Exhibit 10.17


 


WAIVER AND THIRD AMENDMENT TO FINANCING AGREEMENT


 


THIS WAIVER AND THIRD AMENDMENT TO FINANCING
AGREEMENT (this “Amendment”) is entered into as of January 25, 2008, by
and among BODY SHOP OF AMERICA, INC., a Florida corporation (“Body Shop”),
CATALOGUE VENTURES, INC., a Florida corporation (“CV,” CV, together with
Body Shop and each other Person who becomes a borrower under the Financing
Agreement, the “Borrowers”), BODY CENTRAL ACQUISITION CORP., a Delaware
corporation (“Parent”), RINZI AIR, L.L.C., a Florida limited liability
company (“Rinzi,” Rinzi, together with Parent and each other Person who
becomes a guarantor under the Financing Agreement, the “Guarantors,”
such Guarantors, together with the Borrowers, the “Loan Parties”), DYMAS
FUNDING COMPANY, LLC, as administrative agent (in such capacity, “Administrative
Agent”) for the Lenders, and the financial institutions from time to time
party thereto as Lenders.


 


W I T N E S S E T H:


 


WHEREAS, Loan Parties, Administrative Agent and
Lenders have entered into that certain Financing Agreement dated as of October
1, 2006 (as heretofore amended, restated, amended and restated, supplemented or
otherwise modified and in effect from time to time, the “Financing Agreement”);


 


WHEREAS, the Designated Defaults (as such term is
defined herein below) have occurred and are continuing under the Financing
Agreement;


 


WHEREAS, Loan Parties have requested that
Administrative Agent and Lenders (i) waive the Designated Defaults and the
right to impose any default rate of interest on the Obligations as a result
thereof, and (ii) amend the Financing Agreement; and


 


WHEREAS, Administrative Agent and Lenders have
agreed to (i) waive the Designated Defaults and the right to impose any default
rate of interest on the Obligations as a result thereof, and (ii) amend the
Financing Agreement, in each case on the terms and subject to the conditions
hereinafter set forth;


 


NOW, THEREFORE, in consideration of the mutual
agreements, provisions and covenants contained herein, the parties agree as
follows:


 


1.                                      Defined Terms.  Capitalized terms used but not defined herein
shall have the meanings ascribed to them in the Financing Agreement, as amended
hereby.


 


2.                                      Waiver of Designated Defaults; Waiver of Right to Request Default Interest.  Effective as of the date
hereof, upon satisfaction of the conditions precedent set forth in Section 4
below, and in reliance upon the representations and warranties of each Loan
Party set forth herein and in each of the Loan Documents, Administrative Agent
and Lenders hereby waive (a) each of the Defaults and Events of Default
set forth in Exhibit A hereto (each a “Designated Default” and, collectively,
the “Designated Defaults”); and (b) the right to request that interest accrue
at the Default Rate pursuant to Section 2.04(c) of the Financing Agreement on
any


 


EXHIBIT C TO THIS WAIVER AND THIRD AMENDMENT TO
FINANCING AGREEMENT CONTAINS MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. 
SUCH OMITTED MATERIAL IS INDICATED BY “[***].”  ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 PROMULGATED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.


 

















 


Obligations as a result
of the occurrence and continuance of the Designated Defaults for any period
prior to the Effective Date.


 


3.                                      Amendments to Financing Agreement.  Effective as of the date hereof, upon
satisfaction of the conditions precedent set forth in Section 4 below, and in
reliance upon the representations and warranties of each Loan Party set forth
herein and in each of the Loan Documents, the Financing Agreement is hereby
amended as follows:


 


3.1.                            Section 1.01 of the Financing
Agreement is hereby amended by inserting the following defined terms therein in
the appropriate alphabetical order:


 


“Cash Flow Forecast” means the
Initial Cash Flow Forecast, as updated from time to time pursuant to Section
7.01(a)(iv)(D).


 


“Individual Investors” means Jerrold
Rosenbaum, Beth Angelo, Curtis Hill and Laurie E. Bauguss, in each case an
individual.


 


“Initial Cash Flow Forecast” means
the Cash Flow Forecast prepared by the Borrowers and reviewed by Richter
Consulting and attached hereto as Exhibit I.


 


“Investor Demand Notes” means (i)
that certain Demand Promissory Note dated January 23, 2008, in the original
principal amount of $333,333.33, issued by Loan Parties in favor of MG Global
Asset Management Holdings Corp., (ii) that certain Demand Promissory Note dated
January 23, 2008, in the original principal amount of $333,333.34, issued by
Loan Parties in favor of Sponsor, and (iii) that certain Demand Promissory Note
dated January 23, 2008, in the original principal amount of $333,333.33, issued
by Loan Parties in favor of Katmandu Investment Company, LLC.


 


“Investor Guarantors” means Sponsor,
Co-Sponsor and/or its Affiliates and the Individual Investors.


 


“Investor Guaranty” means that
certain Guaranty dated as of the Third Amendment Effective Date executed by
each of the Investor Guarantors in favor of Administrative Agent for the
benefit of the Revolving Loan Lenders.


 


“Investor Letter of Credit” has the
meaning ascribed to the term “Letters of Credit” in the Investor Guaranty.


 


“Third Amendment” means that certain
Waiver and Third Amendment to this Financing Agreement dated as of January 25,
2008, among Administrative Agent, Lenders, Borrowers, Parent and Rinzi Air,
L.L.C., a Florida limited liability company.


 


“Third Amendment Effective Date”
means January 25, 2008.


 


2

















 


3.2.                            Section 1.01 of the Financing Agreement is hereby amended by deleting
the definition of the term “Applicable Margin”
set forth therein in its entirety and substituting the following language
therefor:


 


“Applicable Margin” means, for any
day, the rate per annum set forth below, it being understood and agreed that
the Applicable Margin for (i) Revolving Loans that are Base Rate Loans shall be
the percentage set forth under the column “Base Rate Margin for Revolving Loans”,
(ii) Revolving Loans that are LIBOR Loans shall be the percentage set forth
under column “LIBOR Margin for Revolving Loans and Letter of Credit Fee”, (iii)
portions of Term Loan A that are Base Rate Loans shall be the percentage set
forth under the column “Base Rate Margin for Term Loan A”, (iv) portions of
Term Loan A that are LIBOR Loans shall be the percentage set forth under the
column “LIBOR Margin for Term Loan A”, (v) portions of Term Loan B that are
Base Rate Loans shall be the percentage set forth under the column “Base Rate
Margin for Term Loan B”, (vi) portions of Term Loan B that are LIBOR Loans
shall be the percentage set forth under the column “LIBOR Margin for Term Loan
B”, and (vii) the Letter of Credit Fee shall be the percentage set forth under
the column “LIBOR Margin for Revolving Loans and Letter of Credit Fee”:


 


	
  Base Rate

  Margin for Revolving

  Loans

  	
   

  	
  LIBOR Margin for

  Revolving Loans and

  Letter of Credit Fee

  	
   

  	
  Base Rate

  Margin for

  Term Loan A

  	
   

  	
  LIBOR

  Margin for

  Term Loan A

  	
   

  
	
  3.25%

  	
   

  	
  4.75%

  	
   

  	
  3.25%

  	
   

  	
  4.75%

  	
   

  



 


	
  Base Rate Margin for

  Term Loan B

  	
   

  	
  LIBOR Margin for Term Loan B

  	
   

  
	
  3.75%

  	
   

  	
  5.25%

  	
   

  



 


3.3.                            Section 1.01 of the Financing
Agreement is hereby amended by deleting the definition of the term “Borrowing
Base” set forth therein in its entirety and substituting the following language
therefor:


 


“Borrowing Base” means (i) at any
time during the period commencing on the Third Amendment Effective Date through
and including the last day of the fiscal year of Borrowers ending on or about
December 31, 2009, an amount equal to $11,000,000, and (ii) at any time
thereafter, 70% of Eligible Inventory (as defined in the Borrowing Base
Certificate) at such time.


 


3

















 


3.4.                            Section 1.01 of the Financing
Agreement is hereby amended by deleting the definition of the term “Guarantor”
set forth therein in its entirety and substituting the following language
therefor:


 


“Guarantor” means each Person (other
than any of the Investor Guarantors) which guarantees, pursuant to Section
7.01(j) or otherwise, all or any part of the Obligations, including,
without limitation, upon consummation of the Body Shop Acquisition and
effectiveness of the Closing Date Joinder Agreement, the Parent..


 


3.5.                            Section 1.01 of the Financing
Agreement is hereby amended by deleting the definition of the term “Loan
Documents” set forth therein in its entirety and substituting the following
language therefor:


 


“Loan Document” means this Agreement,
any Guaranty, the Investor Guaranty, any Security Agreement, any Pledge
Agreement, any Mortgage, any Letter of Credit Application, the Fee Letter, any
UCC Filing Authorization Letter, any deposit account control agreement and any
other agreement, instrument, and other document executed and delivered pursuant
hereto or thereto or otherwise evidencing, pertaining to or securing any Loan,
any Letter of Credit Obligation or any other Obligation.


 


3.6.                            Section 1.01 of the Financing
Agreement is hereby amended by deleting the definition of the term “Material
Adverse Effect” set forth therein in its entirety and substituting the
following language therefor:


 


“Material Adverse Effect” means a
material adverse effect on any of (i) the operations, business, assets,
properties or condition (financial or otherwise) of the Loan Parties taken as a
whole, (ii) the ability of the Loan Party to perform in any material respect
any of its obligations under any Loan Document to which it is a party, (iii)
the legality, validity or enforceability of this Agreement or any other Loan
Document, (iv) the rights and remedies of Administrative Agent or any Lender
under any Loan Document, or (v) the validity, perfection or priority of a Lien
in favor of the Administrative Agent for the benefit of the Administrative
Agent and the Lenders on any of the Collateral. Notwithstanding the foregoing,
and for the avoidance of doubt, the parties hereto hereby acknowledge and agree
that the change of terms of, or termination of, any trade support (including,
without limitation, any factoring arrangements), and the results of such
actions, shall not constitute a Material Adverse Effect.


 


3.7.                            Section 2.06(a) of the Financing
Agreement is hereby deleted in its entirety and the following language is
hereby substituted therefor:


 


(a)                                 Fees.  The Borrowers shall pay (i) to Administrative
Agent the fees specified in the Fee Letter, in the amounts and at the times
specified therein; and (ii) to Administrative Agent for the account of each
Lender (other than a Lender for so long as it is a Defaulting Lender), a fee
(with respect to each Lender, such Lender’s “Third Amendment Fee”) in an
amount equal to 0.5% of the sum of (i) such Lender’s Revolving Loan Commitment,
plus (ii) the aggregate outstanding principal balance of such Lender’s
Term Loans, in each case determined as of the Third Amendment Effective Date.
Each 


 


4

















 


Lender’s
Third Amendment Fee shall be non-refundable for any reason and fully earned as
of the Third Amendment Effective Date and payable as follows: (x) fifty percent
(50%) of such fee shall be payable on the Third Amendment Effective Date, and
(y) fifty percent (50%) of such fee shall be payable on September 30, 2008.


 


3.8.                            Section 6.01(g)(i) of the Financing
Agreement is hereby amended by deleting the last sentence thereof in its
entirety and substituting the following language therefor:


 


Since the last day of the fiscal year of Parent and
its Subsidiaries ended on or about December 31, 2007, no event or development
has occurred that has had or could have, either individually or in the aggregate,
a Material Adverse Effect.


 


3.9.                            Section 6.01(s) of the Financing
Agreement is hereby deleted in its entirety and the following language is
hereby substituted therefor:


 


(s)                                   The proceeds of the Loans shall be used to (a) refinance the existing
indebtedness under the Existing Credit Facility, (b) finance in part the Body
Shop Acquisition, (c) pay fees and expenses incurred in connection with the
Related Transactions, (d) in the case of proceeds of Revolving Loans funded on
the Third Amendment Effective Date, repay then outstanding principal and
accrued and unpaid interest under the Investor Demand Notes, and (e) fund
working capital and other general corporate purposes of the Borrowers and their
respective Subsidiaries, including Permitted Acquisitions.


 


3.10.                     Section 7.01(a)(xiv)
of the Financing Agreement is hereby deleted in its entirety and the following
language is hereby substituted therefor:


 


(xiv) (A) for the week ending January 26,
2008, and each week ending thereafter, no later than Tuesday of the immediately
following week, a detailed summary of Body Shop’s total and same store sales
for such week, each such summary to be in form reasonably satisfactory to
Administrative Agent; (B) for the week ending January 26, 2008, and each week
ending thereafter, no later than Tuesday of the immediately following week, a
summary of Borrowers’ cash receipts and cash expenditures during such week, and
the balance of all of Borrowers’ cash as of the last day of such week, together
with a comparison of such cash receipts and expenditures to those set forth in
the most recent Cash Flow Forecast with respect to such week delivered pursuant
to clause (D) below, each such summary and comparison to be in form
reasonably satisfactory to Administrative Agent and, in the case of each such
summary delivered with respect to any week ending on or prior to May 2, 2008,
reviewed by Richter Consulting; (C) for the fiscal month ending on or about
January 31, 2008, and each fiscal month ending thereafter, as soon as possible,
and in any event within ten (10) Business Days after the end of each such
fiscal month, a detailed summary of Borrowers’ preliminary aggregate gross
profit margins as presented by the merchandising system and estimated gross
month-end inventory values, each such summary to be in form reasonably
satisfactory to Administrative Agent; and (D) for the week ending February 2,
2008 (and the immediately succeeding twelve week period), and for every other
week ending thereafter (and for the immediately succeeding twelve week period),
no later than 


 


5

















 


Wednesday of the immediately following week, an
updated Cash Flow Forecast for such thirteen week period prepared on a week to
week basis, each such updated Cash Flow Forecast to be in form reasonably
satisfactory to Administrative Agent and, in the case of each such Cash Flow
Forecast delivered for any thirteen week period commencing with any week ending
on or prior to May 3, 2008, reviewed by Richter Consulting.


 


3.11.                     Section 7.02(f)(iv) of the Financing
Agreement is hereby amended by inserting the following language therein
immediately before the first word appearing at the beginning of such Section:


 


at any time following delivery of the financial
statements and related Compliance Certificate to Administrative Agent and
Lenders with respect to the fiscal quarter of Parent and its Subsidiaries
ending on or about March 31, 2010,


 


3.12.                     Section 7.02(f)(vii)
of the Financing Agreement is hereby amended by inserting the following
language therein immediately before the first word appearing at the beginning
of such Section:


 


at any time following delivery of the financial
statements and related Compliance Certificate to Administrative Agent and
Lenders with respect to the fiscal quarter of Parent and its Subsidiaries
ending on or about March 31, 2010,


 


3.13.                     Section 7.02(h) of the Financing
Agreement is hereby amended by deleting clause (ii) thereof in its entirety and
substituting the following language therefor:


 


(ii) (x) transactions with another Loan
Party or Affiliate permitted pursuant to another provision of this Agreement,
(y) the repayment of the then outstanding principal and accrued and unpaid
interest under the Investor Demand Notes on the Third Amendment Effective Date,
and (z) payments to each of the Investor Guarantors to reimburse such Investor
Guarantor for reasonable out-of-pocket fees and expenses incurred by such
Investor Guarantor in connection with such Investor Guarantor’s Investor Letter
of Credit, provided, that the aggregate amount of all of such payments made in
respect of this subparagraph (z) does not exceed $100,000 in any Fiscal Year.


 


3.14.                     Section 7.03 of the Financing
Agreement is hereby deleted in its entirety and the following language is
hereby substituted therefor:


 


Section 7.03 
Financial Covenants.  So
long as any principal of or interest on any Loan, Reimbursement Obligation,
Letter of Credit Obligation or any other Obligation (whether or not due) shall
remain unpaid or any Lender shall have any Commitment hereunder, each Loan
Party shall not, unless the Required Lenders shall otherwise consent in
writing:


 


6

















 


(a)                                 Senior Leverage Ratio.  Permit the Senior Leverage Ratio as of the
end of any period of four (4) consecutive fiscal quarters of the Parent and its
Subsidiaries ending on or about any date set forth below forth to be greater
than the applicable ratio set forth below:


 


	
  Fiscal Quarter End

  	
   

  	
  Senior Leverage Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2009

  	
   

  	
  4.45

  	
   

  
	
  June 30, 2009

  	
   

  	
  3.78

  	
   

  
	
  September 30, 2009

  	
   

  	
  3.51

  	
   

  
	
  December 31, 2009

  	
   

  	
  3.21

  	
   

  
	
  March 31, 2010 and each
  fiscal quarter thereafter

  	
   

  	
  1.75

  	
   

  



 


(b)                                 Fixed Charge Coverage Ratio.  Permit the Fixed Charge Coverage Ratio for
any period of four (4) consecutive fiscal quarters of the Parent and its
Subsidiaries ending on or about any date set forth below to be less than the
applicable ratio set forth opposite such date:


 


	
  Fiscal Quarter End

  	
   

  	
  Fixed Charge Coverage Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2009

  	
   

  	
  0.80

  	
   

  
	
  June 30, 2009

  	
   

  	
  0.80

  	
   

  
	
  September 30, 2009

  	
   

  	
  0.80

  	
   

  
	
  December 31, 2009

  	
   

  	
  0.80

  	
   

  
	
  March 31, 2010 and each
  fiscal quarter thereafter

  	
   

  	
  1.10

  	
   

  



 


(c)                                  Capital Expenditures.
Make or commit or agree to make, or permit any of its Subsidiaries to make or
commit or agree to make, any Capital Expenditure (by purchase or Capitalized
Lease) that would cause the aggregate amount of all Capital Expenditures made
by the Parent and its Subsidiaries during any Fiscal Year ending on or about
any date set forth below to exceed the amount set forth below for such Fiscal
Year:


 


	
  Fiscal Year End

  	
   

  	
  Maximum

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2008

  	
   

  	
  $

  	
  2,900,000

  	
   

  
	
  December 31, 2009

  	
   

  	
  $

  	
  3,350,000

  	
   

  
	
  December 31, 2010 and
  for each Fiscal Year thereafter

  	
   

  	
  $

  	
  5,000,000

  	
   

  



 


(d)                                 Minimum Consolidated EBITDA.  Permit Consolidated EBITDA for the period
commencing on March 1, 2008 and ending as of the last day of the fiscal month
of Parent and its Subsidiaries ending on or about each date set forth below to
be less than the applicable amount set forth below:


 


	
  Fiscal Month End

  	
   

  	
  Minimum Consolidated

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  May 31, 2008

  	
   

  	
  $

  	
  3,928,000

  	
   

  
					



 


7

















 


	
  Fiscal Month End

  	
   

  	
  Minimum Consolidated

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30, 2008

  	
   

  	
  $

  	
  4,600,000

  	
   

  
	
  July 31, 2008

  	
   

  	
  $

  	
  4,857,000

  	
   

  
	
  August 31, 2008

  	
   

  	
  $

  	
  6,297,000

  	
   

  
	
  September 30, 2008

  	
   

  	
  $

  	
  6,304,000

  	
   

  
	
  October 31, 2008

  	
   

  	
  $

  	
  5,957,000

  	
   

  
	
  November 30, 2008

  	
   

  	
  $

  	
  5,870,000

  	
   

  
	
  December 31, 2008

  	
   

  	
  $

  	
  8,813,000

  	
   

  



 


3.15.                     Section 8.01 of the Financing
Agreement is hereby amended by (i) re-designating existing clauses (t) and (u)
thereof as clauses “(v)” and “(w),” respectively, and (ii) inserting the
following language therein, immediately following existing clause (s) thereof:


 


(t)                                    any Investor Guarantor shall fail to perform or comply with any term,
covenant or agreement contained in the Investor Guaranty to be performed or
observed by such Investor Guarantor;


 


(u)                                 except pursuant to the express terms thereof, any agreement or
obligation of any Investor Guarantor contained in or evidenced by the Investor
Guaranty shall cease to be enforceable against such Investor Guarantor in
accordance with its terms, or any Investor Guarantor shall deny or disaffirm
its obligations under the Investor Guaranty, or the Investor Guaranty shall be
cancelled, terminated, revoked or rescinded, or any action or proceeding shall
have been commenced by any Investor Guarantor seeking to deny, disaffirm,
contest, cancel, terminate, revoke or rescind the obligations of such Investor
Guarantor under the Investor Guaranty, or any court or other Governmental
Authority shall issue a judgment, order, decree or ruling to the effect that
any of the obligations of any Investor Guarantor under the Investor Guaranty
are illegal, invalid or unenforceable.


 


3.16.                     Exhibit C (Form of Compliance
Certificate) to the Financing Agreement is hereby deleted in its entirety and
the Compliance Certificate attached hereto as Exhibit B is hereby substituted
therefor.


 


3.17.                     The Financing Agreement is hereby amended by adding as new Exhibit I
thereto the cash flow forecast attached hereto as Exhibit C.


 


4.                                      Conditions. The effectiveness of
this Amendment is subject to the following conditions precedent, with the date
on which such conditions have been satisfied being January 25, 2008 (the “Effective
Date”):


 


a.                                      receipt by Administrative Agent of a copy of this Amendment duly executed
and delivered by each Loan Party, Administrative Agent and the Required
Lenders;


 


b.                                      receipt by Administrative Agent of (i) a copy of the Investor Guaranty duly
executed and delivered by each of the Investor Guarantors, and (ii) the
original of each Investor Letter of Credit;


 


8














 


c.                                       substantially contemporaneous receipt by Administrative Agent in immediately
available Dollars of (i) that portion of the Third Amendment Fee due and
payable on the Third Amendment Effective Date and (ii) an amount equal to
$1,053,093.33, being repayment in full of all due and payable but unpaid
interest on the Loans as of the Effective Date;


 


d.                                      the truth and accuracy of the representations and warranties contained
in Section 5 hereof; and


 


e.                                       no Default or Event of Default other than the Designated Defaults has
occurred that is continuing.


 


5.                                       Representations and Warranties.
Each Loan Party hereby represents and warrants to Administrative Agent and each
Lender as follows:


 


a.                                       after giving effect to this Amendment, the representations and
warranties of the Loan Parties contained in the Loan Documents are true and
correct in all material respects as of the date hereof (except to the extent
that any such representation or warranty (A) expressly refers to an
earlier date, in which case such representation or warranty remains true and
correct as of such earlier date, (B) is not true and correct due to events
or conditions, the occurrence or existence of which are not prohibited by the
Financing Agreement or the other Loan Documents and which do not, in and of
themselves, constitute a Default or Event of Default or (C) is not true
and correct as a result of disclosures made in writing to, and approved by, the
Administrative Agent and Lenders in connection with a Permitted Acquisition);


 


b.                                      the execution, delivery and performance by such Loan Party of this
Amendment are within its powers, have been duly authorized by all necessary
action pursuant to its Organization Documents, require no further action by or
in respect of, or filing with, any governmental body, agency or official and do
not violate, conflict with or cause a breach or a default under any provision
of applicable law or regulation or of the Organization Documents of any Loan
Party or of any agreement, judgment, injunction, order, decree or other instrument
binding upon it;


 


c.                                       this Amendment constitutes the valid and binding obligation of the Loan
Parties, enforceable against such Persons in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws; and


 


d.                                      no Default or Event of Default exists.


 


6.                                       No Waiver. Except as otherwise
specifically set forth herein with respect to the Designated Defaults, nothing
contained herein is intended or should be deemed or construed to constitute a
waiver of any Default or Event of Default which has occurred or exists under
the Financing Agreement, or hereafter may occur under the Financing Agreement,
as amended hereby, or to establish a custom or course of conduct or dealing among
any Borrower, any Guarantor, Administrative Agent, the Lenders or any of them.
Except as specifically set forth 


 


9

















 


herein, Administrative
Agent and the Lenders hereby expressly reserve all of their rights and remedies
under the Financing Agreement, as amended hereby, the other Loan Documents and
applicable law. Except as otherwise specifically set forth herein, nothing
contained herein is intended or should be deemed or construed to constitute a
waiver of compliance with any other term or condition contained in the
Financing Agreement or any of the other Loan Documents or constitute a course
of conduct or dealing among the parties. Except as amended hereby, the
Financing Agreement and other Loan Documents remain unmodified and in full
force and effect. All references in the Loan Documents to the Financing
Agreement shall be deemed to be references to the Financing Agreement as
amended hereby.


 


7.                                       Severability. In case any provision
of or obligation under this Amendment shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.


 


8.                                       Headings. Headings and captions
used in this Amendment (including the Exhibits, Schedules and Annexes hereto,
if any) are included for convenience of reference only and shall not be given
any substantive effect.


 


9.                                       Costs and Expenses. Notwithstanding
the provisions of Section 11.03 of the Financing Agreement, the Borrowers
will pay on demand all reasonable fees and expenses of counsel for each Lender
incurred in connection with the negotiation, execution and delivery of the Third
Amendment and the Investor Guaranty.


 


10.                                 GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK. EACH LOAN PARTY
HEREBY RATIFIES AND AFFIRMS THE CONSENT TO THE JURISDICTION CONTAINED IN SECTION 11.09
OF THE FINANCING AGREEMENT WITH RESPECT TO ALL ACTIONS ARISING OUT OF THIS
AMENDMENT.


 


11.                                 WAIVER OF JURY TRIAL.  EACH LOAN
PARTY, ADMINISTRATIVE AGENT AND EACH LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER
THIS AMENDMENT OR THE OTHER LOAN DOCUMENTS, OR UNDER ANY OTHER AMENDMENT,
WAIVER, CONSENT, INSTRUMENT, DOCUMENT OR OTHER AGREEMENT DELIVERED OR
WHICH IN THE FUTURE MAY BE DELIVERED IN CONNECTION THEREWITH, OR ARISING
FROM ANY FINANCING RELATIONSHIP EXISTING IN CONNECTION WITH THIS AMENDMENT, AND
AGREES THAT ANY SUCH ACTION, PROCEEDINGS OR COUNTERCLAIM SHALL BE TRIED BEFORE
A COURT AND NOT BEFORE A JURY. EACH LOAN PARTY CERTIFIES THAT NO OFFICER,
REPRESENTATIVE, AGENT OR ATTORNEY OF ADMINISTRATIVE AGENT OR ANY LENDER HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT ADMINISTRATIVE AGENT OR ANY LENDER
WOULD NOT, IN THE EVENT OF ANY ACTION, PROCEEDING 


 


10

















 


OR
COUNTERCLAIM, SEEK TO ENFORCE THE FOREGOING WAIVERS. EACH LOAN PARTY HEREBY
ACKNOWLEDGES THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
ADMINISTRATIVE AGENT AND THE LENDERS ENTERING INTO THIS AMENDMENT.


 


12.                                 Counterparts; Integration.
This Amendment may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which shall be deemed to be an
original, but all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of this Amendment by telecopier,
email or similar electronic transmission shall be equally as effective as
delivery of an original executed counterpart of this Amendment. Any party
delivering an executed counterpart of this Amendment by telecopier, email or
similar electronic transmission also shall deliver an original executed
counterpart of this Amendment but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect
of this Amendment. This Amendment constitutes the entire agreement and
understanding among the parties hereto with respect to the subject matter
hereof and supersedes any and all prior agreements and understandings, oral or
written, relating to the subject matter hereof.


 


13.                                 Reaffirmation. Each Loan Party, in its
respective capacities under each of the Loan Documents to which it is a party
(including the capacities of obligor, grantor, mortgagor, pledgor, guarantor,
indemnitor and assignor, as applicable, and each other similar capacity, if
any, in which such Loan Party has granted Liens on all or any part of the
properties or assets of such Loan Party, or otherwise acts as an accommodation
party, guarantor, indemnitor or surety with respect to all or any part of the
Obligations), hereby (a) agrees that the terms and provisions hereof shall
not affect in any way any payment, performance, observance or other obligations
or liabilities of such Loan Party under the Financing Agreement or any of the
other Loan Documents, all of which obligations and liabilities shall remain in
full force and effect and extend to the further loans, extensions of credit and
other Obligations provided for thereunder, and each of which obligations and
liabilities are hereby ratified, confirmed and reaffirmed in all respects; (b) to
the extent such Loan Party has granted Liens on any of its properties or assets
pursuant to any of the Loan Documents to secure the prompt and complete
payment, performance and/or observance of all or any part of the Obligations,
acknowledges, ratifies, confirms and reaffirms such grant of Liens, and
acknowledges and agrees that all of such Liens are intended and shall be deemed
and construed to secure to the fullest extent set forth therein all now
existing and hereafter arising Obligations


 


14.                                 Release. Each Loan Party
acknowledges that (a) as of the Effective Date, such Loan Party has no
defenses, claims or set-offs to the enforcement of any liabilities, obligations
and agreements owing to Administrative Agent or any Lender, and (b) Administrative
Agent and each Lender have fully performed all such Person’s respective
obligations to such Loan Party that the Administrative Agent or such Lender, as
the case may be, may have had or may have on or prior to the Effective Date.
Each Loan Party hereby irrevocably releases and forever discharges
Administrative Agent and each Lender and their respective affiliates,
subsidiaries, successors, assigns, directors, officers, employees, agents,
consultants and attorneys (each, a “Released Person”) of and from all damages,
losses, claims, demands, liabilities, obligations, actions or causes of action
whatsoever that such Loan Party may now have or claim to have 


 


11

















 


currently against any
Released Person on account of or in any way touching, concerning, arising out
of or founded upon this Amendment, the Financing Agreement or any other Loan
Document, whether presently known or unknown and of every nature and extent
whatsoever, but only to the extent relating to matters arising on or prior to
the Effective Date.


 


[Remainder of Page Intentionally
Left Blank; Signature Page Follows]


 


12

















 


IN WITNESS WHEREOF, the parties hereto have caused
this Amendment to be executed by their respective officers thereunto duly
authorized, as of the date first above written.


 


	
   

  	
  BORROWERS:

  
	
   

  	
   

  	
   

  
	
   

  	
  BODY SHOP OF AMERICA, INC., a Florida corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Curtis V. Hill

  
	
   

  	
  Name:

  	
  Curtis V. Hill

  
	
   

  	
  Title:

  	
  President and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CATALOGUE
  VENTURES, INC., a Florida corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Curtis V. Hill

  
	
   

  	
  Name:

  	
  Curtis V. Hill

  
	
   

  	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GUARANTORS:

  
	
   

  	
   

  
	
   

  	
  BODY CENTRAL ACQUISITION CORP., a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Curtis V. Hill

  
	
   

  	
  Name:

  	
  Curtis V. Hill

  
	
   

  	
  Title:

  	
  President and Chief Executive Officer

  



 

















 


	
   

  	
  RINZI AIR, L.L.C., a Florida limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Curtis V. Hill

  
	
   

  	
  Name:

  	
  Curtis V. Hill

  
	
   

  	
  Title:

  	
  President and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ADMINISTRATIVE AGENT:

  
	
   

  	
   

  
	
   

  	
  DYMAS FUNDING COMPANY, LLC, as Administrative Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Dymas Capital Management Company, LLC, its
  Manager

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Albert M. Ricchio

  
	
   

  	
   

  	
  Name:

  	
  Albert M. Ricchio

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LENDERS:

  
	
   

  	
   

  	
   

  
	
   

  	
  CHURCHILL FINANCIAL CAYMAN LTD., as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Churchill Financial LLC, as Collateral Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Christopher Cox

  
	
   

  	
   

  	
  Name:

  	
  Christopher Cox

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  



 

















 


	
   

  	
  NEWSTAR SHORT-TERM FUNDING LLC, as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  NewStar Financial, Inc., its Designated
  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ P. Emery Covington

  
	
   

  	
   

  	
  Name:

  	
  NewStar Financial

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NEWSTAR LLC 2005-1,  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  NewStar Financial, Inc., its Sole Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ P. Emery Covington

  
	
   

  	
   

  	
  Name:

  	
  NewStar Financial

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  A3 FUNDING LP,
  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  A3 Fund Management LLC, its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Alexander J, Ornstein

  
	
   

  	
   

  	
  Name:

  	
  Alexander J. Ornstein

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  



 

















 


	
   

  	
  A4 FUNDING LP,  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  A4 Fund Management, Inc., its General
  Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Alexander J, Ornstein

  
	
   

  	
   

  	
  Name:

  	
  Alexander J. Ornstein

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ABLECO FINANCE LLC,  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Alexander J, Ornstein

  
	
   

  	
  Name:

  	
  Alexander J. Ornstein

  
	
   

  	
  Title:

  	
  Senior Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NATIONAL CITY BANK,  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jennifer Obers

  
	
   

  	
  Name:

  	
  Jennifer Obers

  
	
   

  	
  Title:

  	
  Portfolio Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CAPITALSOURCE FINANCE LLC,  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 














 


EXHIBIT A

TO

WAIVER AND THIRD AMENDMENT

TO

FINANCING AGREEMENT

Dated as of January 25, 2008


 


DESIGNATED
DEFAULTS


 


None,
except:


 


1.             the Event of Default arising
under Section 8.01(a)(ii) of the Financing Agreement as a
result of Borrowers’ failure to make in accordance with the provisions of the
Financing Agreement the interest payment that was due on certain of the Loans
on January 16, 2008;


 


2.             the Event of Default arising
under Section 8.01(c) of the Financing Agreement as a result
of Borrowers’ failure to cause the Senior Leverage Ratio of the Parent and its
Subsidiaries as of the end of the four (4) consecutive fiscal quarters of
the Parent and its Subsidiaries ending on or about December 31, 2007 to be
no greater than 2.60, as required pursuant to Section 7.03(a) of
the Financing Agreement; and


 


3.             the Event of Default arising
under Section 8.01(c) of the Financing Agreement as a result
of Borrowers’ failure to cause the Fixed Charge Coverage Ratio of the Parent
and its Subsidiaries for the four (4) consecutive fiscal quarters of the
Parent and its Subsidiaries ending on or about December 31, 2007 to be no
less than 1.05, as required pursuant to Section 7.03(b) of the
Financing Agreement.


 

















 


EXHIBIT B

TO

WAIVER AND THIRD AMENDMENT

TO

FINANCING AGREEMENT

Dated as of January 25, 2008


 


COMPLIANCE
CERTIFICATE


 


Attached.


 

















 


EXHIBIT C
TO FINANCING AGREEMENT


 


COMPLIANCE
CERTIFICATE


 


Date:                                 ,
20      


 


This
Compliance Certificate (this “Certificate”) is given by BODY CENTRAL ACQUISITION
CORP., a Delaware corporation, in its capacity as administrative borrower (in
such capacity “Administrative Borrower”), pursuant to subsection 7.01(a)(iii) of
that certain Financing Agreement dated as of October 1, 2006 among
Administrative Borrower, the other Borrowers from time to time party thereto,
each subsidiary of the Administrative Borrower listed as a “Guarantor” on the
signature pages thereto, Dymas Funding Company, LLC, in its capacity as
Administrative Agent, and the other financial institutions party thereto as “Lenders”
(as such agreement may have been amended, restated, supplemented or otherwise
modified from time to time, the “Financing Agreement”). Capitalized terms used
herein without definition shall have the meanings set forth in the Financing
Agreement.


 


The
officer executing this Certificate is an Authorized Officer of Administrative
Borrower and, as such, is duly authorized to execute and deliver this
Certificate on behalf of Administrative Borrower. By executing this Certificate
such Authorized Officer hereby certifies to Administrative Agent and Lenders
that:


 


(a)           the financial statements
delivered with this Certificate in accordance with subsection 7.01(a)(i) and/or
(ii), as applicable, of the Financing Agreement are correct and complete and
fairly present in all material respects, and in accordance with GAAP, the
financial position and the results of operations and cash flows of Parent and
its Subsidiaries as of the dates of and for the periods covered by such
financial statements in a manner consistent with that of the most recent
audited financial statements (subject in the case of interim financial
statements to normal year-end adjustments, the absence of footnote disclosures
and accounting for lease leveling and tenant allowances);


 


(b)           I have reviewed the
provisions of the Financing Agreement and the other Loan Documents and have
made or caused to be made under my supervision a review of the conditions and
operations of the Parent and its Subsidiaries during the period covered by the
financial statements delivered with this Certificate with a view to determining
whether Parent and its Subsidiaries were in compliance with all of the
provisions of the Financing Agreement and such Loan Documents at the times such
compliance is required hereby and thereby, and such review has not disclosed,
nor do I have knowledge of, the existence during such period of an Event of
Default or Default or, if an Event of Default or Default existed, Exhibit B
attached hereto sets forth the nature and period of existence of such Event of
Default or Default and the action which the Parent and its Subsidiaries propose
to take or have taken with respect thereto;


 


(c)           Exhibit A attached
hereto is a correct calculation of each of the financial covenants contained in
Section 7.03 of the Financing Agreement, calculated with respect to Parent
and its Subsidiaries on a consolidated basis; and


 

















 


(d)           Since the Closing Date and
except as disclosed in prior Compliance Certificates delivered to
Administrative Agent, none of Parent or any of its Subsidiaries has:


 


(i)            changed its
legal name, identity, jurisdiction of incorporation, organization or formation
or organizational structure or formed or acquired any Subsidiary except as
follows: 
                                                                            ;


 


(ii)           acquired the
assets of, or merged or consolidated with or into, any Person, except as
follows:                                                                              ;
and


 


(iii)          changed its address or
otherwise relocated, acquired fee simple title to any real property or entered
into any real property leases, except as follows: 
                                                                        ;


 


[Remainder of page intentionally left blank; signature page follows]


 

















 


IN
WITNESS WHEREOF, Administrative Borrower has caused this Certificate to be
executed by one of its Authorized Officers this
                    
day of
                    
, 20      .


 


 


	
   

  	
  BODY
  CENTRAL ACQUISITION CORP., a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 

















 


EXHIBIT A
TO

COMPLIANCE CERTIFICATE


 


Note:  All calculations set forth in this
Certificate are for Parent and its Subsidiaries on a consolidated basis and are
without duplication.


 


Covenant 7.03(a) — Senior Leverage Ratio*


 


	
  Senior
  Leverage Ratio is defined as Net Consolidated Senior Funded Indebtedness
  divided by Consolidated EBITDA and is calculated as follows:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Net
  Consolidated Senior Funded Indebtedness:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Average
  daily outstanding principal balance of Revolving Loans for the three month
  period (or such shorter period as shall have elapsed since the Closing Date)
  ended as of the date of measurement

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Plus:       Outstanding principal balance of Term Loans as of
  the date of measurement

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Principal
  portion of Capitalized Lease Obligations or Indebtedness secured by purchase
  money Liens as of the date of measurement

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Without
  duplication, all other Indebtedness of the Parent and its Subsidiaries as of
  the date of measurement other than Indebtedness described in clauses
  (iv) and (vii) of the definition thereof

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Equal:     Gross Consolidated Senior
  Funded Indebtedness

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Less:       Subordinated Indebtedness
  included above

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Unrestricted
  cash on hand in excess of $3,000,000 in which Administrative Agent has a
  perfected first Lien

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Equal:     Net Consolidated Senior
  Funded Indebtedness

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Consolidated
  EBITDA (as calculated per Covenant 7.03(d))

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Senior
  Leverage Ratio (Net Consolidated Senior Funded Indebtedness divided by
  Consolidated EBITDA)

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Maximum
  Senior Leverage Ratio

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  In
  Compliance

  	
   

  	
   

  	
   

  	
  Yes/No

  



 






*              To be completed only for
periods when compliance with covenant is required.


 


A-1

















 


Covenant 7.03(b) — Fixed Charge Coverage†


 


	
  Fixed
  Charge Coverage Ratio is defined as (Consolidated EBITDA less Unfinanced
  Capital Expenditures) divided by Fixed Charges and is calculated as follows:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Consolidated
  EBITDA (as calculated per Covenant 7.03(d))

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Less:
  Unfinanced Capital Expenditures (as calculated per covenant 7.03(c)

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Equals:
  Consolidated Operating Cash

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Flow
  Fixed Charges:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Consolidated
  Net Interest Expense (as calculated per Exhibit B) for the applicable
  measurement period

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Plus:       All principal of Indebtedness scheduled to be paid
  or prepaid during the applicable measurement period

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  income
  taxes paid or payable in cash during the applicable measurement period

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Restricted
  Payments paid in cash during the applicable measurement period, other than
  dividends or distributions paid by any Loan Party to a Borrower or a
  Wholly-Owned Subsidiary of a Borrower during such period; excluding, however,
  Restricted Payments in respect of the repurchase or redemption of
  Series C preferred stock up to an aggregate amount equal to the sum of
  $3,000,000 plus all accrued dividends on the Series C preferred stock
  through the date of such Restricted Payment

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Management
  Fees (if any) paid in cash during the applicable measurement period

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Equal:     Fixed Charges

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fixed
  Charge Coverage Ratio (Consolidated Operating Cash Flow divided by Fixed
  Charges)

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Minimum
  Fixed Charge Coverage Ratio

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  In
  Compliance

  	
   

  	
   

  	
   

  	
  Yes/No

  



 






†              To be completed only for
periods when compliance with covenant is required.


 


A-2

















 


Covenant 7.03(c)

Capital Expenditure Limit


 


	
  For
  purposes of Covenant 7.03(c), Capital Expenditures are calculated as follows:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  The
  aggregate of all expenditures or obligations incurred by Parent and its
  Subsidiaries for the Fiscal Year (or shorter period) covered by the financial
  statements delivered with this Certificate, that, in accordance with GAAP,
  are or should be capitalized

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Plus:       To the extent not included above, the aggregate of
  all expenditures during such period to acquire by purchase or otherwise the
  business or fixed assets of, or the Capital Stock of, any Person

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Total
  Capital Expenditures

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Less:       Net Cash Proceeds of Dispositions reinvested to
  the extent permitted by Section 2.05(C)(iii) and which are included
  in Total Capital Expenditures

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Extraordinary
  Receipts consisting of proceeds of casualty insurance and/or condemnation
  awards reinvested to the extent permitted by Section 2.05(C)(v) and
  which are included in Total Capital Expenditures

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  The
  aggregate amount of contracted for tenant allowances

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Capital
  Expenditures

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Permitted
  Capital Expenditures

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  In
  Compliance for Capital Expenditures

  	
   

  	
  Yes/No

  



 


A-3

















 


	
  For
  purposes of calculating Fixed Charge Coverage Ratio, Unfinanced Capital
  Expenditures are defined as follows:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  The
  aggregate of all expenditures or obligations incurred by Parent and its
  Subsidiaries for the twelve-month period ending on the last day of the most
  current month covered by the financial statements delivered with this
  Certificate, that, in accordance with GAAP, are or should be capitalized

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Plus:       To the extent not included above, the aggregate of
  all expenditures during such period to acquire by purchase or otherwise the
  business or fixed assets of, or the Capital Stock of, any Person

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Total
  Capital Expenditures

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Less:       Net Cash Proceeds of Dispositions reinvested to
  the extent permitted by Section 2.05(C)(iii) and which are included
  in Total Capital Expenditures

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Extraordinary
  Receipts consisting of proceeds of casualty insurance and/or condemnation
  awards reinvested to the extent permitted by Section 2.05(C)(v) and
  which are included in Total Capital Expenditures

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  The
  aggregate amount of contracted for tenant allowances

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Capital
  Expenditures

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Less:       Portion of Capital Expenditures financed under
  Capitalized Leases or other Indebtedness (Indebtedness, for this purpose,
  does not include drawings under the Revolving Loan Commitment)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Less:       $3,000,000 in the
  aggregate during testing periods in 2007

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Unfinanced
  Capital Expenditures (used in calculation of Fixed Charge Coverage Ratio)

  	
   

  	
   

  



 


A-4

















 


Covenant 7.03(d)

Calculation of Minimum Consolidated EBITDA


 


	
  Consolidated
  EBITDA is calculated as follows:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Net
  income (or loss) for the applicable period of measurement of Parent and its
  Subsidiaries on a consolidated basis determined in accordance with GAAP, but
  excluding: (a) the income (or loss) of any Person (other than a
  Subsidiary of the Parent) in which Borrower has an ownership interest except
  to the extent of the amount of dividends or other distributions actually paid
  to the Borrower or any of its Subsidiaries in cash by such Person during such
  period and the payment of dividends or similar distributions by that
  Subsidiary is not at the time prohibited by operation of the terms of its
  charter or of any agreement, instrument, judgment, decree, order, statute,
  rule or governmental regulation applicable to that Subsidiary;
  (b) the income (or loss) of any Person accrued prior to the date it
  becomes a Subsidiary of the Borrower or is merged into or consolidated with
  the Borrower or any of its Subsidiaries or that Person’s assets are acquired
  by the Borrower or any of its Subsidiaries; (c) the proceeds of any life
  insurance policy; (d) gains or losses from the Disposition of property
  or assets not in the ordinary course of business of the Borrower and its
  Subsidiaries, and related tax effects in accordance with GAAP; and
  (e) any other non-recurring non-cash or extraordinary gains or losses of
  the Parent or its Subsidiaries, and related tax effects in accordance with
  GAAP

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Plus,
  without duplication and to the extent deducted in determining net income (or
  loss) above:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  interest
  expense, less interest income

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  income
  tax expense

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  depreciation
  expense

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  amortization
  expense

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  management
  fee to Sponsor pursuant to a management agreement entered into as permitted
  by the Financing Agreement

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  fees
  and expenses paid to Investor Guarantors to the extent permitted pursuant to
  Section 7.02(h) of the Financing Agreement

  	
   

  	
   

  



 


A-5

















 


	
  fees
  and expenses paid (i) on or about the Closing Date in connection with
  the Loan Documents or the Related Transaction Documents, to the extent such
  fees and expenses do not exceed $555,000 in the aggregate, and (ii) in
  connection with that certain Waiver and First Amendment to Financing
  Agreement to Administrative Agent

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Fees
  and expenses paid in connection with the transactions contemplated by the
  Third Amendment (including, without limitation, fees paid to the
  Administrative Agent and the Lenders pursuant to the Third Amendment, fees
  paid to Richter Consulting and fees and expenses paid to legal counsel)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Non
  cash adjustments relating to lease leveling

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Fees
  and expenses paid in connection with the internet security breach to the
  extent such fees and expenses do not exceed $130,000 in the aggregate

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Consolidated
  EBITDA (used in calculating Senior Leverage Ratio and Fixed Charge Coverage
  Ratio)

  	
   

  	
   

  



 


A-6

















 


EXHIBIT B
TO

COMPLIANCE CERTIFICATE


 


Calculation
of Consolidated Net Interest Expense


 


	
  Gross
  interest expense during the applicable measurement period

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Less:
  Interest income during the applicable measurement period

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  amortization
  of capitalized fees and expenses incurred in connection with the Related
  Transactions and included in gross interest expense

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  amortization
  of original issue discount included in gross interest expense

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  interest
  paid in kind or capitalized and included in gross interest expense

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Consolidated
  Net Interest Expense (used in calculation of Fixed Charge Coverage Ratio)

  	
   

  	
   

  



 


B-1














 


EXHIBIT C

TO

WAIVER AND THIRD AMENDMENT

TO

FINANCING AGREEMENT

Dated as of January 25, 2008


 


INITIAL
CASH FLOW FORECAST


 


Attached.


 






	
  [***]

  	
  INDICATES
  MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN
  REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND
  EXCHANGE COMMISSION PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES ACT
  OF 1933, AS AMENDED.

  



 















 




	
  Body Shop of America, Inc.

  	
   

  	
  DRAFT - FOR DISCUSSIONS
  PURPOSES ONLY

  
	
  13-week
  Cash Flow

  	
   

  	
   

  






 


	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  January

  	
   

  	
  February

  	
   

  	
  March

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  29-Dec

  05-Jan

  	
   

  	
  06-Jan

  12-Jan

  	
   

  	
  13-Jan

  19-Jan

  	
   

  	
  20-Jan

  26-Jan

  	
   

  	
  27-Jan

  02-Feb

  	
   

  	
  03-Feb

  09-Feb

  	
   

  	
  10-Feb

  16-Feb

  	
   

  	
  17-Feb

  23-Feb

  	
   

  	
  24-Feb

  01-Mar

  	
   

  	
  02-Mar

  08-Mar

  	
   

  	
  09-Mar

  15-Mar

  	
   

  	
  16-Mar

  22-Mar

  	
   

  	
  23-Mar

  29-Mar

  	
   

  	
   

  	
   

  
	
  Beg of Period

  	
   

  	
  Reported

  	
   

  	
  Reported

  	
   

  	
  Forecasted

  	
   

  	
  Forecasted

  	
   

  	
  Forecasted

  	
   

  	
  Forecasted

  	
   

  	
  Forecasted

  	
   

  	
  Forecasted

  	
   

  	
  Forecasted

  	
   

  	
  Forecasted

  	
   

  	
  Forecasted

  	
   

  	
  Forecasted

  	
   

  	
  Forecasted

  	
   

  	
  Total

  	
   

  
	
  week ended

  	
   

  	
  1

  	
   

  	
  2

  	
   

  	
  3

  	
   

  	
  4

  	
   

  	
  5

  	
   

  	
  6

  	
   

  	
  7

  	
   

  	
  8

  	
   

  	
  9

  	
   

  	
  10

  	
   

  	
  11

  	
   

  	
  12

  	
   

  	
  13

  	
   

  	
  $000’s

  	
   

  
	
  Cash, beginning of period

  	
   

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Cash Receipts

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Body Shop -sales plan

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Catalogue - sales plan

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Sales Tax

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Tenant Allowances

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Cash Disbursements

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  March. Payables - Non-Factored

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  March. Payables - Factored

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Expense Payables

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Payroll

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Rent

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Sales Tax

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Catalog postage

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Group health insurance

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Amort/Interest on Notes A & B

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Additional Expense Items

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Net Change In Cash

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Cash, end of period

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Key Assumptions (13-week CF - base case)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sales

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Overall

  	
   

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
   

  	
   

  
	
  Comp Stores (est)

  	
   

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Note 1 - Merchandising Plan

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Overall

  	
   

  	
  [***]

  	
  %

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  [***]

  	
  %

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  [***]

  	
  %

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Comp Stores

  	
   

  	
  [***]

  	
  %

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  [***]

  	
  %

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  [***]

  	
  %

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Dec

  	
   

  	
  Nov

  	
   

  	
  Oct

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Note 2 - Historical Sales
  Results

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Overall

  	
   

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Comp Stores

  	
   

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Vendor terms maintained at 60 days through January,
  45 days through February, and 30 days thereafter.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sensitivity #1: [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sales Assumption

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Overall

  	
   

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
   

  	
   

  
	
  Comp Stores (est)

  	
   

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
   

  	
   

  
	
  Sales shortfall

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
   

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  [***]

  	
   

  
	
  Cash (EQP)

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sensitivity #2: [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sales Assumption

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Overall

  	
   

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
   

  	
   

  
	
  Comp Stores (est)

  	
   

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
   

  	
   

  
	
  Sales shortfall

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Cash (EQP)

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sensitivity #3: [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sales Assumption

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Overall

  	
   

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
   

  	
   

  
	
  Comp Stores (est)

  	
   

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
   

  	
   

  
	
  Sales shortfall

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Cash (EQP)

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  



 






[***]     INDICATES
MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED.  ALL SUCH OMITTED MATERIAL HAS
BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.