Document:

EXHIBIT 10.23

MD
BEAUTY, INC.

THIRD
AMENDMENT TO CREDIT AGREEMENT

This THIRD AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is dated as of March 17, 2006 and entered into
by and among BARE ESCENTUALS, INC., a Delaware
corporation, formerly known as STB Beauty, Inc. (“Holdings”),
MD BEAUTY, INC., a Delaware corporation
(the “Company”), THE
FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (each
individually referred to herein as a “Lender” and
collectively as “Lenders”),
and BNP PARIBAS (“BNP Paribas”), as administrative agent for Lenders (in such
capacity, “Administrative
Agent”).  Reference is made to that certain Credit
Agreement dated as of February 18, 2005, as amended by the First Amendment to
Credit Agreement dated as of July 21, 2005, and as amended by the Second
Amendment to Credit Agreement dated as of October 7, 2005, by and among
Holdings, Company, the Lenders referenced therein and BNP Paribas, as
Administrative Agent (the “Credit Agreement”).
Capitalized terms used herein without definition shall have the same meanings
as set forth in the Credit Agreement, as amended hereby.

RECITALS

WHEREAS, Company and Lenders desire to amend the
Credit Agreement to postpone the date on which Company has to comply with
hedging requirements under subsection 6.10 of the Credit Agreement.

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

SECTION 1.                                                    AMENDMENTS TO CREDIT AGREEMENT

Subsection 6.10 of
the Credit Agreement is hereby amended by deleting such subsection in its
entirety and substituting the following therefor:

“6.10        Interest Rate Protection.

At all times after September 30, 2006, Company shall maintain in effect
for three years after the Closing Date one or more Interest Rate Agreements in
an aggregate notional principal amount of not less than 40% of the aggregate
principal amount of the Term Loans and the Second Lien Term Loans outstanding,
each such Interest Rate Agreement to be in form and substance satisfactory to
Administrative Agent; provided that Company shall not be obligated to maintain
in effect any such Interest Rate Agreements at any time that the Applicable
Consolidated Leverage Ratio is less than or equal to 2.00:1:00.  For purposes of clarification, while the
above described Interest Rate Agreements are required to be maintained during
the above described periods, each individual Interest Rate Agreement is not
required to be of such duration.”.

 

SECTION 2.                                                    REPRESENTATIONS AND WARRANTIES

In order to induce
Lenders and Administrative Agent to enter into this Amendment, Company and
Holdings each represents and warrants to each Lender and Administrative Agent
that the following statements are true, correct and complete:

(i)            each of Company and
Holdings has all requisite corporate power and authority to enter into this
Amendment and to carry out the transactions contemplated by, and perform its
obligations under, the Credit Agreement as amended by this Amendment (the “Amended Agreement”);

(ii)           the execution and
delivery of this Amendment and the performance of the Amended Agreement have
been duly authorized by all necessary corporate action on the part of Company
and Holdings;

(iii)          the execution and
delivery by Company and Holdings of this Amendment and the performance by
Company and Holdings of the Amended Agreement do not and will not (i) violate
any provision of any law or any governmental rule or regulation applicable to
Holdings, Company or any of its Subsidiaries, the Certificate or Articles of
Incorporation or Bylaws of Holdings, Company or any of its Subsidiaries or any
order, judgment or decree of any court or other agency of government binding on
Holdings, Company or any of its Subsidiaries, (ii) conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a default
under any Contractual Obligation of Holdings, Company or any of its
Subsidiaries, (iii) result in or require the creation or imposition of any Lien
upon any of the properties or assets of Holdings, Company or any of its
Subsidiaries (other than Liens created under any of the Loan Documents in favor
of Administrative Agent on behalf of Lenders and other Liens permitted under
the Amended Agreement), or (iv) require any approval of stockholders or any
approval or consent of any Person under any Contractual Obligation of Holdings,
Company or any of its Subsidiaries, except for with respect to the foregoing
clauses (i) , (ii) and (iv)  above, such violations, conflicts,
breaches, defaults or failures to obtain approvals or consents which could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect;

(iv)          the execution and
delivery by Company of this Amendment and the performance by Holdings and
Company of the Amended Agreement do not and will not require any registration
with, consent or approval of, or notice to, or other action to, with or by, any
federal, state or other governmental authority or regulatory body, except for
registrations, consents, approvals, notices and other actions that have been
obtained, given or taken, or the failure of which to obtain, give or take have
not and could not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect;

(v)           this Amendment and
the Amended Agreement have been duly executed and delivered by Company and
Holdings and are the legally valid and binding obligations of Company and
Holdings, enforceable against Company and Holdings in accordance with their
respective terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors’
rights generally or by equitable principles relating to enforceability; and

 

2

(vi)          no event has
occurred and is continuing or will result from the consummation of the
transactions contemplated by this Amendment that would constitute an Event of
Default or a Potential Event of Default.

SECTION 3.                                                    CONDITIONS TO EFFECTIVENESS

Except as set forth below,
this Amendment shall become effective only upon the satisfaction of the
following conditions precedent (the “Closing Conditions”):

A.            Amendment
of Second Lien Term Loan Agreement. 
Administrative Agent shall have received a written amendment of the
Second Lien Term Loan Agreement executed by Holdings, Company, Requisite
Lenders under the Second Lien Term Loan Agreement and BNP Paribas, as
administrative agent, in form and substance satisfactory to Administrative
Agent, which amendment shall be in form substantially similar to this
Amendment.

B.            Fees
and Expenses.  Administrative Agent shall have received all
of Administrative Agent’s reasonable costs and expenses as described in
subsection 10.2 of the Credit Agreement incurred by Administrative Agent
(including, without limitation, the reasonable fees and disbursements of O’Melveny
& Myers LLP) in connection with this Amendment and the documents and
transactions related hereto, and any fees separately agreed upon between
Company and Administrative Agent.

C.            Notification
of Execution.  Receipt by Administrative Agent and Company
of written or telephonic notice that Company, Holdings and the Requisite Lenders
have executed this Amendment and authorized its delivery.

SECTION 4.                                                    MISCELLANEOUS

A.            Reference
to and Effect on the Credit Agreement and the Other Loan Documents.

(i)            On
and after the effective date of this Amendment, each reference in the Credit
Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words of like
import referring to the Credit Agreement and each reference in the other Loan
Documents to the “Credit Agreement”, “thereunder”, “thereof” or words of like
import referring to the Credit Agreement shall mean and be a reference to the
Credit Agreement as amended hereby.

(ii)           Except
as specifically amended by this Amendment, the Credit Agreement and the other
Loan Documents shall remain in full force and effect and are hereby ratified
and confirmed.

(iii)          The
execution, delivery and performance of this Amendment shall not, except as
expressly provided herein, constitute a waiver of any provision of, or operate
as a waiver of any right, power or remedy of Administrative Agent or any Lender
under the Credit Agreement or any of the other Loan Documents.

 

3

B.            Headings. 
Section and subsection headings in this Amendment are included herein
for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose or be given any substantive effect.

C.            Applicable
Law.  THIS AMENDMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK).

D.            Counterparts. 
This Amendment may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.

[Remainder of this page intentionally left blank]

 

4

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

 

	
  COMPANY:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MD BEAUTY, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ LESLIE A BLODGETT

  
	
   

  	
  Name: 

  	
  Leslie A Blodgett

  
	
   

  	
  Title: 

  	
  President, Chief Executive
  Officer and

  
	
   

  	
   

  	
  Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  HOLDINGS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BARE ESCENTUALS, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ LESLIE A BLODGETT

  
	
   

  	
  Name: 

  	
  Leslie A Blodgett

  
	
   

  	
  Title: 

  	
  President and Chief
  Executive Officer

  

 

S-1

 

	
  LENDERS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BNP PARIBAS,

  
	
   

  	
  individually and as
  Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ CECILE SCHERER

  
	
   

  	
  Name: 

  	
  CECILE SCHERER

  
	
   

  	
  Title: 

  	
  Director

  
	
   

  	
   

  	
  Merchant Banking Group

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ PJ de FILIPPIS

  
	
   

  	
  Name: 

  	
  PJ de FILIPPIS

  
	
   

  	
  Title: 

  	
  MANAGING DIRECTOR

  

 

S-2

 

	
   

  	
  280 FUNDING I

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ GEORGE FAN

  
	
   

  	
  Name: 

  	
  GEORGE FAN

  
	
   

  	
  Title: 

  	
  AUTHORIZED SIGNATORY

  

 

S-3

 

	
   

  	
  SEQUILS-Glace Bay, Ltd.

  
	
   

  	
  By: GSO Capital Partners
  LP as Collateral Manager

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ LEE M. SHAIMAN

  
	
   

  	
  Name: 

  	
  Lee M. Shaiman

  
	
   

  	
  Title: 

  	
  Authorized Signatory

  

 

S-4

 

	
   

  	
  Gale Force I CLO, Ltd.

  
	
   

  	
  By: GSO Capital Partners
  LP as Collateral Manager

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ LEE M. SHAIMAN

  
	
   

  	
  Name: 

  	
  Lee M. Shaiman

  
	
   

  	
  Title: 

  	
  Authorized Signatory

  

 

S-5

 

	
   

  	
  CIT LENDING SERVICES 

  
	
   

  	
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ MICHAEL L. LAMANES

  
	
   

  	
  Name: 

  	
  Michael L. LaManes

  
	
   

  	
  Title: 

  	
  Vice President

  

 

S-6

 

 

	
   

  	
  Venture CDO 2002, Limited

  
	
   

  	
  By its investment advisor,

  
	
   

  	
  MJX Asset Management LLC

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ MARTIN DAVEY

  
	
   

  	
  Name: 

  	
  Martin Davey

  
	
   

  	
  Title: 

  	
  Managing Director

  

 

S-7

 

	
   

  	
  Venture II CDO 2002, Limited

  
	
   

  	
  By its investment advisor,

  
	
   

  	
  MJX Asset Management LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ MARTIN DAVEY

  
	
   

  	
  Name: 

  	
  Martin Davey

  
	
   

  	
  Title: 

  	
  Managing Director

  

 

S-8

 

	
   

  	
  Venture III CDO Limited

  
	
   

  	
  By its investment advisor,

  
	
   

  	
  MJX Asset Management LLC

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ MARTIN DAVEY

  
	
   

  	
  Name: 

  	
  Martin Davey

  
	
   

  	
  Title: 

  	
  Managing Director

  

 

S-9

 

	
   

  	
  Venture IV CDO Limited

  
	
   

  	
  By its investment advisor,

  
	
   

  	
  MJX Asset Management LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ MARTIN DAVEY

  
	
   

  	
  Name: 

  	
  Martin Davey

  
	
   

  	
  Title: 

  	
  Managing Director

  

 

S-10

 

	
   

  	
  Venture V CDO Limited

  
	
   

  	
  By its investment advisor,

  
	
   

  	
  MJX Asset Management LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ MARTIN DAVEY

  
	
   

  	
  Name: 

  	
  Martin Davey

  
	
   

  	
  Title: 

  	
  Managing Director

  

 

S-11

 

	
   

  	
  Vista Leveraged Income Fund

  
	
   

  	
  By its investment advisor,

  
	
   

  	
  MJX Asset Management LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ MARTIN DAVEY

  
	
   

  	
  Name: 

  	
  Martin Davey

  
	
   

  	
  Title: 

  	
  Managing Director

  

 

S-12

 

	
   

  	
  CIBC Inc. as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ GERALD GIRARDI

  
	
   

  	
  Name:

  	
  Gerald Girardi

  
	
   

  	
  Title:

  	
  Authorized Signatory CIBC
  Inc.

  

 

S-13

 

	
   

  	
  Denali Capital LLC,
  managing member of DC

  Funding Partners LLC, portfolio manager for

  DENALI CAPITAL CLO I, LTD., or an affiliate

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOHN P. THACKER

  
	
   

  	
  Name:

  	
  John P. Thacker

  
	
   

  	
  Title:

  	
  Chief Credit Officer

  

 

S-14

 

	
   

  	
  Denali Capital LLC,
  managing member of DC

  Funding Partners LLC, portfolio manager for

  DENALI CAPITAL CLO III, LTD., or an affiliate

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOHN P. THACKER

  
	
   

  	
  Name:

  	
  John P. Thacker

  
	
   

  	
  Title:

  	
  Chief Credit Officer

  
	
   

  	
   

  	
   

  

 

S-15

 

	
   

  	
  Denali Capital LLC,
  managing member of DC

  Funding Partners LLC, portfolio manager for

  DENALI CAPITAL CLO IV, LTD., or an affiliate

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOHN P. THACKER

  
	
   

  	
  Name:

  	
  John P. Thacker

  
	
   

  	
  Title:

  	
  Chief Credit Officer

  

 

S-16

 

	
   

  	
  Denali Capital LLC,
  managing member of DC

  Funding Partners LLC, portfolio manager for

  DENALI CAPITAL CLO V, LTD., or an affiliate

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOHN P. THACKER

  
	
   

  	
  Name:

  	
  John P. Thacker

  
	
   

  	
  Title:

  	
  Chief Credit Officer

  

 

S-17

 

	
   

  	
  Denali Capital LLC,
  managing member of DC

  Funding Partners LLC, portfolio manager for

  DENALI CAPITAL CLO VI, LTD., or an affiliate

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOHN P. THACKER

  
	
   

  	
  Name:

  	
  John P. Thacker

  
	
   

  	
  Title:

  	
  Chief Credit Officer

  

 

S-18

	
   

  	
  Denali Capital LLC,
  managing member of DC

  Funding Partners, portfolio manager for

  DENALI CAPITAL CREDIT OPPORTUNITY FUND FINANCING, LTD., or an affiliate

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOHN P. THACKER

  
	
   

  	
  Name:

  	
  John P. Thacker

  
	
   

  	
  Title:

  	
  Chief Credit Officer

  

 

 

S-19

 

	
   

  	
  GSC PARTNERS GEMINI FUND
  LIMITED

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:  GSCP (NJ),
  L.P., as Collateral Monitor

  
	
   

  	
  By:  GSCP (NJ),
  INC., its General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ SETH KATZENSTEIN

  
	
   

  	
   

  	
  Name:

  	
  Seth Katzenstein

  
	
   

  	
   

  	
  Title:

  	
  Authorized Signatory

  
	
   

  	
   

  	
   

  	
  GSC Partners

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  GSC PARTNERS CDO FUND IV,
  LIMITED

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:  GSCP (NJ),
  L.P., as Collateral Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ SETH KATZENSTEIN

  
	
   

  	
   

  	
  Name:

  	
  Seth Katzenstein

  
	
   

  	
   

  	
  Title:

  	
  Authorized Signatory

  
	
   

  	
   

  	
   

  	
  GSC Partners

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  GSC PARTNERS CDO FUND V, LIMITED

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:  GSCP (NJ),
  L.P., as Collateral Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ SETH KATZENSTEIN

  
	
   

  	
   

  	
  Name:

  	
  Seth Katzenstein

  
	
   

  	
   

  	
  Title:

  	
  Authorized Signatory

  
	
   

  	
   

  	
   

  	
  GSC Partners

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  GSC PARTNERS CDO FUND VI,
  LIMITED

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:  GSCP (NJ),
  L.P., as Collateral Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ SETH KATZENSTEIN

  
	
   

  	
   

  	
  Name:

  	
  Seth Katzenstein

  
	
   

  	
   

  	
  Title:

  	
  Authorized Signatory

  
	
   

  	
   

  	
   

  	
  GSC Partners

  

 

S-20

 

	
   

  	
  GSC PARTNERS CDO FUND VII,
  LIMITED

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:  GSCP (NJ),
  L.P., as Collateral Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ SETH KATZENSTEIN

  
	
   

  	
   

  	
  Name:

  	
  Seth Katzenstein

  
	
   

  	
   

  	
  Title:

  	
  Authorized Signatory

  
	
   

  	
   

  	
   

  	
  GSC Partners

  

 

S-21

 

	
   

  	
   

  	
  Investors Bank & Trust
  Company as Sub-Custodian Agent of CypressTree International Loan Holding Company
  Limited

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ MARTHA HADELER

  
	
   

  	
   

  	
  Name:

  	
  Martha Hadeler

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ PRESTON I. CARNES, JR.

  
	
   

  	
   

  	
  Name:

  	
  Preston I. Carnes, Jr.

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  

 

S-22

 

	
   

  	
   

  	
  Hewett’s Island CLO II, Ltd.

  
	
   

  	
   

  	
  By:

  	
  CypressTree Investment
  Management Company, Inc., as Portfolio Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ PRESTON I. CARNES, JR.

  
	
   

  	
   

  	
  Name:

  	
  Preston I. Carnes, Jr.

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  

 

S-23

 

	
   

  	
   

  	
  Hewett’s Island CLO III, Ltd.

  
	
   

  	
   

  	
  By:

  	
  CypressTree Investment
  Management Company, Inc., as Portfolio Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ John Frabotta [Initial Illegible]

  
	
   

  	
   

  	
  Name:

  	
  John Frabotta

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  

 

S-24

	
  Hewett’s Island CLO IV, Ltd.

  
	
  By:

  	
   CypressTree Investment Management Company,
  Inc.,

  
	
   

  	
  as Portfolio Manager

  
	
   

  	
   

  
	
  By:

  	
  /s/ Preston I. Carnes, Jr.

  
	
  Name:

  	
   Preston I. Carnes, Jr.

  
	
  Title:

  	
   Managing Director

  

 

 

S-25

 

	
  CYPRESSTREE CLAIF FUNDING LLC

  
	
   

  	
   

  
	
  By:

  	
  /s/ M. Cristina Higgins

  
	
  Name:

  	
   M. Cristina Higgins

  
	
  Title:

  	
   Assistant Vice President

  

 

 

 

S-26

 

	
  BALLANTYNE FUNDING LLC

  
	
   

  	
   

  
	
  By:

  	
  /s/ M. Cristina Higgins

  
	
  Name:

  	
   M. Cristina Higgins

  
	
  Title:

  	
   Assistant Vice President

  

 

 

 

S-27

 

	
  Rockwall CDO LTD.

  
	
  By: Highland Capital
  Management, L.P.

  
	
  As Collateral Manager

  
	
  By: Strand Advisors, Inc., It’s
  General Partner

  
	
   

  	
   

  
	
  By:

  	
  /s/ Chad Schramek

  
	
  Name:

  	
   

  
	
  Title:

  	
  Chad Schramek, Assistant
  Treasurer

  
	
   

  	
  Strand Advisors, Inc.,
  General Partner of

  
	
   

  	
  Highland Capital
  Management, L.P.

  

 

 

 

S-28

 

	
  Gleneagles CLO, Ltd.

  
	
  By: Highland Capital
  Management, L.P., As Collateral Manager

  
	
  By: Strand Advisors, Inc., Its
  General Partner

  
	
   

  	
   

  
	
  By:

  	
  /s/ Chad Schramek

  
	
  Name:

  	
   

  
	
  Title:

  	
  Chad Schramek, Assistant
  Treasurer

  
	
   

  	
  Strand Advisors, Inc.,
  General Partner of

  
	
   

  	
  Highland Capital
  Management, L.P.

  

 

 

 

S-29

 

	
  Loan Star State Trust

  
	
  By: Highland Capital
  Management, L.P., As Collateral Manager

  
	
  By: Strand Advisors, Inc., Its
  Investment Advisor

  
	
   

  	
   

  
	
  By:

  	
  /s/ Chad Schramek

  
	
  Name:

  	
  Chad Schramek, Assistant
  Treasurer

  
	
  Title:

  	
  Strand Advisors, Inc.,
  General Partner of

  
	
   

  	
  Highland Capital
  Management, L.P.

  
	
   

  	
   

  

 

 

 

S-30

	
  Highland Credit Opportunities
  CDO Ltd.

  
	
   

  	
   

  
	
  By:

  	
  /s/ Darren Britt

  
	
  Name:

  	
  Darren Britt

  
	
  Title:

  	
  Attorney - N - Fact

  

 

 

 

S-31

 

	
  LATITUDE CLO I, LTD

  
	
   

  	
   

  
	
  By:

  	
  /s/ Chauncey F. Lufkin III

  
	
  Name:

  	
  Chauncey F. Lufkin III

  
	
  Title:

  	
   

  

 

 

S-32

 

	
  GLC CDO I, Ltd.

  
	
   

  	
   

  
	
  By:

  	
  /s/ Michael Ferris

  
	
  Name:

  	
  Michael Ferris

  
	
  Title:

  	
  Principal, GLC Management

  

 

 

S-33

 

	
  Evergreen CBNA Loan Funding LLC,
  for itself or

  
	
  as agent for Evergreen CFPI
  Loan Funding LLC

  
	
   

  	
   

  
	
  By:

  	
  /s/ Mikus N. Kins

  
	
  Name:

  	
  MIKUS N. KINS

  
	
  Title:

  	
  Attorney-in-fact

  

 

 

S-34

 

	
  LightPoint CLO III, Ltd.

  
	
  LightPoint CLO IV, Ltd.

  
	
   

  	
   

  
	
  By:

  	
  /s/ Colin Dolan

  
	
  Name:

  	
  COLIN DONLAN

  
	
  Title:

  	
  VICE PRESIDENT

  

 

 

S-35

 

	
  HALCYON STRUCTURED ASSET

  
	
  MANAGEMENT CLO I LTD.

  
	
   

  	
   

  
	
  By:

  	
  Halcyon Structured Asset

  
	
  Management L.P., as
  Collateral

  
	
  Manager under the
  Collateral

  
	
  Management Agreement dated

  
	
  September 23, 2005 between
  Halcyon

  
	
  Structured Asset
  Management L.P. and

  
	
  Halcyon Structured Asset
  Management

  
	
  CLO I Ltd.

  
	
   

  	
   

  
	
  By:

  	
  Halcyon Structured Asset

  
	
  Management LLC, its sole
  general

  
	
  partner

  
	
   

  	
   

  
	
  By:

  	
  /s/ James Pasquarelli

  
	
  Name:

  	
  James Pasquarelli

  
	
  Title:

  	
  Chief Financial Officer

  

 

 

S-36

 

	
   

  	
  Franklin CLO IV, Limited

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ DAVID ARDINI

  
	
   

  	
  Name:

  	
  David Ardini

  
	
   

  	
  Title:

  	
  Vice President

  

 

 

S-37

	
   

  	
  Stanfield Carrera CLO, Ltd.

  By: Stanfield Capital Partners LLC

  as its Asset Manager

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ CHRISTOPHER E. JANSEN

  
	
   

  	
  Name:

  	
  Christopher E. Jansen

  
	
   

  	
  Title:

  	
  Managing Partner

  

 

 

S-38

	
   

  	
  Stanfield Arbitrage CDO, Ltd.

  By: Stanfield Capital Partners LLC

  as its Collateral Manager

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ CHRISTOPHER E. JANSEN

  
	
   

  	
  Name:

  	
  Christopher E. Jansen

  
	
   

  	
  Title:

  	
  Managing Partner

  

 

 

S-39

	
   

  	
  Stanfield Vantage CLO, Ltd

  By: Stanfield Capital Partners, LLC

  as its Asset Manager

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ CHRISTOPHER E. JANSEN

  
	
   

  	
  Name:

  	
  Christopher E. Jansen

  
	
   

  	
  Title:

  	
  Managing Partner

  

 

 

S-40

	
   

  	
  Stanfield Bristol CLO, Ltd.

  By: Stanfield Capital Partners LLC

  as it Collateral Manager

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ CHRISTOPHER E. JANSEN

  
	
   

  	
  Name:

  	
  Christopher E. Jansen

  
	
   

  	
  Title:

  	
  Managing Partner

  

 

 

S-41

	
   

  	
  Castle Garden Funding

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ ANDREW H. MARSHAK

  
	
   

  	
  Name:

  	
  ANDREW H. MARSHAK

  
	
   

  	
  Title:

  	
  AUTHORIZED SIGNATORY

  

 

 

S-42

 

 

	
   

  	
  Atrium II

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ ANDREW H. MARSHAK

  
	
   

  	
  Name: 

  	
  ANDREW H. MARSHAK

  
	
   

  	
  Title: 

  	
  AUTHORIZED SIGNATORY

  

 

S-43

 

	
   

  	
  Atrium IV

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ ANDREW H. MARSHAK

  
	
   

  	
  Name:  

  	
  ANDREW H. MARSHAK

  
	
   

  	
  Title: 

  	
  AUTHORIZED SIGNATORY

  

 

S-44

 

	
   

  	
  Madison Park Funding I, Ltd.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ ANDREW H. MARSHAK

  
	
   

  	
  Name: 

  	
  ANDREW H. MARSHAK

  
	
   

  	
  Title: 

  	
  AUTHORIZED SIGNATORY

  

 

S-45

 

	
   

  	
  [ULT CBNA Loan Funding LLC, for itself

  
	
   

  	
  or as agent for ULT CFPI Loan Funding

  
	
   

  	
  LLC]

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ ROY HYKAL

  
	
   

  	
  Name: 

  	
  Roy Hykal

  
	
   

  	
  Title: 

  	
  Attorney-At-FACT

  

 

S-46

 

	
   

  	
  Whitehorse I, Ltd.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ ETHAN UNDERWOOD

  
	
   

  	
  Name: 

  	
  Ethan Underwood

  
	
   

  	
  Title: 

  	
  Portfolio Manager

  

 

S-47

 

	
   

  	
  Whitehorse II, Ltd.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ ETHAN UNDERWOOD

  
	
   

  	
  Name: 

  	
  Ethan Underwood

  
	
   

  	
  Title: 

  	
  Portfolio Manager

  

 

S-48

 

 

	
   

  	
  Whitehorse III, Ltd.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ ETHAN UNDERWOOD

  
	
   

  	
  Name:  

  	
  Ethan Underwood

  
	
   

  	
  Title: 

  	
  Portfolio Manager

  

 

S-49

 

	
   

  	
  Grand Central Asset Trust, HLD Series

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ MIKUS N. KINS

  
	
   

  	
  Name:  

  	
  MIKUS N. KINS

  
	
   

  	
  Title: 

  	
  Attorney-in-fact

  

 

S-50

 

	
   

  	
  The Governor and Company of the Bank of Ireland

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ PAUL CLARKE

  
	
   

  	
  Name:  

  	
  Paul Clarke

  
	
   

  	
  Title: 

  	
  Authorized Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ [ILLEGIBLE]

  
	
   

  	
  Name:  

  	
  [ILLEGIBLE]

  
	
   

  	
  Title: 

  	
  Authorized Signatory

  

 

S-51

 

	
   

  	
  KC CLO II PLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ [ILLEGIBLE]

  
	
   

  	
  Name: 

  	
  [ILLEGIBLE]

  
	
   

  	
  Title: 

  	
  [ILLEGIBLE]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ IRINA [ILLEGIBLE]

  
	
   

  	
   

  	
  Irina [ILLEGIBLE]

  
	
   

  	
   

  	
  Vice President

  

 

S-52Exhibit 10.24

BARE
ESCENTUALS BEAUTY, INC.

FOURTH
AMENDMENT TO CREDIT AGREEMENT

This FOURTH AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is dated as of June 7, 2006 and entered into by
and among BARE ESCENTUALS, INC., a Delaware
corporation, formerly known as STB Beauty, Inc. (“Holdings”),
BARE ESCENTUALS BEAUTY, INC., a
Delaware corporation, formerly known as MD Beauty, Inc. (the “Company”), THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF
(each individually referred to herein as a “Consenting Lender” and
collectively as “Consenting Lenders”), and BNP PARIBAS (“BNP
Paribas”), as administrative agent for Lenders (in such
capacity, “Administrative
Agent”), and solely
for purposes of Section 3 hereof, the Credit Support Parties (as defined
in Section 3 hereof).  Reference
is made to that certain Credit Agreement dated as of February 18, 2005, as
amended by the First Amendment to Credit Agreement dated as of July 21, 2005,
the Second Amendment to Credit Agreement dated as of October 7, 2005, and the
Third Amendment to Credit Agreement dated as of March 17, 2006, in each case by
and among Holdings, Company, the Lenders referenced therein and BNP Paribas, as
Administrative Agent (the “Credit Agreement”).
Capitalized terms used herein without definition shall have the same meanings
as set forth in the Credit Agreement, as amended hereby.

RECITALS

WHEREAS, Company and Lenders desire to amend the
Credit Agreement to:

(i)            permit Company to incur additional
Term Loans under the Credit Agreement (“New Terms Loans”),
in an aggregate principal amount which, when added to the Term Loans held by
Consenting Lenders, equals $359,250,000, the proceeds of which will be used to
prepay Term Loans which are held by Non-Consenting Lenders (defined below), to
make a dividend to the shareholders of Holdings and to pay certain transaction
costs and expenses;

(ii)           increase the aggregate Revolving Loan
Commitments to $25,000,000;

(iii)          permit Company to incur additional
Second Lien Term Loans in the aggregate principal amount of up to $88,000,000,
the proceeds of which will be used to make a dividend to the shareholders of
Holdings and to pay certain transaction costs and expenses;

(iv)          permit Holdings to issue subordinated
notes in the aggregate principal amount of up to $125,000,000, the proceeds of
which will be used to make a dividend to the shareholders of Holdings and to
pay certain transaction costs and expenses (it being understood that the notes
issued by Holdings concurrently with the execution of the original Credit
Agreement have since been prepaid in full as permitted by the First Amendment
to the Credit Agreement); and

(iv) make certain
other modifications as set forth below. 
Lenders party to the Credit Agreement which are not Consenting Lenders
(each a “Non-Consenting Lender” and together the
“Non-Consenting Lenders”)) will not be
affected by Section 1 of this Amendment because their Loans will be fully
prepaid and their Revolving Loan Commitments will be terminated on the Fourth
Amendment Effective Date.

 

 

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

SECTION 1.                                                    AMENDMENTS TO CREDIT AGREEMENT

1.1          Amendments to Subsection 1.1:  Certain Defined Terms.

A.            Subsection 1.1 of the Credit Agreement is
hereby amended by deleting the definition of “Maximum Consolidated Capital
Expenditures Amount” therefrom.

B.            Subsection 1.1 of the Credit Agreement is
hereby further amended by adding thereto the following definitions, which shall
be inserted in proper alphabetical order:

“Fourth Amendment” means that certain Fourth Amendment to
this Agreement, dated as of June 7, 2006.

“Fourth Amendment Effective Date” means the date the
conditions to the effectiveness of the Fourth Amendment, set forth in Section 4
thereof, are satisfied.

“Fourth Amendment Dividend Payment” means, collectively, (a)
the application by the Company of (i) a portion of the proceeds of the
additional Term Loans contemplated by the Fourth Amendment and the additional
Second Lien Term Loans contemplated by the Second Lien Fourth Amendment and
(ii) certain other funds, in each case towards a dividend by the Company to
Holdings and (b) the application by Holdings of the proceeds of the dividends
described in clause (a) and the proceeds of the Holdings Notes towards a
dividend to its shareholders, such dividends to be made on or about the Fourth
Amendment Effective Date in an aggregate amount not to exceed $341,000,000.

“IPO” means the consummation of an initial
public offering of any of Holdings’ equity Securities.

“Second Lien Fourth Amendment” means the Fourth Amendment to
Term Loan Agreement dated as of June 7, 2006 by and among Holdings, Company,
the financial institutions party thereto, and BNP Paribas, as administrative
agent for lenders thereunder.

C.            Subsection 1.1 of the Credit Agreement is
hereby further amended by deleting the definition of the term set forth in
quotation marks below and substituting therefor the following definition:

“Borrowing
Base” means, at any time, an amount equal to the Revolving Loan Commitment Amount then in
effect.

“Change in
Control” means any of
the following:  (a) at any time prior to
an IPO, Permitted Holders shall cease to beneficially own and control, directly
or indirectly, at least a majority of the issued and outstanding shares of
Capital Stock of Company entitled (without regard to the occurrence of any
contingency) to vote for the election of members of the Governing Body of
Company; (b) at any time after an IPO, (I) Permitted

 

2

 

Holders shall cease to beneficially own and
control, directly or indirectly, at least 30% of the capital stock of Company, or
(II) any “person” or “group” (as such terms are used in sections 13(d) and
14(d) of the Exchange Act, but excluding any employee benefit plan of such
person and its subsidiaries, and any person or entity acting in its capacity as
trustee, agent or other fiduciary or administrator of any such plan), excluding
Permitted Holders, shall become the beneficial owner, directly or indirectly,
of a greater percentage of the then outstanding voting stock of the Company
than that held by Permitted Holders; (c) during any period of twelve (12)
consecutive months, the Governing Body of the Company shall not consist of a
majority of the Continuing Members; (d) the failure at any time of Holdings to legally and
beneficially own and control 100% of the issued and outstanding shares of
Capital Stock of Company or the failure at any time of Holdings to have the
ability to elect all of the Governing Body of Company; or (e) the occurrence of
any “Change in Control” or similar event under the Second Lien Term Loan
Documents or the Holdings Note Documents. 
As used herein, the term “beneficially own” or “beneficial ownership”
shall have the meaning set forth in the Exchange Act and the rules and
regulations promulgated thereunder.

“Consolidated EBITDA” means, for any period, the sum, without
duplication, of the amounts for such period of (i) Consolidated Net Income,
(ii) Consolidated Interest Expense, (iii) taxes paid or provisions for taxes
based on income, (iv) total depreciation expense, (v) total amortization
expense, (vi) other non-cash items (including, without limitation, non-cash effect
of any purchase accounting, write-down of intangibles and marking hedges to
market), (vii) non-cash employee compensation expenses, (viii) the CEO Payment
Amount, (ix) Management Fees during such period, (x) any charges associated
with the one-time write offs related to the Emeryville Lease and the Corporate
Office Lease, provided that the aggregate amount of such charges included in
this clause (x) shall not exceed $2,000,000, (xi) Transaction Costs and any
other non-recurring or extraordinary Cash costs incurred in such period,
provided that the aggregate amount of such other non-recurring or extraordinary
Cash costs included in this clause (xi) shall not exceed $3,000,000 in any one
Fiscal Year or $9,000,000 in the aggregate from and after the Closing Date, and
(xii) reasonable and customary expenses incurred in such period and associated
with an IPO; provided that the aggregate amount of such expenses  included in this clause (xii) shall not
exceed $2,500,000, but only, in the case of clauses (ii)-(xii), to the extent
deducted in the calculation of Consolidated Net Income, less other non-cash
items added in the calculation of Consolidated Net Income (other than any such
non-cash item to the extent it will result in the receipt of cash payments in
any future period), all of the foregoing as determined on a consolidated basis
for Company and its Subsidiaries in conformity with GAAP.  Notwithstanding anything contained herein to
the contrary, the creation and reversal of reserves in the ordinary course of
business shall not constitute non-cash items for purposes of calculating
Consolidated EBITDA.

“Consolidated Excess Cash Flow” means, for any period, an
amount (if positive) equal to (i) the sum, without duplication, of the amounts
for such period of (a) Consolidated EBITDA (but determined by adding back
thereto, but without duplication, any amounts deducted in the calculation of
Consolidated Net Income for such period that were paid, incurred or accrued in
violation of any of the provisions of this Agreement) and (b) the Consolidated
Working Capital Adjustment minus (ii) the sum, without duplication,
of the

 

3

 

amounts for such
period of (a) voluntary and scheduled repayments of Consolidated Total Debt
(excluding repayments of Revolving Loans or Swing Line Loans except to the
extent the Revolving Loan Commitment Amount is permanently reduced in
connection with such repayments, and repayments of Indebtedness that is not
incurred in compliance with subsection 7.1), (b) Consolidated Capital
Expenditures (net proceeds of any related financing with respect to such
expenditures) (c) Consolidated Cash Interest Expense in respect of Indebtedness
incurred in compliance with subsection 7.1, (d) current taxes based on
income of Company and its Subsidiaries paid in cash such period, (e) Management
Fees paid in cash during such period to the extent permitted pursuant to
subsection 7.5, (f) any cash consideration paid during such period by Company
or any of its Subsidiaries in connection with any Permitted Acquisition (net of
any amount of Indebtedness incurred or assumed or proceeds of any equity
received, in connection therewith), and (g) Transaction Costs, expenses
associated with an IPO, and any other non-recurring or extraordinary Cash
costs, in each case incurred in such period and added to Consolidated Net
Income in the calculation of Consolidated EBITDA for such period; provided
that for Fiscal Year 2006, all components of Consolidated Excess Cash Flow
shall be calculated for the period from the Fourth Amendment Effective Date to
January 1, 2007.

“Holdings Note Purchase Agreement” means
that certain Note Purchase Agreement dated as of June 7, 2006 by and between
Holdings, York Street Mezzanine Partners, L.P., York Street Mezzanine Partners
II, L.P. and certain other note purchasers party thereto, pursuant to which the
Holdings Notes are issued on June 7, 2006.

“Holdings Note Documents” means the Holdings Note Purchase
Agreement, Holdings Subordination Agreement, Holdings Notes, the management fee
subordination agreement dated as of June 7, 2006 by and among Berkshire
Partners LLC, York Street Mezzanine Partners, L.P., York Street Mezzanine
Partners II, L.P. and certain other note purchasers party thereto, the
subordination letter dated as of June 7, 2006 by and among JH Partners LLC,
York Street Mezzanine Partners, L.P., York Street Mezzanine Partners II, L.P.
and certain other note purchasers party thereto, and the Subordination
Agreement dated as of June 7, 2006 by and among Holdings, York Street Mezzanine
Partners, L.P., York Street Mezzanine Partners II, L.P., Berkshire Investors
LLC, Berkshire Fund V Limited Partnership, Berkshire Fund VI Limited
Partnership and JH MDB Investors, L.P. and certain other note holders party thereto.

“Holdings Notes” means those certain 15.0% Senior
Subordinated Notes due June 7, 2014 issued by Holdings pursuant to the Holdings
Note Purchase Agreement.

“Holdings Subordination Agreement” means that certain
Subordination Agreement dated as of the date hereof by and among Administrative
Agent, BNP Paribas, as administrative agent under the Second Lien Term Loan
Agreement, Holdings, York Street Mezzanine Partners, L.P., York Street
Mezzanine Partners II, L.P. and certain other note purchasers party thereto.

“Lender” and “Lenders” means
the Persons identified as “Lenders” and listed on the signature pages of the
Fourth Amendment, together with their successors and permitted

 

4

 

assigns pursuant
to subsection 10.1, and the term “Lenders” shall include Swing Line Lender
unless the context otherwise requires; provided that the term “Lenders”,
when used in the context of a particular Commitment, shall mean Lenders having
that Commitment.

“Second Lien Term Loan Agreement” means the Term Loan
Agreement dated as of February 18, 2005, by and among Holdings, Company, the
financial institutions party thereto and BNP Paribas, as administrative agent,
as amended by the First Amendment to Term Loan Agreement dated as of July 21,
2005, the Second Lien Second Amendment, the Third Amendment to Term Loan
Agreement dated as of March 16, 2006, the Second Lien Fourth Amendment, and any
replacement agreement or facility existing at any time and permitted pursuant
to the terms hereof; provided that the lenders party to such replacement
agreement or facility expressly agree to be bound by the Intercreditor
Agreement or enter into an intercreditor agreement in form and substance
satisfactory to Administrative Agent and the Requisite Lenders.

“Transaction Costs” means all fees, costs, expenses,
premiums, termination payments and prepayment penalties incurred by any Loan
Party (a) on, before or shortly after the Closing Date in connection with the
transactions contemplated by the Loan Documents and the Related Agreements,
including write-off of deferred financing costs and (b) on, before or shortly
after the Fourth Amendment Effective Date in connection with the transactions
contemplated by the Fourth Amendment, including write-off of deferred financing
costs.

1.2                               New Term Loans and New Revolving
Commitments; Conversion of Existing Loans and Commitments; Waiver of Prepayment.

A.            Term Loans.  Each
Consenting Lender that has committed to fund New Term Loans agrees to lend to
the Company on the Fourth Amendment Effective Date the amount of such New Term
Loan commitment.  The Company shall apply
the proceeds of such Term Loans to prepay Term Loans held by Non-Consenting
Lenders, and for the other purposes described in Section 2.5A of the Credit
Agreement (as amended hereby).

B.            Revolving Loans. 
The Revolving Loan Commitments of each Non-Consenting Lender shall be
deemed terminated on the Fourth Amendment Effective Date.  Each Consenting Lender’s existing Revolving
Loan Commitment shall remain in effect, or shall be increased, as the case may
be, to equal the Revolving Loan Commitment ascribed to such Lender on Schedule
2.1 annexed to this Fourth Amendment. 
Schedule 2.1 to the Credit Agreement is deleted and replaced by Schedule
2.1 annexed to this Fourth Amendment effective on the Fourth Amendment
Effective Date.  Each Consenting Lender
agrees to lend to the Company on the Fourth Amendment Effective Date its Pro
Rata Share (based on such new Schedule 2.1), if any, of the principal
amount (together with accrued and unpaid interest thereon) of the Revolving
Loans held by Non-Consenting Lenders immediately prior to the Fourth Amendment
Effective Date.  The Company shall apply
the proceeds of such Revolving Loans to repay Revolving Loans held by Non-Consenting
Lenders.

 

5

 

C.            Waiver of Prepayment and Ratable Sharing. 
Each Consenting Lender hereby waives any requirement under Section
2.4B(iii) the Credit Agreement that its Loans be prepaid, or that its
Revolving Loan Commitments be terminated, from the proceeds of the Loans funded
pursuant to this Fourth Amendment, the loans funded pursuant to the Second Lien
Fourth Amendment or the Holdings Notes. 
Furthermore, each Consenting Lender waives its rights under Section
10.5 of the Credit Agreement to ratably share in any prepayment of Loans
held by Non-Consenting Lenders pursuant to this Fourth Amendment.  The foregoing waivers shall be narrowly
construed to apply only to the transactions specifically described
therein.  All requirements for prior
notification of prepayment of Loans and termination of Revolving Loan
Commitments are hereby waived for the sole purposes of effecting the
transactions contemplated by this Fourth Amendment.

1.3                               Amendments to Subsection 2.1A:
Commitments.

A.            Subsection 2.1A(i) of the Credit
Agreement is hereby amended by deleting such subsection in its entirety and
substituting the following therefor:

“(i)  Term Loans.  On the Fourth Amendment Effective Date, the
Term Loans will be funded and used for the purposes identified in subsection
2.5A.  The amount of each Lender’s Term
Loan Exposure shall be set forth in the Register and the aggregate amount of
the Term Loans as of the Fourth Amendment Effective Date is $359,250,000; provided
that the Term Loan Exposure of each Lender shall be adjusted to give effect to
any assignments of such Term Loans pursuant to subsection 10.1B.  Once repaid or prepaid, Term Loans may not be
reborrowed.”

B.            Subsection 2.1A(ii) of the Credit
Agreement is hereby amended by changing the number “$15,000,000” therein to “25,000,000.”

1.4                               Amendment to Subsection 2.2A: Rate of
Interest.

Subsection
2.2A(i) of the Credit Agreement is hereby amended by deleting the table
contained therein in its entirety and substituting the following therefor:  

	
  Consolidated Leverage Ratio

  	
   

  	
  LIBOR Margin

  	
   

  	
  Base Rate Margin

  	
   

  
	
  Greater than or equal to
  3.50:1.00

  	
   

  	
  2.75

  	
  %

  	
  1.75

  	
  %

  
	
  Less than 3.50:1.00

  	
   

  	
  2.50

  	
  %

  	
  1.50

  	
  %

  

 

6

 

1.5                               Amendments to Subsection 2.4A: Repayments,
Prepayments and Reductions in Revolving Loan Commitments.

A.            Subsection 2.4A of the Credit Agreement
is hereby amended by deleting the table contained therein in its entirety and
substituting the following therefor:   

	
  Date

  	
   

  	
  Scheduled Repayment

  
	
  June 30, 2006

  	
   

  	
   

  	
  $

  	
  4,490,625

  	
   

  
	
  September 30, 2006

  	
   

  	
   

  	
  $

  	
  4,490,625

  	
   

  
	
  December 31, 2006

  	
   

  	
   

  	
  $

  	
  4,490,625

  	
   

  
	
  March 31, 2007

  	
   

  	
   

  	
  $

  	
  4,490,625

  	
   

  
	
  June 30, 2007

  	
   

  	
   

  	
  $

  	
  4,490,625

  	
   

  
	
  September 30, 2007

  	
   

  	
   

  	
  $

  	
  4,490,625

  	
   

  
	
  December 31, 2007

  	
   

  	
   

  	
  $

  	
  4,490,625

  	
   

  
	
  March 31, 2008

  	
   

  	
   

  	
  $

  	
  4,490,625

  	
   

  
	
  June 30, 2008

  	
   

  	
   

  	
  $

  	
  4,490,625

  	
   

  
	
  September 30, 2008

  	
   

  	
   

  	
  $

  	
  4,490,625

  	
   

  
	
  December 31, 2008

  	
   

  	
   

  	
  $

  	
  4,490,625

  	
   

  
	
  March 31, 2009

  	
   

  	
   

  	
  $

  	
  4,490,625

  	
   

  
	
  June 30, 2009

  	
   

  	
   

  	
  $

  	
  4,490,625

  	
   

  
	
  September 30, 2009

  	
   

  	
   

  	
  $

  	
  4,490,625

  	
   

  
	
  December 31, 2009

  	
   

  	
   

  	
  $

  	
  4,490,625

  	
   

  
	
  March 31, 2010

  	
   

  	
   

  	
  $

  	
  4,490,625

  	
   

  
	
  June 30, 2010

  	
   

  	
   

  	
  $

  	
  4,490,625

  	
   

  
	
  September 30, 2010

  	
   

  	
   

  	
  $

  	
  4,490,625

  	
   

  
	
  December 31, 2010

  	
   

  	
   

  	
  $

  	
  4,490,625

  	
   

  
	
  March 31, 2011

  	
   

  	
   

  	
  $

  	
  4,490,625

  	
   

  
	
  June 30, 2011

  	
   

  	
   

  	
  $

  	
  67,359,375

  	
   

  
	
  September 30, 2011

  	
   

  	
   

  	
  $

  	
  67,359,375

  	
   

  
	
  December 31, 2011

  	
   

  	
   

  	
  $

  	
  67,359,375

  	
   

  
	
  Stated Maturity Date

  	
   

  	
   

  	
  $

  	
  67,359,375

  	
   

  
	
  TOTAL:*

  	
   

  	
   

  	
  $

  	
  359,250,000

  	
   

  

*Total
of payments June 30, 2006 through Stated Maturity Date

 

7

 

B.            Subsection 2.4B(iii)(c) of the Credit
Agreement is hereby amended by inserting, at the end of the parenthetical
therein, the following:

“and (vi) Net Securities Proceeds which are applied to make a
prepayment of Holdings Notes or Second Lien Term Loans permitted by clauses
(vii) and (viii) of subsection 7.5”

1.6                               Amendment to Subsection 2.5: Use of
Proceeds.

Subsection 2.5A of
the Credit Agreement is hereby deleted and replaced with the following:

“The proceeds of the Term Loans funded on the Fourth Amendment
Effective Date will be applied to (i) refinance certain existing Term Loans,
(ii) make the Fourth Amendment Dividend Payment and (iii) to pay for fees and
expenses incurred in connection with the Fourth Amendment and the Second Lien
Fourth Amendment.”

1.7                               Amendments to Subsection 6.1: Financial
Statements and Other Reports.

A.            Subsection 6.1(ii) of the Credit
Agreement is hereby amended by inserting the following at end thereof:

“provided, however,
that, with respect to any fiscal period ended 180 days or more after an IPO, so long as Company is required to file
reports under Section 13 of the Exchange Act, the requirements of this
paragraph shall be deemed satisfied (including the requirements to deliver
monthly financial statements) by the delivery of the quarterly financials of
Company on Form 10-Q for the relevant Fiscal Quarter, signed by the duly
authorized officer or officers of Company”.

B.            Subsection 6.1(iii) of the Credit
Agreement is hereby amended by inserting the following at end thereof:

“provided, however,
that, with respect to any fiscal period ended 180 days or more after an IPO, so long as Company is required to file
reports under Section 13 of the Exchange Act, the requirements of this
paragraph shall be deemed satisfied by the delivery of, the year-end financials
of Company on Form 10-K for such Fiscal Year, signed by the duly authorized
officer or officers of Company”.

C.            Subsection 6.1(xviii) of the Credit
Agreement (requiring the delivery of Borrowing Base Certificates) is hereby
deleted.

1.8                               Amendment to Subsection 6.10: Interest
Rate Protection.

Subsection 6.10 of
the Credit Agreement is hereby amended by deleting “September 30, 2006” and
replacing same with “October 2, 2007” and by deleting “2.00:1.00” and replacing
same with “3.00:1.00.”

 

8

 

1.9                               Amendments to Subsection 7.1:
Indebtedness.

A.            Subsection 7.1(iii) of the Credit
Agreement is hereby amended by deleting such subsection in its entirety and
substituting the following therefor:

“(iii)  Company and its
Subsidiaries may become and remain liable with respect to Indebtedness in
respect of Capital Leases or to finance the purchase price of equipment,
fixtures, inventory and other similar property of Company and its Subsidiaries
aggregating not in excess of $2,000,000 in Fiscal Year 2005, $8,000,000 in
Fiscal Year 2006, $12,000,000 in Fiscal Year 2007, $16,000,000 in Fiscal Year
2008 and $20,000,000 in Fiscal Year 2009 and thereafter;

B.            Subsection 7.1(vi) of the Credit
Agreement is hereby further amended by deleting “$146,000,000” and replacing
same with “$234,000,000.”

C.            Subsection 7.1(viii) of the Credit
Agreement is hereby further amended by deleting “$10,000,000” and replacing
same with “$15,000,000.”

1.10                        Amendment to Subsection 7.2: Liens and
Related Matters.

Subsection
7.2A(iii) of the Credit Agreement is hereby amended by deleting such subsection
in its entirety and substituting the following therefor:

“(iii) Liens
securing Indebtedness incurred pursuant to subsection 7.1(iii); provided
that such Liens shall not in the aggregate secure Indebtedness in excess of
$2,000,000 in Fiscal Year 2005, $8,000,000 in Fiscal Year 2006, $12,000,000 in
Fiscal Year 2007, $16,000,000 in Fiscal Year 2008 and $20,000,000 in Fiscal
Year 2009 and thereafter;

1.11                        Amendments to Subsection 7.3:  Investments; Acquisitions.

A.            Subsection 7.3(iv) of the Credit
Agreement is hereby amended by deleting the phrase “permitted by subsection 7.8”
therefrom.

B.            Subsection 7.3(x) of the Credit Agreement
is hereby amended by deleting “$5,000,000” in each place it appears and
replacing same with “$10,000,000” and by deleting “$15,000,000” in each place
it appears and replacing same with “$30,000,000.”

C.            Subsection 7.3(xii) of the Credit
Agreement is hereby amended by deleting “$10,000,000” and replacing same with “$15,000,000.”

D.            Subsection 7.3(xiv) of the Credit
Agreement is hereby amended by deleting “$1,000,000” and replacing same with “$2,000,000.”

1.12                        Amendments to Subsection 7.4:  Contingent Obligations.

A.            Subsection 7.4(v) of the Credit Agreement
is hereby amended by deleting “$1,000,000” and replacing same with “$2,000,000.”

 

9

 

B.            Subsection 7.4(viii) of the Credit
Agreement is hereby amended by deleting “$2,000,000” and replacing same with “$4,000,000.”

C.            Subsection 7.4(ix) of the Credit
Agreement is hereby amended by deleting “$8,000,000” and replacing same with “$10,000,000.”

1.13                        Amendment to Subsection 7.5:  Restricted Junior Payments.

Subsection 7.5 of
the Credit Agreement is hereby deleted in its entirety and replaced with the
following:

“Neither Company nor Holdings shall, nor shall either permit any of its
Subsidiaries to, directly or indirectly, declare, order, pay, make or set apart
any sum for any Restricted Junior Payment; provided that (i) Company
and Holdings may make the Fourth Amendment Dividend Payment, (ii)  Company
may make regularly scheduled payments of interest on the Second Lien Term Loans
so long as no Event of Default described in subsection 8.1, 8.6 or 8.7 exists,
and so long as the Administrative Agent has not delivered to the Borrower
written notice of acceleration or the intent to commence any other remedy with
respect to any other then-existing Event of Default, (iii) Company may
prepay the Second Lien Term Loans, with the Excess Cash Flow not required to be
prepaid under subsection 2.4B(iii)(e), provided that the Applicable
Consolidated Leverage Ratio is 3.00:1.00 or less, (iv) Company may make
Restricted Junior Payments to Holdings (a) in an aggregate amount not to exceed
$300,000 in any Fiscal Year, to the extent necessary to permit Holdings to pay
general administrative costs and expenses (other than Management Fees), and (b)
to the extent necessary to permit Holdings to discharge the consolidated tax
liabilities of Holdings and its Subsidiaries, in each case so long as Holdings
applies the amount of any such Restricted Junior Payment for such purpose, (v)
so long as no Event of Default or Potential Event of Default shall have
occurred and be continuing or shall be caused thereby, Company may make
Restricted Junior Payments to Holdings to the extent necessary to permit
Holdings to repurchase Holdings Capital Stock (or any options rights to acquire
such Capital Stock) from any former or current employee of Holdings or its
Subsidiaries so long as the aggregate amount of all such repurchases shall not
exceed $5,000,000 in any Fiscal Year and shall not exceed $10,000,000 in the
aggregate, and Holdings may repurchase such Capital Stock using the proceeds of
such Restricted Junior Payments by Company or, if such Restricted Payments are
not made by Company in sufficient amounts to effect such repurchase, Holdings
may issue promissory notes in exchange for such Capital Stock and may
subsequently redeem such promissory notes, (vi) so long as no Event of Default
under any of subsection 8.1, 8.6 or 8.7 shall have occurred and be continuing,
Company may pay Management Fees with respect to and as provided under the terms
of the Management Agreements; (vii) Company may prepay the Second Lien Term Loans
with Net Securities Proceeds from the issuance of any equity Securities of
Holdings, provided that the Applicable
Consolidated Leverage Ratio immediately prior to such issuance is 3.00:1.00 or less; (viii) Company may prepay the Holdings Notes with Net
Securities Proceeds from the issuance of any equity Securities of Holdings
provided that the Applicable Consolidated Leverage Ratio is 4.50:1.00 or less
(provided, however, that for this purpose only, the Applicable Consolidated
Leverage Ratio will be calculated (A) to

 

10

 

include the
amount of the then-outstanding Holdings Notes in Consolidated Total Debt, and
(B) to give pro forma effect to the prepayment of Indebtedness to made from
such Net Securities Proceeds, including the proposed prepayment of Holdings
Notes); and (ix)
Company may make Restricted Junior Payments to Holdings to the extent necessary
to permit Holdings to pay transaction fees set forth in Section 1.6 of the
Holdings Note Purchase Agreement.”

1.14                        Amendments to Subsection 7.6: Financial
Covenants.

A.            Subsection 7.6A of the Credit Agreement
is hereby amended by deleting such subsection in its entirety and substituting
the following therefor:

“A.          Minimum
Cash Interest Coverage Ratio. 
Company shall not permit the ratio of (i) Consolidated EBITDA to (ii)
Consolidated Cash Interest Expense for any four-Fiscal Quarter period ending
during any of the periods set forth below to be less than the correlative ratio
indicated:

	
  Period ending

  	
   

  	
  Minimum Cash Interest Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Second Fiscal Quarter 2005

  	
   

  	
  2.70:1.00

  	
   

  
	
  Third Fiscal Quarter 2005

  	
   

  	
  2.70:1.00

  	
   

  
	
  Fourth Fiscal Quarter 2005

  	
   

  	
  1.75:1.00

  	
   

  
	
  First Fiscal Quarter 2006

  	
   

  	
  2.00:1.00

  	
   

  
	
  Third Fiscal Quarter 2006

  	
   

  	
  1.70:1.00

  	
   

  
	
  Fourth Fiscal Quarter 2006

  	
   

  	
  1.70:1.00

  	
   

  
	
  First Fiscal Quarter 2007

  	
   

  	
  1.70:1.00

  	
   

  
	
  Second Fiscal Quarter 2007

  	
   

  	
  1.70:1.00

  	
   

  
	
  Third Fiscal Quarter 2007

  	
   

  	
  1.75:1.00

  	
   

  
	
  Fourth Fiscal Quarter 2007

  	
   

  	
  1.85:1.00

  	
   

  
	
  First Fiscal Quarter 2008

  	
   

  	
  2.00:1.00

  	
   

  
	
  Second Fiscal Quarter 2008

  	
   

  	
  2.00:1.00

  	
   

  
	
  Third Fiscal Quarter 2008

  	
   

  	
  2.10:1.00

  	
   

  
	
  Fourth Fiscal Quarter 2008

  	
   

  	
  2.15:1.00

  	
   

  
	
  First Fiscal Quarter 2009
  and each Fiscal Quarter thereafter

  	
   

  	
  2.50:1.00

  	
   

  

 

For purposes of calculating compliance with the Minimum Cash Interest
Coverage Ratio covenant set forth in this subsection 7.6A for the period from
the Fourth Amendment Effective Date though the first anniversary of the Fourth
Amendment Effective Date, Consolidated Cash Interest Expense shall be
calculated as of any date of determination by multiplying Consolidated Cash
Interest Expense from the Fourth Amendment Effective Date through such date of
determination by a fraction the numerator of which is 365 and the denominator
of which is the number of days elapsed since the Fourth Amendment Effective Date
as of such date of determination.”

B.            Subsection 7.6B of the Credit Agreement
is hereby deleted.

 

11

C.            Subsection 7.6C of the Credit Agreement
is hereby amended by deleting the table contained therein in its entirety and
substituting the following therefor:

	
  Period

  	
   

  	
  Maximum Leverage Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Second Fiscal Quarter 2005

  	
   

  	
  4.75:1.00

  	
   

  
	
  Third Fiscal Quarter 2005

  	
   

  	
  4.75:1.00

  	
   

  
	
  Fourth Fiscal Quarter 2005

  	
   

  	
  5.90:1.00

  	
   

  
	
  First Fiscal Quarter 2006

  	
   

  	
  5.75:1.00

  	
   

  
	
  Third Fiscal Quarter 2006

  	
   

  	
  6.00:1.00

  	
   

  
	
  Fourth Fiscal Quarter 2006

  	
   

  	
  5.85:1.00

  	
   

  
	
  First Fiscal Quarter 2007

  	
   

  	
  5.85:1.00

  	
   

  
	
  Second Fiscal Quarter 2007

  	
   

  	
  5.80:1.00

  	
   

  
	
  Third Fiscal Quarter 2007

  	
   

  	
  5.50:1.00

  	
   

  
	
  Fourth Fiscal Quarter 2007

  	
   

  	
  5.25:1.00

  	
   

  
	
  First Fiscal Quarter 2008

  	
   

  	
  4.85:1.00

  	
   

  
	
  Second Fiscal Quarter 2008

  	
   

  	
  4.75:1.00

  	
   

  
	
  Third Fiscal Quarter 2008

  	
   

  	
  4.50:1.00

  	
   

  
	
  Fourth Fiscal Quarter 2008

  	
   

  	
  4.10:1.00

  	
   

  
	
  First Fiscal Quarter 2009

  	
   

  	
  3.50:1.00

  	
   

  
	
  Second Fiscal Quarter 2009

  	
   

  	
  3.50:1.00

  	
   

  
	
  Third Fiscal Quarter 2009

  	
   

  	
  3.50:1.00

  	
   

  
	
  Fourth Fiscal Quarter 2009

  	
   

  	
  3.50:1.00

  	
   

  
	
  First Fiscal Quarter 2010

  	
   

  	
  2.50:1.00

  	
   

  
	
  Second Fiscal Quarter 2010

  	
   

  	
  2.50:1.00

  	
   

  
	
  Third Fiscal Quarter 2010

  	
   

  	
  2.50:1.00

  	
   

  
	
  Fourth Fiscal Quarter 2010

  	
   

  	
  2.50:1.00

  	
   

  
	
  First Fiscal Quarter 2011 and each Fiscal Quarter thereafter

  	
   

  	
  1.75:1.00

  	
   

  

 

1.15                        Amendment to Subsection 7.7: Restriction on
Fundamental Changes; Asset Sales.

Subsection 7.7(v)
of the Credit Agreement is hereby amended by deleting “$400,000” and replacing
same with “$800,000.”

1.16                        Amendment to Subsection 7.8: Consolidated
Capital Expenditures.

Subsection 7.8 of
the Credit Agreement is hereby deleted.

1.17                        Amendment to Subsection 10.19: Confidentiality.

                Subsection 10.19 of the Credit Agreement is hereby
amended by deleting clause (f) in its entirety and replacing the following
therefor:

“(f) subject to an agreement containing provisions substantially
the same as those of this subsection 10.19, to (i) any Eligible Assignee
of or participant in, or any prospective Eligible Assignee of or Participant
in, any of its rights or obligations under this 

 

12

Agreement, (ii) any pledgee referred to in subsection 10.01D, or  (iii) any direct or indirect contractual
counterparty or prospective counterparty (or such contractual counterparty’s or
prospective counterparty’s professional advisor) to any credit derivative
transaction relating to obligations of Company”.

SECTION 2.                                                    REPRESENTATIONS AND WARRANTIES

In order to induce
Lenders and Administrative Agent to enter into this Amendment, Company and
Holdings each represents and warrants to each Lender and Administrative Agent
that the following statements are true, correct and complete:

(i)            each of Company and
Holdings has all requisite corporate power and authority to enter into this
Amendment and to carry out the transactions contemplated by, and perform its
obligations under, the Credit Agreement as amended by this Amendment (the “Amended Agreement”);

(ii)           the execution and
delivery of this Amendment and the performance of the Amended Agreement have
been duly authorized by all necessary corporate action on the part of Company
and Holdings;

(iii)          the execution and
delivery by Company and Holdings of this Amendment and the performance by
Company and Holdings of the Amended Agreement do not and will not (i) violate
any provision of any law or any governmental rule or regulation applicable to
Holdings, Company or any of its Subsidiaries, the Certificate or Articles of
Incorporation or Bylaws of Holdings, Company or any of its Subsidiaries or any
order, judgment or decree of any court or other agency of government binding on
Holdings, Company or any of its Subsidiaries, (ii) conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a default
under any Contractual Obligation of Holdings, Company or any of its
Subsidiaries, (iii) result in or require the creation or imposition of any Lien
upon any of the properties or assets of Holdings, Company or any of its
Subsidiaries (other than Liens created under any of the Loan Documents in favor
of Administrative Agent on behalf of Lenders and other Liens permitted under
the Amended Agreement), or (iv) require any approval of stockholders or any
approval or consent of any Person under any Contractual Obligation of Holdings,
Company or any of its Subsidiaries, except for with respect to the foregoing
clauses (i) , (ii) and (iv)  above, such violations, conflicts,
breaches, defaults or failures to obtain approvals or consents which could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect;

(iv)          the execution and
delivery by Company of this Amendment and the performance by Holdings and
Company of the Amended Agreement do not and will not require any registration
with, consent or approval of, or notice to, or other action to, with or by, any
federal, state or other governmental authority or regulatory body, except for
registrations, consents, approvals, notices and other actions the failure to
obtain or take have not and could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect;

(v)           this Amendment and
the Amended Agreement have been duly executed and delivered by Company and
Holdings and are the legally valid and binding obligations of Company and
Holdings, enforceable against Company and Holdings in accordance with their 

 

13

respective terms,
except as may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to or limiting creditors’ rights generally or by
equitable principles relating to enforceability;

(vi)          the representations
and warranties contained in Section 5 of the Credit Agreement are and will be
true, correct and complete in all material respects on and as of the date
hereof and the Fourth Amendment Effective Date to the same extent as though
made on and as of such dates, except to the extent such representations and
warranties specifically relate to an earlier date, in which case they were
true, correct and complete in all material respects on and as of such earlier
date; and

(vii)         no event has
occurred and is continuing or will result from the consummation of the
transactions contemplated by this Amendment that would constitute an Event of
Default or a Potential Event of Default.

SECTION 3.                 ACKNOWLEDGEMENT AND CONSENT

Each Subsidiary
Guarantor (each individually a “Credit Support Party”
and collectively, the “Credit Support Parties”) has read this Amendment and consents
to the terms hereof and further hereby confirms and agrees that,
notwithstanding the effectiveness of this Amendment, the obligations of such
Credit Support Party under, and the Liens granted by such Credit Support Party
as collateral security for the indebtedness, obligations and liabilities
evidenced by the Credit Agreement and the other Loan Documents pursuant to,
each of the Loan Documents to
which such Credit Support Party is a party shall not be impaired and each of
the Loan Documents to which such
Credit Support Party is a party is, and shall continue to be, in full force and
effect and is hereby confirmed and ratified in all respects.

Each of Holdings,
Company and the Subsidiary Guarantors hereby acknowledges and agrees that the
Secured Obligations under, and as defined in, the Security Agreement dated as
of February 18, 2006, by and among Holdings, Company, the Subsidiary Guarantors
and Administrative Agent (the “Security Agreement”)
will include all Obligations under, and as defined in, the Credit Agreement (as
amended hereby).

Each Subsidiary
Guarantor acknowledges and agrees that (i) notwithstanding the conditions
to effectiveness set forth in this Amendment, such Credit Support Party is not
required by the terms of the Credit Agreement or any other Loan Document to
consent to the amendments to the Credit Agreement effected pursuant to this
Amendment and (ii) nothing in the Credit Agreement, this Amendment or any
other Loan Document shall be deemed to require the consent of such Credit Support
Party to any future amendments to the Credit Agreement.

SECTION 4.                                                    CONDITIONS TO EFFECTIVENESS

Except as set forth
below, this Amendment shall become effective only upon the satisfaction of the
following conditions precedent (the “Closing Conditions”):

A.            Corporate
Documents.  On or before the Fourth Amendment Effective
Date, Company shall and shall cause each other Credit Support Party to deliver
to Lenders (or to Administrative Agent for Lenders with sufficient executed
copies, where appropriate, for each 

 

14

Lender and its
counsel), with respect to Company or such other Credit Party, as the case may
be, a Secretary’s Certificate, in form and substance reasonably satisfactory to
Administrative Agent and dated the Fourth Amendment Effective Date, certifying
that (1) the Organizational Documents of Company, (2) the resolutions of the
Board of Directors of Company and each other Credit Support Party and (3) the
signature and incumbency certificate of Company and each other Credit Support
Party, in each case, as delivered to Administrative Agent on the Closing Date,
are in full force and effect and have not been amended or modified in any
respect since the Closing Date.

B.            Opinion
of Counsel.  Lenders and their respective counsel (or
Administrative Agent on behalf of Lenders and their respective counsel) shall
have received executed copies of one or more favorable written opinions of
Latham & Watkins LLP, counsel for Loan Parties in form and substance
reasonably satisfactory to Administrative Agent and its counsel and dated as of
the Fourth Amendment Effective Date.

C.            Amendment
of Second Lien Term Loan Agreement. 
Administrative Agent shall have received a written amendment of the
Second Lien Term Loan Agreement executed by Holdings, Company, Requisite Lenders
under the Second Lien Term Loan Agreement and BNP Paribas, as administrative
agent, in form and substance satisfactory to Administrative Agent.

D.            Holdings Note Documents. 
Administrative Agent shall have received a copy of each of the fully
executed and final Holdings Note Documents, in form and substance satisfactory
to Administrative Agent.

E.             Litigation. 
No action, suit, investigation, litigation or proceeding by any entity
(private or governmental) before any court, arbitration or governmental authority
shall be pending or, to the knowledge of Holdings, Company or their respective
Subsidiaries, threatened with respect to this Amendment, any other Loan
Document, any other Related Agreement or any other documentation executed in
connection herewith or with respect to the transactions contemplated hereby, or
which could reasonably be expected to have a Material Adverse Effect.

F.             Certificate Regarding Financial
Conditions.  On the Fourth Amendment Effective Date,
Company shall have delivered to Administrative Agent an Officer’s Certificate
executed by the chief financial officer of Company certifying that (i) the
ratio of (A) Consolidated Total Debt immediately after giving effect to the
transactions contemplated by this Fourth Amendment to (B) Consolidated EBITDA
for the twelve month period ending April 30, 2006, does not exceed 5.50:1.00,
together with calculations demonstrating the foregoing in form and substance
reasonably satisfactory to Administrative Agent, and (ii) no Potential Event of
Default or Event of Default has occurred and is continuing.

G.            Solvency Assurances. 
On the Fourth Amendment Effective Date, Administrative Agent and Lenders
shall have received an Officer’s Certificate of Company dated the Fourth
Amendment Effective Date, substantially in the form of Exhibit A
annexed hereto and with appropriate attachments, in each case demonstrating
that, after giving effect to the consummation of the transactions contemplated
by this Fourth Amendment, the Second Lien Fourth Amendment and the Holdings
Note Documents, (i) Holdings and its Subsidiaries on a 

 

15

consolidated basis will
be Solvent and (ii) Company and its Subsidiaries on a consolidated basis will
be Solvent.

H.            Completion of
Proceedings.  All corporate and other proceedings taken or to
be taken in connection with the transactions contemplated hereby and all
documents incidental thereto not previously found acceptable by Administrative
Agent, acting on behalf of Lenders, and its counsel shall be satisfactory in
form and substance to Administrative Agent and such counsel, and Administrative
Agent and such counsel shall have received all such counterpart originals or
certified copies of such documents as Administrative Agent may reasonably
request.

I.              Fees
and Expenses.  Administrative Agent shall have received all
of Administrative Agent’s reasonable costs and expenses as described in
subsection 10.2 of the Credit Agreement incurred by Administrative Agent
(including, without limitation, the reasonable fees and disbursements of O’Melveny
& Myers LLP) in connection with this Amendment and the documents and
transactions related hereto, and any fees separately agreed upon between
Company and Administrative Agent.

J.             No Material Adverse
Effect; No Default.  Since December 31, 2005, there
shall not have occurred (i) a material adverse effect upon the business,
operations, properties, assets, liabilities, condition (financial or otherwise)
or prospects of Holdings, Company and its subsidiaries, taken as a whole or
(ii) a material adverse effect on the ability of Holdings, Company or any of
its subsidiaries executing a Loan Document to perform, or of Administrative
Agent or any Lender to enforce, the obligations under the Loan Documents.  No event shall have occurred and be
continuing or would result from the consummation of the borrowing contemplated
by this Fourth Amendment that would constitute an Event of Default or a
Potential Event of Default.

K.            Notification
of Execution.  Receipt by Administrative Agent and Company
of written or telephonic notice that Company, Holdings, Requisite Lenders
(including Lenders committed to fund the New Term Loans and to provide the
Revolving Loan Commitments) and each of the Credit Support Parties has executed
this Amendment and authorized its delivery.

L.            Funding
Conditions.  All funding conditions set forth in Section
4.2 of the Credit Agreement shall have been satisfied.

SECTION 5.                                                    MISCELLANEOUS

A.            Reference
to and Effect on the Credit Agreement and the Other Loan Documents.

(i)            On
and after the effective date of this Amendment, each reference in the Credit
Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words of like
import referring to the Credit Agreement and each reference in the other Loan
Documents to the “Credit Agreement”, “thereunder”, “thereof” or words of like
import referring to the Credit Agreement shall mean and be a reference to the
Credit Agreement as amended hereby.

 

16

(ii)           Except
as specifically amended by this Amendment, the Credit Agreement and the other
Loan Documents shall remain in full force and effect and are hereby ratified
and confirmed.

(iii)          The
execution, delivery and performance of this Amendment shall not, except as
expressly provided herein, constitute a waiver of any provision of, or operate
as a waiver of any right, power or remedy of Administrative Agent or any Lender
under the Credit Agreement or any of the other Loan Documents.

B.            Headings. 
Section and subsection headings in this Amendment are included herein
for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose or be given any substantive effect.

C.            Name
Change.  Lenders hereby waive compliance with the provisions of
Section 6(b) of the Security Agreement, to the extent and only to the extent of
its requirement of 30 days’ prior written notice requirement of the Company’s
name change from “MD Beauty, Inc.” to “Bare Escentuals Beauty, Inc.”

D.            Intercreditor
Agreement.  Lenders hereby authorize Administrative Agent
to enter into the Acknowledgement of Intercreditor Agreement with BNP Paribas,
as administrative agent under the Second Lien Credit Agreement and Company.

E.             Applicable
Law.  THIS AMENDMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK).

F.             Counterparts. 
This Amendment may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.

[Remainder
of this page intentionally left blank]

 

17

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

COMPANY:

BARE ESCENTUALS BEAUTY, INC.

 

 

By:          /s/ Leslie A. Blodgett

Name:     Leslie A Blodgett

Title:                     President,
Chief Executive Officer and Secretary

 

 

HOLDINGS:

BARE ESCENTUALS, INC.

 

 

By:          /s/ Leslie A. Blodgett____________

Name:     Leslie A Blodgett

Title:                     Chief Executive
Officer

 

S-1

CREDIT
SUPPORT PARTIES:

(for purposes of Section 3)                                                                                                                                                        BIOCEUTIX INC.

ID DIRECT, INC.

MD BEAUTY SALES, INC.

 

 

By:          /s/ Leslie A. Blodgett___________

Name:     Leslie A Blodgett

Title:                     President,
Chief Executive Officer and Secretary

 

 

S-2

LENDERS:

BNP PARIBAS,

individually and as Administrative Agent

 

 

By:          /s/ Amy Kirschner___________

Name:     Amy Kirschner

Title:                     Director

 

By:          /s/ Cecile Scherer___________

Name:     Cecile Scherer

Title:                     Director

Merchant Banking Group

 

 

 

S-3

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