EXHIBIT 10.31
AMENDMENT NUMBER TWO DATED AS OF JUNE 15, 1999
BETWEEN THE COMPANY AND FOOTHILL CAPITAL CORPORATION
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.
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 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."
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.
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.
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."
Section 6.13 of the Agreement is amended to read as follows:
52
"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:
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"
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."
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.
53
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 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: Vice President & CFO
---------------------------------
54
