Exhibit 10.48


 


FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT


 


FIRST AMENDMENT TO LOAN
AND SECURITY AGREEMENT (this “Amendment”) dated as of April 11, 2006
among


 


Wells Fargo Retail
Finance, LLC (in such capacity, herein the “Agent”),
a Delaware limited liability company with offices at One Boston Place — 19th
Floor, Boston, Massachusetts 02109, as agent for the ratable benefit of the “Revolving Credit Lenders”, who are, at
present, those financial institutions identified on the signature pages of
this Amendment and who in the future are those Persons (if any) who become “Revolving
Credit Lenders” in accordance with the provisions of Article 17 of the
Loan Agreement described below;


 


and


 


The Revolving Credit
Lenders;


 


and


 


Hoop Retail Stores, LLC,
a Delaware limited liability company with its principal executive offices at
c/o The Children’s Place Retail Stores, Inc., 915 Secaucus Road, Secaucus,
New Jersey 07094 (as successor in interest to The Disney Store, LLC, a
California limited liability company) (the “Borrower”),


 


in consideration of the mutual covenants herein
contained and benefits to be derived herefrom.


 


BACKGROUND:


 


The Borrower, the Revolving Credit Lenders, and the
Agent, among others, have entered into a certain Loan and Security Agreement
dated as of November 21, 2004 (the “Loan Agreement”).
At this time, the Borrower and the Revolving Credit Lenders desire to amend and
modify certain terms and provisions of the Loan Agreement.


 


NOW THEREFORE, in consideration of the mutual promises
and agreements herein contained, the parties hereto hereby agree that the Loan
Agreement is hereby amended as follows:


 


1.                                       Incorporation
of Terms and Conditions of Loan Agreement. All of the terms and conditions
of the Loan Agreement (including, without limitation, all definitions set forth
therein) are specifically incorporated herein by reference. All capitalized
terms not otherwise defined herein shall have the same meaning as in the Loan
Agreement.


 


2.                                       Corporate
Reorganization. Subsequent to the closing on the Loan Agreement, the Lead
Borrower and the Borrowers consummated a corporate reorganization (as more
particularly described on Exhibit “A”, annexed hereto) resulting in the
Borrower being the only borrower under the Loan Agreement. Accordingly, the
Loan Agreement and each of the other Loan Documents are hereby deemed amended
in all respects as may be necessary with respect to each usage of the
terms “Lead Borrower” and “Borrowers” so as to either (i) delete each
term, or (ii) deem each term to read the “Borrower”, as the context may require.


 


3.                                       Representations
and Warranties. The Borrower hereby represents and warrants that (i) except
as the Agent may have expressly waived in writing prior to the date of
this Amendment, the Borrower is not In Default under the Loan Agreement or
under any other Loan Document, and (ii) except with respect to those
representations and warranties which are based upon written disclosure
schedules (which have not been updated as of the date of this Amendment), all
representations and warranties contained in the Loan Agreement and the other
Loan Documents are true and correct as of the date hereof.


 


4.                                       Amendment
to Article I of the Loan Agreement. Article I of the Loan
Agreement is hereby amended as follows:


 

















 


a.                                       The
definition of “Borrowing Base” is hereby deleted in its entirety, and the
following is inserted in its place:


 


“Borrowing Base”:                                     The
aggregate of the following:


 


The Inventory Advance Rate times the Retail
Value of the Borrowers’ Eligible Inventory (other than Eligible L/C Inventory
and Eligible In-transit Inventory, and net of Inventory Reserves), but in no
event greater than Eighty-five percent (85%) (or Ninety percent (90%) during
the Seasonal Period) of the NRLV of the Borrowers’ Eligible Inventory (net of
Inventory Reserves)


 


Plus


 


The Inventory Advance Rate times the Cost of
the Borrowers’ Eligible In-transit Inventory (net of Inventory Reserves), but
in no event greater than Eighty-five percent (85%) (or Ninety percent (90%)
during the Seasonal Period) of the NRLV of the Borrowers’ Eligible In-transit
Inventory (net of Inventory Reserves); (in no event shall the advances against
Eligible In-transit Inventory ever exceed (i) $10,000,000.00 during the
months of September and October each year (and during November, 2004),
or (ii) $5,000,000.00 at all other times)


 


Plus


 


The Inventory Advance Rate times the Cost of
the Borrowers’ Eligible L/C Inventory (net of Inventory Reserves), but in no
event greater than Eighty-five percent (85%) of the NRLV of the Borrowers’
Eligible L/C Inventory (net of Inventory Reserves).


 


Plus


 


The face amount of Eligible Credit Card
Receivables multiplied by Ninety percent (90%).


 


b.                                      The
definition of “Capital Expenditures” is hereby deleted in its entirety, and the
following is inserted in its place:


 


“Capital Expenditures” means the expenditure
of funds which may be capitalized in accordance with GAAP, as then in
effect as of the date of any relevant determination. The testing of compliance
by the Borrower with any financial performance covenant relating to Capital
Expenditures where a change in GAAP has been implemented by the Company
applicable to accounting periods subsequent to January 28, 2006, and where
preparation of the Borrower’s statements and reports in compliance with such
change results in the breach of such a financial performance covenant, where
such a breach would not have occurred if such change had not taken place, or
visa versa, shall be made as if no such material accounting change in GAAP had
been made (other than any such material accounting change specifically taken
into account in the setting of any such covenant).


 


c.                                       A
new definition of “Retail Value” is hereby agreed upon as follows, and inserted
in appropriate alphabetical order:


 


“Retail Value”:  At any given time, the value of the Borrowers’
retail Inventory valued as set forth on the Borrower’s last completed Control
Sheet report (which generally reflects each item of Inventory at its lowest
ticketed or promoted price offered to the public, after all mark-downs) and shall
be determined in accordance with the retail method of accounting, reflecting
the Borrower’s historic business practices.”


 


5.                                       Corresponding
Amendments. The term “Cost” is hereby deleted from Sections 2.1(b)(ii) and
2.17(c)(i) of the Loan Agreement, and the term “Retail Value” is hereby
inserted in its place in each instance where it appears therein.


 

















 


6.                                       Amendment
to Section 4.7 of the Loan Agreement. The first sentence of Section 4.7
of the Loan Agreement is hereby deleted in its entirety, and the following is
inserted in its place:


 


“Neither the Borrower nor Hoop Canada, Inc. have nor
shall hereafter have any Indebtedness other than any Permitted Indebtedness.”


 


7.                                       Amendment
to Exhibit 5.11(a) to the Loan Agreement.   Section 2 of Exhibit 5.11(a) to the
Loan Agreement is hereby deleted in its entirety, and the following is inserted
in its place:


 


“2.                                 Capital Expenditures:                            The
Borrower shall not permit its Capital Expenditures for FY2005 to exceed
$69,000,000.00. Commencing FY2006 and for each fiscal year thereafter, the
Capital Expenditure covenant (net of Capital Expenditures consisting of tenant
construction allowances or other allowances granted by the applicable landlord)
shall be 115% of the amount allocated as Capital Expenditures in the Business Plan
for such fiscal year to which the Agent has provided its written sign off, as
provided herein, such sign off not to be unreasonably withheld. Further, any
unutilized Capital Expenditures in any given fiscal year may be carried
forward as an increase to the subsequent year’s Capital Expenditure covenant,
without regard to any prior carryover.”


 


8.                                       Release
of Canadian Guarantors and Canadian Collateral. From and after the
execution of this Amendment:


 


a.                                       The
liens and security interests granted to the Agent and the Revolving Credit
Lenders on any Inventory and other Collateral located in Canada is terminated
and released. Incidental thereto, the Agent shall:


 


i.                                          Return
the Guaranty executed by Hoop Canada, Inc. and The Disney Store (Canada)
Ltd.;


 


ii.                                       Return
the Canadian General Security Agreements executed by Hoop Canada, Inc. and
The Disney Store (Canada) Ltd.;


 


iii.                                    Terminate
the UCC Financing Statements naming Hoop Canada, Inc. and The Disney Store
(Canada) Ltd.;


 


iv.                                   Terminate
the PPSA Registration Statement naming Hoop Canada, Inc. filed in New
Brunswick; and


 


v.                                      Terminate
the PPSA Registration Statements naming The Disney Store (Canada) Ltd. filed in
(i) Alberta, (ii) British Columbia, (iii) Manitoba, (iv) Nova
Scotia, and (v) Ontario.


 


b.                                      Hoop
Canada, Inc. shall not transfer, assign, mortgage, pledge, lease, grant a
security interest in, or encumber any of its business assets, nor shall Hoop
Canada, Inc. enter into a negative pledge agreement, or similar agreement with
any other party. The Borrower expressly acknowledges and agrees that it shall
be an Event of Default under the Loan Agreement and the other Loan Documents if
there is a breach of any term of this Paragraph 8(b) by Hoop Canada, Inc.


 


9.                                       No
Further Modification. Except as expressly modified in the manner set forth
above, the Loan Agreement and the other Loan Documents shall remain unmodified
and in full force and effect.


 


10.                                 No
Claims; Waiver. The Borrower acknowledges, confirms and agrees that as of
the date hereof the Borrower has no knowledge of any offsets, defenses, claims
or counterclaims against the Agent or any Revolving Credit Lender with respect
to, under or relating to the Loans, the Loan Documents, or the transactions
contemplated therein, and, to the extent that the Borrower has or has ever had
any such offsets, defenses, claims or counterclaims arising on or before the
date


 

















 


hereof, the Borrower hereby specifically WAIVES and RELEASES
any and all rights to such offsets, defenses, claims or counterclaims.


 


11.                                 Binding
Agreement. The terms and provisions hereof shall be binding upon and inure
to the benefit of the parties hereto and their heirs, representatives,
successors and assigns.


 


12.                                 Multiple
Counterparts. This Amendment may be executed in multiple counterparts,
each of which shall constitute an original and together which shall constitute
but one and the same instrument.


 


13.                                 Governing
Law; Sealed Instrument. This Amendment shall be construed, governed, and
enforced pursuant to the law of The Commonwealth of Massachusetts without
regard to principles of conflicts of laws, and shall take effect as a sealed
instrument.


 


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


 

















 


IN WITNESS WHEREOF, this Amendment has been duly
executed and delivered by each of the parties hereto as of the date first above
written.


 


	
   

  	
  (the “Borrower”)

  
	
   

  	
   

  
	
   

  	
  HOOP RETAIL
  STORES, LLC

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Hiten
  Patel

  	
   

  
	
   

  	
   

  
	
   

  	
  Print Name:

  	
  Hiten Patel

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  SVP CFO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (“Agent”)

  
	
   

  	
   

  
	
   

  	
  WELLS FARGO
  RETAIL FINANCE, LLC

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Michelle
  L. Ayou

  	
   

  
	
   

  	
   

  
	
   

  	
  Print Name:

  	
  Michelle L.
  Ayou

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WELLS FARGO
  RETAIL FINANCE, LLC,

  
	
   

  	
  As Revolving
  Credit Lender

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Michelle
  L. Ayou

  	
   

  
	
   

  	
   

  
	
   

  	
  Print Name:

  	
  Michelle L.
  Ayou

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice
  President

  	
   

  
								



 


5

















 


	
   

  	
  WACHOVIA
  CAPITAL FINANCE CORPORATION (NEW

  ENGLAND), As Documentation Agent and as

  Revolving Credit Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Willis A. Williams

  	
   

  
	
   

  	
   

  
	
   

  	
  Print Name:

  	
  Willis
  A. Williams

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LASALLE
  RETAIL FINANCE,

  
	
   

  	
  a
  Division of LaSalle Business Credit, LLC,

  
	
   

  	
  as
  Agent for Standard Federal Bank National Association,

  
	
   

  	
  As Co-Agent
  and as Revolving Credit Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Matthew D. Potter

  	
   

  
	
   

  	
   

  
	
   

  	
  Print Name:

  	
  Matthew
  D. Potter

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Assistant
  Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WEBSTER BUSINESS CREDIT CORP.,

  
	
   

  	
  as Revolving
  Credit Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Walter Stockhecker

  	
   

  
	
   

  	
   

  
	
   

  	
  Print Name:

  	
  Walter
  Stockhecker

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE CIT GROUP/ BUSINESS CREDIT, INC.,

  
	
   

  	
  as Revolving
  Credit Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Manuel R. Borges

  	
   

  
	
   

  	
   

  
	
   

  	
  Print Name:

  	
  Manuel
  R. Borges

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice
  President

  	
   

  
						



 


6

















 


	
  Acknowledged and Agreed:

  
	
  HOOP CANADA, INC.

  
	
   

  
	
   

  
	
  By

  	
  /s/ Hiten
  Patel

  	
   

  
	
   

  
	
  Print Name:

  	
  Hiten Patel

  	
   

  
	
   

  
	
  Title:

  	
  SVP CFO

  	
   

  
					



 


7

















 


Exhibit A


Description of Merger and Amalgamation


 


In November 2004, Hoop Holdings, LLC, a Delaware limited liability
company, a wholly owned subsidiary of The Children’s Place Retail Stores, Inc.,
a Delaware corporation, acquired 100% of the outstanding interest of The Disney
Store, LLC, a California limited liability company.


 


In November 2004, Hoop Canada Holdings, Inc., a Delaware
corporation, a wholly owned subsidiary of Hoop Retail Stores, LLC, a Delaware
limited liability company, which a wholly owned subsidiary of Hoop Holdings,
LLC, acquired 100% of the outstanding interest of The Disney Store (Canada)
Ltd., an Ontario corporation.


 


On November 22, 2004, we merged The Disney Store, LLC into Hoop
Retail Stores, LLC, a Delaware limited liability company, which a wholly owned
subsidiary of Hoop Holdings, LLC. Hoop Retail Stores, LLC was the surviving
corporation in the merger.


 


On November 23, 2004, we amalgamated The Disney Store (Canada)
Ltd. into Hoop Canada, Inc., a New Brunswick corporation, which is a
wholly owned subsidiary of Hoop Canada Holdings, Inc. Hoop Canada, Inc.
was the surviving entity in the amalgamation.


 





 


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