extent any such representation and warranty expressly relates to an
earlier date, in which case such representation and warranty shall be true and
correct in all material respects (or, with respect to those representations and
warranties expressly limited by their terms by materiality or material adverse
effect qualifications, all respects) as to the date to which it relates;


 


2

















 


(c)                                  all
proceedings taken in connection with the transactions contemplated by this
Amendment and all documents, instruments and other legal matters incident
thereto shall be reasonably satisfactory to the Administrative Agent; and


 


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


 


ARTICLE
III  REAFFIRMATION.


 


The Loan Party Representative and each Borrower hereby expressly
reaffirms and assumes all of their obligations and liabilities to the
Administrative Agent and the Lenders as set forth in the Credit Agreement and
the other Loan Documents and agrees to be bound by and abide by and operate and
perform 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 Credit
Agreement and the other Loan Documents, as such obligations and liabilities may
be modified by this Amendment, as though the Credit Agreement and the other
Loan Documents were being re-executed on the date hereof, except to the extent
that such terms expressly relate to an earlier date.  The Loan Party Representative and each
Borrower hereby ratifies, confirms and affirms without condition, all liens and
security interests granted to the Administrative Agent pursuant to the Credit
Agreement and the other Loan Documents and such liens and security interests
shall continue to secure the Obligations under the Credit Agreement as amended
by this Amendment, and all extensions, renewals, refinancings, amendments or
modifications of any of the foregoing.


 


ARTICLE
IV  MISCELLANEOUS


 


Section 4.1                                      Representations
and Warranties.  The Borrowers hereby
jointly and severally represent and warrant to the Administrative Agent that:


 


(a)                                  the
Borrowers and the Loan Party Representative have the legal power and authority
to execute and deliver this Amendment;


 


(b)                                 the
officers of the Loan Party Representative and each of the Borrowers executing this
Amendment have been duly authorized to execute and deliver the same and bind
the Loan Party Representative and each of the Borrowers with respect to the
provisions hereof;


 


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


 


3

















 


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


 


(d)                                 no
Unmatured Default or Event of Default exists under the Credit Agreement, nor
will any occur immediately after the execution and delivery of this Amendment
or by the performance or observance of any provision hereof;


 


(e)                                  all
representations and warranties made by the Loan Parties in the Credit Agreement
or any other Loan Document are true and correct in all material respects on and
as of the date of this Amendment to the same extent as though made on and as of
such date, except to the extent that any thereof expressly relate to an earlier
date;


 


(f)                                    neither
the Loan Party Representative nor any of the Borrowers is aware of any claim or
offset against, or defense or counterclaim to, the Loan Party Representative’s
and each of the Borrowers’ obligations or liabilities under the Credit
Agreement or any Loan Document; and


 


(g)                                 this
Amendment and each document executed by the Loan Party Representative and each
of the Borrowers in connection herewith constitute valid and binding
obligations of the Loan Party Representative and the Borrowers, respectively,
enforceable in accordance with their terms, except to the extent that the
enforceability 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 sought
in equity or at law).


 


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


 


Section 4.3                                      No
Course of Dealing.  The Loan Party
Representative and each of the Borrowers acknowledge and agree that (a) this
Amendment is not intended to, nor shall it, establish any course of dealing
between the Loan Party Representative, the Borrowers, the Administrative Agent
and the Lenders that is inconsistent with the express terms of the Credit
Agreement or any other Loan Document, and (b) notwithstanding any course
of dealing between the Loan Party Representative, the Borrowers, the
Administrative Agent and the Lenders prior to the date hereof, except as set
forth herein, the Lenders shall not be obligated to make any Loan, except in
accordance with the terms and conditions of this Amendment and the Credit
Agreement.


 


Section 4.4                                      Attorney’s
Fees and Costs.  The borrowers hereby
agree to reimburse the Administrative Agent for all of its reasonable
out-of-pocket legal fees and expenses incurred in the preparation and
documentation 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 Party
Representative and the Borrowers under this Amendment shall survive the
execution and delivery of this Amendment.


 


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


 


Section 4.7                                      Governing
Law.  THIS AMENDMENT SHALL BE A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE,
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.


 


Section 4.8                                      Entire
Agreement.  This Amendment sets forth
the entire agreement and understanding among the parties as to the subject
matter hereof and merges and supersedes all prior discussions, agreements, and
undertakings of every kind and nature among them with respect to the subject
matter hereof.


 


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


 


Section 4.10                                Severability
Of Provisions; Captions; Attachments. 
Wherever possible each provision of this Amendment shall be interpreted
in such manner as to be effective and valid under applicable law.  Any provision of this Amendment that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction. The several
captions to Sections and subsections herein are inserted for convenience only
and shall be ignored in interpreting the provisions of this Amendment.  Each schedule or exhibit attached to this
Amendment shall be incorporated herein and shall be deemed to be a part hereof.


 


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


 


[Remainder of Page Intentionally
Left Blank]


 


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IN WITNESS WHEREOF, the parties hereto have executed this Amendment to
be duly executed and delivered by their duly authorized officers as of the date
first 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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