Document:

Exhibit 4.3

 

STOCKHOLDER AGREEMENT

 

This
STOCKHOLDER AGREEMENT (this “Agreement”), dated as of October 1,
2006, is among (i) BODY CENTRAL ACQUISITION CORP., a Delaware corporation
(the “Company”), (ii) the initial stockholders listed on Schedule
1 hereto (each, an “Initial  Stockholder” and collectively,
the “Initial  Stockholders”), and (iii) any Person who
becomes a party to this Agreement by executing an Instrument of Accession (“Instrument
of  Accession”), in the form of Exhibit A hereto
(collectively, the “Subsequent  Stockholders”).

 

WHEREAS,
the Company and certain of the Initial Stockholders have entered into a Share
Purchase Agreement, dated as of the date hereof (the “Share  Purchase
Agreement”), pursuant to which the Company shall issue shares of Series A
Preferred Stock and Common Stock to each of such Initial Stockholders on the
terms and conditions set forth therein;

 

WHEREAS,
the Company, Body Shop of America, Inc. (“BSOA”), Catalogue
Ventures, Inc. (“CV”), and the stockholders of BSOA and CV (the “Selling
Stockholders”), have entered into a Stock Purchase Agreement, dated as
of the date hereof (the “Acquisition Agreement”),
pursuant to which the Company will purchase certain shares of the issued and
outstanding capital stock of BSOA and CV from the Selling Stockholders and the
Selling Stockholders will exchange certain shares of the issued and outstanding
capital stock of BSOA and CV for shares of Series B Preferred Stock and
Common Stock, on the terms and subject to the provisions of the Acquisition
Agreement;

 

WHEREAS,
but for the execution and delivery of this Agreement by the Company and the
Initial Stockholders, the Company and Initial Stockholders would not be willing
to enter into the Share Purchase Agreement and the Acquisition Agreement, as applicable,
or to consummate the transactions contemplated thereby, which transactions will
benefit the parties; and

 

WHEREAS,
the parties hereto wish to set forth their relative rights with regard to the
transfer and issuance of the Company’s securities, election of the Company’s
Board of Directors and certain other matters concerning the parties’ ownership
and transfer of the Company’s securities;

 

NOW,
THEREFORE, the parties to this Agreement hereby agree as follows:

 

1.                                       DEFINITIONS.  For all purposes of this Agreement, the
following terms shall have the meanings set forth below:

 

“Affiliate”
shall mean, with respect to any specified Person, any Person directly or
indirectly controlling, controlled by or under direct or indirect common
control with such specified Person and shall include, without limitation, (a) any
Person who is a director, officer, executive employee, partner or trustee of
such specified Person (or a similar capacity), or beneficial holder of a
Material Interest in such specified Person, any general partner of such
specified Person (if such specified Person is organized as a limited
partnership) and Family Members of any such Persons, (b) any Person of
which such specified Person or an Affiliate (as defined in clause (a) above)
of such specified Person directly or indirectly, holds a Material Interest, (c) any
Person of which an Affiliate (as defined in clause (a) above) of such
Stockholder

 

 

is
a general partner, director, officer, executive employee or trustee (or a
similar capacity), (d) in the case of a specified Person who is an
individual, Family Members of such Person, (e) if such Person is a limited
partnership, any other limited partnership the general partner of which (or the
general partner of such general partner, if such general partner is itself a
partnership) is the same individual or group of individuals that serves as the
general partner of such Person (or as the general partner of such general
partner, if such general partner of such Person is a partnership), and (f) any
Person that is an Affiliated Fund of such Stockholder.  For purposes of this definition, “Material
Interest” means the direct or indirect beneficial ownership (as defined in Rule 13d-3
under the Securities Exchange Act of 1934, as amended) of voting securities or
other voting interests representing at least fifty percent (50%) of the
outstanding voting power of a Person or equity securities or other equity
interests representing at least fifty percent (50%) of the outstanding equity
securities or equity interests of a Person.

 

“Affiliated
Fund” shall mean, with respect to any Person, an investment fund that is an
Affiliate (as defined in clause (a) through (e) of the definition of
Affiliate) of such Person, that is managed by an Affiliate (as defined in clause
(a) through (e) of the definition of Affiliate) of such Person or
that is advised by the same investment adviser as such Person or by an
Affiliate (as defined in clause (a) through (e) of the definition of
Affiliate) of such investment adviser.

 

“AIG
Group” shall mean AIG Global Investment Group and its Affiliates,
collectively.

 

“AIG
Lead  Investor” shall mean AIG Co-Investment Fund, L.P.

 

“Approved
Sale” shall have the meaning set forth in Section 3.1 hereof.

 

“Common
Stock” shall mean the Company’s Common Stock, $0.001 par value per
share.

 

“Company”
shall have the meaning set forth in the preamble hereof.

 

“Company
Election  Period” shall have the meaning set forth in Section 2.2
hereof.

 

“Competitor”
shall mean any Person that is engaged in any business or enterprise, or that is
an Affiliate of any individual or entity that is engage in any business or
enterprise, that is competitive with the business of the Company or any of its
subsidiaries, as determined reasonably and in good faith by the Board of Directors
of the Company from time to time, provided, that any Person that owns,
on a passive basis, less than one percent (1%) of the outstanding securities of
any publicly-held corporation which is a Competitor, absent other involvement
or engagement in the business of such corporation by such Person, shall not be
deemed to a Competitor solely by virtue of such ownership.

 

“Designated
Holder” shall mean WestView, so long as WestView continues to hold all of
the shares of Series A Preferred Stock held by it on the date hereof
(other than any shares of Series A Preferred Stock disposed of by WestView
pursuant to clauses (a) or (c) of Section 2.1), or holds more
shares of the Series A Preferred Stock then outstanding, when aggregated
with any shares of Series A Preferred Stock then held by its Affiliates,
than each other single Stockholder, when aggregated with its respective
Affiliates, provided, that if any time

 

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WestView
does not continue to hold all shares of Series A Preferred Stock held by
it on the date hereof and does not hold more shares of the Series A
Preferred Stock then outstanding, when aggregated with any shares of Series A
Preferred Stock then held by its Affiliates, than each other single Stockholder,
when aggregated with its respective Affiliates, then WestView shall no longer
be the Designated Holder and the AIG Lead Investor shall be the Designated
Holder, provided, that if at such time, or any time thereafter, the AIG
Group neither holds all shares of Series A Preferred Stock held by it on
the date hereof nor does it hold more shares of the Series A Preferred
Stock then outstanding, collectively, than each other single Stockholder, when
aggregated with its respective Affiliates, then the AIG Lead Investor shall not
be the Designated Holder and there shall be no Designated Holder hereunder.

 

“Eligible
Major  Holder” shall mean, as of any date and time, each (x) Major
Holder that at such date and time continues to hold a number of Securities equal
to no less than the lesser of 2,500 shares of Series A Preferred Stock or
Common Stock, or that number of Securities that equals fifty percent (50%) of
the Securities owned by such Major Holder on the date hereof (after giving
effect to any stock splits, combinations or similar transactions involving one
or more classes of Securities as a whole), and (y) each Subsequent
Stockholder to whom any Major Holder transfers at least fifty percent (50%) of
the Securities owned by such Major Holder on the date hereof (after giving
effect to any stock splits, combinations or similar transactions involving one
or more classes of Securities as a whole) pursuant to Section 2.1(b).

 

“Family
Members” shall mean, with respect to any individual, any Related Person
or Family Trust of such individual.

 

“Family
Trust” shall mean, with respect to any individual, any trust, limited
partnership or limited liability company created solely for the benefit of one
or more of such individual’s Related Persons and either controlled by such
individual, or by a professional fiduciary or investment advisor for the
benefit of such individual’s Related Persons.

 

“Instrument of Accession” shall have the
meaning set forth in the preamble hereof.

 

“Investor
Offer Notice” shall have the meaning set
forth in Section 2.2 hereof.

 

“Major
Holders” shall mean (i) the Initial Stockholders listed on Schedule
2 hereto and (ii) each Subsequent Stockholder to whom any of such
Initial Stockholders transfers at least fifty percent (50%) of the Securities
owned by such Initial Stockholder on the date hereof (after giving effect to
any stock splits, combinations or similar transactions involving one or more
classes of Securities as a whole) pursuant to Section 2.1(b).

 

“Non-Transferring
Stockholder” shall have the meaning set forth in Section 2.2
hereof.

 

“Participating
Stockholders” shall have the meaning set forth in Section 2.3
hereof.

 

“Person”
shall mean an individual, partnership, limited liability company, corporation,
association, trust, joint venture, unincorporated organization, or any
government, governmental department or agency or political subdivision thereof.

 

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“Personal
Representative” shall mean the successor or legal representative
(including, without limitation, a guardian, executor, administrator or
conservator) of a dead or incompetent Stockholder.

 

“Preferred
Stock” shall mean the Series A Preferred Stock and the Series B
Preferred Stock.

 

“Public
Sale” shall mean any sale of Common Stock to the public pursuant to a
public offering registered under the Securities Act, or to the public through a
broker or market-maker pursuant to the provisions of Rule 144 (or any
successor rule) adopted under the Securities Act.

 

“Qualified
Public  Offering” shall mean a firm commitment underwritten public
offering pursuant to an effective registration statement under the Securities
Act covering the offer and sale of shares of Common Stock resulting in at least
$25,000,000 of gross proceeds to the Company or any selling shareholders.

 

“Related
Persons” shall mean, with respect to any individual, such individual’s
parents, spouse, brothers, sisters and lineal descendants.

 

“Restricted Securities Agreement” shall mean
any agreements from time to time entered into between the Company and any
Stockholder entitling the Company to repurchase any Securities from such
Stockholder for any reason.

 

“Securities”
shall mean any securities issued by the Company, including but not limited to
any shares of Common Stock, any shares of Preferred Stock, or any warrants,
options or other rights to acquire shares of Common Stock, Preferred Stock or
other securities of the Company as may be outstanding from time to time.

 

“Securities
Act” shall mean the United States of America Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.

 

“Series A
Preferred  Stock” shall mean the Company’s Series A Preferred
Stock, $.001 par value per share.

 

“Series B
Preferred  Stock” shall mean the Company’s Series B Preferred
Stock, $.001 par value per share.

 

“Stockholder
Election  Period” shall have the meaning set forth in Section 2.2
hereof.

 

“Stockholders”
shall mean, collectively, the Initial Stockholders and any Subsequent
Stockholders.

 

“Subsidiary”
shall mean, with respect to the Company, any corporation or other Person of
which (i) a majority (by number of votes) of the outstanding shares or
other equity interests of any class or classes of which shall at the time be
owned or controlled by the Company or by one or more Subsidiaries of the
Company, if the holders of the shares of such class or classes (a) are
ordinarily, in the absence of contingencies, entitled to vote for the election
of a majority of the

 

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directors
(or persons performing similar functions) of the issuer thereof, even though
the right so to vote has been suspended by the happening of such a contingency,
or (b) are at the time entitled, as such holders, to vote for the election
of a majority of the directors (or persons performing similar functions) of the
issuer thereof, whether or not the right so to vote exists by reason of the
happening of a contingency; or (ii) fifty percent (50%) or more of the
outstanding equity securities or equity interests are owned or controlled by
the Company or one or more of its Subsidiaries.

 

“Transfer”
shall have the meaning set forth in Section 2.1 hereof.

 

“Transferring
Stockholder” shall have the meaning set forth in Section 2.2
hereof.

 

“WestView”
shall mean WestView Capital Partners, L.P.

 

“Designated
Holder  Affiliate” shall mean, for purposes of Section 3
only, any Affiliate of the Designated Holder and any other Person who owns more
than ten percent (10%) of the partnership interests or other shares of
beneficial interests of the Designated Holder, and any Person in which the
Designated Holder and its Affiliated Funds own more than ten percent (10%) of
the voting securities or other equity interests.

 

2.                                       RESTRICTIONS ON
TRANSFER OF SECURITIES.

 

2.1.                              Transfer.  Notwithstanding anything to the contrary in
this Agreement, no Stockholder may directly or indirectly sell, assign, pledge
or otherwise transfer (a “Transfer”), and the Company shall not issue or
allow the Transfer of, any interest in any Securities, either voluntarily or
involuntarily, by operation of law or otherwise without (a) the prior
written consent of (x) the Designated Holder or, (y) in the event
that there is no Designated Holder, Stockholders holding in excess of sixty-six
and two-thirds percent (66 2/3%) of the number of shares of Series A
Preferred Stock then outstanding, and (b) strict compliance with the terms
of Sections 2.2 and 2.3, provided that any Transfer of any interest in
any Securities, either voluntarily or involuntarily, by operation of law or
otherwise, in any single transaction or series of related transactions (other
than pursuant to an Approved Sale), that would result in any Person acquiring
more than fifty percent (50%) of the shares of Series A Preferred Stock
held by any Designated Holder shall require the prior written consent of
holders of in excess of sixty-six and two-thirds percent (66 2/3%) of the
shares of Series A Preferred Stock then outstanding, rather than the
consent set forth in (x) above, and provided, further, that
the following Transfers may be made without requiring any such consent of the
Designated Holder or the other holders of the Series A Preferred Stock, as
applicable, or compliance with Sections 2.2 or 2.3:

 

(a)                                  in the case of
any Stockholder that is not a natural person, Transfers (i) to its
Affiliates and to trusts or other entities, all of the owners or beneficiaries
of which are Affiliates, (ii) in the
form of a distribution in kind by such Stockholder of all of the Securities
then held by such Person to its general and limited partners, or (iii) to
any other Person pursuant to such Stockholder’s co-sale rights under Section 2.3
hereof; or

 

(b)                                 in the case of
any Stockholder that is a natural person, Transfers (i) to such
Stockholder’s Family Members or a trust or other entity all the owners or
beneficiaries of which

 

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consist
of such Stockholder’s Family Members, (ii) to such Stockholder’s Personal
Representative, or (iii) to any other Person pursuant to such Stockholder’s
co-sale rights under Section 2.3 hereof; or

 

(c)                                  in the case of
any Stockholder, pursuant to a Qualified Public Offering or an Approved Sale or
to the Company (including pursuant to a Restricted Securities Agreement);

 

provided, that (x) the
restrictions contained in this Section 2 will continue to be applicable to
the Securities after any Transfer pursuant to clauses (a) and (b) above,
and (y) as a condition precedent to any such Transfer pursuant to clauses (a) and
(b) above, the transferee of such Securities pursuant to the immediately
preceding clause (x) above shall have executed and delivered to the
Company an Instrument of Accession, and thereby agree to be bound by, and to
comply with the terms of, this Agreement as a Stockholder party hereto.

 

2.2.                              First  Right  of
Purchase.

 

(a)                                  Any Stockholder
proposing to make any Transfer of Securities other than any Transfer of the
type described in clauses (a) through (c) of Section 2.1 above,
shall (x) require prior consent required pursuant to Section 2.1 and (y) comply
with the provisions of this Section 2.2 and Section 2.3.  At least forty-five (45) days prior to any
such proposed Transfer, the transferring Stockholder (the “Transferring  Stockholder”)
will deliver a written notice (the “Investor  Offer  Notice”)
to the Company.  The Company shall
promptly deliver a copy of such Investor Offer Notice to each of the holders of
Series A Preferred Stock (the “Non-Transferring  Stockholders”).  The Investor Offer Notice will disclose in
reasonable detail the number of Securities proposed to be transferred, the
class or classes of such Securities, the proposed price, terms and conditions
of the Transfer and the identity of the proposed transferee.

 

(b)                                 Subject to the
terms of this Section 2.2, the Company may elect to purchase all or a
portion of the Securities specified in the Investor Offer Notice at the price
and on the terms specified therein by delivering written notice of such
election to the Transferring Stockholder and the Non-Transferring Stockholders
within thirty (30) days after the delivery of the Investor Offer Notice (the “Company
Election  Period”).  If the
Company does not elect to purchase all of such Securities prior to the
expiration of the Company Election Period, each of the Non-Transferring
Stockholders may elect to purchase the balance of the Securities specified in
the Investor Offer Notice at the price and on the terms specified therein by
delivering written notice of such election to the Transferring Stockholder and
the Company within fifteen (15) days after the expiration of the Company
Election Period (the “Stockholder  Election  Period”).

 

(c)                                  If the Company
and/or any Non-Transferring Stockholders elect to purchase all of the
Securities of such class being offered, subject to the terms of
Section 2.1, the Transfer of such Securities will be consummated within
forty-five (45) days after the expiration of the Company Election Period or the
Stockholder Election Period, as the case may be.  If more than one Non-Transferring Stockholder
elects to purchase any of the Securities being offered, each Non-Transferring
Stockholder electing to purchase such Securities will be entitled to purchase
from the Transferring Stockholder a pro rata portion (based upon the respective
numbers of Securities then held by such Non-Transferring Stockholders).  If the Company and/or the Non-Transferring
Stockholders do not elect to purchase all of the Securities being offered,
neither the

 

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Company
nor the Non-Transferring Stockholders shall be entitled to purchase any of the
Securities being offered and the Transferring Stockholder may, within ninety
(90) days but not less than fifteen (15) days after the expiration of the
Stockholder Election Period, complete the Transfer of such Securities at a
price and on terms no more favorable to the transferees than the price and
terms offered in the Investor Offer Notice, provided, that no such
Transfer may be completed except in compliance with Section 2.3, if
applicable, and unless each of such transferees shall have executed and
delivered an Instrument of Accession as a condition precedent to the transfer
thereof.  If the Transferring Stockholder
fails to consummate such Transfer within the ninety (90) day period after the
expiration of the Stockholder Election Period, any subsequent proposed Transfer
of such Securities shall be once again subject to the provisions of this Section 2.2.

 

2.3.                              Participation Rights.  In the event that the Non-Transferring
Stockholders and the Company elect not to purchase all of the Securities
specified in an Investor Offer Notice, each of the Stockholders other than the
Transferring Stockholder may elect to participate in the contemplated sale by
delivering written notice to the Transferring Stockholder within fifteen (15)
days after expiration of the Company Election Period.  If any of such Stockholders elects to
participate in such sale (the “Participating  Stockholders”), each
of the Transferring Stockholder and the Participating Stockholders will be
entitled to sell in the contemplated sale, on the same terms as are applicable
to the Transferring Stockholder, a pro rata portion (based upon the respective
numbers of Securities then held by such Stockholders determined on an
as-converted basis) of the Securities to be sold in the contemplated sale.  The Transferring Stockholder will (i) use
its best efforts to obtain the agreement of the prospective transferee(s) to
the participation of the Participating Stockholders in any contemplated sale and
will not transfer any of its Securities to the prospective transferee(s) if
the prospective transferee(s) declines to allow the participation of the
Participating Stockholders on the terms specified herein, and (ii) use
good faith efforts to negotiate indemnity provisions with the prospective
transferee providing for several and not joint liability and a maximum limit on
liability of each of the Participating Stockholders not exceeding the purchase
price received by such Participating Stockholders for such Securities; provided,
that if the prospective transferee declines to agree to such indemnity
provisions, then the Transferring Stockholder and the Participating
Stockholders shall negotiate in good faith the terms of, and enter into, a
separate contribution agreement on mutually agreeable terms providing that the
Transferring Stockholder and the Participating Stockholders shall reimburse one
another if required to pay more than their pro rata share (based on the number
of Securities sold by such Transferring Stockholder or Participating
Stockholder) of any indemnification claim arising out of representations and
warranties made with respect to the Company, and not with respect to such
Participating Stockholder or such Participating Stockholder’s Securities.

 

2.4.                              Transfers  of  Securities
in  Breach  of  this  Agreement.

 

(a)                                  In the event of
any Transfer of Securities made in breach of this Agreement, commencing
immediately upon the date of such attempted Transfer (i) such Transfer
shall be void and of no effect, (ii) no dividend of any kind or any
distribution pursuant to any liquidation, redemption or otherwise shall be paid
by the Company to the purported transferee in respect of such Securities, with
the amount of any such dividend or distribution being retained by the

 

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Company
until such time as such Transfer has been finally rescinded and reversed, and (iii) neither
the Transferring Stockholder nor the purported transferee shall be entitled to
exercise any rights with respect to such Securities under this Agreement until
such Transfer in breach of this Agreement has been rescinded.

 

(b)                                 If a
Transferring Stockholder sells any Securities in contravention of the
participation rights under Section 2.3 hereof, each Participating
Stockholder who timely exercises the participation rights provided pursuant to Section 2.3,
in addition to such remedies as may be available at law or in equity or
hereunder, may require the Transferring Stockholder to purchase from such Participating
Stockholder the number of Securities that such Participating Stockholder would
have been entitled to sell to the proposed purchaser under Section 2.3 had
the sale been effected pursuant to and in compliance with the terms of Section 2.3.  Any such sale will be made on the same terms
and subject to the same conditions as would have applied had the Participating
Stockholder been entitled to participate in the sale to the proposed purchaser
pursuant to Section 2.3, except that such sale (including, without
limitation, delivery of the purchase price) must be made within ninety (90)
days after the Participating Stockholder learns of the prohibited Transfer,
rather than the time frame otherwise provided in Section 2.3.  The Transferring Stockholder shall also
reimburse the Participating Stockholder for all fees and expenses, including
legal fees and expenses, incurred by such Participating Stockholder pursuant to
any exercise of its right to require the Transferring Stockholder to purchase
its shares pursuant to this Section 2.3(b).

 

3.                                       SALE OF THE
COMPANY.

 

3.1.                              Approved Sale.  In the event the sale of the Company (whether
by merger, consolidation, sale of all or substantially all of the Company’s
assets or sale of all or substantially all the outstanding shares of capital
stock and other securities of the Company) is approved by (x) the
Designated Holder and such sale of the Company is not to the Designated Holder
or an Affiliate of the Designated Holder, or, (y) in the event that there
is no Designated Holder, Stockholders holding in excess of sixty-six and
two-thirds percent (66 2/3%) of the number of shares of Series A Preferred
Stock then outstanding (an “Approved Sale”),
the Designated Holder may, at its option (exercised by written notice to the Company,
which shall be required to promptly deliver notice of such exercise to all
other Stockholders no less than twenty (20) days prior to the consummation of
such Approved Sale), require that all other Stockholders sell or exchange all
Securities owned by them in the same transaction at the same price and on the
same terms and conditions as applicable to the Designated Holder; provided,
that (i) at least seventy-five (75%) of the consideration payable to each
Stockholder pursuant to such Approved Sale shall consist of cash, cash
equivalents or securities of a class that is traded on a national stock
exchange in the United States (including The Nasdaq Stock Market, Inc.)
and is not subject to any holding period requirement under the Securities Act
or contractual restrictions on sale which in either case could restrict the
sale of such securities to the public immediately following the closing of such
Approved Sale, and (ii) any options, warrants or other contingent
Securities to be sold in such Approved Sale will have the proceeds payable in
respect of the shares of Common Stock underlying such contingent Securities
reduced by any amounts payable by the holders thereof to exercise such
contingent Securities; and provided, further, that no Stockholder
shall be obligated to undertake any

 

8

 

indemnity
that is joint in nature or could exceed (i) such
Stockholder’s pro rata share of such indemnification obligation calculated
based on such Stockholder’s pro rata share of the aggregate net proceeds
received by all Stockholders in connection with such Approved Sale, or (ii) the
amount of the proceeds received by such Stockholder in the Approved Sale.

 

3.2.                              Obligations of Stockholders with respect to an
Approved Sale.  The Company
and the Stockholders hereby agree to cooperate fully in any Approved Sale and
not to take any action prejudicial to or inconsistent with such Approved
Sale.  Without limiting the generality of
the foregoing, each Stockholder hereby agrees to (i) vote such Stockholder’s
Securities to approve the terms of any such Approved Sale and such matters
ancillary thereto as may be necessary in the good faith judgment of the Board
of Directors of the Company to effect such Approved Sale, (ii) waive any
appraisal or dissenters rights that such Stockholder would have with respect to
such Approved Sale, (iii) in an Approved Sale structured as a sale of
securities, sell all of such Stockholder’s Securities on the terms and
conditions approved by the Board of Directors of the Company and (iv) upon
request, deliver such Stockholder’s Securities (together with executed
instruments of transfer or assignment) in escrow (pending receipt of the
purchase price therefor) to counsel for the Company in such sale.

 

3.3.                            PROXY.  EACH STOCKHOLDER HEREBY
APPOINTS THE COMPANY IN ANY APPROVED SALE AS SUCH STOCKHOLDER’S TRUE AND LAWFUL
PROXY AND ATTORNEY, WITH FULL POWER OF SUBSTITUTION, TO VOTE AT ANY MEETING OF
THE STOCKHOLDERS OF THE COMPANY, HOWEVER CALLED, OR ANY ADJOURNMENT THEREOF, OR
BY WRITTEN CONSENT OF THE STOCKHOLDERS OF THE COMPANY, ALL VOTING SECURITIES
OWNED BY SUCH STOCKHOLDER OR OVER WHICH SUCH STOCKHOLDER HAS VOTING CONTROL TO
EFFECTUATE THE AGREEMENTS SET FORTH IN THIS SECTION 3 IN THE EVENT OF ANY
BREACH BY SUCH STOCKHOLDER OF ITS OBLIGATIONS UNDER THIS SECTION 3.  THE PROXIES AND POWERS GRANTED BY EACH
STOCKHOLDER PURSUANT TO THIS SECTION 3.3 ARE COUPLED WITH AN INTEREST AND
ARE GIVEN TO SECURE THE PERFORMANCE OF SUCH STOCKHOLDER’S DUTIES UNDER THIS SECTION 3.  SUCH PROXIES ARE IRREVOCABLE FOR SO LONG AS
THIS SECTION 3 REMAINS IN EFFECT AND WILL SURVIVE THE DEATH, INCOMPETENCE
OR DISABILITY OF ANY STOCKHOLDER WHO IS AN INDIVIDUAL AND THE MERGER,
LIQUIDATION OR DISSOLUTION OF ANY STOCKHOLDER THAT IS A CORPORATION, PARTNERSHIP
OR OTHER ENTITY.

 

The
Company will give each Stockholder no less than five days notice prior to
exercising its rights under this Section 3.3.

 

4.                                       BOARD OF
DIRECTORS; VOTING AGREEMENTS.

 

4.1.                              Board  of  Directors.

 

(a)                                  Initially, the
size of the Company’s Board of Directors shall be seven (7) members.  The number of members of the Board of
Directors may be increased (but not

 

9

 

decreased)
by action of the Board of Directors from time to time, subject to the consent
of Stockholders holding in excess of sixty-six and two-thirds percent (66 2/3%)
of the number of shares of Series A Preferred Stock then outstanding.  Subject to paragraph (b) below, in any
and all elections of directors of the Company (whether at a meeting or by
written consent in lieu of a meeting), each Stockholder shall vote, or cause to
be voted, or cause such Stockholder’s designees as directors to vote, all
voting Securities owned by such Stockholder or over which such Stockholder has voting
control so as to nominate and elect as directors:

 

(i)                                     three (3) individuals
designated by WestView, who shall initially be Carlo von Schroeter, John
Turner, and Martin Doolan, provided, that WestView shall no longer have
the right to designate such individuals from and after such time as WestView
and its Affiliates no longer own a number of Securities equal to at least fifty
percent (50%) of the Securities held by WestView on the date hereof (after
giving effect to any stock splits, combinations or similar transactions
involving one or more classes of Securities as a whole);

 

(ii)                                  one individual
designated by the AIG Lead Investor, who shall initially be Scott Gallin, provided,
that the AIG Lead Investor shall no longer have the right to designate such
individual from and after such time as the AIG Group, collectively no longer
own a number of Securities equal to at least fifty percent (50%) of the
Securities held by the AIG Group on the date hereof (after giving effect to any
stock splits, combinations or similar transactions involving one or more
classes of Securities as a whole);

 

(iii)                               George Kolber,
so long as he is employed by the Company as the Chairman of the Company, and
thereafter, his successor as the Chairman of the Company; and

 

(iv)                              two (2) individuals
designated by the holders of more than fifty percent (50%) of the outstanding
shares of Series B Preferred Stock, who shall initially be Jerrold
Rosenbaum and Beth Angelo.

 

(b)                                 If any vacancy
shall occur in the Board of Directors of the Company as a result of death,
disability, resignation or any other termination of a director, the replacement
for such vacating director shall be designated by the Person or Persons who,
pursuant to Sections 4.1(a) above, originally designated such vacating director.  Each Person entitled to designate a director
or a replacement for a director pursuant to this Section 4 shall also be
entitled to designate the removal of such director with or without cause and a
replacement for any director so removed. 
Each Stockholder hereby agrees to vote or cause to be voted or cause
such Stockholder’s designees as directors to vote all voting Securities owned
by such Stockholder or over which such Stockholder has voting control so as to
comply with this Section 4.1(b).

 

(c)                                  There will be a
compensation committee of the Board of Directors, consisting of no more than
three directors (the “Compensation  Committee”) of which (i) two
of such members of the Compensation Committee will be designated by WestView,
who shall initially be Carlo von Schroeter and Martin Doolan; provided,
that WestView shall no longer 

 

10

 

have
the right to designate such individuals from and after such time as WestView
and its Affiliates no longer own a number of securities equal to at least fifty
percent (50%) of the Securities held by WestView on the date hereof (after
giving effect to any stock splits, combinations or similar transactions
involving one or more classes of Securities as a whole), and (ii) one
member of the Compensation Committee will be designated by the AIG Lead
Investor, who shall initially be Scott Gallin; provided, that the AIG
Lead Investor shall no longer have the right to designate such individual from
and after such time as the AIG Group, collectively, no longer own a number of
securities equal to at least fifty percent (50%) of the Securities held by the
AIG Group on the date hereof (after giving effect to any stock splits,
combinations or similar transactions involving one or more classes of
Securities as a whole).  One of the
directors designated by the holders of Series B Preferred Stock pursuant
to Section 4.1(a)(iv) (the “Series B Observer”) shall be
entitled to attend, as a non-voting observer, all meetings of the Compensation
Committee; provided, that the Series B Observer shall not have the
right to attend or observe any portions of any meetings (and will be required
to excuse himself or herself from any such portions of any meetings) in which
any matters relating to such Series B Observer or any Related Persons to
such Series B Observer are to be discussed.  The
Company shall furnish to the Series B Observer copies of all materials
provided to the members of the Compensation Committee at the same time that
such materials are provided to such members of the Compensation Committee and
shall furnish to the Series B Observer copies of the minutes of all
meetings of the Compensation Committee.  The
Compensation Committee shall be charged with approving base salaries, incentive
or similar bonuses and grants of options, restricted stock awards and other
equity based compensation for directors, officers and key employees of the
Company.  There will not be any other
committee (including without limitation any executive committee) of the Board
of Directors unless such committee is specifically approved by the holders of
in excess of sixty-six and two-thirds percent (66 2/3%) of the shares of Series A
Preferred Stock then outstanding.  Except
in the case of an audit committee, if any other committee of the Board of
Directors is established, such committee shall contain such number of directors
so that the proportion of directors on such committee shall be equal relative
to the total number of directors on the entire Board of Directors at such time.

 

(d)                                 The rights of
WestView under this Section 4.1 shall be assignable to any Person who
acquires more than fifty percent (50%) of the number of shares of Series A
Preferred Stock held by WestView on the date hereof (after giving effect to any
stock splits, combinations or similar transactions involving one or more
classes of Securities as a whole).

 

(e)                                  The Company
shall reimburse the reasonable out-of-pocket expenses incurred by the members
of the Board of Directors in attending duly called meetings of the Board of
Directors.

 

(f)                                    The Company
shall cause meetings of the Board of Directors to be held no less frequently
than four (4) times in each twelve (12) calendar month period.

 

4.2.                              Matters Requiring Series B Director Approval.  The Company agrees that the Company
will not take, and will not permit any of its Subsidiaries to take, any of the
following actions without the prior
approval of at least one of the directors designated by the

 

11

 

holders
of more than fifty percent (50%) of the outstanding shares of Series B
Preferred Stock pursuant to Section 4.1(a)(iv) hereof:

 

(a)                                  Make any loan or advance to, or acquire any securities of, the Designated
Holder or any of its Affiliates, other than the acquisition of securities of
the Designated Holder or its Affiliates pursuant to the conversion rights under
the Company’s Certificate of Incorporation or the exercise by the Company of
its rights under Section 2.2 hereof;

 

(b)                                 Issue any new Securities to the Designated Holder or any of its Affiliate
other than pursuant to Section 5.1 hereof or upon conversion of shares of
Series A Preferred Stock;

 

(c)                                  Authorize or permit the sale of the Company or any of its Subsidiaries to
the Designated Holder or any of its Affiliates; or

 

(d)                                 Enter into a merger, consolidation, redemption, recapitalization,
repurchase of securities, statutory share exchange or similar transaction
pursuant to which the securities held by holders of Series B Preferred Stock
are treated materially differently than the securities held by the Designated
Holder and any of its Affiliates, on a per share basis, other than by reason of
any liquidation preference of securities held by the Designated Holder or any
of its Affiliates provided under the Company’s Certificate of Incorporation, as
amended from time to time.

 

4.3.                            PROXY.  EACH STOCKHOLDER HEREBY GRANTS TO THE COMPANY
AN IRREVOCABLE PROXY, COUPLED WITH AN INTEREST, TO VOTE AT ANY MEETING OF THE
STOCKHOLDERS OF THE COMPANY, HOWEVER CALLED, OR ANY ADJOURNMENT THEREOF, OR BY
WRITTEN CONSENT OF THE STOCKHOLDERS OF THE COMPANY, ALL OF THE VOTING
SECURITIES OWNED BY SUCH STOCKHOLDER OR OVER WHICH SUCH STOCKHOLDER HAS VOTING
CONTROL TO THE EXTENT NECESSARY TO CARRY OUT THE PROVISIONS OF THIS SECTION 4
IN THE EVENT OF ANY BREACH BY SUCH STOCKHOLDER OF HIS, HER OR ITS OBLIGATIONS
UNDER THE VOTING AGREEMENT CONTAINED HEREIN.

 

4.4.                              Action  by  Stockholders.  Each Stockholder further agrees that such
Stockholder will not vote any Securities owned by such Stockholder or over
which such Stockholder has voting control, or take any action by written
consent, or take any other action as a stockholder of the Company, to
circumvent the voting arrangements required by this Section 4.

 

5.                                       FIRST REFUSAL
RIGHTS.

 

5.1.                              Pre-Emptive
Rights.  Except for the issuance
of Common Stock (or securities convertible into or containing options or rights
to acquire shares of Common Stock) (i) pursuant to a Public Sale, (ii) as
consideration for the acquisition of all or any substantial portion of the
assets or all or any portion of the capital stock of any Person, (iii) upon
conversion of shares of one class of capital stock of the Company into shares
of another class of capital stock of the Company, or (iv) to any employee or
director of the Company or any of its Subsidiaries as 

 

12

 

employment-related
compensation in a transaction approved by the Board of Directors of the Company
so long as the aggregate number of shares of Common Stock issued or issuable to
such employees and directors does not exceed 52,800 shares (subject to
appropriate and ratable adjustment as a result of stock splits, stock
dividends, combinations, reclassifications, reorganizations or any other similar
events), if the Company authorizes the issuance and sale of any shares of any
class of capital stock or any securities convertible into or containing options
or rights to acquire any shares of any class of capital stock (other than as a
dividend on the outstanding Common Stock), the Company will first offer to sell
to each Eligible Major Holder a pro rata
portion of such securities (based upon the respective number of Securities then
held by all Eligible Major Holders on a fully-diluted basis).  Each Eligible Major Holder will be entitled
to purchase all or part of such stock or securities at the same price and on
the same terms as such stock or securities are to be offered to any other
Persons.

 

5.2.                              Stockholders’  Exercise
of  Right.  Each Eligible
Major Holder entitled to purchase securities under this Section 5 must exercise
such Eligible Major Holder’s purchase rights hereunder within thirty (30) days
after receipt of written notice from the Company describing in reasonable
detail the stock or securities being offered, the purchase price thereof, the
payment terms and such Eligible Major Holder’s percentage allotment.

 

5.3.                              Company’s  Exercise
of  Right.  Upon the
expiration of the offering period described above, the Company will be free to
sell such stock or securities which the Eligible Major Holders entitled to
purchase such stock or securities have not elected to purchase during the
ninety (90) days following such expiration on terms and conditions no more
favorable to the purchasers thereof, in the aggregate, than those offered to
such Eligible Major Holders.  Any stock
or securities offered or sold by the Company after such 90-day period must be
reoffered to the Eligible Major Holders entitled to purchase such stock or
securities pursuant to the terms of this Section 5.

 

6.                                       INFORMATION
RIGHTS.

 

6.1.                              Delivery  of  Information.  The Company shall deliver, or shall cause to
be delivered, to each Eligible Major Holder other than any Eligible Major
Holder that is a Competitor, or is employed by, acts as a consultant to, or is
a stockholder, partner or other holder of an equity or partnership interest in
any Competitor, unless such Eligible Major Holder executes a confidentiality
agreement reasonably satisfactory to the Company containing appropriate
restrictions on the disclosure and use of such information:

 

(a)                                  as soon as
practicable, but in any event within ninety (90) days after the end of each
fiscal year of the Company, a consolidated income statement for such fiscal
year, a consolidated balance sheet of the Company and statement of stockholder’s
equity as of the end of such fiscal year, and a consolidated statement of cash
flows for such fiscal year, such year-end financial reports to be in reasonable
detail, prepared in accordance with generally accepted accounting principles (“GAAP”),
and audited and certified by independent public accountants of nationally
recognized standing selected by the Board of Directors of the Company;

 

(b)                                 within thirty
(30) days of the end of each month, an unaudited income statement and statement
of cash flows for each of the Company’s operating subsidiaries for such month,
a

 

13

 

balance
sheet for and as of the end of such month, and a report setting forth the
comparison of such month unaudited statements to the statements for the same
month in the previous year and projected results for such month on a monthly
and year to date basis, all in reasonable detail;

 

(c)                                  within
forty-five (45) days of the end of each fiscal quarter, an unaudited
consolidated income statement and statement of cash flows of the Company for
such fiscal quarter, a consolidated balance sheet for and as of the end of such
fiscal quarter, and a report setting forth the comparison of such fiscal
quarter’s unaudited statements to the statements for the same fiscal quarter in
the previous year and projected results for such fiscal quarter on a quarterly
and year to date basis, all in reasonable detail;

 

(d)                                 as soon as
practicable, but in any event within thirty (30) days prior to the end of each
fiscal year, a budget and business plan for the Company and each of the Company’s
operating subsidiaries for the next fiscal year, prepared on a monthly basis,
including balance sheets and income statements for such months and, as soon as
prepared, any other budgets or revised budgets prepared by the Company or any
of its operating subsidiaries;

 

(e)                                  with respect to
the financial statements called for in subsections (b) and (c) of this
Section 6.1, an instrument executed by the Chief Financial Officer and
President of the Company or the Company’s operating subsidiary, as the case may
be, and certifying that, to the best of such Person’s knowledge, such financial
statements were prepared in accordance with GAAP consistently applied with
prior practice for earlier periods (with the exception of footnotes that may be
required by GAAP) and fairly present the financial condition of the Company or
the Company’s operating subsidiary, as the case may be, and its results of
operation for the period specified, subject to year-end audit adjustment,
together with a separate report that includes in reasonable detail management’s
discussion and analysis of the financial condition and the results of
operations of the Company and its Subsidiaries as at the end of and for the
fiscal periods covered by such financial statements; and

 

(f)                                    such other
information relating to the financial condition, business, prospects or
corporate affairs of the Company and its operating subsidiaries as such
Eligible Major Holder may from time to time reasonably request.

 

Each
Stockholder hereby acknowledges that except for the information rights provided
by this Section 6.1, by Section 10.7 of the Acquisition Agreement, or by the
Delaware General Corporation Law, as amended from time to time, no Stockholder
shall have any rights to demand or receive information, financial or otherwise,
from the Company with respect to any matter.

 

6.2                                 Inspection.
  The Company shall permit each Eligible Major Holder (and its
representatives) other than any Eligible Major Holder that is a Competitor, or
is employed by, acts as a consultant to, or is a stockholder, partner or other
holder of an equity or partnership interest in any Competitor, upon reasonable
request, at such requesting Eligible Major Holder’s expense, to visit and
inspect the Company’s or its subsidiaries’ properties, to examine its or its
subsidiaries’ books of account and records (and to make reasonable copies) and
to discuss the Company’s or its subsidiaries affairs, finances and accounts
with its or its subsidiaries’ officers, all at such reasonable times as may be
reasonably requested; provided, however, that the Company shall
not be obligated pursuant to this Section 6.2 to provide access to any
information

 

14

 

which
it reasonably considers to be a trade secret or confidential information,
unless the requesting stockholder signs a nondisclosure agreement reasonably
acceptable to the Company containing appropriate restrictions on the disclosure
and use of such information.

 

6.3                                 Confidentiality.  Each Eligible Major Holder receiving
information under the covenants set forth in Section 6.1 and
Section 6.2 hereby  agrees to hold
in confidence and trust and to act in a fiduciary manner with respect to all
information so provided and to use its reasonable best efforts to ensure that
any third party to which it provides such information pursuant to this Section
6.3 shall hold such information in confidence and trust; provided, however, that
notwithstanding the foregoing, each of WestView and each member of the AIG
Group may, after giving the Company an opportunity to review generally in form
and substance such information, include summary financial information
concerning the Company and general statements concerning the nature and
progress of the Company’s and its subsidiaries’ business in its reports to its
limited partners; and provided, further, that Jerrold Rosenbaum
may provide American International Specialty Lines Insurance Company, the
issuer of a seller-side insurance policy in connection with the Acquisition
Agreement, with the Company’s annual financial statements and information
regarding material amendments and waivers under the Company’s credit agreement
with its primary lenders, as provided pursuant to Section 6.1 above and Section
10.7 of the Acquisition Agreement, to the extent required by such insurance
policy, without such provision being deemed a violation of this Section 6.3.

 

7.                                       ADDITIONAL
LEGEND.  So long as any Securities are
subject to the provisions hereof, all certificates or instruments representing
Securities will have imprinted on them the following legend:

 

The
shares represented by this certificate are subject to the terms of a certain
Stockholder Agreement, dated as of October 1, 2006, among the issuer of this
certificate and certain stockholders. 
The Stockholder Agreement contains certain restrictive provisions
relating to the voting and transfer of shares of the stock represented
hereby.  A copy of the Stockholder
Agreement is on file at the Company’s principal offices.  Upon written request to the Company’s
Secretary, a copy of the Stockholder Agreement will be provided without charge
to appropriately interested persons, as determined by such Secretary.

 

8.                                       SEVERABILITY.  Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.

 

9.                                       ENTIRE
AGREEMENT.  Except as
otherwise expressly set forth herein, this document embodies the complete
agreement and understanding among the parties hereto with respect to the
subject matter hereof and thereof and supersedes and preempts any prior

 

15

 

understandings,
agreements or representations by or among the parties, written or oral, which
may have related to the subject matter hereof in any way.

 

10.                                 SUCCESSORS AND
ASSIGNS.  This Agreement will bind and
inure to the benefit of and be enforceable by the Company and the Stockholders
and their respective successors and assigns.

 

11.                                 COUNTERPARTS.  This Agreement may be executed in separate
counterparts each of which will be an original and all of which taken together
will constitute one and the same agreement.

 

12.                                 REMEDIES.  The Stockholders will be entitled to enforce
their rights under this Agreement specifically (without posting a bond or other
security), to recover damages by reason of any breach of any provision of this
Agreement and to exercise all other rights existing in their favor.  The parties hereto agree and acknowledge that
money damages may not be an adequate remedy for any breach of the provisions of
this Agreement and that any Stockholder may in its sole discretion apply to any
court of law or equity of competent jurisdiction for specific performance
and/or injunctive relief in order to enforce or prevent any violation of the
provisions of this Agreement.  In the
event of any dispute involving the terms of this Agreement, the prevailing
party shall be entitled to collect reasonable fees and expenses incurred by the
prevailing party in connection with such dispute from the other parties to such
dispute.

 

13.                                 AMENDMENT AND
WAIVER. This Agreement may be amended only by a writing duly authorized and
executed by (x) Stockholders holding at least sixty-six and 2/3 percent (66
2/3%) of the shares of Series A Preferred Stock outstanding at such time
(including for purposes of this calculation any issued and outstanding shares
of Common Stock issued upon conversion of shares of Series A Preferred Stock),
and (y) Stockholders holding at least fifty percent (50%) of the shares of
Series B Preferred Stock outstanding at such time (including for purposes of
this calculation any issued and outstanding shares of Common Stock issued upon
conversion of shares of Series B Preferred Stock); provided, however,
that no such amendment shall be effective against any Stockholder who has not
consented to such amendment to the extent that such amendment would be adverse
to the interests of such Stockholder in any material respect and would have a
disproportionate impact in any material respect on the rights of such
Stockholder in its capacity as a Stockholder hereunder when measured against
the impact of such amendment on the rights of other Stockholders in their
capacities as Stockholders hereunder. 
Any rights of the Stockholders under this Agreement may be waived in
writing by (x) Stockholders holding at least sixty-six and 2/3 percent (66
2/3%) of the shares of Series A Preferred Stock outstanding at such time
(including for purposes of this calculation any issued and outstanding shares
of Common Stock issued upon conversion of shares of Series A Preferred Stock),
and (y) Stockholders holding at least fifty percent (50%) of the shares of
Series B Preferred Stock outstanding at such time (including for purposes of
this calculation any issued and outstanding shares of Common Stock issued upon
conversion of shares of Series B Preferred Stock); provided, however,
that no such waiver shall be effective against any Stockholder who has not
consented to such waiver to the extent that such waiver would be adverse to the
interests of such Stockholder in any material respect and would have a
disproportionate impact in any material respect on the rights of such
Stockholder in its capacity as a Stockholder hereunder

 

16

 

when
measured against the impact of such waiver on the rights of other Stockholders
in their capacities as Stockholders hereunder. 
The Company shall notify all Stockholders of each amendment or waiver of
any provision of this Agreement that could reasonably be expected to affect the
rights of such Stockholder hereunder at least five (5) business bays prior to
the effectiveness of such modification, amendment or waiver.  The failure of any party to enforce any of
the provisions of this Agreement will in no way be construed as a waiver of
such provisions and will not affect the right of such party thereafter to
enforce each and every provision of this Agreement in accordance with its
terms.

 

14.                                 EMPLOYMENT.  Nothing contained in this Agreement is
intended to create for any Stockholder who is an officer or employee of the
Company or a Subsidiary of the Company a right to continued employment with the
Company or any of its Subsidiaries or employment in the same position or on the
same terms as those currently in effect.

 

15.                                 TERMINATION.  This Agreement will terminate upon the
earliest to occur of (a) the completion of any voluntary or involuntary
liquidation or dissolution of the Company, (b) the completion of a Qualified
Public Offering, or (c) the consummation of an Approved Sale.

 

16.                               GOVERNING
LAW.  ALL QUESTIONS CONCERNING THE
CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS AGREEMENT WILL BE GOVERNED BY
THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAW.  THE PARTIES HERETO AGREE TO WAIVE
ANY RIGHT TO HAVE ANY DISPUTE ARISING HEREUNDER OR OTHERWISE IN CONNECTION WITH
THE TRANSACTIONS CONTEMPLATED HEREBY ADJUDICATED BY A JURY, AND HEREBY AGREE TO
SUBMIT TO THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS IN CONNECTION WITH
THE RESOLUTION OF ANY SUCH DISPUTE.

 

17.                                 DESCRIPTIVE
HEADINGS.  The
descriptive headings of this Agreement are inserted for convenience only and do
not constitute a part of this Agreement.

 

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

 

19.                                 NOTICES.                                         All notices,
demands, and other communications hereunder shall be in writing or by written
telecommunication, and shall be deemed to be duly given if delivered personally
or by overnight courier or if mailed by certified mail, return receipt
requested, postage prepaid, or sent by telecopier, as follows:

 

If
to the Company, to:

 

Body
Central Acquisition Corp.

6225
Powers Avenue

Jacksonville,
Florida 32217

Attention:  Chairman

Facsimile:  (904) 730-0638

 

17

 

With
copies sent contemporaneously to:

 

WestView
Capital Partners

c/o
Carlo von Schroeter

One
International Place

Seventh
Floor

Boston,
MA  02110

Re:  Body Central Acquisition Corp.

Facsimile:  (617) 261-2060

 

and

 

AIG
Global Investment Group

c/o
Scott Gallin, Direct Investment Group

599
Lexington Avenue, 25th Floor

New
York, NY 10022

Facsimile:
646-735-0665

 

and

 

Johan
V. Brigham, Esq.

Bingham
McCutchen LLP

150
Federal Street

Boston,
MA  02110

Telecopier: (617) 951-8736

 

and

 

Mr.
Jerrold Rosenbaum

Body
Shop of America

6225
Powers Avenue

Jacksonville,
Florida 32217

Fax:
(904) 730-0638

 

If
to any Stockholder, to the last address for such Stockholder on the Company’s
official stockholder records.

 

[Remainder of page intentionally left blank.]

 

18

 

IN
WITNESS WHEREOF, each of the undersigned has executed this Agreement or caused
this Agreement to be executed on its behalf as of the date first written above.

 

	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  BODY
  CENTRAL ACQUISITION CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  Carlo von Schroeter

  
	
   

  	
  Carlo
  von Schroeter

  
	
   

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  STOCKHOLDERS:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WESTVIEW CAPITAL PARTNERS, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  WestView
  Capital Management, L.P., its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  WVCP
  Management, LLC, its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Carlo von Schroeter

  
	
   

  	
  Carlo
  von Schroeter

  
	
   

  	
  Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AIG
  PEP III Direct, L.P.

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  AIG
  Global Investment Corp,

  
	
   

  	
   

  	
  its
  investment Advisor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ F.T. Chong

  
	
   

  	
  F.T.
  Chong

  
	
   

  	
  Managing
  Director

  

 

 

	
   

  	
  AIG
  PEP IV Co-Investment, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:
  

  	
  AIG
  PEP IV Co-Investment GP, L.P.,

  
	
   

  	
   

  	
  its
  general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:
  

  	
  AIG
  PEP IV Co-Investment GP, LLC,

  
	
   

  	
   

  	
  its
  general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:
  

  	
  AIG
  Global Investment Corp.,

  
	
   

  	
   

  	
  its
  managing member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ F.T. Chong

  
	
   

  	
  F.T.
  Chong

  
	
   

  	
  Managing
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AIG
  Co-Investment Fund, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:
   

  	
  AIG
  Co-Investment General Partner, L.P.,

  
	
   

  	
   

  	
  its
  General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:
  

  	
  AIG
  Direct Investments, LLC,

  
	
   

  	
   

  	
  its
  General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ F.T. Chong

  
	
   

  	
  F.T.
  Chong

  
	
   

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AIG
  Private Equity (Bermuda) Ltd.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ S. George Cubbon

  
	
   

  	
  Name:
  S. George Cubbon

  
	
   

  	
  Title:
  President

  

 

2

 

	
   

  	
  American
  International Group, Inc. Retirement Plan

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  AIG
  Global Investment Corp,

  
	
   

  	
   

  	
  the duly authorized investment adviser to the
  American International Group, Inc. Retirement Plan

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ F.T. Chong

  
	
   

  	
  F.T.
  Chong

  
	
   

  	
  Managing
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TERBELL
  PARTNERS, LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Harriette A. Terbell

  
	
   

  	
  Harriette
  A. Terbell

  
	
   

  	
  Managing
  Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE
  DOOLAN FAMILY FIRST LIMITED PARTNERSHIP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Martin Doolan

  
	
   

  	
  Martin
  Doolan

  
	
   

  	
  Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Jerrold Rosenbaum

  
	
   

  	
  Jerrold
  Rosenbaum

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Beth Angelo

  
	
   

  	
  Beth
  Angelo

  
	
   

  	
   

  
	
   

  	
  /s/
  Curtis Hill

  
	
   

  	
  Curtis
  Hill

  

 

3

 

	
   

  	
  /s/
  Laurie Baugass

  
	
   

  	
  Laurie
  Baugass

  
	
   

  	
   

  
	
   

  	
  /s/
  George Kolber

  
	
   

  	
  George
  Kolber

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GVK,
  L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  George Kolber

  
	
   

  	
  Name:
  George Kolber

  
	
   

  	
  Title:
  General Partner

  

 

4Exhibit 10.1

 

 

BODY CENTRAL ACQUISTION CORP.

 

2006 EQUITY INCENTIVE PLAN

 

 

as amended July 31, 2007

 

 

BODY CENTRAL ACQUISITION CORP.

 

2006 EQUITY INCENTIVE PLAN

 

1.                                      Purpose

 

This
Plan is intended to encourage ownership of Common Stock by employees, consultants
and directors of the Company and its Affiliates and to provide additional
incentive for them to promote the success of the Company’s business.  The Plan is intended to be an incentive stock
option plan within the meaning of Section 422 of the Code but not all
Options granted hereunder are required to be Incentive Options.

 

2.                                      Definitions

 

As
used in the Plan the following terms shall have the respective meanings set out
below, unless the context clearly requires otherwise:

 

2.1                                 “Accelerate”, “Accelerated”,
and “Acceleration”, when used with respect to an Option, means that as of the
time of reference such Option will become exercisable with respect to some or
all of the shares of Common Stock for which it was not then otherwise
exercisable by its terms.

 

2.2                                 “Acquiring Person”
means, with respect to any Transaction, the surviving or acquiring person or
entity in connection with such Transaction or acquisition, as the case may be, provided
that if such surviving or acquiring person or entity is controlled, directly or
indirectly, by any other person or entity (an “Ultimate Parent Entity”)
that is not itself controlled by any entity or person that is not a natural
person, the term “Acquiring Person” shall mean such Ultimate Parent Entity.

 

2.3                                 “Affiliate” means,
with respect to any person or entity, any other person or entity controlling,
controlled by or under common control with the first person or entity.

 

2.4                                 Intentionally omitted.

 

2.5                                 “Option Agreement”
means an agreement between the Company and the recipient of an Option, setting
forth the terms and conditions of the Option.

 

2.6                                 “Beneficial Ownership”
has the meaning ascribed to such term in Rule 13d-3, or any successor rule thereto,
promulgated by the Securities and Exchange Commission pursuant to the Exchange
Act.

 

2.7                                 “Board” means the
Company’s board of directors.

 

2.8                                 “Change of Control”
means the closing of any Sale of the Company Transaction.

 

2.9                                 “Code” means the
Internal Revenue Code of 1986, as amended from time to time, or any successor
statute thereto, and any regulations issued from time to time thereunder.

 

2

 

2.10                           “Controlled Affiliate”
means, with respect to any person or entity, any other person or entity that is
controlled by such person or entity.

 

2.11                           “Committee” means any
committee of the Board delegated responsibility by the Board for the
administration of the Plan, as provided in Section 5 of the Plan.  For any period during which no such committee
is in existence, “Committee” shall mean the Board and all authority and
responsibility assigned the Committee under the Plan shall be exercised, if at
all, by the Board.

 

2.12                           “Common Stock” means
common stock, par value $0.001 per share, of the Company.

 

2.13                           “Company” means Body
Central Acquisition Corp., a corporation organized under the laws of the State
of Delaware.

 

2.14                           “Exchange Act” means
the Securities Exchange Act of 1934, as amended.

 

2.15                           “Grant Date” means
the date as of which an Option is granted, as determined under Section 7.1(a).

 

2.16                           “Group” has the
meaning ascribed to such term in Section 13(d)(3) of the Exchange Act
or any successor section thereto.

 

2.17                           “Incentive Option”
means an Option which by its terms is to be treated as an “incentive stock
option” within the meaning of Section 422 of the Code.

 

2.18                           “Market Value” means
the value of a share of Common Stock on a particular date determined by such
methods or procedures as may be established by the Committee.  Unless otherwise determined by the Committee,
if the Common Stock on any date of determination is then traded on the NASDAQ
National Market (or on any other national securities exchange), the Market
Value of Common Stock as of such date shall be the closing price for the Common
Stock as reported on the NASDAQ National Market (or such other national
securities exchange) for that date or, if no closing price is reported for that
date, the closing price on the next preceding date for which a closing price
was reported.

 

2.19                           “Nonstatutory Option”
means any Option that is not an Incentive Option.

 

2.20                           “Option” means an
option to purchase shares of Common Stock.

 

2.21                           “Optionee” means a
Participant to whom an Option shall have been initially granted under the Plan.

 

2.22                           “Participant” means
any holder of an outstanding Option under the Plan.

 

2.23                           “Plan” means this
2006 Equity Incentive Plan of the Company, as amended and in effect from time
to time.

 

3

 

2.24                           “Sale of the Company
Transaction” means any Transaction in which the stockholders of the Company
immediately prior to such Transaction, together with any and all of such
stockholders’ Affiliates, do not own or hold, immediately after consummation of
such Transaction, shares of capital stock of the Acquiring Person in connection
with such Transaction possessing at least twenty-five percent (25%) of the
total voting power of the outstanding capital stock of such Acquiring Person.

 

2.25                           “Securities Act”
means the Securities Act of 1933, as amended.

 

2.26                           “Stockholders Agreement”
means that certain Stockholders Agreement, dated as of October 1, 2006,
among the Company and certain of its stockholders, as the same may be amended
or modified from time to time after the date hereof.

 

2.27                           “Ten Percent Owner”
means a person who owns, or is deemed within the meaning of Section 422(b)(6) of
the Code to own, stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company (or any parent or subsidiary
corporations of the Company, as defined in Section 424(e) and (f),
respectively, of the Code).  Whether a
person is a Ten Percent Owner shall be determined with respect to each Option
based on the facts existing immediately prior to the Grant Date of such Option.

 

2.28                           “Transaction” means
any merger or consolidation of the Company with or into another person or
entity or the sale or transfer of all or substantially all of the assets of the
Company, in each case in a single transaction or in a series of related
transactions.

 

3.                                      Term of
the Plan

 

Unless
the Plan shall have been earlier terminated by the Board, Options may be
granted under this Plan at any time in the period commencing on the effective
date of approval of the Plan by the Board and ending immediately prior to the
tenth anniversary of the earlier of the adoption of the Plan by the Board or
approval of the Plan by the Company’s stockholders.  Options granted pursuant to the Plan within
such period shall not expire solely by reason of the termination of the
Plan.  Options of Incentive Options
granted prior to stockholder approval of the Plan are hereby expressly
conditioned upon such approval, but in the event of the failure of the
stockholders to approve the Plan shall thereafter and for all purposes be
deemed to constitute Nonstatutory Options.

 

4.                                      Stock
Subject to the Plan

 

Subject
to the provisions of Section 8 of the Plan, at no time shall the number of
shares of Common Stock issued pursuant to or subject to outstanding Options
granted under the Plan (including, without limitation, pursuant to Incentive
Options), exceed 52,800 shares of Common Stock. 
For purposes of applying the foregoing limitation, if any Option
expires, terminates, or is cancelled for any reason without having been
exercised in full the shares not purchased by the Participant shall again be
available for Options thereafter to be granted under the Plan.  Shares of Common Stock issued pursuant to the
Plan may be either authorized but unissued shares or shares held by the Company
in its treasury.

 

4

 

5.                                      Administration

 

The
Plan shall be administered by the Committee; provided,
however, that at any time and on any one or more occasions the Board
may itself exercise any of the powers and responsibilities assigned the Committee
under the Plan and when so acting shall have the benefit of all of the
provisions of the Plan pertaining to the Committee’s exercise of its
authorities hereunder.  Subject to the
provisions of the Plan, the Committee shall have complete authority, in its
discretion, to make or to select the manner of making all determinations with
respect to each Option to be granted by the Company under the Plan in addition
to any other determination allowed the Committee under the Plan including,
without limitation: (a) the employee, consultant or director to receive
the Option; (b) the form of Option Agreement; (c) whether an Option
(if granted to an employee) will be an Incentive Option or a Nonstatutory
Option; (d) the time of granting an Option; (e) the number of shares
subject to an Option; (f) the exercise price of an Option and the method
of payment of such exercise price or such purchase price; (g) the term of
an Option; (h) the exercise date or dates of an Option and any
acceleration thereof; and (i) the effect of termination of any employment,
consulting or Board member relationship with the Company or any of its
Affiliates on the subsequent exercisability of an Option.  In making such determinations, the Committee
may take into account the nature of the services rendered by the respective
employees, consultants and directors, their present and potential contributions
to the success of the Company and its Affiliates, and such other factors as the
Committee in its discretion shall deem relevant.  Subject to the provisions of the Plan, the
Committee shall also have complete authority to interpret the Plan, to
prescribe, amend and rescind rules and regulations relating to it, to
determine the terms and provisions of the respective Option Agreements (which
need not be identical), and to make all other determinations necessary or
advisable for the administration of the Plan. 
The Committee’s determinations made in good faith on matters referred to
in this Plan shall be final, binding and conclusive on all persons having or
claiming any interest under the Plan or an Option made pursuant hereto.

 

6.                                      Authorization
and Eligibility

 

The
Committee may grant from time to time and at any time prior to the termination
of the Plan one or more Options, either alone or in combination with any other
Options, to any employee of or consultant to one or more of the Company and its
Affiliates or to any non-employee member of the Board or of any board of
directors (or similar governing authority) of any Affiliate.  However, only employees of the Company, and
of any parent or subsidiary corporations of the Company, as defined in Sections
424(e) and (f), respectively, of the Code, shall be eligible for the grant
of an Incentive Option.  Further, in no
event shall the number of shares of Common Stock covered by Options granted to
any one person in any one calendar year (or portion of a year) ending after
such date exceed eighty percent (80%) of the aggregate number of shares of
Common Stock subject to the Plan.

 

Each
grant of an Option shall be subject to all applicable terms and conditions of
the Plan (including but not limited to any specific terms and conditions
applicable to that type of Option set out in the following Section), and such
other terms and conditions, not inconsistent with the terms of the Plan, as the
Committee may prescribe.  No prospective
Participant shall have any rights with respect to an Option, unless and until
such Participant has executed an agreement 

 

5

 

evidencing
the Option, delivered a fully executed copy thereof to the Company, and
otherwise complied with the applicable terms and conditions of such Option.

 

7.                                      Specific
Terms of Options

 

7.1                                 Date of Grant.  The granting of an Option shall take place at
the time specified in the Option Agreement. 
Only if expressly so provided in the applicable Option Agreement shall
the Grant Date be the date on which the Option Agreement shall have been duly
executed and delivered by the Company and the Optionee.

 

7.2                                 Exercise Price.  The price at which shares of Common Stock may
be acquired under each Incentive Option shall be not less than 100% of the
Market Value of Common Stock on the Grant Date, or not less than 110% of the
Market Value of Common Stock on the Grant Date if the Optionee is a Ten Percent
Owner.  The price at which shares may be
acquired under each Nonstatutory Option shall not be so limited solely by
reason of this Section.

 

7.3                                 Option Period.  No Incentive Option may be exercised on or
after the tenth anniversary of the Grant Date, or on or after the fifth
anniversary of the Grant Date if the Optionee is a Ten Percent Owner.  The Option period under each Nonstatutory
Option shall not be so limited solely by reason of this Section.

 

7.4                                 Exercisability.  An Option may be immediately exercisable or
become exercisable in such installments, cumulative or non-cumulative, as the
Committee may determine.  In the case of
an Option not otherwise immediately exercisable in full, the Committee may
Accelerate such Option in whole or in part at any time; provided, however, that in the case of an
Incentive Option, any such Acceleration of such Incentive Option would not
cause such Incentive Option to fail to comply with the provisions of Section 422
of the Code or the Optionee consents to such Acceleration.

 

7.5                                 Effect of Termination of
Employment, Consulting or Board Member Relationship.  Unless the Committee shall provide otherwise
with respect to any Option, if the Optionee’s employment, consulting or Board
member relationship with the Company and its Affiliates ends for any reason,
including because an entity with which the Optionee has an employment,
consulting or Board member relationship ceases to be an Affiliate of the
Company, any outstanding Option held by a Participant shall cease to be
exercisable in any respect not later than ninety (90) days following that event
and, for the period it remains exercisable following that event, shall be
exercisable only to the extent exercisable at the date of that event.  Military or sick leave or other bona fide
leave shall not be deemed a termination of employment, provided that it does not exceed the
longer of ninety (90) days or the period during which the absent Optionee’s
reemployment rights, if any, are guaranteed by statute or by contract.

 

7.6                                 Transferability.  Except as otherwise provided in this
subsection (f), Options shall not be transferable, and no Option or interest
therein may be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will or by the laws of descent and
distribution.  Except as otherwise
provided in this subsection (f), all of a Participant’s rights in any Option
may be exercised during the life of the Participant only by the Participant or
the Participant’s legal representative. 
However, the Committee may, at or after the grant of a 

 

6

 

Nonstatutory
Option, provide that such Option may be transferred by the recipient to a
family member; provided, however, that
any such transfer is without payment of any consideration whatsoever and that
no transfer of an Option shall be valid unless first approved by the Committee,
acting in its sole discretion.  For this
purpose, “family member” means any child, stepchild, grandchild, parent,
stepparent, spouse, former spouse, sibling, niece, nephew, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law,
including adoptive relationships, any person sharing the Optionee’s household
(other than a tenant or employee), a trust in which the foregoing persons have
more than fifty (50) percent of the beneficial interests, a foundation in which
the foregoing persons (or the Optionee) control the management of assets, and
any other entity in which these persons (or the Optionee) own more than fifty
(50) percent of the voting interests.

 

7.7                                 Method of Exercise.  An Option may be exercised by a Participant
giving written notice, in the manner provided in Section 15, specifying
the number of shares of Common Stock with respect to which the Option is then
being exercised.  The notice shall be
accompanied by payment in the form of cash or check payable to the order of the
Company in an amount equal to the exercise price of the shares of Common Stock
to be purchased.  If the Stock is traded
on an established market, payment of any exercise price may also be made
through and under the terms and conditions of any formal cashless exercise
program authorized by the Company entailing the sale of the Stock subject to
any Option in a brokered transaction (other than to the Company).  Receipt by the Company of such notice and
payment in any authorized means shall constitute the exercise of the
Option.  Within thirty (30) days
thereafter but subject to the remaining provisions of the Plan, the Company
shall deliver or cause to be delivered to the Participant or his agent a
certificate or certificates for the number of shares then being purchased.  Such shares shall be fully paid and
nonassessable.  Notwithstanding any of
the foregoing provisions in this subsection (g) to the contrary, (A) no
Option shall be considered to have been exercised unless and until all of the
provisions governing such exercise specified in the Plan and in the relevant
Option Agreement shall have been duly complied with; and (B) the
obligation of the Company to issue any shares upon exercise of an Option is
subject to the provisions of Section 9.1 hereof and to compliance by the
Optionee and the Participant with all of the provisions of the Plan and the
relevant Option Agreement.

 

7.8                                 Limit on
Incentive Option Characterization.  An Incentive
Option shall be considered to be an Incentive Option only to the extent that
the number of shares of Common Stock for which the Option first becomes
exercisable in a calendar year do not have an aggregate Market Value (as of the
date of the grant of the Option) in excess of the “current limit”.  The current limit for any Optionee for any
calendar year shall be $100,000 minus the
aggregate Market Value at the date of grant of the number of shares of Common
Stock available for purchase for the first time in the same year under each
other Incentive Option previously granted to the Optionee under the Plan, and
under each other incentive stock option previously granted to the Optionee
under any other incentive stock option plan of the Company and its Affiliates,
after December 31, 1986.  Any shares
of Common Stock which would cause the foregoing limit to be violated shall be
deemed to have been granted under a separate Nonstatutory Option, otherwise
identical in its terms to those of the Incentive Option.

 

7.9                                 Notification
of Disposition.  Each person
exercising any Incentive Option granted under the Plan shall be deemed to have
covenanted with the Company to report to the 

 

7

 

Company
any disposition of such shares prior to the expiration of the holding periods
specified by Section 422(a)(1) of the Code and, if and to the extent
that the realization of income in such a disposition imposes upon the Company
federal, state, local or other withholding tax requirements, or any such
withholding is required to secure for the Company an otherwise available tax
deduction, to remit to the Company an amount in cash sufficient to satisfy
those requirements.

 

7.10                           Rights
Pending Exercise.  No person
holding an Option shall be deemed for any purpose to be a stockholder of the
Company with respect to any of the shares of Common Stock issuable pursuant to
his Option, except to the extent that the Option shall have been exercised with
respect thereto and, in addition, a certificate shall have been issued therefor
and delivered to such holder or his agent.

 

8.                                      Adjustment Provisions

 

8.1                                 Adjustment
for Corporate Actions.  All of the
share numbers set forth in the Plan reflect the capital structure of the
Company as of October 1, 2006. 
Subject to the provisions of Section 8.2, if subsequent to such
date the outstanding shares of Common Stock (or any other securities covered by
the Plan by reason of the prior application of this Section) are increased,
decreased, or exchanged for a different number or kind of shares or other
securities, or if additional shares or new or different shares or other
securities are distributed with respect to such shares of Common Stock or other
securities, through merger, consolidation, sale of all or substantially all the
property of the Company, reorganization, recapitalization, reclassification,
stock dividend, stock split, reverse stock split, or other distribution with
respect to such shares of Common Stock, or other securities, an appropriate and
proportionate adjustment will be made in (i) the maximum numbers and kinds
of shares provided in Section 4, (ii) the numbers and kinds of shares
or other securities subject to the then outstanding Options, and (iii) the
exercise price for each share or other unit of any other securities subject to
then outstanding Options (without change in the aggregate purchase price as to
which such Options remain exercisable).

 

8.2                                 Change of
Control.  Subject to the applicable
provisions of the Option Agreement, in the event of a Change of Control, the
Committee shall have the discretion, exercisable in advance of, at the time of,
or (except to the extent otherwise provided below) at any time after, the
Change of Control, to provide for any or all of the following (subject to and
upon such terms as the Committee may deem appropriate): (A) the
Acceleration, in whole or in part, of any or all outstanding Options (including
Options that are assumed or replaced pursuant to clause (B) below) that
are not exercisable in full at the time the Change of Control, such
Acceleration to become effective at the time of the Change of Control, or at
such time following the Change of Control that the employment, consulting or
Board member relationship of the applicable Optionee or Optionees with the
Company and its Affiliates terminates, or at such other time or times as the
Committee shall determine; (B) the assumption of outstanding Options, or
the substitution of outstanding Options with equivalent options, by the
acquiring or succeeding corporation or entity (or an affiliate thereof); or (C) the
termination of all Options (other than Options that are assumed or substituted
pursuant to clause (B) above) that remain outstanding at the time of the
consummation of the Change of Control, provided
that, the Committee shall have made the determination to effect such
termination prior to the consummation of the Change of Control and the
Committee shall have given, or caused to be 

 

8

 

given,
to all Participants written notice of such potential termination at least ten
business days prior to the consummation of the Change of Control, and provided, further, that, if the Committee
shall have determined in its sole and absolute discretion that the Corporation
make payment or provide consideration to the holders of such terminated Options
on account of such termination, which payment or consideration shall be on such
terms and conditions as the Committee shall have determined (and which could
consist of, in the Committee’s sole and absolute discretion, payment to the
applicable Optionee or Optionees of an amount of cash equal to the difference
between the Market Value of the shares of Common Stock for which the Option is
then exercisable and the aggregate exercise price for such shares under the
Option), then the Corporation shall be required to make such payment or provide
such consideration in accordance with the terms and conditions so determined by
the Committee; otherwise the Corporation shall not be required to make any
payment or provide any consideration in connection with, or as a result of, the
termination of Options pursuant to the foregoing provisions of this clause (C).  The provisions of this Section 8.2 shall
not be construed as to limit or restrict in any way the Committee’s general
authority under Sections 7.1(d) hereof to Accelerate Options in whole or
in part at any time.  Each outstanding
Option that is assumed in connection with a Change of Control, or is otherwise
to continue in effect subsequent to a Change of Control, will be appropriately
adjusted, immediately after the Change of Control, as to the number and class
of securities and the price at which it may be exercised in accordance with Section 8.1.

 

8.3                                 Dissolution
or Liquidation.  Upon
dissolution or liquidation of the Company, each outstanding Option shall
terminate, but the Optionee (if at the time he or she has an employment,
consulting or Board member relationship with the Company or any of its
Affiliates) shall have the right, immediately prior to such dissolution or
liquidation, to exercise the Option to the extent exercisable on the date of
such dissolution or liquidation.

 

8.4                                 Related
Matters.  Any adjustment in Options
made pursuant to this Section 8 shall be determined and made, if at all,
by the Committee and shall include any correlative modification of terms,
including of exercise prices, rates of vesting or exercisability, which the
Committee may deem necessary or appropriate so as to ensure that the rights of
the Participants in their respective Options are not substantially diminished
nor enlarged as a result of the adjustment and corporate action other than as
expressly contemplated in this Section 8. 
No fraction of a share shall be purchasable or deliverable upon
exercise, but in the event any adjustment hereunder of the number of shares
covered by an Option shall cause such number to include a fraction of a share,
such number of shares shall be adjusted to the nearest smaller whole number of
shares.  No adjustment of an Option
exercise price per share pursuant to this Section 8 shall result in an
exercise price which is less than the par value of the Common Stock.

 

9.                                      Settlement of Options

 

9.1                                 Violation
of Law.  Notwithstanding any other
provision of the Plan or the relevant Option Agreement, if, at any time, in the
reasonable opinion of the Company, the issuance of shares of Common Stock
covered by an Option may constitute a violation of law, then the Company may
delay such issuance and the delivery of a certificate for such shares until (i) approval
shall have been obtained from such governmental agencies, other than the
Securities and Exchange Commission, as may be required under any applicable law,
rule, or regulation and (ii) in the case where such issuance would
constitute a violation of a law administered by or a 

 

9

 

regulation
of the Securities and Exchange Commission, one of the following conditions
shall have been satisfied:

 

(a)                                  the shares are
at the time of the issue of such shares effectively registered under the
Securities Act; or

 

(b)                                 the Company
shall have determined, on such basis as it deems appropriate (including an
opinion of counsel in form and substance satisfactory to the Company) that the
sale, transfer, assignment, pledge, encumbrance or other disposition of such
shares or such beneficial interest, as the case may be, does not require
registration under the Securities Act or any applicable state securities laws.

 

9.2                                 Corporate
Restrictions on Rights in Stock; Stockholder Agreement.  Any Common Stock to be
issued pursuant to Options granted under the Plan shall be subject to all
restrictions upon the transfer thereof which may be now or hereafter imposed by
the Certificate of Incorporation and the By-laws of the Company, each as
amended and in effect from time to time, as well as by the Stockholder
Agreement.  Whenever Common Stock is to
be issued pursuant to an Option, if the Committee so directs at the time of
grant (or, if such Option is an Option, at any time prior to the exercise
thereof), the Company shall be under no obligation, notwithstanding any other
provision of the Plan or the relevant Option Agreement to the contrary, to
issue such shares until such time, if ever, as the recipient of the Option (and
any person who exercises any Option, in whole or in part), shall have become a
party to and bound by the Stockholder Agreement and any other agreement that
the Committee shall require in its sole discretion.  In addition, any Common Stock to be issued
pursuant to Options granted under the Plan shall be subject to all
stop-transfer orders and other restrictions as the Committee may deem advisable
under the rules, regulations and other requirements of any stock exchange upon
which the Common Stock is then listed, and any applicable federal or state
securities laws, and the Committee may cause a legend or legends to be put on
any such certificates to make appropriate reference to such restrictions.

 

9.3                                 Investment
Representations.  The Company
shall be under no obligation to issue any shares covered by an Option unless
the shares to be issued pursuant to Options granted under the Plan have been
effectively registered under the Securities Act or the Participant shall have
made such written representations to the Company (upon which the Company
believes it may reasonably rely) as the Company may deem necessary or
appropriate for purposes of confirming that the issuance of such shares will be
exempt from the registration requirements of that Act and any applicable state
securities laws and otherwise in compliance with all applicable laws, rules and
regulations, including but not limited to that the Participant is acquiring
shares for his or her own account for the purpose of investment and not with a
view to, or for sale in connection with, the distribution of any such shares.

 

9.4                                 Registration.  If the Company shall deem it
necessary or desirable to register under the Securities Act or other applicable
statutes any shares of Common Stock issued or to be issued pursuant to Options
granted under the Plan, or to qualify any such shares of Common Stock for
exemption from the Securities Act or other applicable statutes, then the
Company shall take such action at its own expense.  The Company may require from each recipient
of an Option, or each holder of shares of Common Stock acquired pursuant to the
Plan, such 

 

10

 

information
in writing for use in any registration statement, prospectus, preliminary
prospectus or offering circular as is reasonably necessary for such purpose and
may require reasonable indemnity to the Company and its officers and directors
from such holder against all losses, claims, damage and liabilities arising
from such use of the information so furnished and caused by any untrue
statement of any material fact therein or caused by the omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under which they were
made.

 

9.5                                 Lock-Up.  Without the prior written
consent of the Company or the managing underwriter in any public offering of
shares of Common Stock, no Participant shall sell, make any short sale of,
loan, grant any option for the purchase of, pledge or otherwise encumber, or
otherwise dispose of, any shares of Common Stock during the one hundred-eighty
(180) day period commencing on the effective date of the registration statement
relating to any underwritten public offering of securities of the Company.  The foregoing restrictions are intended and
shall be construed so as to preclude any Participant from engaging in any
hedging or other transaction that is designed to or reasonably could be
expected to lead to or result in, a sale or disposition of any shares of Common
Stock during such period even if such shares of Common Stock are or would be
disposed of by someone other than such Participant.  Such prohibited hedging or other transactions
would include, without limitation, any short sale (whether or not against the
box) or any purchase, sale or grant of any right (including without limitation
any put or call option) with respect to any shares of Common Stock or with respect
to any security that includes, relates to, or derives any significant part of
its value from any shares of Common Stock. 
Without limiting the generality of the foregoing provisions of this Section 9.5,
if, in connection with any underwritten public offering of securities of the
Company, the managing underwriter of such offering requires that the Company’s
directors and officers enter into a lock-up agreement containing provisions
that are more restrictive than the provisions set forth in the preceding sentence,
then (a) each Participant (regardless of whether or not such Participant
has complied or complies with the provisions of clause (b) below) shall be
bound by, and shall be deemed to have agreed to, the same lock-up terms as
those to which the Company’s directors and officers are required to adhere; and
(b) at the request of the Company or such managing underwriter, each
Participant shall execute and deliver a lock-up agreement in form and substance
equivalent to that which is required to be executed by the Company’s directors
and officers.

 

9.6                                 Placement
of Legends; Stop Orders; Etc.  Each share of
Common Stock to be issued pursuant to Options granted under the Plan may bear a
reference to the investment representations made in accordance with Section 9.3
in addition to any other applicable restrictions under the Plan, the terms of
the Option and, if applicable, under any agreement between the Company and any
Optionee and/or Participant, and to the fact that no registration statement has
been filed with the Securities and Exchange Commission in respect to such
shares of Common Stock.  All certificates
for shares of Common Stock or other securities delivered under the Plan shall
be subject to such stock transfer orders and other restrictions as the Committee
may deem advisable under the rules, regulations, and other requirements of any
stock exchange upon which the Common Stock is then listed, and any applicable
federal or state securities law, and the Committee may cause a legend or
legends to be placed on any such certificates to make appropriate reference to
such restrictions.

 

11

 

9.7                                 Tax
Withholding.  Whenever shares
of Common Stock are issued or to be issued pursuant to Options granted under
the Plan, the Company shall have the right to require the recipient to remit to
the Company an amount sufficient to satisfy federal, state, local or other
withholding tax requirements if, when, and to the extent required by law
(whether so required to secure for the Company an otherwise available tax
deduction or otherwise) prior to the delivery of any certificate or
certificates for such shares.  The
obligations of the Company under the Plan shall be conditional on satisfaction
of all such withholding obligations and the Company shall, to the extent
permitted by law, have the right to deduct any such taxes from any payment of
any kind otherwise due to the recipient of an Option.  However, in such cases Participants may
elect, subject to the approval of the Committee, acting in its sole discretion,
to satisfy an applicable withholding requirement, in whole or in part, by
having the Company withhold shares to satisfy their tax obligations.  Participants may only elect to have Shares
withheld having a Market Value on the date the tax is to be determined equal to
the minimum statutory total tax which could be imposed on the transaction.  All elections shall be irrevocable, made in
writing, signed by the Participant, and shall be subject to any restrictions or
limitations that the Committee deems appropriate.

 

10.                               Reservation of Stock

 

The
Company shall at all times during the term of the Plan and any outstanding
Options granted hereunder reserve or otherwise keep available such number of
shares of Common Stock as will be sufficient to satisfy the requirements of the
Plan (if then in effect) and such Options and shall pay all fees and expenses
necessarily incurred by the Company in connection therewith.

 

11.                               No Special Service Rights

 

Nothing
contained in the Plan or in any Option Agreement shall confer upon any
recipient of an Option any right with respect to the continuation of his or her
employment, consulting or Board member relationship with the Company (or any
Affiliate), or interfere in any way with the right of the Company (or any
Affiliate), subject to the terms of any separate employment, consulting or
Board member agreement or provision of law or corporate articles or by-laws to
the contrary, at any time to terminate such employment, consulting or Board
member agreement or to increase or decrease, or otherwise adjust, the other
terms and conditions of the recipient’s employment, consulting or Board member
relationship with the Company and its Affiliates.

 

12.                               Nonexclusivity
of the Plan

 

Neither
the adoption of the Plan by the Board nor the submission of the Plan to the
stockholders of the Company shall be construed as creating any limitations on
the power of the Board to adopt such other incentive arrangements as it may
deem desirable, including without limitation, the granting of stock options
other than under the Plan, and such arrangements may be either applicable
generally or only in specific cases.

 

12

 

13.                               Termination
and Amendment of the Plan

 

The
Board may at any time terminate the Plan or make such amendments or
modifications of the Plan as it shall deem advisable.  In the event of the termination of the Plan,
the terms of the Plan shall survive any such termination with respect to any
Option that is outstanding on the date of such termination, unless the holder
of such Option agrees in writing to terminate such Option or to terminate all
or any of the provisions of the Plan that apply to such Option.  Unless the Board otherwise expressly
provides, any amendment or modification of the Plan shall affect the terms of
any Option outstanding on the date of such amendment or modification as well as
the terms of any Option made from and after the date of such amendment or
modification; provided, however, that,
except to the extent otherwise provided in the last sentence of this paragraph,
(i) no amendment or modification of the Plan shall apply to any Option
that is outstanding on the date of such amendment or modification if such
amendment or modification would reduce the number of shares subject to such
Option, increase the purchase price applicable to shares subject to such Option
or materially adversely affect the provisions applicable to such Option that
relate to the vesting or exercisability of such Option or of the shares subject
to such Option, (ii) no amendment or modification of the Plan shall apply
to any Incentive Option that is outstanding on the date of such amendment or
modification if such amendment or modification would result in such Incentive
Option no longer being treated as an “incentive stock option” within the
meaning of Section 422 of the Code and (iii) no amendment or modification
of the Plan shall apply to any Option that is outstanding on the date of such
amendment or modification unless such amendment or modification of the Plan
shall also apply to all other Options outstanding on the date of such amendment
or modification.  In the event of any
amendment or modification of the Plan that is described in clause (i), (ii) or
(iii) of the foregoing proviso, such amendment or modification of the Plan
shall apply to any Option outstanding on the date of such amendment or modification
only if the recipient of such Option consents in writing thereto.

 

The
Committee may amend or modify, prospectively or retroactively, the terms of any
outstanding Option without amending or modifying the terms of the Plan itself, provided that as amended or modified such
Option is consistent with the terms of the Plan as in effect at the time of the
amendment or modification of such Option, but no such amendment or modification
of such Option shall, without the written consent of the recipient of such
Option, reduce the number of shares subject to such Option, increase the
purchase price applicable to shares subject to such Option, adversely affect
the provisions applicable to such Option that relate to the vesting or
exercisability of such Option or of the shares subject to such Option, or
otherwise materially adversely affect the terms of such Option (except for
amendments or modifications to the terms of such Option or of the stock subject
to such Option that are expressly permitted by the terms of the Plan or that
result from any amendment or modification of the Plan in accordance with the
provisions of the first paragraph of this Section 13), or, if such Option
is an Incentive Option, result in such Incentive Option no longer being treated
as an “incentive stock option” within the meaning of Section 422 of the
Code.

 

In
addition, notwithstanding anything express or implied in any of the foregoing
provisions of this Section 13 to the contrary, the Committee may amend or
modify, prospectively or retroactively, the terms of any outstanding Option to
the extent the Committee reasonably 

 

13

 

determines
necessary or appropriate to conform such Option to the requirements of Section 409A
of the Code (concerning non-qualified deferred compensation), if applicable.

 

14.                               Interpretation
of the Plan

 

In
the event of any conflict between the provisions of this Plan and the
provisions of any applicable Option Agreement, the provisions of this Plan
shall control, except if and to the extent that the conflicting provision in
such Option Agreement was authorized and approved by the Committee at the time
of the grant of the Option evidenced by such Option Agreement or is ratified by
the Committee at any time subsequent to the grant of such Option, in which case
the conflicting provision in such Option Agreement shall control.  Without limiting the generality of the
foregoing provisions of this Section 14, insofar as possible the
provisions of the Plan and such Option Agreement shall be construed so as to
give full force and effect to all such provisions.  In the event of any conflict between the
provisions of this Plan and the provisions of any other agreement between the
Company and the Optionee and/or Participant, the provisions of such agreement
shall control except as required to fulfill the intention that this Plan
constitute an incentive stock option plan within the meaning of Section 422
of the Code, but insofar as possible the provisions of the Plan and any such
agreement shall be construed so as to give full force and effect to all such
provisions.

 

15.                               Notices
and Other Communications

 

Any
notice, demand, request or other communication hereunder to any party shall be
deemed to be sufficient if contained in a written instrument delivered in
person or duly sent by first class registered, certified or overnight mail,
postage prepaid, or telecopied with a confirmation copy by regular, certified
or overnight mail, addressed or telecopied, as the case may be, (i) if to
the recipient of an Option, at his or her residence address last filed with the
Company and (ii) if to the Company, at its principal place of business,
addressed to the attention of its Chief Executive Officer, or to such other
address or telecopier number, as the case may be, as the addressee may have
designated by notice to the addressor. 
All such notices, requests, demands and other communications shall be
deemed to have been received: (i) in the case of personal delivery, on the
date of such delivery; (ii) in the case of mailing, when received by the
addressee; and (iii) in the case of facsimile transmission, when confirmed
by facsimile machine report.

 

16.                               Governing
Law

 

The
Plan and all Option Agreements and actions taken thereunder shall be governed,
interpreted and enforced in accordance with the laws of the State of Delaware,
without regard to the conflict of laws principles thereof.

 

14

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