Exhibit 10.21

GMAC COMMERCIAL FINANCE LLC

1290 Avenue of the Americas

New York, New York 10104

as of February 1, 2007

PERFUMANIA, INC.

MAGNIFIQUE PARFUMES AND COSMETICS, INC.

PERFUMANIA PUERTO RICO, INC.

TEN KESEF II, INC.

251 International Parkway

Sunrise, Florida 33325

 

  Re: Amendment to Amended and Restated Revolving Credit

and Security Agreement (this “Amendment”)

Ladies and Gentlemen:

Reference is made to certain financing arrangements by and among PERFUMANIA,
INC., MAGNIFIQUE PARFUMES AND COSMETICS, INC., PERFUMANIA PUERTO RICO, INC., and
TEN KESEF II, INC. (each individually, a “Borrower” and collectively, the
“Borrowers”) and GMAC Commercial Finance LLC, as agent (in such capacity,
“Agent”) for certain institutional lenders (collectively, “Lenders”) pursuant to
certain financing agreements with Borrowers, including, but not limited to, the
Amended and Restated Revolving Credit and Security Agreement, dated as of
May 12, 2004 (as amended by the Letter re: Amendment to Revolving Credit and
Security Agreement, dated as of June 1, 2005, the Letter re: Amendment to
Revolving Credit and Security Agreement, dated as of September 30, 2006, and as
heretofore amended, supplemented or otherwise modified, the “Credit Agreement”)
entered into by and among Borrowers, Agent and Lenders. Each capitalized term
used herein and not otherwise defined shall have the meaning ascribed to it in
the Credit Agreement.

Borrowers have requested that Agent and Lenders agree to amend certain
provisions of the Credit Agreement as hereinafter set forth and, as an
accommodation to Borrowers, Agent and Lenders have agreed to make such
amendments, subject to the terms and provisions set forth in this Amendment.

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

1. Section 6.5 of the Credit Agreement (Fixed Charge Coverage Ratio) is amended
and restated in its entirety to read as follows:

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“6.5 Fixed Charge Coverage Ratio. Borrowers shall maintain, on a consolidated
basis, as at the end of each fiscal quarter (July 31, October 31, January 31 and
April 30 in any given year), a Fixed Charge Coverage Ratio not less than the
amounts set forth below for each computation period as set forth below (for the
purposes of calculating the Fixed Charge Coverage Ratio, on a non-cumulative
basis, for any given period and for only that period, landlord/tenant allowances
for such period may be offset against the gross capital expenditures for such
period so long as (1) such landlord/tenant allowances are reflected in the
financial statements provided to Agent for such period and (2) Borrowers have
provided Agent with documentation satisfactory to Agent setting forth such
landlord/tenant allowances):

 

Computation Period

  

Fixed Charge Coverage Ratio

12 months ending February 3, 2007    1.1 : 1.0 the 12 consecutive month period
ending as of the end each fiscal quarter commencing with the fiscal quarter
ending April 30, 2007    To be determined based on 85% of the projections as set
forth in Borrower’s yearly business plan, delivered pursuant to Section 9.12
hereof which shall be acceptable to Agent and Required Lenders, in their sole
discretion

2. Section 7.6 of the Credit Agreement (Capital Expenditures) is amended and
restated in its entirety to read as follows:

“7.6 Capital Expenditures. Contract for, purchase or make any other expenditures
or commitments for fixed or capital assets (including capitalized leases) in an
amount that, if added to the amounts of all other such expenditures and
commitments made by Borrowers during the twelve (12) months preceding the date
of calculation, less all landlord/tenant allowances during the twelve
(12) months preceding the date of calculation (which landlord/tenant allowances
may be offset against capital expenditures only so long as (1) such
landlord/tenant allowances are reflected in the financial statements provided to
Agent for such period and (2) Borrowers have provided Agent with documentation
satisfactory to Agent setting forth such landlord/tenant allowances), would
exceed, in the aggregate, $9,500,000 (the “CapEx Limit”).”

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3. Section 16.4 of the Credit Agreement is amended to add subsection 16.4(f) and
16.4(g) immediately after subsection 16.4(e), as follows:

“16.4(f) Notwithstanding any provision to the contrary, any Lender (an
“Assigning Lender”) may assign to one or more special purpose funding vehicles
(each, an “SPV”), which SPV shall be an affiliate of the Assigning Lender, all
or any portion of its funded Advances (without the corresponding commitment to
make such Advances), without the consent of any Person or the payment of a fee,
by execution of a written assignment agreement in a form agreed to by such
Assigning Lender and such SPV, and may grant any such SPV the option, in such
SPV’s sole discretion, to provide the Borrowers all or any part of any Advances
that such Assigning Lender would otherwise be obligated to make pursuant to this
Agreement. Such SPVs shall have all the rights which a Lender making or holding
such Advances would have under this Agreement, but no obligations. The Assigning
Lender shall remain liable for all its original obligations under this
Agreement, including its commitment to make Advances (although the unused
portion thereof shall be reduced by the principal amount of any Advances held by
an SPV). Notwithstanding such assignment, the Agent and Borrowers may deliver
notices to the Assigning Lender (as agent for the SPV) and not separately to the
SPV unless the Agent and Borrowers are requested in writing by the SPV (or its
agent) to deliver such notices separately to it. The Borrowers shall, at the
request of any Assigning Lender, execute and deliver to such Person as such
Assigning Lender may designate, a promissory note in the amount of such
Assigning Lender’s original Note to evidence the Advances of such Assigning
Lender and related SPV.

16.4(g) Nothing contained in this Agreement shall prohibit disclosures to any
trustee, administrator, collateral manager, servicer, backup servicer, lender,
rating agency or secured party of any SPV or its affiliates in connection with
the evaluation, administration, servicing of, or the reporting on, the assets or
securitization activities of such SPV or its affiliates.”

4. In consideration of the amendment to the Credit Agreement provided for
herein, Borrowers jointly and severely agree to pay a non refundable fee to
Lender in the amount of $10,000, which fee shall be fully earned and payable as
of the date hereof and shall be charged by Lender to the account of Borrowers as
of the date hereof.

5. Except as specifically set forth herein, no other changes or modifications to
the Credit Agreement are intended or implied, and, in all other respects, the
Credit Agreement shall continue to remain in full force and effect in accordance
with its terms as of the date hereof. Except as specifically set forth herein,
nothing contained herein shall evidence an amendment or other modification by
Agent and Lenders of any other provision of the Credit Agreement.

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6. The terms and provisions of this Amendment shall be for the benefit of the
parties hereto and their respective successors and assigns; no other person,
firm, entity or corporation shall have any right, benefit or interest under this
Amendment. This Amendment sets forth the entire agreement and understanding of
the parties with respect to the matters set forth herein. This Amendment cannot
be changed, modified, amended or terminated except in a writing executed by the
party or parties to be charged.

7. This Amendment may be signed in counterparts, each of which shall be an
original and all of which, when taken together, shall constitute one instrument.
In making proof of this Amendment, it shall not be necessary to produce or
account for more than one counterpart signed by the party or parties to be
charged.

[Signature Page Follows]

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Very truly yours,  

GMAC COMMERCIAL FINANCE LLC,

as Agent and Lender

  By:  

 

  Title:  

 

 

WACHOVIA BANK, NATIONAL ASSOCIATION

as Lender

  By:  

 

  Title:  

 

 

 

ACKNOWLEDGED AND AGREED:   PERFUMANIA, INC.  
MAGNIFIQUE PARFUMES AND COSMETICS, INC.   PERFUMANIA PUERTO RICO, INC.   TEN
KESEF II, INC.  

By:

 

 

 

Title:

 

 

 

of each

Date: February 1, 2007

 

Amendment as of 2/1/07