Exhibit 10.1
AMENDMENT NUMBER TWO TO AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NUMBER TWO TO AMENDED AND RESTATED LOAN AND SECURITY
AGREEMENT ("Amendment") is entered into as of June 15, 1999, by and between
FOOTHILL CAPITAL CORPORATION, a California corporation ("Foothill"), and THE
CHILDREN'S PLACE RETAIL STORES, INC., a Delaware corporation ("Borrower"), in
light of the following:
FACT ONE: Borrower and Foothill have previously entered into that
certain Amended and Restated Loan and Security Agreement, dated as of July 31,
1997, as amended on February 22, 1999 (the "Agreement").
FACT TWO: Borrower and Foothill desire to further amend the Agreement
as provided for and on the conditions herein.
NOW, THEREFORE, Borrower and Foothill hereby amend and supplement the
Agreement as follows:
1. DEFINITIONS. All initially capitalized terms used in this Amendment
shall have the meanings given to them in the Agreement unless specifically
defined herein.
2. AMENDMENTS.
(a) Section 2.1(c) of the Agreement is amended to read as
follows:
"(c) Foothill shall have no obligation to make
advances hereunder to the extent they would cause the
outstanding Obligations to exceed $40,000,000 (the "Maximum
Amount"); PROVIDED, HOWEVER, Borrower shall have the option to
increase the Maximum Amount to $50,000,000 so long as (i) no
Event of Default has occurred and is continuing and (ii)
Borrower has EBITDA in excess of $40,000,000 for the most
recent 12 months based upon the financial statements delivered
to Foothill by Borrower pursuant to SECTION 6.4. Borrower
shall have a period of 30 days from the date of delivery of
its monthly financial statements to notify Foothill in writing
of its decision to increase the Maximum Amount. Foothill shall
increase the Maximum Amount five business days after receipt
of written notice from Borrower so long as the conditions set
forth in this SECTION 2.1(C) have been met. Concurrent with
Borrower's election to increase the Maximum Amount in
accordance with this section, Borrower shall pay Foothill a
line increase fee in the amount of $25,000."
(b) The dollar amount in Section 2.2(a)(ii) of the Agreement
is increased to $30,000,000 from $20,000,000, and shall be further increased to
$40,000,000 if Borrower elects to increase the Maximum Amount to $50,000,000 in
accordance with Section 2.1(c) of the Agreement.
(c) The annual facility fee in Section 2.8 of the Agreement
for July 31, 1999, only, shall be an amount equal to 0.125% times $30,000,000.
(d) Section 3.3 of the Agreement is amended to read as
follows:
"3.3 TERM; AUTOMATIC RENEWAL. This Agreement shall
become effective upon the execution and delivery hereof by
Borrower and Foothill and shall continue in full force and
effect for a term ending on July 31, 2002 (the "Renewal Date")
and automatically shall be renewed for successive one year
periods thereafter, unless sooner terminated pursuant to the
terms hereof. Either party may terminate this Agreement
effective on the Renewal Date or on any anniversary of the
Renewal Date by giving the other party at least 90 days prior
written notice by registered or certified mail, return receipt
requested. The foregoing notwithstanding, Foothill shall have
the right to terminate its obligations under this Agreement
immediately and without notice upon the occurrence and during
the continuation of an Event of Default."
(e) Section 6.13 of the Agreement is amended to read as
follows:
"6.13 FINANCIAL COVENANTS. Borrower shall maintain:
(a) Current Ratio. A ratio of Consolidated Current
Assets divided by Consolidated Current Liabilities of at least
the following, measured on a fiscal quarter-end basis:
Quarters
Ratio Ending on or About
----- ------------------
1.0-1.0 July 31, 1999 and thereafter
(b) Tangible Net Worth. Tangible Net Worth of not
less than the following, measured on a fiscal quarter-end
basis:
Tangible Quarters
Net Worth Ending on or About
--------- ------------------
$45,000,000 April 30, 1999 and
July 31, 1999
57,000,000 October 31, 1999
$64,000,000 January 31, 2000 and thereafter
(c) Working Capital. Working Capital of not less than
the following, measured on a fiscal quarter-end basis:
2
Quarters
Working Capital Ending on or About
--------------- ------------------
$20,000,000 April 30, 1999
15,000,000 July 31, 1999
20,000,000 October 31, 1999
$25,000,000 January 31, 2000 and thereafter"
(f) Section 7.10 of the Agreement is amended to read as
follows:
"7.10 CAPITAL EXPENDITURES. Make any capital
expenditure, or any commitment therefor, where the aggregate
amount of such capital expenditures (other than capital
expenditures for the purchase of a new headquarters and
distribution center for Borrower), made or committed for in
each fiscal year ending on or about January 31 commencing with
2000 is in excess of $55,000,000."
(g) Schedule 6.15 to the Agreement is replaced with Schedule
6.15 attached hereto.
3. REPRESENTATIONS AND WARRANTIES. Borrower hereby affirms to Foothill
that all of Borrower's representations and warranties set forth in the Agreement
are true, complete and accurate in all respects as of the date hereof."
4. NO DEFAULTS. Borrower hereby affirms to Foothill that no Event of
Default has occurred and is continuing as of the date hereof.
5. CONDITIONS PRECEDENT. The effectiveness of this Amendment is
expressly conditioned upon: (a) receipt by Foothill of an amendment fee in the
amount of $37,500 and (b) receipt by Foothill of an executed copy of this
Amendment.
6. COSTS AND EXPENSES. Borrower shall pay to Foothill all of Foothill's
out-of-pocket costs and expenses (including, without limitation, the fees and
expenses of its counsel, which counsel may include any local counsel deemed
necessary, search fees, filing and recording fees, documentation fees, appraisal
fees, travel expenses, and other fees) arising in connection with the
preparation, execution, and delivery of this Amendment and all related
documents.
7. LIMITED EFFECT. In the event of a conflict between the terms and
provisions of this Amendment and the terms and provisions of the Agreement, the
terms and provisions of this Amendment shall govern. In all other respects, the
Agreement, as amended and supplemented hereby, (including Section 3.5) shall
remain in full force and effect.
8. COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed in any
number of counterparts and by different parties on separate
3
counterparts, each of which when so executed and delivered shall be deemed to be
an original. All such counterparts, taken together, shall constitute but one and
the same Amendment. This Amendment shall become effective upon the execution of
a counterpart of this Amendment by each of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the date first set forth above.
FOOTHILL CAPITAL CORPORATION,
a California corporation
By: /s/ Xxxx Xxxx
Title: Assistant Vice President
THE CHILDREN'S PLACE RETAIL STORES, INC.,
a Delaware corporation
By: /s/ Xxxx Xxxxxx
Title: VP & CFO
