Second Amendment to Credit Agreement and Related Documentation

As of March 20, 2009, Russ Berrie and Company, Inc. ("RB") and its domestic subsidiaries engaged in its infant and juvenile business - Kids Line, LLC, Sassy, Inc., LaJobi, Inc., CoCaLo, Inc. and I&J Holdco, Inc., a holding company (all such subsidiaries collectively, the "Borrowers"), entered into a Second Amendment to Credit Agreement (the "Second Amendment") with the financial institutions party thereto (the "Lenders"), and Bank of America, N.A., successor by merger to LaSalle Bank National Association, as administrative agent for the Lenders (in such capacity, the "Agent"). The Second Amendment amends the Amended and Restated Credit Agreement (the "Credit Agreement") entered into as of April 2, 2008, and amended as of August 13, 2008, among RB, the Borrowers, the Lenders, the Agent, Sovereign Bank as Syndication Agent, Wachovia Bank, N.A. as Documentation Agent and Banc of America Securities LLC as Lead Arranger. Capitalized terms used but undefined in this Item 1.01 shall have the meanings assigned to such terms in the Second Amendment, a copy of which is attached hereto as Exhibit 4.26.

The following constitute the material changes to the Credit Agreement effected by the Second Amendment:

(i) RB is now a guarantor under the Credit Agreement and each other Loan Document to which a Guarantor is a party.

(ii) The commitments now consist of: (a) a $50.0 million revolving credit facility (the "Revolving Loan"), with a subfacility for letters of credit in an amount not to exceed $5.0 million, and (b) an $80.0 million term loan facility (the "Term Loan"). Previously, the maximum Revolving Loan commitment was $75.0 million and the maximum Term Loan commitment was $100.0 million.

(iii) Prior to the Second Amendment, the Credit Agreement contained the following financial covenants: (i) a minimum Fixed Charge Coverage Ratio of 1.25:1.00, with a step-up to 1.35:1.00 at June 30, 2010; (ii) a maximum Total Debt to EBITDA Ratio of 3.25:1.00, with a step-down to 3.00:1.00 at June 30, 2009 and 2.75:1.00 at December 31, 2010; and (iii) an annual capital expenditure limitation. Pursuant to the Second Amendment, the minimum Fixed Charge Coverage Ratio is now a minimum of 1.20:1.00 for the first two quarters of 2009, with a step-down to 1.15:1.00 for the third quarter of 2009, and a step-up to 1.25:1.00 for the fourth quarter of 2009 and the first quarter of 2010 and 1.35:1.00 for each fiscal quarter thereafter. The maximum Total Debt to EBITDA Ratio is now 4.00:1.00 for the first two quarters of 2009, with a step-down to 3.75:1.00 for the third quarter of 2009, a step-down to 3.50:1.00 for the fourth quarter of 2009, a step-down to 3.25:1.00 for the first three quarters of 2010 and a step-down to 2.75:1.00 for the fourth quarter of 2010 and each fiscal quarter thereafter.

(iv) The applicable interest rate margins (to be added to the applicable interest rate) under the Credit Agreement previously ranged from 2.00% - 3.00% for LIBOR Loans and from 0.50% - 1.50% for Base Rate Loans, and pursuant to the Second Amendment, now range from 2.0% - 4.25% for LIBOR Loans and from 1.0% - 3.25% for Base Rate Loans, in each case depending on the Total Debt to EBITDA Ratio (until delivery of specified financial statements and compliance certificates with respect to the quarter ending September 30, 2009, the applicable margins shall be a minimum of 4.00% for LIBOR Loans and 3.00% for Base Rate Loans). The Second Amendment also amended the Base Rate definition to include a floor of 30-day LIBOR plus 1.0%.

(v) As a result of the Second Amendment, the Term Loan will be repaid in quarterly installments of $3.25 million on the last day of each fiscal quarter commencing with the quarter ended March 31, 2009. Prior to the Second Amendment, the quarterly installments were in the amount of $3.6 million. The Borrowers also made a prepayment of the Term Loan in the aggregate amount of $9.2 million on March 20, 2009, which prepayment was funded from a draw on the Revolving Loan.

(vi) Prior to the Second Amendment, the Credit Agreement contained significant limitations on the ability of the Borrowers to distribute cash to RB for the purpose of paying dividends to the shareholders of RB or for the purpose of paying RB's corporate overhead expenses. Pursuant to the Second Amendment, the restrictions pertaining to the ability of the Borrowers to distribute cash to RB for the purpose of paying RB's corporate overhead expenses have been eliminated. However, under the Second Amendment, RB is not permitted to pay a dividend to its shareholders unless (i) the earnout consideration under each of the LaJobi and CoCaLo purchase agreements ("Acquisition Earnouts") have been paid in full,
(ii) before and after giving effect to any such dividend, (a) no default or event of default exists or would result therefrom, (b) Excess Revolving Loan Availability will equal or exceed $4.0 million, and (c) before and after giving effect to any such payment, the applicable financial covenants will be satisfied, and (iii) the Total Debt to EBITDA Ratio for the two most recently completed fiscal quarters shall have been less than 2.00:1.00. In addition, RB is not permitted to repurchase or redeem its stock (with certain limited exceptions) unless (i) the Acquisition Earnouts have been paid in full,
(ii) before and after giving effect to any such dividend, (a) no default or event of default exists or would result therefrom, (b) Excess Revolving Loan Availability will equal or exceed $5.0 million, and (c) before and after giving effect to any such payment, the applicable financial covenants will be satisfied, and (iii) the Total Debt to EBITDA Ratio for the two most recently completed fiscal quarters shall have been less than 2.00:1.00.

(vii) As a result of the Second Amendment, restrictions in the Credit Agreement and in certain other Loan Documents on the activities of RB (requirement to act as a holding company) have been eliminated.

(viii) The Second Amendment added a new requirement that RB Trademark Holdco, LLC, a wholly-owned subsidiary of RB, ("IP Sub") make mandatory prepayments of 100% of any net cash proceeds of any asset sale.

(ix) The requirement that the Borrowers maintain an independent director has been eliminated.

The following fees are currently applicable under the Credit Agreement: an agency fee of $35,000 per annum, a non-use fee of 0.55% to 0.80% of the unused amounts under the Revolving Loan, an annual letter of credit fee (payable monthly, in arrears, and upon termination of the relevant obligations) for undrawn amounts with respect to each letter of credit based on the most recent . . .

The disclosures required by this Item are set forth in Item 1.01 above, which is incorporated herein by reference thereto.

On March 23, 2009, the Company issued a press release announcing the execution of the Second Amendment and related items. The press release has been filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein.

(d) Exhibits

The following exhibits are filed with this report:

Exhibit 4.26*       Second Amendment to Amended and Restated Credit Agreement,
                    dated as of March 20, 2009, among Russ Berrie and Company,
                    Inc., Kids Line, LLC, Sassy, Inc., I&J Holdco, Inc., LaJobi,
                    Inc. and CoCaLo, Inc., the financial institutions party
                    thereto or their assignees (the "Lenders"), and Bank of
                    America, N.A., successor by merger to LaSalle Bank National
                    Association, as Administrative Agent for the Lenders.

Exhibit 4.27*       First Amendment to Amended and Restated Pledge Agreement and
                    Amended and Restated Guaranty and Collateral Agreement, dated
                    as of March 20, 2009, among Russ Berrie and Company Inc.,
                    Kids Line, LLC, Sassy, Inc., I&J Holdco, Inc., LaJobi, Inc.
                    and CoCaLo, Inc. and Bank of America, N.A., successor by
                    merger to LaSalle Bank National Association, as
                    Administrative Agent.

Exhibit 4.28*       Joinder Agreement, dated as of March 20, 2009, by Russ Berrie
                    and Company, Inc., in favor of Bank of America, N.A.,
                    successor by merger to LaSalle Bank National Association, as
                    Administrative Agent.

Exhibit 99.1        Press Release, dated March 23, 2009, announcing the execution
                    of the Second Amendment and related matters.

* Schedules and other attachments are omitted, but will be furnished supplementally to the Commission upon request.