Document:

Exhibit
10.14

 

MASTER REAFFIRMATION AND JOINDER TO LOAN DOCUMENTS

 

THIS MASTER REAFFIRMATION AND JOINDER TO LOAN
DOCUMENTS (this “Agreement”) is made as of October 1, 2006, by and
among BODY CENTRAL ACQUISITION CORP., a Delaware corporation (“Parent”),
BODY SHOP OF AMERICA, INC., a Florida corporation (“Body Shop”),
CATALOGUE VENTURES INC., a Florida corporation (“CV”), RINZI AIR,
L.L.C., a Florida limited liability company (“Rinzi”), and DYMAS FUNDING
COMPANY, LLC, as administrative agent (in such capacity, “Administrative
Agent”) for the Lenders (as defined in the Financing Agreement referred to
below).  Capitalized terms used herein
but not otherwise defined herein shall have the respective meanings ascribed to
such terms in the Financing Agreement.

 

WI T N E S S E T H:

 

WHEREAS, Parent, Administrative Agent and the
Lenders have entered into that certain Financing Agreement dated as of October 1,
2006 (the “Financing Agreement”);

 

WHEREAS, Parent has previously executed and
delivered to Administrative Agent for the benefit of Administrative Agent and
the Lenders various security documents and other agreements, documents and
instruments, including without limitation those agreements, documents and
instruments described on Exhibit A hereto (all such agreements,
documents and instruments being collectively referred to herein as the “Existing
Loan Documents”) in connection with the Financing Agreement;

 

WHEREAS, a portion of the proceeds of the initial
Loans under the Financing Agreement was used to finance the Body Shop
Acquisition;

 

WHEREAS, it is a condition to the continuing
extension of Loans and other financial accommodations by the Lenders under the
Financing Agreement that (i) each of Body Shop and CV be joined as a party
to the Financing Agreement and each other Loan Document as a “Borrower,” (ii) Rinzi
be joined as a party to the Financing Agreement and each other applicable Loan
Document as a “Guarantor,” and (iii) Parent, Body Shop, CV and Rinzi
(collectively, the “Loan Parties”) enter into this Agreement to
acknowledge and agree that the Loan Documents, and the liens, security
interests and guarantees granted and issued thereunder, secure and guarantee
the “Obligations” of the Borrowers and the Guarantors under the Financing
Agreement; and

 

WHEREAS, the Loan Parties will derive both direct
and indirect benefits from the Loans and other financial accommodations made to
the Borrowers pursuant to the Financing Agreement;

 

NOW, THEREFORE, in consideration of the premises
set forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each of the undersigned agrees as
follows:

 

 

1.                                       Joinder to Loan Documents by Body Shop and CV.

 

1.1                                 Each of Body Shop and CV hereby assumes on a joint and several basis all
of the obligations and liabilities of Parent in its capacity as initial
Borrower under the Financing Agreement and each of the other Loan Documents and
hereby agree that they constitute joint and several Borrowers and are bound as
joint and several Borrowers under the terms of the Financing Agreement and each
of the other Loan Documents, in each case as if they had been original
signatories to such Loan Documents.

 

1.2                                 All references in the Loan Documents to the terms “Borrower,” “Grantor,”
“Grantors,” “Assignor,” “Assignors,” “Loan Party” or “Loan Parties,” as
applicable, shall be deemed to include each of Body Shop and CV.  Without limiting the generality of the
foregoing, each of Body Shop and CV hereby (i) repeats and reaffirms all
covenants, agreements, representations and warranties contained in the
Financing Agreement and each other Loan Document to which it is now a party and
(ii) acknowledges and agrees that this Agreement, for the avoidance of
doubt but without in any manner limiting or qualifying any other provision of
this Agreement, constitutes a simultaneous grant of a Lien on and security
interest in any and all personal property of each of Body Shop and CV to the
same extent Liens and security interests are granted by the other Loan Parties
in the Existing Loan Documents.

 

1.3                                 Each of Body Shop and CV hereby acknowledges and agrees that it is
jointly and severally liable for the all the Obligations under the Financing
Agreement and each other Loan Agreement to the same extent and with the same
force and effect as if each of Body Shop and CV had originally been a Borrower
under the Financing Agreement and had originally executed the same as a
Borrower.

 

2.                                       Joinder to Loan Documents by Parent and Rinzi.

 

2.1                                 Parent, pursuant to the Financing Agreement, is liable for all of the
obligations as the Borrower under the Financing Agreement and each other Loan
Document.  From and after the date
hereof, Administrative Agent, each Lender, Parent and each other Loan Party
hereby agree that Parent shall hereafter be a Guarantor, and not the Borrower,
and bound solely as a Guarantor under the terms of the Financing Agreement and
each other Loan Document, as if it had been an original signatory as a
Guarantor under such Loan Documents.

 

2.2                                 Rinzi hereby assumes all of the obligations and liabilities of a
Guarantor under the Financing Agreement and each of the other Loan Documents
and hereby agrees that it, along with Parent, constitute joint and several
Guarantors and are bound as joint and several Guarantors under the terms of the
Financing Agreement and each of the other Loan Documents, in each case as if it
had been an original signatory as a Guarantor under such Loan Documents.

 

2.3                                 All references in the Loan Documents to the terms “Guarantor,” “Guarantors,”
“Pledgor,” “Pledgors,” “Grantor,” “Grantors,” Assignor,” “Assignors,” “Loan
Party” or “Loan Parties,” as applicable, shall be deemed to include Parent and 

 

2

 

Rinzi.  Without limiting the generality of the
foregoing, each of Parent and Rinzi hereby (i) repeats and reaffirms all
covenants, agreements, representations and warranties contained in the
Financing Agreement and each other Loan Document to which it is now a party and
(ii) acknowledges and agrees that, for the avoidance of doubt but without
in any manner limiting or qualifying any other provision of this Agreement, the
grant of a Lien on and security interest in any and all personal property of
Parent and Rinzi, respectively, to the same extent Liens and security interests
are granted in the Existing Loan Documents.

 

2.4                                 Each of Parent and Rinzi hereby acknowledges and agrees that it is
jointly and severally liable for the all the Guaranteed Obligations under the
Financing Agreement to the same extent and with the same force and effect as if
Parent and Rinzi had originally been a Guarantor under the Financing Agreement
and had originally executed the same as such a Guarantor.

 

3.                                       Reaffirmation.  Each Loan Party, as debtor, grantor,
mortgagor, pledgor, guarantor, assignor, or in other similar capacities in
which such Person grants liens or security interests in its properties or
otherwise acts as an accommodation party or guarantor, as the case may be, in
any case under the Existing Loan Documents, hereby ratifies and reaffirms all
of its payment, performance and observance obligations, contingent or
otherwise, under each Existing Loan Document and, to the extent such Person
granted liens on or security interests in any of its properties pursuant to any
such Existing Loan Document as security for the Borrower’s obligations under or
with respect to the Financing Agreement, or its own obligations arising under
any Existing Loan Document, hereby ratifies and reaffirms such grant of liens
and security interests and confirms and agrees that such liens and security
interests hereafter secure all of the Obligations, including, without
limitation, all additional Obligations resulting from the Financing Agreement,
in each case as if each reference in such Existing Loan Documents to the
obligations secured thereby are construed to hereafter mean and refer to such
Obligations after giving effect to the Financing Agreement.  Each of the Loan Parties hereby consents to
the terms and conditions of the Financing Agreement (including, without
limitation, all additional Obligations resulting from the Financing Agreement),
subject to the limitations, if any, set forth therein.  Each of the Loan Parties acknowledges that
each of the Existing Loan Documents remains in full force and effect and is
hereby ratified and confirmed.  The
execution of this Agreement shall not operate as a novation, waiver of any
right, power or remedy of the Administrative Agent or the Lenders, nor constitute
a waiver of any provision of any of the Existing Loan Documents.

 

4.                                       Representations and Warranties.

 

4.1                                 Parent hereby confirms to Administrative Agent and the Lenders that the
representations and warranties set forth in the Financing Agreement and each of
the other Loan Documents, as amended by this Agreement, made by Parent are true
and correct in all material respects as of the date hereof and shall be deemed
to be remade as of the date hereof (except to the extent such representations
and warranties (y) expressly refer to an earlier date, in which case they
shall be true and correct in all material respects as of such earlier date, or (z) is
qualified by materiality or has a Material Adverse Effect qualifier (in which
case such representation or warranty shall be true and correct in all respects)).

 

3

 

4.2                                 Each of Body Shop, CV and Rinzi hereby represents and warrants to
Administrative Agent and the Lenders that: (i) it has full power and
authority to execute and deliver this Agreement, the Financing Agreement and
each other Loan Documents and to perform its obligations hereunder and
thereunder; (ii) upon the execution and delivery hereof, this Agreement
shall be valid, binding and enforceable upon it in accordance with its terms
(except as may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws and by general equitable principles); (iii) the
execution and delivery of this Agreement do not and shall not contravene,
conflict with, violate or constitute a default under (A) the articles or
certificate of formation, operating agreement, certificate of limited liability
or other constituent documents, if applicable, or (B) any applicable law,
rule, regulation, judgment, decree or order or any material agreement,
indenture or instrument to which it is a party or is bound or which is binding
upon or applicable to all or any portion of it property; and (iv) no
Default or Event of Default exists.

 

5.                                       No Further Amendments; Effect.  Each of the Loan Documents shall remain in
full force and effect in accordance with their respective terms.  Except as specifically modified hereby, all
of the terms and conditions of the Financing Agreement and each other Loan
Document shall remain unchanged and in full force and effect.  Each Loan Party acknowledges that, by
Administrative Agent’s and Lenders’ execution hereof, neither Administrative
Agent nor any Lender waives, diminishes or limits any term, condition or
covenant contained in any of the Loan Documents.

 

6.                                       Successors and Assigns.  This Agreement shall be binding upon each of
the Loan Parties and each of their respective successors and assigns and shall
inure to the benefit of Administrative Agent and the Lenders and their
respective successors and assigns.  The
successors and assigns of such entities shall include, without limitation,
their respective receivers, trustees, or debtors-in-possession.

 

7.                                       Further Assurances.  Each of the Loan Parties hereby agrees from
time to time, as and when requested by Administrative Agent or any Lender, to
execute and deliver or cause to be executed and delivered, all such documents,
instruments and agreements and to take, or cause to be taken, such further or
other action as Administrative Agent or such Lender may reasonably deem necessary
in order to carry out the intent and purposes of this Agreement and the Loan
Documents.

 

8.                                       Definitions.  All references to the singular shall be
deemed to include the plural and vice versa where the context so requires.

 

9.                                       Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY,
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
EXCEPT AS REQUIRED BY MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE EXTENT THAT
THE VALIDITY AND PERFECTION OR THE PERFECTION AND THE EFFECT OF PERFECTION OR
NON-PERFECTION OF THE SECURITY INTEREST CREATED HEREBY, OR REMEDIES HEREUNDER, IN
RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAW OF A JURISDICTION
OTHER THAN THE STATE OF NEW YORK.

 

4

 

10.                                 Severability.  Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under such law, such provision shall be ineffective to
the extent of such prohibition or invalidity without invalidating the remainder
of such provision or the remaining provisions of this Agreement.

 

11.                                 Loan Document.  Each Loan Party hereby acknowledges and
agrees that this Agreement constitutes a Loan Document under and as defined in
the Financing Agreement.

 

12.                                 Execution in Counterparts.  This Agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which shall be deemed to be an original, but all of which taken together
shall constitute one and the same agreement. 
Delivery of an executed counterpart of this Agreement by telecopier,
facsimile, email or similar electronic transmission shall be equally as effective
as delivery of an original executed counterpart of this Agreement.

 

13.                                 Section Headings.  The section headings herein are for
convenience of reference only, and shall not affect in any way the
interpretation of any of the provisions hereof.

 

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

 

5

 

IN WITNESS WHEREOF, this Agreement has been duly
executed by each of the undersigned as of the day and year first set forth
above.

 

	
   

  	
  LOAN PARTIES:

  
	
   

  	
   

  
	
   

  	
  BODY SHOP ACQUISITION CORP., a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ George Kolber

  
	
   

  	
  Name:

  	
  George Kolber

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  BODY SHOP AMERICA, INC., a Florida corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ George Kolber

  
	
   

  	
  Name:

  	
  George Kolber

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  CATALOGUE VENTURES, INC., a Florida corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ George Kolber

  
	
   

  	
  Name:

  	
  George Kolber

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Body Shop of America, its sole Member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ George Kolber

  
	
   

  	
   

  	
  Name:

  	
  George Kolber

  
	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  ADMINISTRATIVE AGENT:

  
	
   

  	
   

  
	
   

  	
  DYMAS FUNDING COMPANY, LLC,  as Administrative Agent

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Dymas Capital Management Company LLC, its Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Albert M. Ricchio

  
	
   

  	
   

  	
  Name:

  	
  Albert M. Ricchio

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  

 

 

Exhibit A

 

1.                                       Financing
Agreement, dated as of October 1, 2006, by and among Body Central
Acquisition Corp., Dymas Funding Company, LLC, as Administrative Agent, and the
Lenders from time to time party thereto.

 

2.                                       Revolving Note,
dated as of October 1, 2006, by Parent in favor of Churchill Financial
Cayman Ltd. in the aggregate principal amount of $2,706,766.92

 

3.                                       Term Loan A
Note, dated as of October 1, 2006, by Parent in favor of Churchill
Financial Cayman Ltd. in the aggregate principal amount of $4,962,406.01

 

4.                                       Term Loan B
Note, dated as of October 1, 2006, by Parent in favor of Churchill
Financial Cayman Ltd. in the aggregate principal amount of $4,330,827.07

 

5.                                       Security
Agreement, dated as of October 1, 2006, executed by Body Central
Acquisition Corp. in favor of Dymas Funding Company, LLC, as Administrative
Agent, for the benefit of Administrative Agent and the Lenders.

 

6.                                       Assignment of
Stock Purchase Agreement, dated as of October 1, 2006, between Body
Central Acquisition Corp. and Dymas Funding Company, LLC, as Administrative
Agent.

 

7.                                       Fee Letter,
dated as of October 1, 2006, by Body Shop Acquisition Corp. in favor of
Dymas Funding Company, LLC, as Administrative Agent.

 

8.                                       Post-Closing
Letter Agreement, dated as of October 1, 2006, by Body Shop Acquisition
Corp. and acknowledged and accepted by Dymas Funding Company, LLC, as
Administrative Agent.Exhibit 10.15

 

WAIVER AND FIRST AMENDMENT TO FINANCING AGREEMENT

 

THIS WAIVER AND FIRST AMENDMENT TO FINANCING
AGREEMENT (this “Amendment”) is entered into as of March 16, 2007,
by and among BODY SHOP OF AMERICA, INC., a Florida corporation (“Body
Shop”), CATALOGUE VENTURES, INC., a Florida corporation (“CV,”
CV, together with Body Shop and each other Person who becomes a borrower under
the Financing Agreement, the “Borrowers”), BODY CENTRAL ACQUISITION
CORP., a Delaware corporation (“Parent”), RINZI AIR, L.L.C., a Florida
limited liability company (“Rini,” Rinzi, together with Parent and each
other Person who becomes a guarantor under the Financing Agreement, the “Guarantors,”
such Guarantors, together with the Borrowers, the “Loan Parties”), DYMAS
FUNDING COMPANY, LLC, as administrative agent (in such capacity, “Administrative
Agent”) for the Lenders, and the financial institutions from time to time
party thereto as Lenders.

 

W I T N E S S E T H:

 

WHEREAS, Borrowers, Guarantors, Administrative
Agent, Lenders and certain other parties thereto have entered into that certain
Financing Agreement dated as of October 1, 2006 (as the same may be
further amended, restated, supplemented or otherwise modified from time to
time, the “Financing Agreement”);

 

WHEREAS, Borrowers have informed Administrative
Agent that certain Events of Default have arisen and are continuing
(collectively, the “Designated Defaults”) as a result of the failure of
the Loan Parties to comply (i) with the provisions of Section 7.03(b) (Fixed
Charge Coverage Ratio) of the Financing Agreement by reason of the Parent and
its Subsidiaries having a Fixed Charge Coverage Ratio, as determined as at December 31,
2006 for the four consecutive fiscal quarters ending on or about such date, of
0.97 (as opposed to having a Fixed Charge Coverage Ratio, as determined as of
such date for such four fiscal quarters ending on or about such date, of not
less than 1.05), and (ii) with the provisions of Section 7.03(c)(ii) (Capital
Expenditures) of the Financing. Agreement by reason of the Parent and its
Subsidiaries making. Capital Expenditures (other than a Point of Sale Capital
Expenditures (by purchase or Capitalized Lease)) of $3,516,000 for the six
month period ended December 30, 2006 (as opposed to not making such
Capital Expenditures in excess of $2,500,000 for such period);

 

WHEREAS, the parties to the Financing Agreement
desire to waive the Designated Defaults; and

 

WHEREAS, the parties to the Financing Agreement
desire to amend the Financing Agreement on the terms and subject to the
conditions set forth herein.

 

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

 

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

 

 

2.                                       Amendments.  Effective as of the Effective Date, the
Financing Agreement is amended as follows:

 

a.                                       Section 7.01(a) of the Financing Agreement (Reporting
Requirements) shall be amended by inserting the following clause (xiv) immediately
prior to Section 7.01(b):

 

(xiv)                         for each fiscal month during the fiscal year ending on or about December 31,
2007, as soon as possible, and in any event within ten (10) Business Days
after the end of each such fiscal month, a detailed summary of Borrowers’ same
store sales, preliminary aggregate gross profit margins as presented by the
merchandising system, estimated month-end cash balance and estimated gross
month-end inventory values, such summary to be in form reasonably satisfactory
to Administrative Agent in its sole discretion.

 

b.                                      Section 7.02(0 of the Financing Agreement (Restricted Payments)
shall be amended by inserting the following clause (ix) immediately prior
to Section 7.02(g):

 

(ix)                                Parent may repurchase or redeem, and Borrowers may dividend funds to
Parent to enable Parent to repurchase or redeem, up to 30,000 shares of the Series C
preferred stock of Parent from Ronnie Rosenbaum Family Trust, Marital Trust 1
for Jerrold Rosenbaum, Marital Trust 2 for Jerrold Rosenbaum, Jerrold
Rosenbaum, Beth R. Angelo, Laurie I. Bauguss and Curtis Hill (collectively, the
“Series C Holders” and each, individually, a “Series C
Holder”) for cash consideration of no more than $3,000,000 plus accrued
dividends on such Series C preferred stock through the date of such
repurchase or redemption, provided all of the following conditions are
satisfied:

 

(A)                              dividends on each issued and outstanding share of Series C
preferred stock shall not accrue at a rate in excess of 5%;

 

(B)                                no Default or Event of Default has occurred and is continuing or would
arise as a result of such Restricted Payment;

 

(C)                                after giving effect to such Restricted Payment, Borrowers’ are in
compliance with the covenants set forth in Section 7.03 of the Financing
Agreement, as calculated based on information provided in audited financial
statements;

 

(D)                               Administrative Agent shall have received evidence satisfactory to it
that Consolidated EBITDA of Parent and its Subsidiaries (i) is equal to or
greater than $18,500,000 for the Fiscal Year ending on or about December 31,
2007, as calculated based on information provided in audited financial
statements for such fiscal year, or (ii) if Consolidated EBITDA of Parent
and its Subsidiaries is not equal to or greater than $18,500,000 for the Fiscal
Year ending on or about December 31, 2007, as calculated based on
information provided in audited financial statements for such fiscal year, then
Consolidated EBITDA of Parent and its Subsidiaries is equal to or greater than
$18,500,000 for 

 

2

 

any two consecutive fiscal quarters occurring after
December 31, 2007, as calculated based on information provided in the most
recent financial statements provided to Administrative Agent pursuant to Section 7.01
of this Agreement;

 

(E)                                 the aggregate amount of all such Restricted Payments permitted during
the term of the Financing Agreement shall not exceed the sum of $3,000,000 plus
all accrued dividends on the Series C preferred stock through the date of
such Restricted Payment; and

 

(F)                                 proceeds of Revolving Loans may not be used to make such Restricted
Payment.

 

c.                                       Section 7.03(a) of the Financing Agreement (Senior Leverage
Ratio) shall be amended by deleting the covenant tables contained therein and
substituting the following in lieu thereof:

 

	
  Fiscal Quarter End

  	
   

  	
  Senior Leverage Ratio

  
	
  December 31, 2006

  	
   

  	
  3.15

  
	
  March 31, 2007*

  	
   

  	
  3.85

  
	
  June 30, 2007*

  	
   

  	
  3.75

  
	
  September 30, 2007*

  	
   

  	
  3.55

  
	
  December 31, 2007*

  	
   

  	
  2.95

  
	
  March 31, 2008

  	
   

  	
  2.50

  
	
  June 30, 2008

  	
   

  	
  2.40

  
	
  September 30, 2008

  	
   

  	
  2.30

  
	
  December 31, 2008

  	
   

  	
  2.10

  
	
  March 31, 2009

  	
   

  	
  2.00

  
	
  June 30, 2009

  	
   

  	
  1.90

  
	
  September 30, 2009

  	
   

  	
  1.80

  
	
  December 31, 2009 and each fiscal quarter
  thereafter

  	
   

  	
  1.75

  

 

3

 

Notwithstanding anything to the contrary herein or
in the Compliance Certificate, unrestricted cash on hand shall not be included
in the calculation of Senior Leverage Ratio for testing periods in 2007.

 

d.                                      Section 7.03(b) of the Financing Agreement (Fixed Charge
Coverage Ratio) shall be amended by deleting the covenant tables contained
therein and substituting the following in lieu thereof:

 

 

	
  Fiscal Quarter End

  	
   

  	
  Fixed Charge Coverage Ratio

  
	
  December 31, 2006

  	
   

  	
  1.05

  
	
  March 31, 2007 **

  	
   

  	
  1.00

  
	
  June 30, 2007 **

  	
   

  	
  1.00

  
	
  September 30, 2007 **

  	
   

  	
  1.05

  
	
  December 31, 2007 **

  	
   

  	
  1.05

  
	
  March 31, 2008 and each fiscal quarter
  thereafter

  	
   

  	
  1.10

  

 

**                                  If any fiscal quarter set forth below is included in any period for
which Fixed Charges are being calculated, the amount set forth below opposite
such fiscal month shall be deemed to be Point of Sale Capital Expenditures for
such fiscal quarter:

 

 

	
  Fiscal Quarter Ended:

  	
   

  	
  Amount:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2007

  	
   

  	
  $

  	
  250,000

  	
   

  
	
  June 30, 2007

  	
   

  	
  $

  	
  250,000

  	
   

  
	
  September 30, 2007

  	
   

  	
  $

  	
  1,250,000

  	
   

  
	
  December 31, 2007

  	
   

  	
  $

  	
  1,250,000

  	
   

  

 

e.                                       Section 7.03(c)(ii) of the Financing Agreement (Capital
Expenditures) shall be amended by deleting the covenant tables contained
therein and substituting the following in lieu thereof:

 

 

	
  Fiscal Year End

  	
   

  	
  Maximum

  Capital Expenditures

  	
   

  
	
  December 31, 2007

  	
   

  	
  $

  	
  3,300,000

  	
   

  
	
  December 31, 2008

  	
   

  	
  $

  	
  5,650,000

  	
   

  
	
  December 31, 2009

  	
   

  	
  $

  	
  5,200,000

  	
   

  

 

4

 

	
  Fiscal Year End

  	
   

  	
  Maximum

  Capital Expenditures

  	
   

  
	
  December 31, 2010
  and for each Fiscal Year thereafter

  	
   

  	
  $

  	
  5,000,000

  	
   

  
					

 

f.                                         the Compliance Certificate attached as Exhibit A to the Financing
Agreement is hereby deleted in its entirety and the Compliance Certificate
attached hereto as Exhibit A substituted therefor.

 

3.                                       Waiver and Consent.  The Borrowers have notified the
Administrative Agent and the Lenders that Designated Defaults currently exist
under the Financing Agreement. Effective as of the Effective Date, the Lenders
hereby waive the Designated Defaults. In addition, the Borrowers have notified
the Administrative Agent that, notwithstanding anything to the contrary
contained in Section 2.05(d) of the Financing Agreement, in
connection with the Preferred Stock Issuance (as such term is defined in Section 5(c) hereof),
the Borrowers desire to apply all of the proceeds thereof to the repayment of
the Term Loan B (to be applied against the remaining principal amortization
payments of such Term Loan B pro rata based on the respective amounts thereof)
(such application being hereinafter referred to as the “Modified
Prepayment  Application”). The
Borrowers have requested that the Administrative Agent and the Lenders consent
to such Modified Prepayment Application. Effective as of the Effective Date,
the Lenders hereby consent to the proceeds of the Preferred Stock Issuance
being applied pursuant to the Modified Prepayment Application.

 

4.                                       Covenants.  In connection with the execution of this
Amendment, Borrowers hereby covenant and agree, in addition to any fees or
other amounts paid or payable to Administrative Agent or the Lenders under the
terms of the Financing Agreement, including the fees and other amounts set
forth in the Fee Letter, Borrowers agree to pay, or cause to be paid, to
Administrative Agent, in each case, for the ratable benefit of the Lenders, on
the Effective Date, a fully-earned, non-refundable amendment fee in an amount
equal to One Hundred Fifty-Seven Thousand Five Hundred Dollars ($157,500).

 

5.                                       Conditions.  The effectiveness of this Amendment is
subject to the following conditions precedent, with the date on which such
conditions have been satisfied being March [161, 2007 (the “Effective
Date”):

 

a.                                       the execution and delivery of this Amendment by each Loan Party,
Administrative Agent and the Required Lenders;

 

b.                                      the receipt by Administrative Agent of the amendment fees pursuant to Section 4
hereof;

 

c.                                       Parent shall have issued 30,000 shares of its Series C preferred
stock to the Series C Holders in exchange for cash consideration of not
less than $3,000,000 (the “Preferred Stock Issuance”), the proceeds of
which shall be used to repay the Loans pursuant to the Modified Prepayment
Application;

 

5

 

d.                                      the receipt by Administrative Agent of certified copies of all
Organization Documents of Parent to be amended with respect to the Preferred
Stock Issuance and each other agreement entered into in connection therewith,
each of which shall be in form and substance acceptable to Administrative
Agent;

 

e.                                       the truth and accuracy of the representations and warranties contained
in Section 6 hereof; and

 

f.                                         no Default or Event of Default other than the Designated Defaults shall
have occurred or be continuing.

 

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

 

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

 

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

 

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

 

d.                                      other than with respect to the Designated Defaults, no Default or Event
of Default exists.

 

7.                                       No Waiver.  The waivers in Section 3 hereof shall
not be deemed waivers of any other Default or Event of Default (other than the
Designated Defaults) which has occurred or exists under the Financing Agreement
or hereafter may occur under the Financing Agreement, as amended, or to
establish a custom or course of dealing among any Borrower, any Guarantor,
Administrative Agent, the Lenders or any of them. Except as specifically set
forth herein, Administrative Agent and the Lenders hereby expressly reserve all
of their rights and remedies under the Financing Agreement, as amended, the
other Loan Documents and applicable law. 

 

6

 

Except as contained
herein, nothing contained herein shall be deemed to constitute a waiver of
compliance with any other term or condition contained in the Financing
Agreement or any of the other Loan Documents or constitute a course of conduct
or dealing among the parties. Except as amended hereby, the Financing Agreement
and other Loan Documents remain unmodified and in full force and effect. All
references in the Loan Documents to the Financing Agreement shall be deemed to
be references to the Financing Agreement as amended hereby.

 

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

 

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

 

10.                                 GOVERNING LAW; SUBMISSION TO JURISDICTION.  THIS
AMENDMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED IN THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF
LAWS PRINCIPLES. EACH LOAN PARTY HEREBY RATIFIES AND AFFIRMS THE CONSENT TO THE
JURISDICTION CONTAINED IN SECTION 11.09 OF THE FINANCING AGREEMENT WITH
RESPECT TO ALL ACTIONS ARISING OUT OF THIS AMENDMENT.

 

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

 

12.                                 Counterparts; Integration.  This Amendment may be executed and delivered
via facsimile with the same force and effect as if an original were executed
and may be signed in any 

 

7

 

number of counterparts,
each of which shall be an original, with the same effect as if the signatures
hereto were upon the same instrument. This Amendment constitutes the entire
agreement and understanding among the parties hereto with respect to the
subject matter hereof and supersedes any and all prior agreements and
understandings, oral or written, relating to the subject matter hereof.

 

13.                                 Reaffirmation.  Each of the Loan Parties as debtor, grantor,
pledgor, guarantor, assignor, or in any other similar capacity in which such
Loan Party grants liens or security interests in its property or otherwise acts
as accommodation party or guarantor, as the case may be, hereby (i) ratifies
and reaffirms all of its payment and performance obligations, contingent or
otherwise, under each of the Loan Documents to which it is a party (after
giving effect hereto) and (ii) to the extent such Loan Party granted liens
on or security interests in any of its property pursuant to any such Loan
Document as security for or otherwise guaranteed the Borrowers’ Obligations
under or with respect to the Loan Documents, ratifies and reaffirms such
guarantee and grants of security interests and liens and confirms and agrees
that such security interests and liens hereafter secure all of the Obligations
as amended hereby. Each of the Loan Parties hereby consents to this Amendment
and acknowledges that each of the Loan Documents remains in full force and
effect and is hereby ratified and reaffirmed. The execution of this Amendment
shall not operate as a waiver of any right, power or remedy of the
Administrative Agent or the Lenders, constitute a waiver of any provision of
any of the Loan Documents or serve to effect a novation of the Obligations.

 

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

 

8

 

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

 

 

	
   

  	
  BORROWERS:

  
	
   

  	
   

  
	
   

  	
  BODY SHOP .AMERICA, INC., a Florida corporation

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ George Kolber

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CATALOGUE VENTURES, INC., a Florida corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ George Kolber

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  GUARANTORS:

  
	
   

  	
   

  	
   

  
	
   

  	
  BODY SHOP ACQUISITIONS CORP., a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ George Kolber

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Body Shop of America, Inc., its sole Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ George Kolber

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

1

 

	
   

  	
  ADMINISTRATIVE AGENT:

  
	
   

  	
   

  
	
   

  	
  DYMAS FUNDING COMPANY, LLC, as Administrative Agent

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Dymas Capital Management Company, LLC, its
  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kenneth B. Leonard

  
	
   

  	
  Name:

  	
  Kenneth B. Leonard

  
	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
  LENDERS:

  
	
   

  	
   

  
	
   

  	
  CHURCHILL FINANCIAL CAYMAN LTD., as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Christopher Cox

  
	
   

  	
  Name:

  	
  Christopher Cox

  
	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
  NEWSTAR SHORT-TERM FUNDING LLC, as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  NewStar Financial, Inc., its Designated

  
	
   

  	
   

  	
  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ P. Emery Covington

  
	
   

  	
  Name:

  	
  P. Emery Covington

  
	
   

  	
  Title:

  	
  NewStar Financial

  
	
   

  	
   

  	
  Managing Director

  
	
   

  	
   

  	
  Portfolio Management

  
	
   

  	
   

  	
   

  
	
   

  	
  NEWSTAR LLC 2005-1, as a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  NewStar Financial, Inc., its Sole Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ P. Emery Covington

  
	
   

  	
  Name:

  	
  P. Emery Covington

  
	
   

  	
  Title:

  	
  NewStar Financial

  
	
   

  	
   

  	
  Managing Director

  
	
   

  	
   

  	
  Portfolio Management

  

 

2

 

	
   

  	
  A3 FUNDING LP,
  as a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  A3 Fund Management LLC, its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Alexander J. Ornstein

  
	
   

  	
  Name:

  	
  Alexander J. Ornstein

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  ABLECO FINANCE LLC, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Alexander J. Ornstein

  
	
   

  	
  Name:

  	
  Alexander J. Ornstein

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  NATIONAL CITY BANK, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jennifer A. Obers

  
	
   

  	
  Name:

  	
  Jennifer A. Obers

  
	
   

  	
  Title:

  	
  Relationship Manager

  
	
   

  	
   

  	
   

  
	
   

  	
  CAPITALSOURCE FINANCE LLC, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John N. Toufanian

  
	
   

  	
  Name:

  	
  John N. Toufanian

  
	
   

  	
  Title:

  	
  Authorized Signatory

  

 

3

 

EXHIBIT A

 

Compliance Certificate

 

See attached.

 

1

 

EXHIBIT C
TO FINANCING AGREEMENT

 

COMPLIANCE
CERTIFICATE

 

Date: 
                      ,
200  

 

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

 

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

 

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

 

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

 

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

 

(d)                                 Based on the
Senior Leverage Ratio, the Applicable Margin for Base Rate Loans is
                          
and the Applicable Margin for LIBOR Loans is
                          ;
and

 

2

 

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

 

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

 

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

 

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

 

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

 

3

 

IN WITNESS WHEREOF, Administrative Borrower
has caused this Certificate to be executed by one of its Authorized Officers
this        day of                             ,
200 .

 

	
   

  	
  BODY
  CENTRAL ACQUISITION CORP., a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

4

 

EXHIBIT A
TO

COMPLIANCE CERTIFICATE

 

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

 

Covenant 7.03(a) — Senior Leverage Ratio

 

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

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Net
  Consolidated Senior Funded Indebtedness:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

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

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

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

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

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

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

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

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Equal:            Gross Consolidated Senior
  Funded Indebtedness

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Less:                    Subordinated Indebtedness
  included above Unrestricted cash on hand in excess of $3,000,000 in which
  Administrative Agent has a perfected first Lien *

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Equal:            Net Consolidated Senior
  Funded Indebtedness

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Consolidated
  EBITDA (as calculated per Exhibit B)

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

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

  	
   

  	
   

  	
   

  	
   

  

 

*                               Notwithstanding
anything to the contrary herein or in the Financing Agreement, unrestricted
cash on hand in excess of $3,000,000 shall not be included in the calculation
of Senior Leverage Ratio for testing periods in 2007.

 

5

 

	
  Maximum
  Senior Leverage Ratio

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  In
  Compliance

  	
   

  	
   

  	
   

  	
  Yes/No

  

 

6

 

Covenant 7.03(b) — Fixed
Charge Coverage

 

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

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Consolidated
  EBITDA (as calculated per Exhibit B)

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

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

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Equals:
  Consolidated Operating Cash Flow Fixed Charges:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

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

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

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

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

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

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

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

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

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

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Equal:               Fixed
  Charges**

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

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

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Minimum
  Fixed Charge Coverage Ratio

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  In
  Compliance

  	
   

  	
   

  	
   

  	
  Yes/No

  

 

*              If any fiscal quarter set forth
below is included in any period for which Fixed Charges are being calculated,
the amount set forth below opposite such fiscal quarter shall be deemed to be
Point of Sale Capital Expenditures for such fiscal quarter:

 

7

 

	
  Fiscal
  Quarter Ended:

  	
   

  	
  Amount:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2007

  	
   

  	
  $

  	
  250,000

  	
   

  
	
  June 30, 2007

  	
   

  	
  $

  	
  250,000

  	
   

  
	
  September 30, 2007

  	
   

  	
  $

  	
  1,250,000

  	
   

  
	
  December 31, 2007

  	
   

  	
  $

  	
  1,250,000

  	
   

  

 

**
If any fiscal month set forth below is included in any period for which Fixed
Charges are being calculated, the amount set forth below opposite such fiscal
month shall be deemed to be Fixed Charges for such fiscal month:

 

	
  Month

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January, 2006

  	
   

  	
  $

  	
  900,000

  	
   

  
	
  February, 2006

  	
   

  	
  $

  	
  900,000

  	
   

  
	
  March, 2006

  	
   

  	
  $

  	
  900,000

  	
   

  
	
  April, 2006

  	
   

  	
  $

  	
  900,000

  	
   

  
	
  May, 2006

  	
   

  	
  $

  	
  900,000

  	
   

  
	
  June, 2006

  	
   

  	
  $

  	
  900,000

  	
   

  
	
  July, 2006

  	
   

  	
  $

  	
  900,000

  	
   

  
	
  August, 2006

  	
   

  	
  $

  	
  900,000

  	
   

  
	
  September, 2006

  	
   

  	
  $

  	
  900,000

  	
   

  

 

8

 

Covenant 7.03(c)

Capital Expenditure Limit

 

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

  	
   

  	
   

  
	
   

  	
   

  	
   

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

  	
   

  	
   

  
	
   

  	
   

  	
   

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

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Total
  Capital Expenditures

  	
   

  	
   

  
	
   

  	
   

  	
   

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

  	
   

  	
   

  
	
   

  	
   

  	
   

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

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  The aggregate amount of contracted for tenant allowances

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Capital
  Expenditures

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (a)                                  Portion of
  Capital Expenditures which constitute Point of Sale Capital Expenditures

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (b)                                 Potion of
  Capital Expenditures which constitute Capital Expenditures other than Point
  of Sale Capital Expenditures

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Permitted
  Capital Expenditures

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (a)                                  Point of Sale
  Capital Expenditures (including carry forward of
  $                from prior Fiscal Year)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (b)                                 Capital
  Expenditures other than Point of Sale Capital Expenditures (including carry
  forward of
  $                from prior Fiscal Year)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  In
  Compliance for Point of Sale Capital Expenditures

  	
   

  	
  Yes/No

  

 

9

 

	
  In
  Compliance for Capital Expenditures other than Point of Sale Capital Expenditures

  	
   

  	
  Yes/No

  

 

10

 

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

  	
   

  	
   

  
	
   

  	
   

  	
   

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

  	
   

  	
   

  
	
   

  	
   

  	
   

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

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Total
  Capital Expenditures

  	
   

  	
   

  
	
   

  	
   

  	
   

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

  	
   

  	
   

  
	
   

  	
   

  	
   

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

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  The
  aggregate amount of contracted for tenant allowances

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Capital
  Expenditures

  	
   

  	
   

  
	
   

  	
   

  	
   

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

  	
   

  	
   

  
	
   

  	
   

  	
   

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

  	
   

  	
   

  
	
   

  	
   

  	
   

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

  	
   

  	
   

  

 

11

 

EXHIBIT B TO COMPLIANCE CERTIFICATE

 

Calculation of Consolidated EBITDA

 

	
  Consolidated
  EBITDA is calculated as follows:

  	
   

  	
   

  
	
   

  	
   

  	
   

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

  	
   

  	
   

  
	
   

  	
   

  	
   

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

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  interest
  expense, less interest income

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  income
  tax expense

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  depreciation
  expense

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  amortization
  expense

  	
   

  	
   

  
	
   

  	
   

  	
   

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

  	
   

  	
   

  
	
   

  	
   

  	
   

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

  	
   

  	
   

  

 

12

 

	
  Non
  cash adjustments relating to lease leveling

  	
   

  	
   

  
	
   

  	
   

  	
   

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

  	
   

  	
   

  
	
   

  	
   

  	
   

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

  	
   

  	
   

  

 

13

 

EXHIBIT C TO

COMPLIANCE CERTIFICATE

 

Calculation of Consolidated Net Interest Expense

 

	
  Gross
  interest expense during the applicable measurement period

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Less:
  Interest income during the applicable measurement period

  	
   

  	
   

  
	
   

  	
   

  	
   

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

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  amortization
  of original issue discount included in gross interest expense

  	
   

  	
   

  
	
   

  	
   

  	
   

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

  	
   

  	
   

  
	
   

  	
   

  	
   

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

  	
   

  	
   

  

 

14

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