EXHIBIT 10.3
MASTER AMENDMENT TO REVOLVING
CREDIT AGREEMENT
AND SECURITY
AGREEMENT
Master Amendment entered into as of
July 19, 1999 between CACHE, INC. (the “Borrower”) and
FLEET BANK, NATIONAL ASSOCIATION (the
“Bank”).
WHEREAS, the Borrower and the Bank
are parties to a Second Amended and Restated Revolving Credit
Agreement dated as of August 26, 1996 (the
“Agreement”);
WHEREAS, the Borrower has requested
that the Bank amend, and the Bank has agreed to amend, certain
provisions of the Agreement;
WHEREAS, the Borrower and the Bank
are parties to a Security Agreement dated as of August 26, 1996
(the “Security Agreement”); and
WHEREAS, the Borrower has executed
in favor of the Bank, a Note (as such term is defined in the
Agreement) in the face of amount of $12,000,000.00 and dated August
26, 1996 (the “Note”).
NOW, THEREFORE, the parties hereto
hereby agree as follows:
1.
The Agreement is hereby amended as
follows:
(a)
The Second Whereas clause is hereby
amended by replacing the reference to “$12,000,000”
with “$15,000,000”.
(b)
Section 1.1(b) of the Agreement is
hereby amended and restated in its entirety to read as
follows:
The total principal amount of all
outstanding Loans, together with the face amount of all outstanding
Letters of Credit, as hereinafter defined, shall not exceed
$15,000,000; provided, however, that for one consecutive thirty day
period during each fiscal year of the Borrower, there shall be no
Loans or Letters of Credit outstanding.
(c)
Section 1.1(f) of the Agreement is
hereby amended by adding a new subsection (6) to read as
follows:
(6)
If the entire amount of any required
principal and/or interest is not paid in full within (10) days
after the same is due, Borrower shall pay to the Bank a late fee
equal to five percent (5%) of the required payment.
(d)
Section 1.1 of the Agreement is
hereby amended by adding a new subsection (i) to read as
follows:
(i)
The Borrower shall maintain with the
Bank a non-interest bearing deposits with average daily collected
balances net of activity costs equal to not less than $200,000
during each calendar quarter. If the averge daily balance is less
than that required above, the Borrower shall pay a deficiency fee
during each such quarter equal to interest on the deficiency at the
average of the Prime Rate during such quarter.
(e)
Section 2.2 of the Agreement is
hereby amended by deleting the word “and” at the end of
Subsection 2.2(b), replacing the reference to “(c)”
with “(d)” and by adding a new subsection (c) to read
as follows:
(c)
receipt by the Bank of a Guarantee
of the Liabilities executed by each Subsidiary of the Borrower
formed or acquired by the Borrower after the date of the initial
Loans, each satisfactory to the Bank in form and substance;
and
(f)
Section 2.3 of the Agreement is
hereby amended by replacing the reference to “Section 2.1
hereof” with “Sections 2.1 and 4.24
hereof”.
(g)
Article 3 of the Agreement is hereby
amended by adding a new Section 3.21 to read as follows:
3.21 Year 2000 . (a)
The Borrower has taken and is taking all necessary and appropriate
steps to ascertain the extent of and successfully address business
and financial risks facing the Borrower as a result of the Year
2000 Risk (that is the risk that computer applications used by the
Borrower may be unable to recognize and perform without error
date-sensitive functions involving certain dates prior to and any
date after December 31, 1999) and (b) the Borrower’s material
computer applications and those of its key vendors and suppliers
will, on a timely basis, adequately address the Year 2000 Risk in
all material respects.
(h)
Section 4.12 of the Agreement is
hereby amended and restated in its entirety to read as
follows:
4.12
Debt Ratio
.
(a)
The Borrower will not permit its
Debt Ratio to exceed (i) 1.00 to 1.00 as at the end of any of its
first, second or fourth fiscal quarters, or (ii) 1.25 to 1.00 as at
the end of any of its third fiscal quarters.
2
(b)
The Bank will determine compliance
with the foregoing based on the financial information which the
Borrower is required to submit to the Bank.
(i)
Section 4.13 of the Agreement is
hereby amended and restated in its entirety to read as
follows:
4.13
Fixed Charge Coverage
Ratio .
(a)
The Borrower will not permit its
Fixed Charge Coverage to be less than 1.15 to 1.00 as at the end of
any of its fiscal quarters, on a rolling four quarter
basis.
(b)
The Bank will determine compliance
with the foregoing based on the financial information which the
Borrower is required to submit to the Bank.
(j)
Section 4.14 of the Agreement is
hereby amended and restated in its entirety to read as
follows:
4.14
Current Ratio
.
(a)
The Borrower shall not permit the
ratio of the Borrower’s current assets to current liabilities
(including, without limitation, all Liabilities and all other long
term loans (regardless of classification under GAAP) owing to
Persons other than the Bank) to be less than (i) 1.15 to 1.00 as at
the end of any of its first, second or fourth fiscal quarters or
(ii) 1.0 to 1.0 as at the end of any of its third fiscal
quarters.
(b)
The Bank will determine compliance
with the foregoing based on the financial information which the
Borrower is required to submit to the Bank.
(k)
Section 4.15 of the Agreement is
hereby amended by amending and restating subsection (n), (o) and
(p) thereof in their entirety and by adding new subsections (q),
(r) and (s) to read as follows:
(n)
The Borrower shall not make capital
expenditures in excess of $10,000,000 for the fiscal year ending
December 31, 1999.
(o)
The Borrower shall not make capital
expenditures in excess of $11,000,000 for the fiscal year ending
December 31, 2000.
3
(p)
The Borrower shall not make capital
expenditures in excess of $13,000,000 for the fiscal year ending
December 31, 2001.
(q)
The Borrower shall not make capital
expenditures in excess of $13,000,000 for the fiscal year ending
December 31, 2002.
(r)
The Borrower shall not make capital
expenditures in excess of $2,500,000 for the period beginning
January 1, 2003 and ending January 31, 2003.
(s)
The Bank will determine compliance
with the foregoing based on the financial information which the
Borrower is required to submit to the Bank.
(l)
Section 4.16 of the Agreement is
hereby amended and restated in its entirety to read as
follows:
4.16
Intentionally Omitted
.
(m)
Section 4.18 is amended and restated
in its entirety to read as follows:
The Borrower will not make any
Restricted Payments at any time, provided, that, the Borrower may
pay dividends to its shareholders so long as at the time there
exists no Event of Default.
(n)
Article 4 of the Agreement is hereby
amended by adding a new Section 4.24 and a new Section 4.25 each to
read in their entirety as follows:
4.24
UCC Financing
Statements . The
Borrower shall deliver to the Bank UCC-1 financing statements
naming the Borrower as debtor and executed by the Borrower and the
Bank as the secured party in proper form for filing in such
jurisidictions as the Bank may reasonably request, and copies of
UCC filing searches against the Borrower, as debtor, conducted in
each new jurisdiction in which any Collateral is
located.
4.25
Liens . The Borrower shall not (i) create,
assume or permit to exist, any Lien on any of its property or
assets now owned or hereafter acquired except (a) Liens in favor of
the Bank; (b) other liens incidental to the conduct of its business
or the ownership of its property and assets which were not incurred
in connection with the borrowing of money or the obtaining of
advances or credit and which do not materially impair the use
thereof in the operation of its
4
business; (c) Liens for taxes or
other governmental charges which are not delinquent or which are
being contested in good faith and for which a reserve shall have
been established in accordance with GAAP; and (d) purchase money
Liens granted to secure the unpaid purchase price of any fixed
assets purchased within the limitations of this
