DE Shaw Laminar Portfolios Schedule 13D

0001359824-06-000031.txt : 20060818 0001359824-06-000031.hdr.sgml : 20060818 20060818153519 ACCESSION NUMBER: 0001359824-06-000031 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20060818 DATE AS OF CHANGE: 20060818 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: RUSS BERRIE & CO INC CENTRAL INDEX KEY: 0000739878 STANDARD INDUSTRIAL CLASSIFICATION: DOLLS & STUFFED TOYS [3942] IRS NUMBER: 221815337 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-35778 FILM NUMBER: 061043586 BUSINESS ADDRESS: STREET 1: 111 BAUER DR CITY: OAKLAND STATE: NJ ZIP: 07436 BUSINESS PHONE: 2013379000 MAIL ADDRESS: STREET 2: 111 BAUER DRIVE CITY: OAKLAND STATE: NJ ZIP: 07436 FORMER COMPANY: FORMER CONFORMED NAME: BERRIE RUSS & CO INC DATE OF NAME CHANGE: 19920703 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: DE SHAW LAMINAR PORTFOLIOS LLC CENTRAL INDEX KEY: 0001263972 IRS NUMBER: 010577802 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D MAIL ADDRESS: STREET 1: 120 W 45TH STREET STREET 2: TOWER 45, 39TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10036 SC 13D 1 schedule13d.htm DE SHAW LAMINAR PORTFOLIOS SCHEDULE 13D DE Shaw Laminar Portfolios Schedule 13D

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

Russ Berrie and Company, Inc.

____________________________________________________

(Name of Issuer)

Common Stock, stated value $0.10 per share

____________________________________________________

(Title of Class Securities)

78223310

_______________________________________________________

D. E. Shaw Laminar Portfolios, L.L.C.

Attn: Compliance Department

120 West Forty-Fifth Street

Floor 39, Tower 45

New York, NY 10036

212-478-0000

________________________________________________________

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communication)

Copies to:

Christopher Boies, Esq.

Boies, Schiller & Flexner LLP

333 Main Street

Armonk, NY 10504

914-749-8200

August 9, 2006

________________________________________________________

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box: o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 240.13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

CUSIP No. 78223310 Page 1 of 4

	1	Name of Reporting Person. I.R.S. IDENTIFICATION NO. OF ABOVE PERSON D.E. Shaw Laminar Portfolios, L.L.C
	2	Check the Appropriate Box if a Member of a Group (See Instructions) (a) o (b) o
	3	SEC Use Only
	4	Source of Funds (See Instructions) WC
	5	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o
	6	Citizenship or Place of Organization Delaware
Number of Shares Beneficially	7	Sole Voting Power 0
Owned by Each Reporting	8	Shared Voting Power 4,399,733
Person With	9	Sole Dispositive Power 0
	10	Shared Dispositive Power 4,399,733
	11	Aggregate Amount Beneficially Owned by Each Reporting Person 4,399,733
	12	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o
	13	Percent of Class Represented by Amount in Row (11) 21.1%
	14	Type of Reporting Person (See Instructions) OO

CUSIP No. 78223310 Page 2 of 4

	1	Name of Reporting Person. I.R.S. IDENTIFICATION NO. OF ABOVE PERSON D.E. Shaw & Co., L.P. FEIN 13-3695715
	2	Check the Appropriate Box if a Member of a Group (See Instructions) (a) o (b) o
	3	SEC Use Only
	4	Source of Funds (See Instructions) AF
	5	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o
	6	Citizenship or Place of Organization Delaware
Number of Shares Beneficially	7	Sole Voting Power 0
Owned by Each Reporting	8	Shared Voting Power 4,399,733
Person With	9	Sole Dispositive Power 0
	10	Shared Dispositive Power 4,399,733
	11	Aggregate Amount Beneficially Owned by Each Reporting Person 4,399,733
	12	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o
	13	Percent of Class Represented by Amount in Row (11) 21.1%
	14	Type of Reporting Person (See Instructions) IA, PN

CUSIP No. 78223310 Page 3 of 4

	1	Name of Reporting Person. I.R.S. IDENTIFICATION NO. OF ABOVE PERSON D.E. Shaw & Co., L.L.C.
	2	Check the Appropriate Box if a Member of a Group (See Instructions) (a) o (b) o
	3	SEC Use Only
	4	Source of Funds (See Instructions) AF
	5	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o
	6	Citizenship or Place of Organization Delaware
Number of Shares Beneficially	7	Sole Voting Power 0
Owned by Each Reporting	8	Shared Voting Power 4,399,733
Person With	9	Sole Dispositive Power 0
	10	Shared Dispositive Power 4,399,733
	11	Aggregate Amount Beneficially Owned by Each Reporting Person 4,399,733
	12	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o
	13	Percent of Class Represented by Amount in Row (11) 21.1%
	14	Type of Reporting Person (See Instructions) OO

CUSIP No. 78223310 Page 4 of 4

	1	Name of Reporting Person. I.R.S. IDENTIFICATION NO. OF ABOVE PERSON David E. Shaw
	2	Check the Appropriate Box if a Member of a Group (See Instructions) (a) o (b) o
	3	SEC Use Only
	4	Source of Funds (See Instructions) AF
	5	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o
	6	Citizenship or Place of Organization United States
Number of Shares Beneficially	7	Sole Voting Power 0
Owned by Each Reporting	8	Shared Voting Power 4,399,733
Person With	9	Sole Dispositive Power 0
	10	Shared Dispositive Power 4,399,733
	11	Aggregate Amount Beneficially Owned by Each Reporting Person 4,399,733
	12	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o
	13	Percent of Class Represented by Amount in Row (11) 21.1%
	14	Type of Reporting Person (See Instructions) IN

Item 1. Security and the Issuer

This statement on Schedule 13D relates to the common stock, stated value $0.10 per share (the “Common Stock”), of Russ Berrie and Company, Inc., a New Jersey corporation (the “Issuer”), and is being filed pursuant to Rule 13d-1 under the Act. The principal executive offices of the Issuer are located at 111 Bauer Drive, Oakland, New Jersey 07436.

Item 2. Identity and Background

(a), (f) This statement is filed on behalf of D. E. Shaw Laminar Portfolios, L.L.C., a Delaware limited liability company (“Laminar”), D. E. Shaw & Co., L.P., a Delaware limited partnership (“DESCO LP”), D. E. Shaw & Co., L.L.C., a Delaware limited liability company (“DESCO LLC”), and David E. Shaw, a citizen of the United States of America (David E. Shaw, together with Laminar, DESCO LP and DESCO LLC, collectively, the “Reporting Persons”). The Reporting Persons are filing jointly and the agreement among the Reporting Persons to file jointly is attached hereto as Exhibit 3 and incorporated herein by reference.

(b) The business address and principal office, as applicable, of all Reporting Persons is 120 West Forty-Fifth Street, Floor 39, Tower 45, New York, NY 10036.

(c) The principal business of Laminar is that of a limited liability company focusing primarily on distressed-securities related investment strategies. Laminar does not have any executive officers or directors. The principal business of DESCO LP is to act as an investment adviser to certain funds, including, without limitation, Laminar. The principal business of DESCO LLC is to act as managing member to certain funds, including, without limitation, Laminar. D. E. Shaw & Co., Inc., a Delaware corporation (“DESCO Inc.”), is the general partner of DESCO LP. D. E. Shaw & Co. II, Inc., a Delaware corporation (“DESCO II, Inc.”), is the managing member of DESCO LLC. David E. Shaw is the president and sole shareholder of DESCO Inc. and DESCO II, Inc.

(d), (e) During the last five years, neither any Reporting Person nor, to the best knowledge of any Reporting Person, any person named in Item 2, has been (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violations with respect to such laws.

Item 3. Source and Amount of Funds or Other Consideration

In acquiring 4,399,733 shares of Common Stock on August 9, 2006, Laminar expended approximately $49,716,982.90 of its working capital.

Item 4. Purpose of Transaction

On August 9, 2006, Laminar entered into a Securities Purchase Agreement (the “Purchase Agreement”) with The Russell Berrie Foundation, a New Jersey Nonprofit Corporation, pursuant to which Laminar purchased 4,399,733 shares of Common Stock. A copy of the Purchase Agreement is attached hereto as Exhibit 4. The transactions contemplated by the Purchase Agreement consummated on August 10, 2006.

Under the Investors’ Rights Agreement (as defined below), and subject to certain terms and conditions contained therein, the Issuer has agreed to cause up to two persons designated by Laminar to be nominated for election as members of the board of directors of the Issuer (the “Board”) at each meeting of the stockholders of the Issuer called for the purpose of electing members of the Board. The number of such designees Laminar may name may be permanently decreased or eliminated based upon the aggregate holdings of Laminar and its affiliates of the Issuer’s Common Stock on the date such designees are to be designated. Laminar may decide at any time and from time to time to request that one or more observers selected by Laminar be given the right to attend meetings of the Board.

Laminar purchased the shares of Common Stock for the purpose of investing in the Issuer. Laminar will review its investment in the shares of Common Stock from time to time and subject to the Investors’ Rights Agreement and to applicable law and regulation and depending upon certain factors, including, without limitation, the financial performance of the Issuer, the availability and price of shares of Common Stock or other securities related to the Issuer, and other general market and investment conditions, Laminar may determine to:

-	acquire additional shares of Common Stock through open market purchases or otherwise;

-	hold or vote the Common Stock; or

-	sell, trade, engage in short selling of, hedge, or enter into any similar transactions with respect to shares of Common Stock through the open market or otherwise.

There can be no assurance, however, that any Reporting Persons will take any such actions.

Pursuant to an Investors’ Rights Agreement, dated as of August 10, 2006, by and among Russ Berrie and Company, Inc., as issuer, and Prentice Capital Partners, L.P., Prentice Capital Partners QP, L.P., Prentice Capital Offshore, Ltd., GPC XLIII, L.L.C., PEC I, L.L.C., S.A.C. Capital Associates, L.L.C., Prentice Special Opportunities Master, L.P., Prentice Special Opportunities, L.P., and D. E. Shaw Laminar Portfolios, L.L.C., as buyers (the “Investors’ Rights Agreement”), for a period of two and one half years after August 10, 2006, Laminar shall not (a) subject to certain exceptions under the Investors’ Rights Agreement, directly or indirectly acquire, nor cause any person or entity controlled by Laminar to acquire, shares of any class of securities of the Issuer without the consent of a majority of the Issuer’s Independent Directors (as defined in the Investors’ Rights Agreement), (b) nominate directors, propose nominees for election as directors, or vote for or consent to the election or removal of directors if the purpose or effect of any such action would be to cause Independent Directors not to constitute a majority of the Board or otherwise to cause the company to not be in compliance with the corporate governance rules of the New York Stock Exchange, or (c) subject to certain exceptions under the Investors’ Rights Agreement, without the prior written consent of Prentice Capital Management, L.P. (“Prentice”), directly or indirectly acquire, nor cause any person or entity controlled by Laminar to acquire, shares of Common Stock if, after giving effect thereto, Laminar would be a Beneficial Owner (as defined in the Investors’ Rights Agreement) of in excess of an aggregate of 40% of the outstanding shares of Common Stock. A copy of the Investors’ Rights Agreement is attached hereto as Exhibit 5.

The foregoing descriptions of the Purchase Agreement and the Investors’ Rights Agreement do not purport to be complete and are qualified in their entirety by the terms and conditions of such agreements, each of which is incorporated herein by reference in response to this Item 4, and each of which has been attached as an Exhibit to this Schedule 13D.

As part of Laminar’s ongoing review of its investment in the Common Stock, Laminar will from time to time hold talks or discussions with, write letters to, and respond to inquiries from various parties, including, without limitation, the Issuer’s Board, management or representatives, other shareholders, existing or potential strategic partners or competitors, industry analysts, investment and financial professionals, and other persons or entities regarding the Issuer’s affairs and strategic alternatives. In addition, Laminar may in its sole and absolute discretion take such action it deems necessary to preserve the value of its investments in the Issuer through bankruptcy court action, litigation or other similar strategies.

Item 5. Interest in Securities of the Issuer

(a), (b) Based upon the Issuer’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2006, there were 20,853,372 shares of Common Stock outstanding as of July 31, 2006. The 4,399,733 shares of Common Stock beneficially owned by Laminar (the “Subject Shares”) represent approximately 21.1% of the outstanding shares of Common Stock. Laminar will have the power to vote or to direct the vote of (and the power to dispose or direct the disposition of) the Subject Shares.

DESCO LP as Laminar’s investment adviser and DESCO LLC as Laminar’s managing member may be deemed to have the shared power to vote or direct the vote of (and the shared power to dispose or direct the disposition of) the Subject Shares. As managing member of DESCO LLC, DESCO II, Inc. may be deemed to have the shared power to vote or to direct the vote of (and the shared power to dispose or direct the disposition of) the Subject Shares. As general partner of DESCO LP, DESCO, Inc. may be deemed to have the shared power to vote or to direct the vote of (and the shared power to dispose or direct the disposition of) the Subject Shares. None of DESCO LP, DESCO LLC, DESCO, Inc., or DESCO II, Inc., owns any shares of Common Stock directly and each such entity disclaims beneficial ownership of the Subject Shares.

David E. Shaw does not own any shares of Common Stock directly. By virtue of David E. Shaw’s position as president and sole shareholder of DESCO, Inc., which is the general partner of DESCO LP, and by virtue of David E. Shaw’s position as president and sole shareholder of DESCO II, Inc., which is the managing member of DESCO LLC, David E. Shaw may be deemed to have the shared power to vote or direct the vote of (and the shared power to dispose or direct the disposition of) the Subject Shares and, therefore, David E. Shaw may be deemed to be the indirect beneficial owner of the Subject Shares. David E. Shaw disclaims beneficial ownership of the Subject Shares.

As of the date hereof, neither any Reporting Person nor, to the best knowledge of any Reporting Person, any of the persons set forth in Item 2 owns any shares of Common Stock other than the Subject Shares.

(c) Within the last 60 days, no transactions in shares of Common Stock of the Issuer were effected by any Reporting Person or, to the best knowledge of any Reporting Person, any of the persons set forth in Item 2.

(d) No person other than the Reporting Persons has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Subject Shares.

Clause (e) of Item 5 of Schedule 13D is not applicable.

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer

Except for the matters described herein, neither the Reporting Persons nor, to the best knowledge of any Reporting Person, any of the persons listed in Item 2 has any contract, arrangement, understanding or relationship with any person with respect to any securities of the Issuer.

Item 7. Material to be filed as Exhibits

Exhibit 1 Power of Attorney, granted by David E. Shaw relating to D. E. Shaw & Co., Inc., in favor of the signatories hereto, among others, dated February 24, 2004.

Exhibit 2 Power of Attorney, granted by David E. Shaw relating to D. E. Shaw & Co. II, Inc., in favor of the signatories hereto, among others, dated February 24, 2004.

Exhibit 3 Joint Filing Agreement, by and among the Reporting Persons, dated August 18, 2006.

Exhibit 4 Securities Purchase Agreement, by and among The Russell Berrie Foundation, a New Jersey Nonprofit Corporation, and D. E. Shaw Laminar Portfolios, L.L.C., dated as of August 9, 2006.

Exhibit 5 Investors’ Rights Agreement, by and among Russ Berrie and Company, Inc., as issuer, and Prentice Capital Partners, L.P., Prentice Capital Partners QP, L.P., Prentice Capital Offshore, Ltd., GPC XLIII, L.L.C., PEC I, L.L.C., S.A.C. Capital Associates, L.L.C., Prentice Special Opportunities Master, L.P., Prentice Special Opportunities, L.P., and D.E. Shaw Laminar Portfolios, L.L.C., as buyers, dated as of August 10, 2006.

SIGNATURES

After reasonable inquiry and to the best of each of the undersigned’s knowledge and belief, each of the undersigned, severally and not jointly, certifies that the information set forth in this statement is true, complete and correct. Powers of Attorney, dated February 24, 2004, granted by David E. Shaw in favor of Anne Dinning, Julius Gaudio, Lou Salkind, Stuart Steckler and Eric Wepsic are attached hereto as Exhibit 1 and Exhibit 2 and incorporated herein by reference.

Dated: August 18, 2006


	D.E. SHAW LAMINAR PORTFOLIOS, L.L.C.
	BY:	D.E. SHAW & CO., L.L.C., as managing member


	By:	/s/ Julius Gaudio
		Julius Gaudio
		Managing Director

	BY:	D.E. SHAW & CO., L.P.,

	By:	/s/ Julius Gaudio
		Julius Gaudio
		Manging Director

	BY:	D.E. SHAW & CO., L.L.C.,

	By:	/s/ Julius Gaudio
		Julius Gaudio
		Managing Director



	BY:	DAVID E. SHAW

	By:	/s/ Julius Gaudio
		Name: Julius Gaudio
		Title: Attorney-in-Fact for David E. Shaw

EX-1 2 exhibit1.htm POWER OF ATTORNEY FOR CERTAIN FILINGS Power of Attorney for Certain Filings

Exhibit 1

POWER OF ATTORNEY

FOR CERTAIN FILINGS

UNDER THE SECURITIES EXCHANGE ACT OF 1934

I, David E. Shaw, hereby make, constitute and appoint each of:

Anne Dinning,

Julius Gaudio,

Lou Salkind,

Stuart Steckler, and

Eric Wepsic,

acting individually, as my agent and attorney-in-fact, with full power of substitution, for the purpose of, from time to time, executing in my name and/or my capacity as President of D. E. Shaw & Co., Inc. (acting for itself or as the general partner of D. E. Shaw & Co., L. P., and general partner or managing member of other entities, any which in turn may be acting for itself or other entities) all documents, certificates, instruments, statement, other filings, and amendments to the forgoing (collectively, “documents”) determined by such person to be necessary or appropriate to comply with ownership or control-person reporting requirements imposed by any United States or non-United States governmental or regulatory authority, including without limitation Forms 3, 4, 5, 13D, 13F and 13G required to be filed with the Securities and Exchange Commission; and delivering, furnishing or filing any such documents with the appropriate governmental or regulatory authority. Any such determination shall be conclusively evidenced by such person’s execution, delivery, furnishing and/or filing of the applicable document.

This power of attorney shall be valid from the date hereof and replaces the power granted on February 5, 2001, which is hereby cancelled.

IN WITNESS HEREOF, I have executed this instrument as of the date set forth below.

Date: February 24, 2004

DAVID E. SHAW, as President of D. E. Shaw & Co., Inc.

/s/David E. Shaw

New York, New York

EX-2 3 exhibit2.htm POWER OF ATTORNEY Power of Attorney

Exhibit 2

POWER OF ATTORNEY

FOR CERTAIN FILINGS

UNDER THE SECURITIES EXCHANGE ACT OF 1934

I, David E. Shaw, hereby make, constitute and appoint each of:

Anne Dinning,

Julius Gaudio,

Lou Salkind,

Stuart Steckler, and

Eric Wepsic,

acting individually, as my agent and attorney-in-fact, with full power of substitution, for the purpose of, from time to time, executing in my name and/or my capacity as President of D. E. Shaw & Co. II, Inc. (acting for itself or as the managing member of D. E. Shaw & Co., L. L. C., which in turn may be acting for itself or as the managing member of other entities) all documents, certificates, instruments, statement, other filings, and amendments to the forgoing (collectively, “documents”) determined by such person to be necessary or appropriate to comply with ownership or control-person reporting requirements imposed by any United States or non-United States governmental or regulatory authority, including without limitation Forms 3, 4, 5, 13D, 13F and 13G required to be filed with the Securities and Exchange Commission; and delivering, furnishing or filing any such documents with the appropriate governmental or regulatory authority. Any such determination shall be conclusively evidenced by such person’s execution, delivery, furnishing and/or filing of the applicable document.

This power of attorney shall be valid from the date hereof and replaces the power granted on February 5, 2001, which is hereby cancelled.

IN WITNESS HEREOF, I have executed this instrument as of the date set forth below.

Date: February 24, 2004

DAVID E. SHAW, as President of D. E. Shaw & Co. II, Inc.

/s/David E. Shaw

New York, New York

EX-3 4 exhibit3.htm JOINT FILING AGREEMENT Joint Filing Agreement

Exhibit 3

JOINT FILING AGREEMENT

In accordance with Rule 13d-1(k)(1) under the Securities Exchange Act of 1934, as amended, each of the undersigned Reporting Persons hereby agrees to the joint filing, along with all other such Reporting Persons, on behalf of each of them of a statement on Schedule 13D (including amendments thereto) with respect to the common stock, stated value $0.10 per share, of Russ Berrie and Company, Inc., and that this Agreement be included as an Exhibit to such joint filing. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument.

IN WITNESS WHEREOF, each of the undersigned hereby executes this Agreement as of this 18th day of August, 2006.


	D.E. SHAW LAMINAR PORTFOLIOS, L.L.C.
	BY:	D.E. SHAW & CO., L.L.C., as managing member


	By:	/s/ Julius Gaudio
		Name: Julius Gaudio
		Title: Managing Director

	BY:	D.E. SHAW & CO., L.P.,

	By:	/s/ Julius Gaudio
		Name: Julius Gaudio
		Title: Managing Director

	BY:	D.E. SHAW & CO., L.L.C.,

	By:	/s/ Julius Gaudio
		Name: Julius Gaudio
		Title: Managing Director



	BY:	DAVID E. SHAW

	By:	/s/ Julius Gaudio
		Name: Julius Gaudio
		Title: Attorney-in-Fact for David E. Shaw

EX-4 5 exhibit4.htm SHARE PURCHASE AGREEMENT Share Purchase Agreement

SHARE PURCHASE AGREEMENT

SHARE PURCHASE AGREEMENT (the “Agreement”), dated as of August 9, 2006 by and among The Russell Berrie Foundation, a New Jersey Nonprofit Corporation (the “Seller”), and D. E. Shaw Laminar Portfolios, L.L.C. (the “Investor”).

WITNESSETH:

WHEREAS, the Seller owns an aggregate of 8,799,466 shares of common stock, stated value $.10 per share, of Russ Berrie and Company, Inc., a New Jersey corporation (the “Company”), which shares constitute approximately 42.2% of the issued and outstanding shares of Company common stock; and

WHEREAS, the Investor desires to purchase, and the Seller desires to sell, upon the terms and conditions set forth herein, 4,399,733 shares of common stock of the Company (the “RBC Stock”);

NOW, THEREFORE, in consideration of the premises and the mutual covenants set forth below and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows:

ARTICLE 1

PURCHASE AND SALE OF SHARES

Section 1.1 Purchase and Sale of RBC Stock. Subject to the satisfaction of the conditions set forth in Sections 5.1 and 5.2 hereof (or the waiver thereof by the party entitled to waive that condition), the Seller shall sell to the Investor, and the Investor shall purchase from the Seller on the Closing Date (as defined below), the RBC Stock set forth opposite the Investor’s name in column (3) on the Schedule of Investors attached hereto (the “Closing”).

Section 1.2 Purchase Price. The purchase price for the RBC Stock to be purchased by the Investor at the Closing shall be $11.30 per share (the “Purchase Price”).

Section 1.3 Form of Payment. At the Closing, the Investor shall pay the Purchase Price to the Seller for the RBC Stock by wire transfer of immediately available funds into an account designated by the Seller.

ARTICLE 2

CLOSING

Section 2.1 Closing Date. The date and time of the Closing (the “Closing Date”) shall be 10:00 a.m., New York City Time, at the offices of Weil, Gotshal and Manges LLP, 767 Fifth Avenue, New York, NY 10153 (or at such other time or place as the parties may designate in writing) on that date that is one business day following the satisfaction or waiver of each condition to the Closing set forth in Sections 5.1 and 5.2 hereof (other than those conditions that may be satisfied only by a delivery at or action to be taken at the Closing), of which satisfaction the Seller shall give the Investor same day notice, or on such other date as the parties may agree.

Section 2.2 Items To Be Delivered by the Seller. At the Closing, and subject to the terms and conditions contained herein, the Seller shall deliver (i) to the Investor one or more share certificates representing the RBC Stock to be purchased by the Investor hereunder and that is represented by certificates owned by the Seller, accompanied by a duly endorsed stock power in blank or other appropriate instrument of transfer (duly endorsed and otherwise in form sufficient for transfer and reasonably satisfactory to each Investor) and (ii) cause to be issued to the Investor confirmation of book entry transfer of such of the remaining shares of the RBC Stock as are held for the Seller's benefit in a Depository Trust Company account into such Depository Trust Company account of the Investor as may be designated by the Investor, as well as deliver each of the other items described in Section 5.1 hereof. After the Closing, in addition to its obligations under Section 6.6 hereof, the Seller shall cooperate with the Investor, and use its best efforts, to cause appropriate share certificates representing the RBC Stock sold to the Investor hereunder to be recorded in the name of the Investor, as the Investor shall reasonably request.

Section 2.3 Items to be Delivered by the Investor. At the Closing, and subject to the terms and conditions contained herein, the Investor shall deliver to the Seller the Purchase Price for the RBC Stock being purchased by the Investor, and each of the other items described in Section 5.2 hereof.

Section 2.4 Support of Company Indemnity Obligations. The Investor shall not (i) for seven years following the Closing vote any shares of the Company owned by it or which it has the power to vote in favor of any amendment of the certificate of incorporation or the by-laws of the Company or any other action on the part of the Company that changes in a manner adverse to the individuals who are directors or officers of the Company and are also trustees or officers of the Seller or are also 2002A Trustees (as defined below) the provisions of the Company’s certificate of incorporation or by-laws providing for indemnification of the Company’s directors and officers (the Seller acknowledges and agrees that voting in favor of any future transaction in which the Company may be merged with or into another entity and will not survive the consummation of the transaction shall not be deemed to implicate this Section 2.4) or (ii) cause the Company to (which, in the case of any directors nominated by the Investor, shall be limited to using its commercially reasonable efforts to cause such designees not to) take any action that would prevent the Company from indemnifying such individuals as so provided by such provisions or applicable law or that would exclude such individuals from the coverage afforded by the Company’s directors and officers liability insurance as from time to time in effect on the same basis as the Company’s directors and officers in office at that time.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF THE SELLER

The Seller hereby represents and warrants to the Investor as follows:

Section 3.1 Ownership of RBC Stock. The Seller is the sole record and beneficial owner of the RBC Stock, except that pursuant to the Receipt, Release, Refunding and Share Voting and Disposition Agreement (the “2002A Agreement”), dated as of March 28, 2006, among the Stock Trustees of The Russell Berrie 2002A Trust (as defined in the Indenture of The Russell Berrie 2002A Trust) (collectively, the “2002A Trustees”) and the Seller (a true and complete copy of which has been made available to the Investor), the 2002A Trustees have the power to determine the voting and any disposition of 4,624,451 shares of the RBC Stock (including to approve the sale thereof by the Seller pursuant hereto) and except that certain of the shares of RBC Stock are held for the Seller’s account of record by a nominee of the Seller’s broker. The RBC Stock constitutes 100% of the shares of common stock of the Company owned by the Seller and the Seller has no options, warrants or other rights to acquire common stock of the Seller. The 2002A Trust Agreement shall terminate with respect to the RBC Stock at the Closing and, from and after the Closing, the 2002A Trustees shall have no voting, dispositive or other rights with respect to the RBC Stock. Following the Closing, the Investor shall have no obligations to the 2002A Trustees of any kind by virtue of its purchase of the RBC Stock and the 2002A Trustees shall have no right to assert any claim against the Investor in connection with the 2002A Agreement. The Seller has valid marketable title to the RBC Stock free and clear of any lien, security interest or encumbrance of any nature and free of any claim by any person to or against such RBC Stock, except as otherwise described above in this Section 3.1. The Seller shall, as of the Closing, have the full right, power and authority to sell, assign, transfer and convey the RBC Stock to the Purchaser as provided herein. The Seller shall transfer all of its right, title and interest in and to the RBC Stock to the Investor free and clear of any lien, security interest, or other encumbrance of any nature and free of any claim by any person or entity to or against the RBC Stock.

Section 3.2 Authorization, Validity and Enforceability. This Agreement and the transactions contemplated of the Seller hereby have been duly authorized by the Seller (including by any necessary action of the 2002A Trustees). This Agreement has been duly executed and delivered by the Seller and constitutes the valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms, and the execution, delivery and performance of this Agreement by it will not violate or result in a default under any provision of any material commitment, agreement or instrument to which the Seller is a party or by which the Seller is bound and will not contravene any law, rule or regulation of any administrative agency or governmental body, or any order, writ, injunction or decree of any court, administrative agency or governmental agency applicable to the Seller.

Section 3.3 Litigation; Approvals. There are no proceedings pending or, to the knowledge of the Seller, threatened, and there is no order, writ, judgment or decree affecting the Seller which, if adversely determined, would reasonably be expected to have a material adverse effect on the transactions contemplated hereby. No approval by or filing with any governmental or regulatory body or other person is required for the Seller to enter into or perform this Agreement, except for such as have been received or made and except for any filings under Schedule 13D or Section 16 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as Seller may be required to make in connection with this Agreement and the transactions contemplated hereby. Based on the representation of the Investor contained in Section 4.2 hereof, the Seller has determined that the transactions contemplated hereby do not require that the Seller make filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”).

Section 3.4 [Intentionally Omitted]

Section 3.5 No Reliance. The Seller understands and acknowledges that the Investor, together with the Investor’s affiliates, has received material non-public information regarding the Company and/or the RBC Stock, including historical financial information and certain projections relating to the Company’s business. The Seller hereby represents and warrants that it is financially sophisticated with respect to the RBC Stock and the Company; it is represented on the board of directors of the Company; it is capable of obtaining all information that it deems material to the transactions contemplated hereby from its records, its agents, and/or the Company; it has been afforded the opportunity to ask such questions of the Company as it deems material to this transaction and such questions have been addressed to its satisfaction; it is capable of evaluating the risks associated with a transaction involving the RBC Stock and the Company, including the risk of transacting on the basis of information that may be materially different from the information available to the Investor, and that it is capable of sustaining any loss that may result from engaging in such a transaction on such basis without material injury; and it acknowledges that no representations have been made by the Investor in respect of this transaction or the Company except as expressly set forth in this Agreement. In light of the foregoing, the Seller hereby waives any and all claims (including, without limitation, any and all claims under any applicable securities law) it may have or may hereafter acquire against the Investor relating to any failure by the Investor to disclose to the Seller in connection with the Seller’s sale of the RBC Stock pursuant hereto any information which may be considered to be material non-public information in respect of the Company.

Section 3.6 No Intermediary. Except as otherwise disclosed by supplemental letter provided by the Seller to the Investor, there is no investment banker, broker, finder or other intermediary who might be entitled to any fee or commission upon consummation of the transactions contemplated hereby based upon arrangements made by or on behalf of the Seller and any such fee or commission as may be payable shall be the sole responsibility of the Seller and shall be paid by the Seller.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF INVESTOR

The Investor represents and warrants to Seller as follows:

Section 4.1 Validity and Enforceability. This Agreement and the transaction contemplated of the Investor hereby have been duly authorized by the Investor. This Agreement has been duly executed and delivered by the Investor and constitutes the valid and binding obligation of the Investor, enforceable in accordance with its terms, and the execution, delivery and performance of this Agreement by it will not violate or result in a default under any provisions of any material commitment, agreement or instrument to which the Investor is a party or by which the Investor is bound, and will not contravene any law, rule or regulation of any administrative agency or governmental body or any order, writ, injunction or decree of any court, administrative agency or governmental agency applicable to the Investor.

Section 4.2 Litigation; Approvals. There are no proceedings pending or threatened, and there is no order, writ, judgment or decree affecting the Investor, which, if adversely determined, would have a material adverse effect on the transactions contemplated hereby. No approval by or filing with any governmental or regulatory body or other party is required for the Investor to enter into or perform this Agreement, except for such as have been received or made and except for any filing on Schedule 13D or Section 16 under the Exchange Act as the Investor may be required to make in connection with the transactions contemplated hereby. The Investor has determined that the transactions contemplated hereby do not require that the Investor make filings under the HSR Act.

Section 4.3 Certain Securities Law Matters. The Investor is an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated pursuant to the Securities Act of 1933. The Investor has substantial experience in evaluating and investing in securities in companies similar to the Company so that the Investor is capable of evaluating the merits and risks of the Investor’s investment in the Company and has the capacity to protect the Investor’s own interests. The Investor is acquiring the RBC Stock for investment for the Investor’s own account, not as a nominee or agent, and not with the view towards, or for resale in connection with, any public sale or distribution thereof; provided, however, that by making the representations herein, the Investor does not agree to hold any of the RBC Stock being purchased by it for any minimum or other specific term and reserves the right to dispose of the RBC Stock being purchased by it at any time in accordance with or pursuant to a registration statement or an exemption under the Securities Act of 1933. The Investor understands that the offer and sale of the RBC Stock has not been, and will not be, registered under applicable Federal or state securities laws, except pursuant to the Investors’ Rights Agreement.

Section 4.4 No Reliance. The Investor acknowledges and agrees that, in negotiating and entering into this Agreement, (i) it has relied on no representations made by the Seller, the Company, or any director, officer, employee, investment banker, legal counsel or other representative or agent thereof other than those of the Seller expressly set forth herein or those of the Company expressly set forth in an agreement signed by the Company and delivered to the Investor referred to herein, (ii) it has been afforded the opportunity to do a due diligence review of the business and affairs of the Company, including to ask such questions of the Company, as it deems appropriate and material to the transactions contemplated hereby and that its requests for information and questions have been addressed to its satisfaction and (iii) it has not relied on the Seller, the Company or any director, officer, employee, investment banker, legal counsel or other representative or agent thereof with respect to the sufficiency of its due diligence or the information provided to it and has relied on its own expertise and judgment in deciding the sufficiency thereof. The Investor understands and acknowledges that the Seller has received material non-public information regarding the Company and/or the RBC Stock, including historical financial information and certain projections relating to the Company’s business. The Investor hereby represents and warrants that it is financially sophisticated with respect to the RBC Stock and the Company; it is capable of evaluating the risks associated with a transaction involving the RBC Stock and the Company, including the risk of transacting on the basis of information that may be materially different from the information available to the Seller, and that it is capable of sustaining any loss that may result from engaging in such a transaction on such basis without material injury. In light of the foregoing, the Investor hereby waives any and all claims (including, without limitation, any and all claims under any applicable securities law) it may have or may hereafter acquire against the Seller relating to any failure by the Seller to disclose to the Investor in connection with the Investor’s purchase of the RBC Stock pursuant hereto any information which may be considered to be material non-public information in respect of the Company.

Section 4.5 No Intermediary. There is no investment banker, broker, finder or other intermediary who might be entitled to any fee or commission upon consummation of the transactions contemplated by this Agreement based upon arrangements made by or on behalf the Investor.

ARTICLE 5

CONDITIONS TO CLOSING

Section 5.1 Investor Conditions. The obligation of the Investor hereunder to purchase the RBC Stock at the Closing is subject to the satisfaction, at or before the Closing Date, of the following conditions, provided that these conditions are for the Investor’s sole benefit and may be waived by the Investor at any time in its sole discretion by providing the Seller with prior written notice thereof:

5.1.1 Representations and Warranties. Except as otherwise contemplated or permitted hereby, (a) the representations and warranties of the Seller contained in this Agreement or in any certificate or document to be delivered to the Investor pursuant hereto shall be deemed to have been made again at and as of the Closing Date and shall be true and correct in all material respects as of such date, except to the extent that any representation or warranty is made as of a specified date, in which case such representation and warranty shall be true and correct in all material respects as of such date, and (b) the Seller shall have performed and complied in all material respects with all agreements and conditions required by this Agreement to be performed or complied with by the Seller prior to or on the Closing Date. The Investor shall have been furnished with a certificate in customary form of an appropriate trustee or director of the Seller, dated as of the Closing Date, certifying to the effect of this Section 5.1.1.

5.1.2 No Actions. No action, suit or proceeding by any court or governmental or regulatory authority shall be pending, no investigation by any governmental or regulatory authority shall have been commenced and no action, suit or proceeding by any governmental or regulatory authority shall have been threatened against the Investor, the Seller or the Company or any of their respective principals, trustees, officers or directors seeking to restrain, prevent or change the transactions contemplated hereby or questioning the legality or validity of any such transactions or seeking damages in connection with any such transactions.

5.1.3 Consents. All consents, approvals and authorizations of governmental and regulatory authorities and all filings with and notifications of governmental authorities and regulatory agencies or other entities which regulate the business of the Company necessary to the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby shall have been obtained or effected.

5.1.4 No Material Adverse Change. There shall have been no material adverse change since the date hereof in the business, assets, financial condition, results of operations or prospects of the Company.

5.1.5 [Intentionally Omitted]

5.1.6 Investors’ Rights Agreement. The Company and the Investor shall have entered into a Investors’ Rights Agreement substantially in a form attached hereto, providing for, among other things, (a) the Company’s agreement to nominate certain representatives of the Investor for election to the Board of Directors of the Company and to facilitate the election of such representatives, and (b) certain registration rights of the Investor with respect to the RBC Stock being purchased hereunder.

5.1.7 Opinion of Counsel. The Investor shall have received the legal opinion of the Seller’s counsel, dated the Closing Date, substantially in a form attached hereto.

5.1.8 Approval of Documents. The form and substance of all certificates, instruments, opinions, and other documents required to be delivered to the Investor under this Agreement shall be reasonably satisfactory in all respects to the Investor and its counsel.

5.1.9 Company Resolutions. The Investor shall have received a true, complete and accurate copy, as delivered by the Company to the Seller, of resolutions passed by the Board of Directors of the Company on August 2, 2006 and of resolutions passed by the Special Committee of the Board of Directors on August 9, 2006, approving the transactions on the part of the Company contemplated by this Agreement (including, without limitation, approving the Company’s execution and delivery of the Investors’ Rights Agreement and, approving for purposes of the New Jersey Shareholders Protection Act, any “business combination” transaction which may be proposed to be engaged in between the Investor and the Company at any time or from time to time following the Closing, such approval to constitute advance approval of such business combination transactions under the terms of such Act); such resolutions have not been modified, rescinded or amended and remain in full force and effect.

Section 5.2 Seller’s Conditions. The obligation of the Seller hereunder to sell to the Investor the RBC Stock at the Closing is subject to the satisfaction, at or before the Closing Date, of each of the following conditions, provided that these conditions are for the Seller’s sole benefit and may be waived by the Seller at any time in its sole discretion by providing the Investor with prior written notice thereof:

5.2.1 Representations and Warranties. Except as otherwise contemplated or permitted hereby, (a) the representations and warranties of the Investor contained in this Agreement or in any certificate or document to be delivered to the Seller by the Investor pursuant hereto shall be deemed to have been made again at and as of the Closing Date and shall be true and correct in all material respects as of such date, except to the extent that any representation or warranty is made as of a specified date, in which case such representation and warranty shall be true and correct as of such date in all material respects, and (b) the Investor shall have performed and complied in all material respects with all agreements and conditions required by this Agreement to be performed or complied with by the Investor prior to or on the Closing Date. The Seller shall have been furnished with a certificate in customary form of an authorized signatory of the Investor, dated as of the Closing Date, certifying to the effect of this Section 5.2.1.

5.2.2 No Actions. No action, suit or proceeding by any court or governmental or regulatory authority shall be pending, no investigation by any governmental or regulatory authority shall have been commenced and no action, suit or proceeding by any governmental or regulatory authority shall have been threatened against the Seller, the Company or the Investor or any of their respective principals, trustees, officers or directors seeking to restrain, prevent or change the transactions contemplated hereby or questioning the legality or validity of any such transactions or seeking damages in connection with any such transactions.

5.2.3 Consents. All consents, approvals and authorizations of governmental and regulatory authorities and all filings with and notifications of governmental authorities and regulatory agencies or other entities which regulate the business of the Company necessary to the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby shall have been obtained or effected.

5.2.4 Approval of Documents. The form and substance of all certificates, instruments and other documents required to be delivered to the Seller under this Agreement shall be reasonably satisfactory in all respects to the Seller and its counsel.

ARTICLE 6

MISCELLANEOUS

Section 6.1 Survival of Agreements. All the representations and warranties made herein shall survive the execution and delivery of this Agreement and the sale and delivery of the RBC Stock pursuant hereto for, and only for, a period of two (2) years from the Closing Date, except for Sections 3.1, 3.2, 3.6 and 4.1 which shall survive until the expiration of the applicable statute of limitations.

Section 6.2 Expenses. Each party hereto shall pay its own expenses in connection with the transactions contemplated hereby.

Section 6.3 Notices. All notices, requests, consents, or other communication hereunder shall be in writing and shall be delivered personally or by courier or mailed by first class registered or certified mail to, in the case of the Investor, its address set forth on the Schedule of Investors attached hereto and, in the case of the Seller, to The Russell Berrie Foundation, Glenpointe Centre East-7^th Floor, 300 Frank W. Burr Blvd, Teaneck, New Jersey 07766, Facsimile: (201) 287-0826, Attention: Ilan Kaufthal, with a copy to Weil, Gotshal and Manges LLP, 767 Fifth Avenue, New York, NY 10153, Facsimile: (212) 310-8007, Attention: Robert Messineo, Esq.

Section 6.4 Captions and Section Headings. As used herein, captions and section headings are for convenience only and are not a part of this Agreement and shall not be used in construing it.

Section 6.5 Entire Agreement. This Agreement and the other documents delivered pursuant hereto and thereto, or incorporated by reference herein, contain the entire agreement between the parties hereto concerning the transactions contemplated herein and supersede all prior agreements or understandings between the parties hereto relating to the subject matter hereof.

Section 6.6 Additional Documents. The parties hereto will, at any time after the date hereof, sign, execute and deliver, or cause others so to do, all such powers of attorney, deeds, assignments, documents and instruments and do or cause to be done all such other acts and deeds as may be necessary or proper to carry out the transactions contemplated by this Agreement, including, in the case of the Seller, taking any and all action necessary to cause the Company’s transfer agent to remove any reference to the 2002A Agreement on the share certificates to be delivered to the Investor representing the RBC Stock.

Section 6.7 Termination; Amendment. This Agreement may be terminated at any time by the Investor or the Seller, by notice given to the other, if the Closing has not occurred by August 30, 2006 other than by reason of the breach of this Agreement by the terminating party, and upon such termination neither the Investor nor the Seller shall have any obligation or liability hereunder (except for damages arising out of any such breach). This Agreement may be amended, supplemented or interpreted at any time, but only by a written agreement executed by the parties hereto.

Section 6.8 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

Section 6.9 Severability. If any one or more of the provisions of this agreement shall be held to be invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected thereby. To the extent permitted by applicable law, each party waives any provision of law which renders any provision of this Agreement invalid, illegal or unenforceable in any respect.

Section 6.10 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns. No assignment of this Agreement or of any rights or obligations hereunder may be made by either the Seller or the Investor, directly or indirectly (by operation of law or otherwise), without the prior written consent of the other parties hereto.

Section 6.11 Governing Law. This Agreement, and all matters arising directly or indirectly hereunder, shall be governed by the laws of the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT.

NY2:\1668168\02\ZR6002!.DOC\71523.0003

IN WITNESS WHEREOF, the Investor and the Seller have caused their respective signature page to this Securities Purchase Agreement to be duly executed as of the date first written above.

SELLER:

THE RUSSELL BERRIE FOUNDATION, A NEW JERSEY NONPROFIT CORPORATION
By:


	/s/ Myron Rosner
Secretary

INVESTOR:

D. E. Shaw Laminar Portfolios, L.L.C.



By:	/s/ Julius Gaudio
Name: Julius Gaudio
Title: Authorized Signatory

NY2:\1668168\02\ZR6002!.DOC\71523.0003

SCHEDULE OF INVESTORS

(1)	(2)	(3)	(4)	(5)
Investor	Address and Facsimile Number	Number of Acquired Shares	Purchase Price	Legal Representative's Address and Facsimile Number
D. E. Shaw Laminar Portfolios, L.L.C.	c/o D. E. Shaw & Co., L.P. 120 West 45th Street, 39th Floor New York, New York 10036Telephone: (212) 478-0628 Facsimile: (212) 845-1628	4,399,733	$49,716,982.90	McCarter& English, LLP Four Gateway Center 100 Mulberry Street Newark, New Jersey 07102-4056 Attn: David F. Broderick, Esq. 973-639-2031 (direct tel.) 973-297-3815 (direct fax) dbroderick@mccarter.com

EX-5 6 exhibit5.htm INVESTORS RIGHT AGREEMENT Investors Right Agreement

INVESTORS’ RIGHTS AGREEMENT

INVESTORS’ RIGHTS AGREEMENT (this “Agreement”), dated as of August 9, 2006, by and among Russ Berrie and Company, Inc., a New Jersey corporation, with headquarters located at 111 Bauer Drive, Oakland, New Jersey 07436 (the “Company”), and the undersigned Buyers (as defined below).

WHEREAS:

A. In connection with (i) the Amended and Restated Share Purchase Agreement (the “Prentice Securities Purchase Agreement”), dated as of August 9, 2006, by and among The Russell Berrie Foundation as the seller (the “Seller”) and the Prentice Buyers (defined as each entity on the signature pages hereto identified as “Prentice Buyers”) and (ii) the Share Purchase Agreement (the "Laminar Securities Purchase Agreement" and together with the Prentice Securities Purchase Agreement, the "Securities Purchase Agreements"), dated as of August 9, 2006, by and among the Seller and the Laminar Buyers (defined as each entity on the signature pages hereto identified as “Laminar Buyers”, and collectively with the Prentice Buyers, the “Buyers”), the Seller has agreed, upon the terms and subject to the conditions set forth in the Securities Purchase Agreements, to sell to each Buyer shares of the Company’s common stock, $0.10 stated value per share (the “Common Stock”, as acquired by the Buyers from the Seller pursuant to the Securities Purchase Agreements, the “Acquired Shares”).

B. In order to induce the Buyers to enter into their respective Securities Purchase Agreements, the Company has agreed to (i) nominate and facilitate the election of up to two (2) designees of Prentice (defined below) and two (2) designees of Laminar (as defined below) to serve as directors of the Company following the purchase of the Acquired Shares, and (ii) provide certain registration rights to specified persons under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the “1933 Act”), and applicable state securities laws, subject in each case to the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and each of the Buyers hereby agree as follows:

I. Board Composition

1. Prentice Directors.

a. Subject to any limitations imposed by stock exchange rules in effect from time to time applicable to the Company, the Company agrees to cause two persons designated by Prentice Capital Management, L.P. (“Prentice”) to be nominated for election at every meeting of the stockholders of the Company called with respect to the election of members of the board of directors of the Company, and at every adjournment or postponement thereof, and on every action or approval by written consent of the stockholders or the board of directors with respect to the election of members of the board of directors of the Company (a “Prentice Director”); provided that at any time that Prentice shall have the right under this Section I.1(a) to designate more than one Prentice Director, at least one of such designees shall be an Independent Director (as defined in Exhibit A hereto). Should a person designated pursuant to this Section I.1(a) be unwilling or unable to serve, or otherwise cease to serve, the Company shall cause persons designated by Prentice (subject to the provisions of Section I.1 and I.3(a)) to replace such member on the board of directors. If Prentice desires to remove any Prentice Director, the Company shall cooperate with and shall support such removal and any vacancy shall be filled in accordance with the preceding sentence; provided that Prentice reimburses the Company for all costs (including, but not limited to, attorneys’ fees) incurred by it in connection with such removal, the special meeting of stockholders called to consider such removal and the solicitation of proxies for such meeting, in each case in the event that such special meeting or solicitation of proxies was undertaken by the Company at the request of Prentice and would not otherwise have been held.

b. Notwithstanding anything herein to the contrary:

(i) If, at any time, the aggregate number of shares of the Common Stock held by the Prentice Buyers and their affiliates falls below 2,600,000 shares (as adjusted to reflect any stock split, stock dividend or other distributions or recapitalizations made by the Company to holders of the Common Stock), then the number of directors that Prentice may designate in accordance with Section I.1(a) above shall be permanently decreased to one.

(ii) If, at any time, the aggregate number of shares of the Common Stock held by the Prentice Buyers and their affiliates falls below 1,500,000 shares (as adjusted to reflect any stock split, stock dividend or other distributions or recapitalizations made by the Company to holders of the Common Stock), then Prentice shall cease to have any rights under this Section I.1 and the Company shall not be obligated to nominate or facilitate the election of any designee of Prentice.

c. The right to designate Prentice Directors is personal to Prentice and may not be assigned except in its entirety to an affiliate of Prentice or any Prentice Buyer.

2. Laminar Directors.

a. Subject to any limitations imposed by stock exchange rules in effect from time to time applicable to the Company, the Company agrees to cause two persons designated by D. E. Shaw Laminar Portfolios, L.L.C. (“Laminar”) to be nominated for election at every meeting of the stockholders of the Company called with respect to the election of members of the board of directors of the Company, and at every adjournment or postponement thereof, and on every action or approval by written consent of the stockholders or the board of directors with respect to the election of members of the board of directors of the Company (a “Laminar Director”); provided that at any time that Laminar shall have the right under this Section I.2(a) to designate more than one Laminar Director, at least one of such designees shall be an Independent Director (as defined in Exhibit A hereto). Should a person designated pursuant to this Section I.2(a) be unwilling or unable to serve, or otherwise cease to serve, the Company shall cause persons designated by Laminar (subject to the provisions of Section I.2 and I.3(a)) to replace such member on the board of directors. If Laminar desires to remove any Laminar Director, the Company shall cooperate with and shall support such removal and any vacancy shall be filled in accordance with the preceding sentence; provided that Laminar reimburses the Company for all costs (including, but not limited to, attorneys’ fees) incurred by it in connection with such removal, the special meeting of stockholders called to consider such removal and the solicitation of proxies for such meeting, in each case in the event that such special meeting or solicitation of proxies was undertaken by the Company at the request of Laminar and would not otherwise have been held.

b. Notwithstanding anything herein to the contrary:

(i) If, at any time, the aggregate number of shares of the Common Stock held by the Laminar Buyers and their affiliates falls below 2,600,000 shares (as adjusted to reflect any stock split, stock dividend or other distributions or recapitalizations made by the Company to holders of the Common Stock), then the number of directors that Laminar may designate in accordance with Section I.2(a) above shall be permanently decreased to one.

(ii) If, at any time, the aggregate number of shares of the Common Stock held by the Laminar Buyers and their affiliates falls below 1,500,000 shares (as adjusted to reflect any stock split, stock dividend or other distributions or recapitalizations made by the Company to holders of the Common Stock), then Laminar shall cease to have any rights under this Section I.2 and the Company shall not be obligated to nominate or facilitate the election of any designee of Laminar.

c. The right to designate Laminar Directors is personal to Laminar and may not be assigned except in its entirety to an affiliate of Laminar or any Laminar Buyer.

3. Company Obligations.

a. Notwithstanding anything herein to the contrary, the Company shall not be obligated to cause to be nominated for election to the board of directors of the Company or to recommend to the stockholders the election of any designee of Prentice or Laminar (i) who fails to submit to the Company on a timely basis such questionnaires as the Company may require of its directors generally and such other information as the Company may reasonably request or (ii) if the board of directors of the Company or the nominating committee thereof determines in good faith that such action would be inconsistent with its fiduciary duties or applicable law; provided, that in the event that the board of directors of the Company or the nominating committee shall determine in good faith that such action would be inconsistent with its fiduciary duties, the Company shall promptly notify Prentice or Laminar, as applicable, of the basis for such belief and, to the extent that the Board of Directors of the Company or the Nominating/Governance Committee of the Board of Directors of the Company continues to believe that such action is inconsistent with its fiduciary duties, shall permit Prentice or Laminar, as applicable, to provide an alternate nominee or nominees sufficiently in advance of the meeting of the stockholders called with respect to such nominees.

b. At any time that Prentice or Laminar shall have the right to nominate any director(s) pursuant to this Section I, the Company shall not take any action to change the size of the entire board of directors of the Company from nine persons, including, without limitation, by way of amendment of its bylaws or certificate of incorporation.

c. No later than August 31, 2006, the Company shall take all reasonable action within its control to cause the Board of Directors of the Company to be comprised of nine (9) members, including two (2) Prentice Directors and two (2) Laminar Directors in accordance with Sections I.1(a) and I.2(a) hereof.

II. Registration Rights

1. Definitions

As used in this Agreement, the following terms shall have the following meanings:

a. "1934 Act" means the Securities Exchange Act of 1934, as amended.

b. “Business Day” means any day other than Saturday, Sunday or any other day on which commercial banks in the City of New York are authorized or required by law to remain closed.

c. “Closing Date” shall have the meaning set forth in the Securities Purchase Agreements.

d. “Effective Date” means the date the Registration Statement is declared effective by the SEC.

e. “Incidental Registration” shall mean a registration required to be effected by the Company pursuant to Section II.2(b).

f. “Investor” means a Buyer, for so long as it shall hold Registrable Securities or any transferee or assignee thereof to whom a Buyer assigns its rights under this Agreement and who agrees to become bound by the provisions of this Agreement in accordance with Section II.9 and any transferee or assignee thereof to whom a transferee or assignee assigns its rights under this Agreement and who agrees to become bound by the provisions of this Agreement in accordance with Section II.9.

g. "Laminar Investor" means an Investor that is a Laminar Buyer or a permitted transferee or assignee thereof.

h. “Participating Stockholders” has the meaning ascribed to it in Section II.2(a)(v).

i. “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization and a government or any department or agency thereof.

j. "Prentice Investor" means an Investor that is a Prentice Buyer or a permitted transferee or assignee thereof.

k. “register,” “registered,” and “registration” refer to a registration effected by preparing and filing one or more Registration Statements in compliance with the 1933 Act and pursuant to Rule 415 and the declaration or ordering of effectiveness of such Registration Statement(s) by the SEC.

l. “Registrable Securities” means (i) the Acquired Shares and (ii) any capital stock of the Company issued or issuable with respect to the Acquired Shares as a result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise, excluding (i) any such securities sold under any effective registration statement, (ii) any such securities sold pursuant to Rule 144 under the 1933 Act or (iii) any such securities held by any Investor if all of such shares held by such Person may be sold without restriction by reason of Rule 144(k) under the 1933 Act or any other rule or statute of similar effect allowing for the unrestricted resale of such shares without registration under the 1933 Act.

m. “Registration Expenses” shall mean all expenses incident to the Company’s performance of or compliance with this Agreement, including without limitation, all registration and filing fees, fees and expenses incident to the Company’s or any Investor’s performance of or compliance with any registration or proposed registration under this Agreement (whether or not any of the registration statements in connection therewith become effective), fees and expenses of compliance with securities or blue sky laws, printing expenses, messenger and delivery expenses, fees and expenses for listing or quoting the Registrable Securities on each securities exchange or automated quotation on which similar securities issued by the Company are then listed or quoted, and fees and disbursements of (i) counsel for the Company, the underwriters, or any Investor, (ii) any transfer agent, (iii) all independent certified public accountants incidental to or required by any registration under this Agreement (including “cold comfort” letter and audit fees that would not have been incurred but for a registration pursuant to this Agreement), (iv) underwriters and (v) other persons retained by the Company, the underwriters or any Investor in connection with any registration under this Agreement. Registration Expenses shall include any underwriters’ discounts or commissions or brokers’ fees or fees of similar securities industry professionals and any transfer taxes relating to the disposition of the Registrable Securities by any Investors. Notwithstanding the foregoing, Registration Expenses shall not include an allocation of internal expenses of the Company (including salaries and expenses of the Company’s officers and employees).

n. “Registration Request” has the meaning ascribed to it in Section II.2(a) hereof.

o. “Registration Statement” means a registration statement or registration statements of the Company filed under the 1933 Act covering the Registrable Securities.

p. “Requesting Stockholders” has the meaning ascribed to it in Section II.2(a) hereof.

q. “Rule 415” means Rule 415 under the 1933 Act or any successor rule providing for offering securities on a continuous or delayed basis.

r. “SEC” means the United States Securities and Exchange Commission.

s. “Underwriters” shall mean the underwriters, if any, of the offering being registered under the 1933 Act.

t. “Underwritten Offering” shall mean a sale of securities of the Company to an Underwriter or Underwriters for reoffering to the public.

2. Registration.

a. Demand Registration. (i) Subject in all cases to Section II.2(a)(iii) below, at any time beginning on June 1, 2007, if the Company shall have been requested in writing (a “Registration Request”) by a Prentice Investor or a Laminar Investor to effect the registration under the 1933 Act of shares of Registrable Securities (the “Requesting Stockholders”), then the Company shall:

(1) within ten (10) days of the receipt of such Registration Request (but in no event prior to June 1, 2007), give written notice of such request to all Investors other than the Requesting Stockholders describing the terms of such request; and

(2) use its reasonable efforts to file, as soon as practicable on or after June 1, 2007, a Registration Statement under the 1933 Act for the sale of (x) all Registrable Securities for which the Requesting Stockholders shall have requested registration under this Section II.2(a) and (y) all other Registrable Securities that any Investors with rights to request registration under Section II.2(b) have requested the Company include in such registration by request received by the Company within 15 days after such Persons receive the Company’s notice, subject to the limitation of paragraph (v) below.

(ii) Any Registration Request will specify (i) the number of Registrable Securities proposed to be sold and (ii) the intended method of distribution thereof.

(iii) Notwithstanding the provisions of Section II.2(a)(i), the Company shall not be obligated to file or cause to become effective any Registration Statement relating to a Registration Request unless Investors holding at least two-thirds of the outstanding Registrable Securities shall have elected to participate in such offering pursuant to such Registration Statement, and such registration shall include at least 1,000,000 shares of Registrable Securities. In addition, notwithstanding the provisions of Section II.2(a)(i), the Company shall not be obligated to file and cause to become effective more than three Registration Statements pursuant to Section II.2(a)(i). In addition, notwithstanding the provisions of Section II.2(a)(i), the Company shall not be obligated to file a Registration Statement relating to any Registration Request: (A) within a period of 60 days after the effective date of any other registration statement of the Company (other than a registration statement on Form S-4 or S-8 or any successor or other form hereafter promulgated for similar purposes) or (B) while a registration statement contemplated by Section 2(d) is effective under the 1933 Act. A Registration Statement shall not be counted for purposes of the foregoing until such time as such Registration Statement has been declared effective by the Commission.

(iv) The Company shall select the registration statement form for any registration pursuant to Section II.2(a)(i); provided that the prospectus included in a Registration Statement for an Underwritten Offering shall include such information required by Form S-1 (or any successor form) as the managing Underwriters may reasonably request.

(v) In the event of an Underwritten Offering, the Company, together with all Investors proposing to distribute their securities through such underwriting in accordance with this Agreement (the “Participating Stockholders”), shall enter into an underwriting agreement in customary form and reasonably satisfactory to the Company with the managing Underwriter(s) selected for such underwriting by the Requesting Stockholders, which Underwriter(s) shall be reasonably acceptable to the Company. Notwithstanding any other provision hereof, if the managing Underwriter(s) advises the Company and the Participating Stockholders in writing that because the number of shares requested by the Participating Stockholders to be included in the registration exceeds the number which can be sold in an orderly manner in such offering within a price range acceptable to the Requesting Stockholders or that marketing factors require a limitation of the number of shares to be underwritten on behalf of the Participating Stockholders (the “Underwritten Registration Cutback”), and such Underwritten Registration Cutback results in less than all of the Registrable Securities of the Participating Stockholders that are requested to be included in such registration to actually be included in such registration, then the Company will include in such registration, a number of shares which the Company is so advised can be sold in (or during the time of) such offering without such interference or affect on the price or sale, such number of Registrable Securities shared pro rata among all of the Participating Stockholders based on the total number of Registrable Securities held by each such Participating Stockholder and shall not include any securities of any other Person, including without limitation the Company.

b. Incidental Registration. (1) If the Company at any time proposes to register securities under the Securities Act (other than a registration on Form S-4 or S-8 or any similar or successor form to such forms) whether or not pursuant to registration rights granted to other holders of its securities and whether or not for sale for its account, the Company shall deliver prompt written notice to the Investors of its intention to undertake such registration, describing in reasonable detail the proposed registration and distribution and of such Investor’s right to participate in such registration under this Section II.2(b) as hereinafter provided. Subject to the other provisions of this Section II.2(b), upon the written request of each Investor made within 7 days after the receipt of such written notice (which request shall specify the amount of Registrable Securities to be registered on behalf of such Investor and the intended method of disposition thereof), the Company shall use its reasonable efforts to effect the registration under the 1933 Act of all Registrable Securities requested by Investors to be so registered (an “Incidental Registration”), to the extent requisite to permit the disposition (in accordance with the intended methods thereof as aforesaid) of the Registrable Securities so to be registered, by inclusion of such Registrable Securities in the Registration Statement which covers the securities which the Company proposes to register. Each Investor may, at any time at least two Business Day’s prior to the effective date of the Registration Statement (and for any reason), revoke such request by delivering written notice to the Company revoking such requested inclusion.

(2) If at any time after giving written notice of its intention to register any securities and prior to the effective date of the Registration Statement filed in connection with such Incidental Registration, the Company shall determine for any reason not to register or to delay registration of such securities, the Company may, at its election, give written notice of such determination to each participating Investor and, thereupon, (A) in the case of a determination not to register, the Company shall be relieved of its obligation to register any Registrable Securities in connection with such registration and (B) in the case of a determination to delay such registration, the Company shall be permitted to delay the registration of such Registrable Securities for the same period as the delay in registering such other securities.

(3) If an Incidental Registration involves an Underwritten Offering, and the sole or the lead managing Underwriter, as the case may be, of such Underwritten Offering shall advise the Company in writing (with a copy to each Investor requesting registration) that, in its opinion, the amount of securities (including Registrable Securities) requested to be included in such registration exceeds the amount which can be sold in such offering without interfering with the successful marketing of the securities being offered (such writing to state the approximate number of such securities which may be included in such offering without such effect), or, in the case of an Incidental Registration not involving an Underwritten Offering, the Company shall reasonably determine (and notify the Investors), after consultation with an investment banking firm, that the amount of securities (including Registrable Securities) proposed to be sold in such offering exceeds the number which can be sold in such offering within a price range acceptable to the Company, the Company shall include in such registration, to the extent of the number which the Company is so advised may be included in such offering without such effect, (i) in the case of a registration initiated by the Company, (A) first, the securities that the Company proposes to register for its own account, (B) second, the Registrable Securities requested to be included in such registration by the Investors, allocated pro rata in proportion to the number of Registrable Securities requested to be included in such registration by each of them, and (C) third, other securities of the Company to be registered on behalf of any other Person, allocated pro rata in proportion to the number of securities requested to be included in such registration by each of them; and (ii) in the case of a registration initiated by a Person(s) other than the Company or the Investors, (A) first, the securities of the Company to be registered on behalf of such initiating Person(s), (B) second, the securities that the Company proposes to register for its own account, and (C) third, Registrable Securities requested to be included in such registration by the Investors and other securities requested to be included by any other Person, allocated pro rata in proportion to the number of securities requested to be included in such registration by each of them.

(4) If the Incidental Registration is, in whole or in part, an Underwritten Offering, any request by Investors under this Section II.2(b) must specify that the Registrable Securities be included in the underwriting on the same terms and conditions as the securities of the Company otherwise being sold through Underwriters under such registration.

c. Legal Counsel. The Prentice Investors and the Laminar Investors shall each have the right, as applicable, to select one legal counsel to review and oversee any registration pursuant to this Section II.2 (the "Prentice Legal Counsel" and the "Laminar Legal Counsel", respectively, and collectively, “Legal Counsel”). The Company and Legal Counsel shall reasonably cooperate with each other in performing the Company’s obligations under this Agreement.

d. Form S-3 Registration.

(i) In case the Company shall receive from any Investor(s) holding 25 percent (25%) of the Registrable Securities then outstanding a written request or requests that the Company effect a registration on Form S-3 (or any successor to Form S-3) or any similar short-form registration statement and any related qualification or compliance with respect to all or a part of the Registrable Securities owned by such Investor(s), the Company will:

(1) within ten (10) days of the receipt thereof, give written notice of such request to all Investors; and

(2) as soon as practicable, use its reasonable efforts to effect such registration and all such qualifications and compliances as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such Investors’ Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any other Investor joining in such request as are specified in a written request given within fifteen (15) days after receipt of such written notice from the Company; provided, however, that the Company shall not be obligated to effect any such registration, qualification or compliance pursuant to this paragraph (d):

(A) if Form S-3 is not available to the Company or for such offering by the Investors,

(B) if the Investors, together with the holders of any other securities of the Company entitled to inclusion in such registration, propose to sell Registrable Securities and such other securities (if any) at an aggregate price to the public of less than five hundred thousand dollars ($500,000), or

(C) if the Company has, within the twelve (12) month period preceding the effective date of such registration, already effected a registration on Form S-3 for the Investors pursuant to this paragraph (d) (such twelve month period commencing on the date such prior registration statement ceased to be effective or all Registrable Securities covered thereby were sold).

3. Related Obligations.

At such time as the Company is obligated to file a Registration Statement with the SEC pursuant to Section II.2(a), II.2(b) or II.2(d), the Company will use its reasonable efforts to effect the registration of the Registrable Securities in accordance with the intended method of disposition thereof and, pursuant thereto, the Company shall have the following obligations:

a. The Company shall promptly prepare and file with the SEC a Registration Statement with respect to the Registrable Securities and use its reasonable efforts to cause such Registration Statement relating to the Registrable Securities to become effective as soon as practicable after such filing. The Company shall keep each Registration Statement effective pursuant to Rule 415 at all times until the earlier of, as applicable, (i) 120 days (or, in the case of a shelf registration, until the date as of which the Investors may sell all of the Registrable Securities covered by such Registration Statement without restriction pursuant to Rule 144(k) (or any successor thereto) promulgated under the 1933 Act) after the Effective Date or (ii) the date on which the Investors shall have sold all of the Registrable Securities covered by such Registration Statement (the “Registration Period”). The term “reasonable efforts” shall include, that the Company shall submit to the SEC, as soon as is practicable after the later of the date that (i) the Company learns that no review of a particular Registration Statement will be made by the staff of the SEC or that the staff has no further comments on a particular Registration Statement, as the case may be, and (ii) the approval of applicable Legal Counsel pursuant to Section II.3(c) (which approval is promptly sought), a request for acceleration of effectiveness of such Registration Statement.

b. The Company shall prepare and file with the SEC such amendments (including post-effective amendments) and supplements to a Registration Statement and the prospectus used in connection with such Registration Statement, as may be necessary to keep such Registration Statement effective at all times during the Registration Period.

c. The Company shall permit applicable Legal Counsel to review and comment upon (i) a Registration Statement at least three Business Days prior to its filing with the SEC and (ii) all amendments and supplements to all Registration Statements (except for Annual Reports on Form 10-K and Reports on Form 10-Q and any similar or successor reports) within a reasonable number of days prior to their filing with the SEC. The Company shall not submit a request for acceleration of the effectiveness of a Registration Statement or any amendment or supplement thereto without the prior approval of applicable Legal Counsel, which consent shall not be unreasonably withheld. The Company shall furnish to applicable Legal Counsel, without charge, (i) copies of any correspondence from the SEC or the staff of the SEC to the Company or its representatives relating to any Registration Statement, (ii) promptly after the same is prepared and filed with the SEC, one copy of any Registration Statement and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference, if requested by a participating Investor, and all exhibits (excluding unredacted copies of exhibits for which confidential treatment is sought) and (iii) upon the effectiveness of any Registration Statement, one copy of the prospectus included in such Registration Statement and all amendments and supplements thereto. The Company shall reasonably cooperate with applicable Legal Counsel in performing the Company’s obligations pursuant to Section II.3.

d. The Company shall furnish to each Investor whose Registrable Securities are included in any Registration Statement, without charge, (i) promptly after the same is prepared and filed with the SEC, at least one copy of such Registration Statement and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference, if requested by an Investor, all exhibits (excluding unredacted copies of exhibits for which confidential treatment is sought) and each preliminary prospectus, (ii) upon the effectiveness of any Registration Statement, such number of copies of the prospectus included in such Registration Statement and all amendments and supplements thereto as such Investor may reasonably request and (iii) such other documents, including copies of any preliminary or final prospectus, as such Investor may reasonably request from time to time in order to facilitate the disposition of the Registrable Securities owned by such Investor.

e. The Company shall use its reasonable efforts to (i) register and qualify, unless an exemption from registration and qualification applies, the resale by Investors of the Registrable Securities covered by a Registration Statement under such other securities or “blue sky” laws of such jurisdictions in the United States specified in writing by any Investor, (ii) prepare and file in those jurisdictions, such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain the effectiveness thereof during the Registration Period, and (iii) take such other actions as may be necessary to maintain such registrations and qualifications in effect at all times during the Registration Period; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (x) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section II.3(e), (y) subject itself to general taxation in any such jurisdiction, or (z) file a general consent to service of process in any such jurisdiction. The Company shall promptly notify applicable Legal Counsel and each participating Investor of the receipt by the Company of any notification with respect to the suspension of the registration or qualification of any of the Registrable Securities for sale under the securities or “blue sky” laws of any such jurisdiction or its receipt of notice of the initiation or threatening of any proceeding for such purpose.

f. The Company shall notify applicable Legal Counsel and each Investor in writing of the happening of any event, as promptly as practicable after becoming aware of such event, as a result of which the prospectus included in a Registration Statement, as then in effect, includes an untrue statement of a material fact or omission to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (provided that in no event shall such notice contain any material, nonpublic information), and, subject to Section 4(c), promptly prepare a supplement or amendment to such Registration Statement to correct such untrue statement or omission, and deliver ten (10) copies of such supplement or amendment to applicable Legal Counsel and each Investor (or such other number of copies as applicable Legal Counsel or such Investor may reasonably request). Each Investor shall immediately discontinue any offer or sale of Registrable Securities upon receipt of such a notice. The Company shall also promptly notify applicable Legal Counsel and each participating Investor in writing (i) when a prospectus or any prospectus supplement or post-effective amendment has been filed, and when a Registration Statement or any post-effective amendment has become effective (by facsimile or e-mail), (ii) of any request by the SEC for amendments or supplements to a Registration Statement or related prospectus or related information, and (iii) of the Company’s reasonable determination that a post-effective amendment to a Registration Statement would be appropriate.

g. The Company shall use its reasonable efforts to prevent the issuance of any stop order or other suspension of effectiveness of a Registration Statement, or the suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction for which such qualification has been requested and, if such an order or suspension is issued, to use its reasonable efforts to obtain the withdrawal of such order or suspension and to notify applicable Legal Counsel and each Investor who holds Registrable Securities being sold of the issuance of such order and the resolution thereof or its receipt of notice of the initiation or threat of any proceeding for such purpose. Each Investor shall immediately discontinue any offer or sale of Registrable Securities upon receipt of such a notice.

h. If any Investor is deemed to be, alleged to be or reasonably believes may be deemed or alleged to be, an underwriter or is required under applicable securities laws to be described in the Registration Statement as an underwriter, at the reasonable request of any Investor, the Company shall use commercially reasonable efforts (which shall include requesting that the Company's independent certified accountant and counsel representing the Company furnish to such Investor) to furnish to such Investor, on the date of the effectiveness of the Registration Statement and thereafter from time to time on such dates as an Investor may reasonably request (i) a letter, dated such date, from the Company's independent certified public accountants in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the Investors, and (ii) an opinion, dated as of such date, of counsel representing the Company for purposes of such Registration Statement, in form, scope and substance as is customarily given in an underwritten public offering, addressed to the Investors.

i. Upon the written request of any participating Investor in connection with such Investor’s due diligence requirements, if any, the Company shall make available for inspection by (i) such Investor, (ii) applicable Legal Counsel and (iii) one firm of accountants or other agents retained by the Investors (collectively, the “Inspectors”), all pertinent financial and other records, and pertinent corporate documents and properties of the Company (collectively, the “Records”), as shall be reasonably deemed necessary by each Inspector, and cause the Company’s officers, directors and employees to supply all information which any Inspector may reasonably request; provided, however, that (i) such request shall not unreasonably interfere with the business of the Company and (ii) each Inspector shall agree to hold in strict confidence and shall not make any disclosure (except to an Investor) or use of any Record or other information which the Company determines in good faith to be confidential, and of which determination the Inspectors are so notified, unless (a) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in any Registration Statement or is otherwise required under the 1933 Act, (b) the release of such Records is ordered pursuant to a final, non-appealable subpoena or order from a court or government body of competent jurisdiction, or (c) the information in such Records has been made generally available to the public other than by disclosure in violation of this Agreement or any applicable confidentiality agreement. Each Investor agrees that it shall, upon learning that disclosure of such Records is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt notice to the Company and allow the Company, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, the Records deemed confidential. Nothing herein (or in any other confidentiality agreement between the Company and any Investor) shall be deemed to limit the Investors’ ability to sell Registrable Securities in a manner which is otherwise consistent with applicable laws and regulations.

j. The Company shall hold in confidence and not make any disclosure of information concerning an Investor provided to the Company unless (i) disclosure of such information is necessary to comply with federal or state securities laws, (ii) the disclosure of such information is necessary to avoid or correct a misstatement or omission in any Registration Statement, (iii) the release of such information is ordered pursuant to a subpoena or other final, non-appealable order from a court or governmental body of competent jurisdiction, or (iv) such information has been made generally available to the public other than by disclosure in violation of this Agreement or any other agreement. The Company agrees that it shall, upon learning that disclosure of such information concerning an Investor is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt written notice to such Investor and allow such Investor, at the Investor’s expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information.

k. The Company shall use its reasonable efforts to cause all of the Registrable Securities covered by a Registration Statement to be listed on each securities exchange on which securities of the same class or series issued by the Company are then listed, if any, if the listing of such Registrable Securities is then permitted under the rules of such exchange.

l. The Company shall cooperate with participating Investors and, to the extent applicable, facilitate the timely preparation and delivery of certificates (not bearing any restrictive legend) representing the Registrable Securities to be offered pursuant to a Registration Statement and enable such certificates to be in such denominations or amounts, as the case may be, as the Investors may reasonably request and registered in such names as the managing Underwriter, if any, or such Investors may request.

m. If reasonably requested by an Investor, the Company shall (i) as soon as practicable incorporate in a prospectus supplement or post-effective amendment such information as an Investor reasonably requests to be included therein relating to the sale and distribution of Registrable Securities, including, without limitation, information with respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be sold in such offering; and (ii) as soon as practicable make all required filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment.

n. The Company shall otherwise use its reasonable efforts to comply with all applicable rules and regulations of the SEC in connection with any registration hereunder.

o. Within two (2) Business Days after a Registration Statement which covers Registrable Securities is ordered effective by the SEC, the Company shall deliver, to the transfer agent for such Registrable Securities (with copies to the Investors whose Registrable Securities are included in such Registration Statement) confirmation that such Registration Statement has been declared effective by the SEC.

p. Notwithstanding anything to the contrary herein, (i) if the Company has commenced preparation of a registration statement with respect to a public offering of securities by the Company (other than in connection with employee benefit and similar plans) (a “Company Offering”) prior to the receipt of a Registration Request or a request pursuant to Section II.2(d) and the Company furnishes the Requesting Stockholders with written notice to such effect (the “Transaction Delay Notice”) promptly after such request, the Company shall not be required to effect any registration pursuant to Section II.2(a)(i) or Section II.2(d) hereof until the earliest of (A) 60 days after the completion of such Company Offering, (B) promptly after the abandonment of such Company Offering or (C) 120 days after the date of the Transaction Delay Notice, and (ii) if upon receipt of a Registration Request or a request under Section II.2(d) or while a Registration Request or a request under Section II.2(d) is pending, the Company determines in its reasonable judgment after consultation with its securities counsel that the filing of a registration statement would require disclosure of material information which would not otherwise be required to be disclosed and that such disclosure would not be in the best interest of the Company and the Company provides the Requesting Stockholders written notice thereof promptly after the Company makes such determination, which shall be made promptly after the receipt of any request, the Company shall not be required to comply with its obligations under Section II.2(a)(i) or Section II.2(d) hereof until the earlier of (A) the date upon which such material information is disclosed to the public or ceases to be material or (B) 90 days after the Requesting Stockholders’ receipt of such notice.

4. Obligations of the Investors.

a. At least five (5) Business Days prior to the first anticipated filing date of a Registration Statement, the Company shall notify each Investor in writing of the information the Company requires from each such Investor if such Investor elects to have any of such Investor’s Registrable Securities included in such Registration Statement. It shall be a condition precedent to the obligations of the Company to complete the registration pursuant to this Agreement with respect to the Registrable Securities of a particular Investor that such Investor shall furnish to the Company such information regarding itself, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it as shall be reasonably required to effect the effectiveness of the registration of such Registrable Securities and shall execute such documents in connection with such registration as the Company may reasonably request.

b. Each Investor, by such Investor’s acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of any Registration Statement hereunder, unless such Investor has notified the Company in writing of such Investor’s election to exclude all of such Investor’s Registrable Securities from such Registration Statement.

c. Each Investor agrees that, upon receipt of any notice (which shall be in writing) from the Company (a “Blackout Notice”) that the Company is in possession of material non-public information that it deems advisable not to disclose or is engaged in negotiations or planning for a merger or acquisition or disposition transaction by the Company that, in any case, the Company would then be required to disclose in connection with a registration statement for a primary offering of the Company’s Common Stock, such Investor will immediately discontinue offers or sales of Registrable Securities pursuant to any Registration Statement(s) covering such Registrable Securities for the period set forth in such Blackout Notice; provided, that in no event shall such period set forth in any Blackout Notice exceed 90 consecutive days and or shall all such periods pursuant to this Section 4(c) and Section 3(p) above exceed 120 days in any 365-day period.

d. Each Investor covenants and agrees that it will comply with the prospectus delivery requirements of the 1933 Act as applicable to it or an exemption therefrom in connection with sales of Registrable Securities pursuant to the Registration Statement.

e. Each Investor agrees that it will not effect any disposition of the Registrable Securities that would constitute a sale within the meaning of the 1933 Act or pursuant to any applicable state securities laws, except as contemplated hereunder or as otherwise permitted by law, and that it will promptly notify the Company of any changes in the information set forth in any Registration Statement regarding such Investor or its plan of distribution provided, however, that by making the agreements herein, such Investor does not agree to hold any of the Registrable Securities for any minimum or other specific term and reserves the right to dispose of the Registrable Securities at any time in accordance with or pursuant to a registration statement or an exemption under the 1933 Act.

f. No Investor may participate in any Underwritten Offering unless such Investor completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreement and other documents required under the terms of the underwriting arrangements pertaining to such registration and consistent with the provisions of this Agreement.

5. Expenses of Registration.

Notwithstanding anything in this Agreement to the contrary, no Investor shall be entitled to have any of its Registrable Securities included in any registration statement contemplated by this Agreement unless it executes and delivers to the Company at the time of its request to include such Registrable Securities an agreement reasonably satisfactory to the Company that such Investor will bear its pro-rata share (based upon the number of Registrable Securities to be sold by each participating Investor) of all Registration Expenses incident to such registration statement; provided, that no such agreement shall be required with respect to an Incidental Registration initiated by a Person other than the Company for which such other Person is not required to bear its pro rata share of all Registration Expenses incident to such registration statement.

6. Indemnification.

In the event any Registrable Securities are included in a Registration Statement under this Agreement:

a. To the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold harmless and defend each Investor, the directors, officers, members, partners, employees, agents, representatives of, and each Person, if any, who controls any Investor within the meaning of the 1933 Act or the 1934 Act (each, an “Indemnified Person”), against any losses, claims, damages, liabilities, judgments, fines, penalties, charges, costs, reasonable attorneys’ fees, amounts paid in settlement or expenses, joint or several, (collectively, “Claims”) incurred in investigating, preparing or defending any action, claim, suit, inquiry, proceeding, investigation or appeal taken from the foregoing by or before any court or governmental, administrative or other regulatory agency, body or the SEC (“Indemnified Damages”), to which any of them may become subject insofar as such Claims arise out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact in a Registration Statement or any post-effective amendment thereto, or the omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus if used prior to the effective date of such Registration Statement, or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in the light of the circumstances under which the statements therein were made, not misleading, or (iii) any violation or alleged violation by the Company of the 1933 Act, the 1934 Act, any other law, including without limitation any state securities law, or any rule or regulation thereunder relating to the offer or sale of the Registrable Securities pursuant to a Registration Statement (collectively, “Violations”). Subject to Section II.6(c), the Company shall reimburse the Indemnified Persons, promptly as such expenses are incurred and are due and payable, for any legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section II.6(a): (i) shall not apply to a Claim by an Indemnified Person arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company by an Indemnified Person expressly for use in connection with the preparation of the Registration Statement, prospectus, or any such amendment thereof or supplement thereto, (ii) shall not apply with respect to Claims arising from the sale of Registrable Securities to a Person to whom there was not sent or given, at or prior to the written confirmation of such sale, a copy of the Registration Statement or the prospectus contained therein, as amended or supplemented, to the extent such delivery was required under the 1933 Act or the rules or regulations thereunder and (iii) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably withheld or delayed.

b. In connection with any Registration Statement in which an Investor is participating, each such Investor agrees to severally and not jointly indemnify, hold harmless and defend, to the same extent and in the same manner as is set forth in Section II.6(a), the Company, each of its directors, officers, employees, agents, representatives of, and each Person, if any, who controls the Company within the meaning of the 1933 Act or the 1934 Act (each, an “Indemnified Party”), against any Claim or Indemnified Damages to which any of them may become subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim or Indemnified Damages arise out of or are based upon any Violation, in each case to the extent, and only to the extent, that such Violation occurs in reliance upon and in conformity with written information furnished to the Company by such Investor expressly for use in connection with such Registration Statement; or for any violation or alleged violation or failure by an Investor to comply with the 1933 Act, the 1934 Act, any other law, including without limitation any state securities law, or any rule or regulation thereunder relating to the offer or sale of the Registrable Securities pursuant to a Registration Statement, and, subject to Section II.6(c), such Investor will reimburse any legal or other expenses reasonably incurred by an Indemnified Party in connection with investigating or defending any such Claim; provided, however, that the indemnity agreement contained in this Section II.6(b) and the agreement with respect to contribution contained in Section 7 shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of such Investor, which consent shall not be unreasonably withheld or delayed; provided, further, however, that the Investor shall be liable under this Section 6(b) for only that amount of a Claim or Indemnified Damages as does not exceed the net proceeds to such Investor as a result of the sale of Registrable Securities pursuant to such Registration Statement.

c. Promptly after receipt by an Indemnified Person or Indemnified Party under this Section II.6 of notice of the commencement of any action or proceeding (including any governmental action or proceeding) involving a Claim, such Indemnified Person or Indemnified Party shall, if a Claim in respect thereof is to be made against any indemnifying party under this Section II.6, deliver to the indemnifying party a written notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually satisfactory to the indemnifying party and the Indemnified Person or the Indemnified Party, as the case may be; provided, however, that an Indemnified Person or Indemnified Party shall have the right to retain its own counsel with the fees and expenses of not more than one counsel for such Indemnified Person or Indemnified Party to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the indemnifying party, the representation by such counsel of the Indemnified Person or Indemnified Party and the indemnifying party would be inappropriate under applicable professional standards due to actual or potential differing interests between such Indemnified Person or Indemnified Party and any other party represented by such counsel in such proceeding. In the case of an indemnified Person, legal counsel referred to in the immediately preceding sentence shall be selected by the Investors holding at least a majority in interest of the Registrable Securities included in the Registration Statement to which the Claim relates. Upon receipt of notice from the indemnifying party to such indemnified Person of its election to assume the defense of such action and approval by the indemnified Person of counsel, the indemnifying party will not be liable to such indemnified Person under this section for any legal or other expenses subsequently incurred by such indemnified Person in connection with the defense thereof unless the indemnified Person shall have employed such counsel in connection with the assumption of legal defenses in accordance with the preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the expenses of more than one separate counsel representing all of the indemnified Persons who are parties to such action), in which case the reasonable fees and expenses of counsel shall be at the expense of the indemnifying party. The Indemnified Party or Indemnified Person shall cooperate fully with the indemnifying party in connection with any negotiation or defense of any such action or Claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Indemnified Party or Indemnified Person which relates to such action or Claim. The indemnifying party shall keep the Indemnified Party or Indemnified Person reasonably apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. No indemnifying party shall be liable for any settlement of any action, claim or proceeding effected without its prior written consent, provided, however, that the indemnifying party shall not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the prior written consent of the Indemnified Party or Indemnified Person, consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party or Indemnified Person of a release from all liability in respect to such Claim or litigation, and does not involve the imposition of equitable remedies or the imposition of any obligations on such Indemnified Party or Indemnified Person and does not otherwise adversely affect such indemnified Person, other than as a result of the imposition of financial obligations for which such indemnified Person will be indemnified hereunder, and provided further that such settlement shall not include any admission as to fault on the part of the Indemnified Person or Indemnified Party. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified Person or Indemnified Party under this Section 6, except to the extent that the indemnifying party is prejudiced in its ability to defend such action.

d. The indemnification required by this Section II.6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or Indemnified Damages are incurred.

e. The indemnity agreements contained herein shall be in addition to (i) any cause of action or similar right of the Indemnified Party or Indemnified Person against the indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject to pursuant to applicable law.

7. Contribution.

If the indemnification provided for in Section II.6 is required by its terms but is for any reason held to be unavailable to or otherwise insufficient to hold harmless an indemnified Person thereunder in respect to any Claims referred to therein as subject to indemnification, then each applicable indemnifying Person shall contribute to the amount paid or payable by such indemnified Person as a result of any Claims referred to therein as subject to indemnification in such proportion as is appropriate to reflect the relative fault of the Company on the one hand and the Investors, on the other, in connection with the actions, statements or omissions that resulted in such Claims, as well as any other relevant equitable considerations. The relative fault of the Company, on the one hand, and each Investor, on the other, shall be determined by reference to, among other things, whether the untrue or alleged statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by such Investor and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the Claims referred to above shall be deemed to include, subject to the limitations set forth in Section II.6(c), any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim. The provisions set forth in Section II.6(c) with respect to the notice of the threat or commencement of any threat or action shall apply if a claim for contribution is to be made under this Section II.7; provided, however, that no additional notice shall be required with respect to any threat or action for which notice has been given under Section II.6(c) for purposes of indemnification. The Company and each Investor agree that it would not be just and equitable if contribution pursuant to this Section II.7 were determined solely by pro rata allocation (even if the Investors were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in this paragraph. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Investors’ obligations to contribute pursuant to this Section II.7 are several and not joint and contribution by any seller of Registrable Securities shall be limited in amount to the net amount of proceeds received by such seller from the sale of such Registrable Securities pursuant to such Registration Statement.

8. Reports Under the 1934 Act.

With a view to making available to the Investors the benefits of Rule 144 promulgated under the 1933 Act or any other similar rule or regulation of the SEC that may at any time permit the Investors to sell securities of the Company to the public without registration (“Rule 144”), the Company agrees to:

a. use its reasonable efforts to make and keep public information available, as those terms are understood and defined in Rule 144, and as may be required in order to be eligible to use Form S-3; provided, however, that so long as the Company has acted in good faith in its attempts to make and keep such public information available, the failure to do so shall not be a breach of this Agreement.

b. use its reasonable efforts to file with the SEC all reports and other documents required of the Company under the 1933 Act and the 1934 Act so long as the Company remains subject to such requirements and the filing of such reports and other documents is required for the applicable provisions of Rule 144; and

c. furnish to each Investor, promptly upon request, (i) a written statement by the Company, if true, that it has complied with the reporting requirements of Rule 144, the 1933 Act and the 1934 Act, (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested to permit the Investors to sell such securities pursuant to Rule 144 without registration.

9. Assignment of Registration Rights.

The rights under Section II of this Agreement shall be automatically assignable by the Investors to any transferee of all or any portion of such Investor’s Registrable Securities if: (i) the Investor agrees in writing with the transferee or assignee to assign such rights, and a copy of such agreement is furnished to the Company within a reasonable time after such assignment; (ii) the Company is, within a reasonable time after such transfer or assignment, furnished with written notice of (a) the name and address of such transferee or assignee, and (b) the securities with respect to which such registration rights are being transferred or assigned; (iii) immediately following such transfer or assignment the further disposition of such securities by the transferee or assignee is restricted under the 1933 Act or applicable state securities laws; and (iv) at or before the time the Company receives the written notice contemplated by clause (ii) of this sentence the transferee or assignee agrees in writing with the Company to be bound by all of the provisions contained herein.

10. Amendment of Registration Rights.

Provisions of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the holders of at least two-thirds of the Registrable Securities then outstanding. Any amendment or waiver effected in accordance with this Section II.10 shall be binding upon each Investor and the Company. No such amendment shall be effective to the extent that it applies to less than all of the holders of the Registrable Securities. No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of any of this Agreement unless the same consideration also is offered to all of the parties to this Agreement.

11. Miscellaneous.

a. A Person is deemed to be a holder of Registrable Securities whenever such Person owns or is deemed to own of record such Registrable Securities. If the Company receives conflicting instructions, notices or elections from two or more Persons with respect to the same Registrable Securities, the Company shall act upon the basis of instructions, notice or election received from the such record owner of such Registrable Securities.

b. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) one Business Day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be:

If to the Company:

Russ Berrie and Company, Inc.
111 Bauer Drive
Oakland, New Jersey 07436
Telephone:	(201) 405-2444
Facsimile:	(201) 287-0826
Attention:	Chief Executive Officer
With a copy to:

Russ Berrie and Company, Inc.
111 Bauer Drive
Oakland, New Jersey 07436
Telephone:	(201) 405-2444
Facsimile:	(201) 287-0826
Attention:	General Counsel

and

Kaye Scholer
425 Park Avenue
New York, NY 10022
Telephone:	(212) 836-8201
Facsimile:	(212 ) 836-8211
Attention:	Joel I. Greenberg, Esq.

If to a Buyer, to its address and facsimile number set forth on the Schedule of Buyers attached hereto, with copies to such Buyer’s representatives as set forth on the Schedule of Buyers, or to such other address and/or facsimile number and/or to the attention of such other Person as the recipient party has specified by written notice given to each other party five (5) days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s facsimile machine containing the time, date, recipient facsimile number and an image of the first page of such transmission or (C) provided by a courier or overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery service in accordance with clause (i), (ii) or (iii) above, respectively.

c. Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall not operate as a waiver thereof.

d. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

e. Subject to the remainder of this paragraph, this Agreement and the instruments referenced herein constitute the entire agreement among the parties hereto with respect to the subject matter hereof. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein. This Agreement and the instruments referenced herein supersede all prior agreements and understandings among the parties hereto with respect to the subject matter hereof, provided that this agreement does not supersede, or modify the obligations of (i) the Prentice Buyers under the letter agreement dated June, 2006 between the Company and Prentice, which shall remain in full force and effect in accordance with its terms (each Prentice Investor shall comply with such letter agreement as if it were Prentice, and the limitations expressed in that letter agreement shall be applied to all Prentice Investors collectively as if they were one entity), other than the provisions of Section 7 thereof, which provisions shall be superseded in their entirety by the provisions attached hereto as Exhibit A, which are incorporated herein by reference thereto and made a part hereof, and (ii) (i) the Laminar Buyers under the letter agreement dated February 15, 2006 between the Company and Laminar which shall remain in full force and effect in accordance with its terms (each Laminar Investor shall comply with such letter agreement as if it were the original signatory thereof, and the limitations expressed in that letter agreement shall be applied to all Laminar Investors collectively as if they were one entity), other than the provisions of Section 7 thereof, which provisions shall be superseded in their entirety by the provisions attached hereto as Exhibit A, which are incorporated herein by reference thereto and made a part hereof.

f. Subject to the requirements of Section II.9, this Agreement shall inure to the benefit of and be binding upon the permitted successors and assigns of each of the parties hereto.

g. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

h. This Agreement may be executed in identical counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement. This Agreement, once executed by a party, may be delivered to the other party hereto by facsimile transmission (including in Adobe Acrobat format) of a copy of this Agreement bearing the signature of the party so delivering this Agreement.

i. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

j. All consents and other determinations required to be made by the Investors pursuant to this Agreement shall be made, unless otherwise specified in this Agreement, by holders of a majority of Registrable Securities.

k. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent and no rules of strict construction will be applied against any party.

l. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

m. The obligations of each Investor hereunder are several and not joint with the obligations of any other Investor, and no provision of this Agreement is intended to confer any obligations on any Investor vis-à-vis any other Investor. Nothing contained herein, and no action taken by any Investor pursuant hereto, shall be deemed to constitute the Investors as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Investors are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated herein.

n. Severability. Any provision of this Agreement 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, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

o. Enforcement. Each party hereto acknowledges that money damages would not be an adequate remedy in the event that any of the covenants or agreements in this Agreement are not performed in accordance with its terms, and it is therefore agreed that in addition to and without limiting any other remedy or right it may have, the non-breaching party will have the right to an injunction, temporary restraining order or other equitable relief in any court of competent jurisdiction enjoining any such breach and enforcing specifically the terms and provisions hereof.

[Signature Page Follows]

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IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this Investors’ Rights Agreement to be duly executed as of the date first written above.

COMPANY:

RUSS BERRIE AND COMPANY, INC.

By:/s/ Andrew R. Gatto

Name: Andrew R. Gatto

Title: Chief Executive Officer

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Revised Investors Rights Agreement (DES).DOC

IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this Investors’ Rights Agreement to be duly executed as of the date first written above.

PRENTICE BUYERS:

PRENTICE CAPITAL PARTNERS, LP

By: Prentice Capital GP, LLC

By: /s/ Mathew Hoffman

Name: Mathew Hoffman

Title: General Counsel

PRENTICE CAPITAL PARTNERS QP, LP

By: Prentice Capital GP, LLC

By: /s/ Mathew Hoffman

Name: Mathew Hoffman

Title: General Counsel

PRENTICE CAPITAL OFFSHORE, LTD.

By: Prentice Capital Management, LP, its investment manager

By: /s/ Mathew Hoffman

Name: Mathew Hoffman

Title: General Counsel

GPC XLIII, LLC

By: Prentice Capital Management, LP, its advisor

By: /s/ Mathew Hoffman

Name: Mathew Hoffman

Title: General Counsel

PEC I, LLC

By: Prentice Capital Management, LP, its manager

By: /s/ Mathew Hoffman

Name: Mathew Hoffman

Title: General Counsel

S.A.C. CAPITAL ASSOCIATES, LLC

By: S.A.C. Capital Advisors, LLC

By: /s/ Peter Nussbaum

Name: Peter Nussbaum

Title: General Counsel

PRENTICE SPECIAL OPPORTUNITIES MASTER, L.P.

By: Prentice Capital GP II, LP, its General Partner

By: /s/ Mathew Hoffman

Name: Mathew Hoffman

Title: General Counsel

PRENTICE SPECIAL OPPORTUNITIES, LP

By: Prentice Capital GP II, LP, its General Partner

By: /s/ Mathew Hoffman

Name: Mathew Hoffman

Title: General Counsel

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Revised Investors Rights Agreement (DES).DOC

SHAW BUYER:

D. E. SHAW LAMINAR PORTFOLIOS, L.L.C.

By: /s/ Julius Gaudio

Name: Julius Gaudio

Title: Authorized Signatory

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Revised Investors Rights Agreement (DES).DOC

SCHEDULE OF BUYERS

(1)	(2)	(3)	(4)	(5)
Buyer	Address and Facsimile Number	Number of Acquired Shares	Purchase Price	Legal Representative's Address and Facsimile Number
Prentice Capital Partners, LP	c/o Prentice Capital Management, L.P. 623 Fifth Avenue, 32nd Floor Attn: Matthew Hoffman Telephone: (212) 756-8051 Facsimile: (212) 756-1471	100,340	$1,133,842	Schulte Roth & Zabel LLP 919 Third Avenue New York, New York 10022 Attention: Eleazer Klein, Esq. Facsimile: (212) 593-5955 Telephone: (212) 756-2376
Prentice Capital Partners QP. LP	c/o Prentice Capital Management, L.P. 623 Fifth Avenue, 32nd Floor Attn: Matthew Hoffman Telephone: (212) 756-8051 Facsimile: (212) 756-1471	484,357	$5,473,234.10	Schulte Roth & Zabel LLP 919 Third Avenue New York, New York 10022 Attention: Eleazer Klein, Esq. Facsimile: (212) 593-5955 Telephone: (212) 756-2376
Prentice Capital Offshore, Ltd.	c/o Prentice Capital Management, L.P. 623 Fifth Avenue, 32nd Floor Attn: Matthew Hoffman Telephone: (212) 756-8051 Facsimile: (212) 756-1471	1,063,272	$12,014,973.60	Schulte Roth & Zabel LLP 919 Third Avenue New York, New York 10022 Attention: Eleazer Klein, Esq. Facsimile: (212) 593-5955 Telephone: (212) 756-2376
GPC XLIII, LLC	c/o Prentice Capital Management, L.P. 623 Fifth Avenue, 32nd Floor Attn: Matthew Hoffman Telephone: (212) 756-8051 Facsimile: (212) 756-1471	230,335	$2,602,785.50	Schulte Roth & Zabel LLP 919 Third Avenue New York, New York 10022 Attention: Eleazer Klein, Esq. Facsimile: (212) 593-5955 Telephone: (212) 756-2376
PEC I, LLC	c/o Prentice Capital Management, L.P. 623 Fifth Avenue, 32nd Floor Attn: Matthew Hoffman Telephone: (212) 756-8051 Facsimile: (212) 756-1471	351,979	$3,977,362.70	Schulte Roth & Zabel LLP 919 Third Avenue New York, New York 10022 Attention: Eleazer Klein, Esq. Facsimile: (212) 593-5955 Telephone: (212) 756-2376
Prentice Special Opportunities Master, L.P.	c/o Prentice Capital Management, L.P. 623 Fifth Avenue, 32nd Floor Attn: Matthew Hoffman Telephone: (212) 756-8051 Facsimile: (212) 756-1471	646,252	$7,302,647.60	Schulte Roth & Zabel LLP 919 Third Avenue New York, New York 10022 Attention: Eleazer Klein, Esq. Facsimile: (212) 593-5955 Telephone: (212) 756-2376
Prentice Special Opportunities, LP	c/o Prentice Capital Management, L.P. 623 Fifth Avenue, 32nd Floor Attn: Matthew Hoffman Telephone: (212) 756-8051 Facsimile: (212) 756-1471	233,694	$2,640,742.60	Schulte Roth & Zabel LLP 919 Third Avenue New York, New York 10022 Attention: Eleazer Klein, Esq. Facsimile: (212) 593-5955 Telephone: (212) 756-2376
S.A.C. Capital Associates, LLC	c/o S.A.C. Capital Advisors, LLC 72 Cummings Point Road Stamford, Connecticut 06902 Attn: Peter Nussbaum Telephone: (203) 890-2094 Facsimile: (203) 890-2393 With a copy to: c/o Prentice Capital Management, L.P. 623 Fifth Avenue, 32nd Floor Attn: Matthew Hoffman Telephone: (212) 756-8051 Facsimile: (212) 756-1471	1,289,504	$14,571,395.20
D. E. Shaw Laminar Portfolios, L.L.C.	c/o D. E. Shaw & Co., L.P. 120 West 45th Street, 39th Floor New York, New York 10036 Telephone: (212) 478-0628 Facsimile: (212) 845-1628	4,399,733	$49,716,982.90	McCarter& English, LLP Four Gateway Center 100 Mulberry Street Newark, New Jersey 07102-4056 Attn: David F. Broderick, Esq. 973-639-2031 (direct tel.) 973-297-3815 (direct fax) dbroderick@mccarter.com

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EXHIBIT A

I. Prentice Covenants. For a period of two and one half years after the Closing Date, Prentice, and, to the extent acting on its behalf, its Representatives (defined below), shall not directly or indirectly, and Prentice shall cause any person or entity controlled by Prentice not to,

(x) without the consent of a majority of Independent Directors (defined below), in any manner acquire, agree to acquire or make any proposal to acquire, directly or indirectly, any shares of any class of securities of the Company, except that this clause shall not prohibit:

(A) the acquisition by the Prentice Buyers of up to 2,083,000 shares of Common Stock if, after giving effect thereto, Prentice, the Prentice Buyers and their respective affiliates would not have Beneficial ownership (defined below) in excess of an aggregate of 31% of the outstanding shares of Common Stock (provided, however, that this limitation shall not apply to, and the Prentice Buyers will be permitted hereunder to consummate without the consent of a majority of Independent Directors, the acquisition of Common Stock Beneficially owned by (i) the Laminar Buyers, (ii) Third Avenue Management LLC and/or (iii) Franklin Advisory Services, LLC (each of the Persons in clauses (ii) or (iii) above, an “Existing Institution”), in each case to the extent that Prentice, the Prentice Buyers or their respective affiliates would not thereafter have Beneficial ownership in excess of an aggregate of 60% of the outstanding shares of Common Stock, and provided, in the case of clauses (ii) and (iii) above: on the date of the consummation of the acquisition by the Prentice Buyers from the applicable Existing Institution (the “Prentice Consummation Date”), (x) such Existing Institution does not have Beneficial ownership of more than 105% of the number of shares of common stock of the Company it Beneficially owned on the Closing Date and (y) the applicable Existing Institution enters into an agreement with the Company to refrain from acquiring any additional Common Stock for a period of one year commencing on the Prentice Consummation Date, in form reasonable satisfactory to the Company. If the Prentice Buyers propose to make an acquisition from any Existing Institution pursuant to the preceding sentence, at the request of Prentice, the Company will give reasonable access to the relevant Existing Institution to non-public information regarding the Company and its business, subject to the execution by such Existing Institution of a confidentiality agreement with the Company, in form reasonably satisfactory to the Company.

(B) the acquisition by the Prentice Buyers of securities of the Company as a result of any stock split, stock dividend, or other distributions or recapitalizations made by the Company to holders of a class or series of such securities generally;

(D) the acquisition by the Prentice Buyers of shares of Common Stock in connection with any primary offering of such Common Stock by the Company, at a cash price per share equal to the price at which such shares were offered for sale to the public; provided, that the maximum number of shares of Common Stock that may be acquired by the Prentice Buyers pursuant to this clause (D) shall equal (1) the number of shares of Common Stock offered in such primary offering multiplied by (2) the percentage of the outstanding Common Stock Beneficially owned by Prentice, the Prentice Buyers and their respective affiliates immediately prior to such primary offering;

(y) nominate, or otherwise propose candidates for election to the Board of Directors of the Company, or vote or consent as a holder of voting securities of the Company with respect to the election or removal of directors, if the purpose or effect of such action would be to cause Independent Directors not to constitute a majority of the members of the Board of Directors of the Company or otherwise to cause the Company not to be in compliance with the corporate governance rules of the New York Stock Exchange (without regard to any “controlled company” or similar exemption); or

(z) without the prior written consent of Laminar, permit Prentice or any Prentice Buyer or any of their respective affiliates to, in any manner, acquire, agree to acquire or make any proposal to acquire, directly or indirectly, shares of Common Stock if, after giving effect thereto, Prentice, the Prentice Buyers and their respective affiliates would have Beneficial ownership in excess of an aggregate of 40% of the outstanding shares of Common Stock, provided, that no consent from Laminar shall be required (i) if Laminar, the Laminar Buyers and their respective affiliates do not Beneficially own at least 10% of the outstanding shares of Common Stock, or (ii) in respect of any acquisition pursuant to clauses (B), (C), or (D) of paragraph I(x) hereof made by Prentice, any Prentice Buyer or any of their respective affiliates.

II. Laminar Covenants. For a period of two and one half years after the Closing Date, Laminar, and, to the extent acting on its behalf, its Representatives, shall not directly or indirectly, and Laminar shall cause any person or entity controlled by Laminar not to,

(x) without the consent of a majority of Independent Directors, in any manner acquire, agree to acquire or make any proposal to acquire, directly or indirectly, shares of any class of securities of the Company, except that this clause shall not prohibit:

(A) the acquisition by the Laminar Buyers of up to 2,083,000 shares of Common Stock if, after giving effect thereto, Laminar, the Laminar Buyers and their respective affiliates would not have Beneficial ownership (defined below) in excess of an aggregate of 31% of the outstanding shares of Common Stock (provided, however, that this limitation shall not apply to, and the Laminar Buyers will be permitted hereunder to consummate without the consent of a majority of Independent Directors, the acquisition of Common Stock Beneficially owned by (i) the Prentice Buyers or (ii) any Existing Institution, in each case to the extent that Laminar, the Laminar Buyers or their respective affiliates would not thereafter have Beneficial ownership in excess of an aggregate of 60% of the outstanding shares of Common Stock, and provided, in the case of clause (ii) above: on the date of the consummation of the acquisition by the Laminar Buyers from the applicable Existing Institution (the “Laminar Consummation Date”), (x) such Existing Institution does not have Beneficial ownership of more than 105% of the number of shares of Common Stock it Beneficially owned on the Closing Date and (y) the applicable Existing Institution enters into an agreement with the Company to refrain from acquiring any additional Common Stock for a period of one year commencing on the Laminar Consummation Date, in form reasonable satisfactory to the Company. If the Laminar Buyers propose to make an acquisition from any Existing Institution or any other person or entity pursuant to the preceding sentence, at the request of Laminar, the Company will give reasonable access to the relevant Existing Institution or any other person or entity to non-public information regarding the Company and its business, subject to the execution by such Existing Institution, person or entity of a confidentiality agreement with the Company, in form reasonably satisfactory to the Company.

(B) the acquisition by the Laminar Buyers of securities of the Company as a result of any stock split, stock dividend, or other distributions or recapitalizations made by the Company to holders of a class or series of such securities generally;

(D) the acquisition by the Laminar Buyers of shares of Common Stock from the Company in connection with any primary offering of such Common Stock by the Company, at a cash price per share equal to the price at which such shares were offered for sale to the public; provided, that the maximum number of shares of Common Stock that may be acquired by the Laminar Buyers pursuant to this clause (D) shall equal (1) the number of shares of Common Stock offered in such primary offering multiplied by (2) the percentage of the outstanding Common Stock Beneficially owned by Laminar, the Laminar Buyers and their respective affiliates immediately prior to such primary offering;

(z) without the prior written consent of Prentice, permit Laminar or any Laminar Buyer or any of their respective affiliates to, in any manner, acquire, agree to acquire or make any proposal to acquire, directly or indirectly, shares of Common Stock if, after giving effect thereto, Laminar, the Laminar Buyers and their respective affiliates would have Beneficial ownership in excess of an aggregate of 40% of the outstanding shares of Common Stock, provided, that no consent from Prentice shall be required (i) if Prentice, the Prentice Buyers and their respective affiliates do not Beneficially own at least 10% of the outstanding shares of Common Stock, or (ii) in respect of any acquisition pursuant to clause (B), (C) or (D) of paragraph II(x) hereof made by Laminar, any Laminar Buyer or any of their respective affiliates.

As used in Sections I. and II. above, the term (i) “Representatives”, in the case of Prentice, means any of Prentice’s affiliates, or any of Prentice’s or its affiliates’ directors, officers, employees, investors, advisors, agents and other representatives, including, without limitation, attorneys, accountants, consultants, potential institutional sources of debt financing or financial advisors, and in the case of Laminar, means any of Laminar’s affiliates, or any of Laminar’s or its affiliates’ directors, officers, employees, members, partners, advisors, agents and other representatives, including, without limitation, attorneys, accountants, consultants, potential institutional sources of debt financing or financial advisors, (ii) “Beneficial owner” (including, with correlative meaning, the term “Beneficial ownership”) has the meaning given to that term in Rule 13d-3 under the Securities Exchange act of 1934, as amended (except that, for purposes of clauses I.(x) and (y), and II.(x) and (y), such definition shall be applied as if the phrase “within 60 days” in paragraph (d)(1)(i) of such Rule were “whether currently or at any time in the future”), (iii) “Independent Director” shall mean a member of the board of directors of the Company who qualifies as an “Independent Director” for purposes of the governance rules of the New York Stock Exchange and who would be an “Independent Director” under such rules if each of Prentice and the Prentice Buyers and Laminar and the Laminar Buyers were the listed company with respect to which independence is being determined, and (iv) “Qualifying Tender Offer” shall mean a cash tender offer for all of the outstanding shares of common stock of the Company that is (x) made to all holders of such common stock, (y) is approved and determined to be fair to the holders of common stock (other than the Buyers or their affiliates) by a majority of the Independent Directors (after receiving and taking into account an opinion as to the fairness of the offer to such holders from an investment bank) and (z) is accepted by the holders of a majority of the outstanding shares of common stock (excluding, for purposes of such calculation, any shares of common stock Beneficially owned by Laminar, the Laminar Buyers and their respective affiliates if the Qualifying Tender Offer is being initiated by a Laminar Buyer, or owned by Prentice, the Prentice Buyers and their respective affiliates if the Qualifying Tender Offer is being initiated by a Prentice Buyer). Nothing in this section shall constitute approval of any such transaction by the Board of Directors to the extent such approval is required by applicable law and/or the terms of those certain resolutions being delivered to the Buyers pursuant to Section 5.1.9 of the Securities Purchase Agreements. Other capitalized terms used but undefined in this Exhibit A shall have the meanings ascribed to them in the Investors' Rights Agreement to which this document is attached as an exhibit.