-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RPrlNjneMdfdsEZ+bjv84NoIxvB/qedhtgs6mq2ytqafXVOV9Gwk5vyqzOPYzbGv 84PJxPHRDT6PxiRsIv3XTQ== 0001341004-06-000532.txt : 20060223 0001341004-06-000532.hdr.sgml : 20060223 20060223172641 ACCESSION NUMBER: 0001341004-06-000532 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20060223 DATE AS OF CHANGE: 20060223 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: 06640365 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: THIRD AVENUE MANAGEMENT LLC CENTRAL INDEX KEY: 0001099281 IRS NUMBER: 010690900 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 622 THIRD AVENUE STREET 2: 32ND FLOOR CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2128885222 MAIL ADDRESS: STREET 1: 622 THIRD AVENUE STREET 2: 32ND FLOOR CITY: NEW YORK STATE: NY ZIP: 10017 FORMER COMPANY: FORMER CONFORMED NAME: EQSF ADVISERS INC DATE OF NAME CHANGE: 19991118 SC 13D 1 tamsc13d.htm

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, $0.10 stated value

___________________________________________

(Title of Class and Securities)

 

782233100

___________________________________________

(CUSIP Number of Class of Securities)

 

Third Avenue Management LLC

Attn: Mr. David Barse

622 Third Avenue, 32nd Floor

New York, NY 10017

(212) 888-2290

___________________________________________________________

 

(Name, Address and Telephone Number of Person Authorized to

Receive Notices and Communications)

 

February 13, 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 which is the subject of this Schedule 13D, and is filing this Schedule because of Sections 240.13d-1(e), 240.13d-1(f), or 240.13d-1(g), check the following box: x

 

* 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.

 

The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

 

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CUSIP No. 782233100

13D

___________________________________________________________________

(1) NAMES OF REPORTING PERSONS

 

Third Avenue Management LLC

I.D. No. 01-0690900

___________________________________________________________________

(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:

 

(a)

 

(b)

___________________________________________________________________

(3) SEC USE ONLY

___________________________________________________________________

(4) SOURCE OF FUNDS

 

WC

___________________________________________________________________

(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS

 

REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)

o

___________________________________________________________________

(6) CITIZENSHIP OR PLACE OF ORGANIZATION

 

Delaware

___________________________________________________________________

 

(7) SOLE VOTING POWER

 

NUMBER OF SHARES

BENEFICIALLY

3,525,810 shares

OWNED BY EACH

REPORTING PERSON

________________________________

WITH

(8) SHARED VOTING POWER

 

 

 

0 shares

 

 

________________________________

 

(9) SOLE DISPOSITIVE POWER

 

 

 

3,619,285 shares

 

 

________________________________

 

(10) SHARED DISPOSITIVE POWER

 

 

0 shares

 

___________________________________________________________________

(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

 

3,619,285 shares

___________________________________________________________________

(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES

CERTAIN SHARES o ___________________________________________________________________

(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11

 

17.4%

___________________________________________________________________

(14) TYPE OF REPORTING PERSON

 

IA

___________________________________________________________________

 

Note: All shares identified above are shares of the Company’s class of common stock, and the percentage in Row 13 above relates to such class of common stock.

 

 

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Item 1. Security and Issuer

 

The securities to which this statement on Schedule 13D relates are the common stock, $.10 stated value (the "Common Stock"), of Russ Berrie and Company, Inc., a New Jersey corporation (the "Company"), with principal executive offices at 111 Bauer Drive, Oakland, New Jersey 07436.

 

Item 2. Identity and Background

 

(a) This statement is filed by Third Avenue Management LLC ("TAM"). The executive officers of TAM are:

 

 

•

Martin J. Whitman: Co-Chief Investment Officer of TAM.

 

 

•

Curtis Jensen: Co-Chief Investment Officer of TAM.

 

 

•

David Barse: Chief Executive Officer of TAM.

 

 

•

Vincent J. Dugan: Chief Financial Officer of TAM.

 

 

•

W. James Hall: General Counsel and Secretary of TAM.

 

(b) The address of the principal business and principal office of TAM and its executive officers is:

 

622 Third Avenue, 32nd Floor, New York, NY 10017.

 

(c) The principal business of TAM, a registered investment advisor under Section 203 of the Investment Advisors Act of 1940, is to invest funds on a discretionary basis on behalf of investment companies registered under the Investment Company Act of 1940, sub-advised accounts and individually managed separate accounts. The principal occupation of each of its executive officers is to act in the capacity listed above.

 

(d) Neither TAM, nor, to the best of its knowledge, any of its executive officers has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

 

(e) Neither TAM, nor, to the best of its knowledge, any of its executive officers has, during the last five years, been 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 violation with respect to such laws.

 

(f) TAM is a limited liability company organized under the laws of the State of Delaware. Each of its executive officers is a citizen of the United States.

 

 

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Item 3. Source and Amount of Funds or Other Consideration

 

TAM is a registered investment adviser that acts as direct adviser to certain investment companies and other funds, as a sub-adviser to certain other institutions, and as an adviser to separately managed accounts. Certain portfolios of these funds have used working capital to purchase shares of Common Stock upon the orders of TAM acting as adviser or sub-adviser. Advised funds: Aegon/TransAmerica Series of the Third Avenue Value Portfolio, an investment company registered under the Investment Company Act of 1940, has expended $3,991,378.75 to acquire 256,700 shares of Common Stock; Met Investors Series Trust of the Third Avenue Small Cap Portfolio, an investment company registered under the Investment Company Act of 1940, has expended $6,877,265.81 to acquire 336,290 shares of Common Stock; Third Avenue Small Cap Value Fund, an investment company registered under the Investment Company Act of 1940, has expended $18,830,543.10 to acquire 901,300 shares of Common Stock; Third Avenue Value Portfolio of the Third Avenue Variable Series Trust, an investment company registered under the Investment Company Act of 1940, has expended $8,262,595.43 to acquire 398,300 shares of Common Stock; Touchstone Variable Series Trust-Touchstone Third Avenue Value Fund, an investment company registered under the Investment Company Act of 1940, has expended $631,450.02 to acquire 32,000 shares of Common Stock; LODH Invest - The US Expertise Fund, an offshore fund for which TAM acts as investment advisor, has expended $276,310.02 to acquire 15,000 shares of Common Stock; OFI Select-Third Avenue US Equity Fund (SICAV), an offshore fund for which TAM acts as investment advisor, has expended $276,310.02 to acquire 15,000 shares of Common Stock; various separately managed accounts for which TAM acts as investment advisor have expended a total of $27,280,806.85 to acquire 1,669,595 shares of Common Stock. TAM plans to use the available capital of these funds and accounts in any future purchases of Common Stock.

 

Item 4. Purpose of Transaction

 

TAM acquired the Common stock for investment purposes and previously reported its beneficial ownership on Schedule 13G.

TAM is considering the possible purchase of up to 5 million additional shares of Common Stock from The Russell Berrie Foundation, a New Jersey nonprofit corporation, The Estate of Russell Berrie and The Russell Berrie 2002A Trust. In this regard, TAM has entered into an agreement with the Company dated January 23, 2006 with respect to the provision by the Company of nonpublic information relating to the Company and other matters (the "Agreement"), a copy of which is filed herewith as Exhibit 1. TAM has made no decision with respect to such a purchase, and there can be no assurance that any such purchase will be proposed or consummated. If TAM were to purchase 5 million shares of Common Stock currently held by such stockholders, TAM would beneficially own, including the approximately 3.6 million shares of Common Stock currently beneficially owned by TAM, Common Stock representing approximately 41% of the outstanding Common Stock. In addition, although no decision has been made by TAM as to whether it will propose such purchase or the price or the form of consideration in any such purchase, TAM expects that it would propose in any such transaction a per share purchase price lower than the current trading price of the Common Stock on the New York Stock Exchange. The Agreement provides that TAM and its affiliates, agents, representatives or controlling persons may

 

4

 


 

not, for a period of six months from the date of the Agreement, acquire or agree to acquire, directly or indirectly, beneficial ownership in excess of 5% of any class of securities of the Company or any of its affiliates in addition to the securities held by TAM on January 23, 2006, the date of the Agreement. As a result, any such purchase or agreement to purchase such Common Stock owned by these stockholders would require the consent of the Company. There can be no assurance that the Company would consent to any such purchase of Common Stock. In the event TAM were to acquire the Common Stock from these stockholders, TAM intends to seek, in connection with any such purchase, a change in the current membership of the Board of Directors of the Company and would expect to replace the directors of the Company who serve as trustees of The Russell Berrie 2002A Trust or The Russell Berrie Foundation.

TAM has had discussions with another stockholder of the Company with respect to a possible purchase of Common Stock, and has worked with such other shareholder in meeting with representatives of the Company and in connection with reviewing and evaluating information with respect to the Company. However, TAM has no agreement, arrangement or understanding with such other shareholder with respect to the Common Stock or the Company and there can be no assurance that any such agreement, arrangement or understanding will be reached, or that any transaction between TAM and such other stockholder relating to the Common Stock or the Company will be proposed or consummated.

TAM may also in the future contact the Company from time to time to express TAM's views regarding the business and operations and other matters related to the Company and may seek to influence the Company with respect to actions under consideration by the Company.

The foregoing represents the transactions and actions currently under consideration by TAM with respect to the Common Stock. The transactions and actions currently under consideration are subject to change at any time. Among other things, subject to the terms of the Agreement, TAM may seek to acquire additional shares of Common Stock in the open market, in private transactions other than as set forth above or otherwise, may seek to sell all or a portion of the Common Stock currently held by it or may seek to propose or consummate a transaction with respect to the Common Stock or the Company other than as set forth above.

Except as set forth above, TAM has no present plans or proposals which relate to or would result in any of the actions specified in clauses (a) through (j) of Item 4 of Schedule 13D.

Item 5. Interest in Securities of the Issuer

 

(a-b)     The aggregate number and percentage of shares of Common Stock to which this Schedule 13D relates is 3,619,285 shares of the common stock of the Company, constituting approximately 17.4% of the 20,824,480 shares outstanding.

 

A. Aegon/TransAmerica Series of the Third Avenue Value Portfolio

(a) Amount beneficially owned: 256,700 shares.

(b) Percent of class: 1.2%

(c) Number of shares as to which TAM has:

(i) Sole power to vote or direct the vote: 256,700

(ii) Shared power to vote or direct the vote: 0

 

5

 


 

 

(iii) Sole power to dispose or direct the disposition: 256,700

(iv) Shared power to dispose or direct the disposition: 0

 

B. Met Investors Series Trust of the Third Avenue Small Cap Portfolio

(a) Amount beneficially owned: 336,290 shares.

(b) Percent of class: 1.6%

(c) Number of shares as to which TAM has:

(i) Sole power to vote or direct the vote: 336,290

(ii) Shared power to vote or direct the vote: 0

(iii) Sole power to dispose or direct the disposition: 336,290

(iv) Shared power to dispose or direct the disposition: 0

 

C. Third Avenue Small Cap Value Fund

(a) Amount beneficially owned: 901,300 shares.

(b) Percent of class: 4.3%

(c) Number of shares as to which TAM has:

(i) Sole power to vote or direct the vote: 901,300

(ii) Shared power to vote or direct the vote: 0

(iii) Sole power to dispose or direct the disposition: 901,300

(iv) Shared power to dispose or direct the disposition: 0

 

D. Third Avenue Value Portfolio of the Third Avenue Variable Series Trust

(a) Amount beneficially owned: 398,300 shares.

(b) Percent of class: 1.9%

(c) Number of shares as to which TAM has:

(i) Sole power to vote or direct the vote: 398,300

(ii) Shared power to vote or direct the vote: 0

(iii) Sole power to dispose or direct the disposition: 398,300

(iv) Shared power to dispose or direct the disposition: 0

 

E. Touchstone Variable Series Trust-Touchstone Third Avenue Value Fund

(a) Amount beneficially owned: 32,000 shares.

(b) Percent of class: 0.2%

(c) Number of shares as to which TAM has:

(i) Sole power to vote or direct the vote: 32,000

(ii) Shared power to vote or direct the vote: 0

(iii) Sole power to dispose or direct the disposition: 32,000

(iv) Shared power to dispose or direct the disposition: 0

 

F. LODH Invest - The US Expertise Fund

(a) Amount beneficially owned: 15,000 shares.

(b) Percent of class: 0.1%

(c) Number of shares as to which TAM has:

(i) Sole power to vote or direct the vote: 15,000

(ii) Shared power to vote or direct the vote: 0

(iii) Sole power to dispose or direct the disposition: 15,000

 

6

 


 

 

(iv) Shared power to dispose or direct the disposition: 0

 

G. OFI Select-Third Avenue US Equity Fund (SICAV)

(a) Amount beneficially owned: 10,100 shares.

(b) Percent of class: 0.05%

(c) Number of shares as to which TAM has:

(i) Sole power to vote or direct the vote: 10,100

(ii) Shared power to vote or direct the vote: 0

(iii) Sole power to dispose or direct the disposition: 10,100

(iv) Shared power to dispose or direct the disposition: 0

 

H. Third Avenue Management Separately Managed Accounts

(a) Amount beneficially owned: 1,669,595 shares.

(b) Percent of class: 8.0%

(c) Number of shares as to which TAM has:

(i) Sole power to vote or direct the vote: 1,576,120

(ii) Shared power to vote or direct the vote: 0

(iii) Sole power to dispose or direct the disposition: 1,669,595

(iv) Shared power to dispose or direct the disposition: 0

 

(c) Third Avenue Management Separately Managed Accounts sold 13,100 shares of Common Stock at a price of $11.10 per share on December 28, 2005; 250 shares at $11.40 per share on December 30, 2005; 2000 shares at $11.97 per share on January 9, 2006; 375 shares at $12.02 per share on January 30, 2006; 225 shares at $12.50 per share on February 9, 2006; and 100 shares at $12.53 per share on February 10, 2006. All such sales were effected on the New York Stock Exchange.

 

(d) No other person is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, such Common Stock other than the funds and accounts identified above.

 

(e) Not applicable.

 

Item 6.

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

 

On January 23, 2006, TAM entered into the Agreement with the Company. The Agreement provides that, for six months from its date, TAM and its affiliates, directors, officers, employees, advisors, agents, representatives and controlling persons (collectively, "Representatives") may not acquire or agree to acquire, directly or indirectly, any property of the Company and its affiliates, or "beneficial ownership" (within the meaning of the New Jersey Shareholder Protection Act) in excess of 5% of any class of securities of the Company or any of its affiliates, in addition to securities held by TAM as of the date of the agreement (but excluding debt securities), or propose to enter into any merger, consolidation, recapitalization, business combination, partnership, joint venture or other similar transaction involving the Company or any of its affiliates. For twelve months, TAM has agreed that neither TAM nor its Representatives may make or in any way

 

7

 


 

participate in a solicitation of proxies to vote, or seek to advise or influence any person with respect to the voting of any voting securities of the Company or its affiliates. The Agreement also contemplates the provision by the Company to TAM of certain non-public information regarding the Company, to be used by TAM solely in evaluating a possible negotiated transaction between TAM, acting on behalf of investment advisory clients, and the Company or one or more of such stockholders regarding an acquisition of all or a portion of the assets or shares of the Company.

 

Item 7. Material to be Filed as an Exhibit

 

 

Exhibit 1: Letter agreement, dated January 23, 2006, between TAM and the Company.

 

 

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SIGNATURES

 

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

Dated: February 23, 2006

 

THIRD AVENUE MANAGEMENT LLC

 

By /s/ David M. Barse

_______________________________

David M. Barse

Chief Executive Officer

 

 

 

 

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 EX-99 2 ex1.txt EXHIBIT 1 Exhibit 1 January 23, 2006 Third Avenue Management LLC 622 Third Avenue, 32nd Floor New York, NY 10017 Attn: Michael Lehmann Dear Michael, In connection with a possible negotiated transaction between Third Avenue Management LLC, acting on behalf of certain investment advisory clients ("you"), and (a) the Company or (b) one or more members of its Principal Stockholder Group (as hereinafter defined) involving your acquisition (the "Transaction") of all or a portion of the shares or assets of Russ Berrie and Company, Inc. (together, with its subsidiaries, the "Company"), you have requested the right to review certain non-public information regarding the Company. In consideration of, and as a condition to, the Company's furnishing to you or consenting to the Principal Stockholder Group's furnishing to you such information and any other information (whether in oral or written form, electronically stored or otherwise) delivered by or on behalf of the Company or the Principal Stockholder Group to you or any of your affiliates, directors, officers, employees, advisors, agents, representatives or "controlling persons," (within the meaning of the Securities Exchange Act of 1934, as amended (the "1934 Act") (such persons for either you or the Company being herein referred to collectively as "Representatives" and such information being herein referred to as "Evaluation Material"), the Company hereby requests your agreement as follows: 1. You and your Representatives (i) will use the Evaluation Material solely for the purpose of evaluating a possible Transaction and (ii) will keep the Evaluation Material strictly confidential and will not (except as required by applicable law, regulation or legal process, and only after compliance with Paragraph 3 below), without the Company's prior written consent, disclose any information in the Evaluation Material, except that the Evaluation Material (or portions thereof) may be disclosed to those of your Representatives who need to know such information for the purpose of evaluating a possible Transaction (it being understood that, prior to such disclosure, your Representatives will be informed of the confidential nature of the Evaluation Material and shall agree to be bound by this Agreement). You agree to be responsible for any breach of this Agreement by your Representatives. 2. As used in this Agreement: (a) The term "Evaluation Material" does not include any information which (i) at the time of disclosure or thereafter is generally known by the public (other than as a result of its disclosure by you or your Representatives), (ii) was or becomes available to you on a non-confidential basis from a person not bound by a confidentiality agreement with the Company or its Representatives and not otherwise prohibited from transmitting the information to you or (iii) is independently developed by you without violating your obligations hereunder. (b) The term "person" shall be broadly interpreted to include, without limitation, any corporation, company, joint venture, partnership or individual. (c) The term "Principal Stockholder Group" means, collectively, The Russell Berrie Foundation, a New Jersey Nonprofit Corporation, The Estate of Russell Berrie, and The Russell Berrie 2002A Trust. 3. In the event that you receive a request or are required to disclose all or any part of the information contained in the Evaluation Material pursuant to the terms of a valid and effective subpoena or order issued by a court of competent jurisdiction or a federal, state or local governmental or regulatory body or pursuant to a civil investigative demand or similar judicial process, you agree to (i) promptly notify the Company of the existence, terms and circumstances surrounding such a request or requirement, (ii) consult with the Company on the advisability of, and cooperate, at the Company's expense, with the Company as it may reasonably request in, taking legally available steps to resist or narrow such request or requirement, and (iii) if disclosure of such information is required, disclose only such information which you reasonably believe is legally required to be disclosed and exercise your reasonable efforts, at the Company's expense, to obtain an order or other reliable assurance that confidential treatment will be accorded to such information. 4. Unless otherwise required by law in the opinion of your counsel, neither you nor your Representatives will, without the Company's prior written consent, announce or disclose to any person either the fact that discussions or negotiations are taking place concerning a possible Transaction, or any of the terms, conditions or other facts with respect to any such possible Transaction, including, without limitation, the status thereof and the fact that the Evaluation Material has been made available to you. You will provide the Company with reasonable advance notice of any announcement or disclosure referred to in this paragraph. 5. Until the earlier of the consummation by you of a Transaction with the Company and one year from the date of this Agreement, you agree not to, directly or indirectly, (A) solicit for purposes of employment, offer to hire, entice away, or enter into any contract with any employee of the Company, or otherwise solicit, induce or otherwise encourage any such person to discontinue, cancel or refrain from entering into any relationship (contractual or otherwise) with the Company (other than through general advertising or other general solicitation not targeted to the Company's employees) or (B) solicit or seek to do business with, or enter into any contractual relationship with, any supplier to or contractor of the Company which is identified by you through the Evaluation Material or your consideration of a possible Transaction or otherwise solicit, induce or otherwise encourage any such person to discontinue, cancel or refrain from entering into any relationship (contractual or otherwise) with the Company, without in either case the Company's prior written consent. 6. Unless otherwise agreed to by the Company in writing, all (i) requests for information, (ii) requests for facility tours or management meetings, and (iii) discussions or questions regarding procedures, will be submitted or directed to Mr. Andrew Gatto, President and CEO, at the Company. Neither you nor your Representatives will contact any supplier, customer or other person having a business relationship with the Company with regard to the Company or a possible Transaction, without the Company's prior written consent. Notwithstanding the foregoing, you may request and receive information from any member of the Principal Stockholder Group. 7. For a period of six months from the date of this Agreement, you and your Representatives shall not, directly or indirectly, and you shall cause any person or entity controlled by you not to, without the prior written consent of the Board of Directors of the Company, (i) in any manner acquire or agree to acquire, directly or indirectly, any property of the Company or any of its affiliates or Beneficial ownership (defined below) in excess of 5% of any class of securities of the Company or any of its affiliates (in addition to any securities held by you at the time of this Agreement), (ii) propose to enter into, directly or indirectly, any merger, consolidation, recapitalization, business combination, partnership, joint venture or other similar transaction involving the Company or any of its affiliates, (iii) make, or in any way participate in, any "solicitation" of "proxies" (as such terms are used in the proxy rules of the Securities and Exchange Commission) to vote, or seek to advise or influence any person with respect to the voting of any voting securities of the Company or any of its affiliates (the restriction contained in this section 7(iii) is to remain binding for a period of twelve months from the date of this agreement). As used in this Paragraph 7, (i) the term "Beneficial owner" (including, with correlative meaning, the term "Beneficial ownership") has the meaning given to that term in the New Jersey Shareholders Protection Act, Title 14, Sections 10A-1 et. seq. Nothing contained in or to be inferred from this Agreement is intended to or shall prohibit, bar or limit your right, at any time and whether acting alone or together with others, to purchase any instruments evidencing payment obligations of the Company, including by way of illustration but not limitation notes or loans owing by the Company to banks or other lenders. 8. In addition, you hereby acknowledge that you are aware, and that you will advise your Representatives who receive the Evaluation Material, that the United States securities laws prohibit any person who has material, non-public information concerning the matters which are the subject of this Agreement from purchasing or selling securities of the Company (and options, warrants and rights relating thereto) and from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person including, without limitation any of your Representatives, is likely to purchase or sell such securities. 9. This Agreement does not constitute or create any obligation of the Company to provide any Evaluation Material or other information to you, but merely defines the duties and obligations of you and your Representatives with respect to the Evaluation Material to the extent it may be disclosed or made available. Under no circumstances is the Company obligated to disclose or make available any information, including any Evaluation Material, which it, in its sole and absolute discretion, determines not to disclose. You understand and acknowledge that neither the Company nor any of its affiliates or Representatives is making any representation or warranty, express or implied, as to the accuracy or completeness of the Evaluation Material or any other information provided to you by the Company or any of its affiliates or Representatives. Neither the Company nor any of its respective affiliates or Representatives, nor any of our respective officers, directors, employees, agents or controlling persons (within the meaning of the 1934 Act) shall have any liability to you or any other person (including, without limitation, any of your Representatives) resulting from your use of the Evaluation Material. 10. You agree that unless and until a definitive agreement with respect to any Transaction has been executed and delivered, none of the Company, any member of the Principal Stockholder Group or you will be under any legal obligation of any kind whatsoever with respect to such a Transaction by virtue of (i) this Agreement or (ii) any written or oral expression with respect to such a Transaction by any of the directors, officers, employees, agents, advisors or representatives of the Company, any member of the Principal Stockholder Group or you, except, in the case of this letter, for the matters specifically agreed to herein. 11. You agree that the Company has not granted you any license, copyright, or similar right with respect to any of the Evaluation Material or any other information provided to you by the Company or the Principal Stockholder Group or their respective affiliates or Representatives. 12. If you determine that you do not wish to proceed with the Transaction, you will promptly advise the Company in writing of that decision, In that case, or in the event that (i) a Transaction is not consummated by you or (ii) at any time the Company requests, you will promptly, at the Company's option, (a) deliver to us all of the Evaluation Material, including all copies, reproductions, summaries, analyses or extracts thereof or based thereon in your possession or in the possession of any of your Representatives or (b) destroy all Evaluation Material in your possession or in the possession of any of your Representatives (such destruction to be certified by you); provided, however, that with respect to any analyses, compilations, studies or other documents prepared by you or for your use containing or reflecting any Evaluation Material, you may promptly destroy all copies thereof in lieu of returning such items to the Company; provided, further, that you and your Representatives may retain all Evaluation Material residing in your respective automatic backup systems and/or any Evaluation Material that you reasonably believe must be retained in order to comply with regulatory or statutory requirements. 13. You acknowledge that remedies at law may be inadequate to protect the Company against any actual or threatened breach of this Agreement by you or by your Representatives and, without prejudice to the rights and remedies otherwise available to the Company, you agree to the granting of temporary, preliminary and permanent injunctive relief in the Company's favor without proof of actual damages and to waive, and to cause your Representatives to waive, any requirement for the securing or posting of any bond in connection with such remedy. 14. The validity and interpretation of this Agreement shall be governed by, construed and enforced in accordance with, the laws of the State of New York applicable to agreements made and to be fully performed therein (excluding conflicts of laws rules). You irrevocably (i) submit (and waive any objection or defense) to the personal jurisdiction of any court of the State of New York in Manhattan or the United State District Court for the Southern District of New York for the purpose of any suit, action, or other proceeding arising out of or relating to this Agreement, or any of the agreements or transactions contemplated hereby (each a "Proceeding"), (ii) agree that all claims in respect a any Proceeding may be heard and determined in any such court, and (iii) waive, to the fullest extent permitted by law, any immunity you have acquired, or hereafter may acquire, from jurisdiction of any such court or from any legal process therein, and (iv) agree not to commence any Proceeding other than in any such court, and waive, to the fullest extent permitted by applicable law any claim that any such Proceeding is brought in an improper or inconvenient forum. 15. The benefits of this Agreement inure to the respective successors and assigns of the parties hereto and of the indemnified parties hereunder and their successors and assigns and Representatives, and the obligations and liabilities assumed in this Agreement by the parties hereto shall be binding upon their respective successors and assigns. 16. If it is found in a final judgment by a court of competent jurisdiction (not subject to further appeal) that any term or provision hereof is invalid or unenforceable, (i) the remaining terms and provisions hereof shall be unimpaired and shall remain in full force and effect and (ii) the invalid or unenforceable provision or term shall be replaced by a term or provision that is valid and enforceable and that comes closest to expressing the intention of such invalid or unenforceable term or provision. 17. This Agreement embodies the entire agreement and understanding of the parties hereto and supersedes any and all prior agreements, arrangements and understandings relating to the matters provided for herein. No alteration, waiver, amendment, change or supplement hereto shall be binding or effective unless the same is set forth in writing signed by a duly authorized representative of each party and may be modified or waived only by a separate letter executed by the Company and you expressly so modifying or waiving such Agreement. 18. For the convenience of the parties, any number of counterparts of this Agreement may be executed by the parties hereto. Each such counterpart shall be, and shall be deemed to be, an original instrument, but all such counterparts taken together shall constitute one and the same Agreement. 19. This Agreement shall terminate and be of no further force and effect twelve months from the date hereof. This Agreement is being delivered to you in duplicate. Kindly execute and return one copy of this letter which will constitute our Agreement with respect to the subject matter of this letter. Very truly yours, RUSS BERRIE AND COMPANY, INC. By: /s/ Andrew Gatto ------------------------- Name: Andrew Gatto Title: President and CEO Confirmed and Agreed to this ____ day of January 2006 THIRD AVENUE MANAGEMENT LLC By: ---------------------------- Name: Title: -----END PRIVACY-ENHANCED MESSAGE-----