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Exhibit 10.16
AMENDMENT NO. 1 TO
AMENDED AND RESTATED LINE OF CREDIT AGREEMENT
This Amendment No. 1 (the "Amendment") dated as of July 17, 1997, is
among Bank of America National Trust and Savings Association (the "Bank"), The
Gymboree Corporation ("TGC"), Gymboree Manufacturing, Inc. ("GMI"), Gymboree,
Inc. ("GI"), and Gymboree Industries Limited. ("GIL") (TGC, GMI, GI, and GIL are
hereinafter referred to collectively as the "Borrowers" and individually as a
"Borrower").
RECITALS
A. The Bank, TGC, and GMI entered into a certain Amended and
Restated Line of Credit Agreement dated as of October 27, 1995 (the
"Agreement").
B. TGC has a wholly-owned Canadian subsidiary, GI. TGC also has a
wholly-owned Irish subsidiary, Gymboree Industries Holdings Limited, which, in
turn, has a wholly-owned Irish subsidiary, GIL.
C. TGC and GMI have requested the Bank to add GI and GIL as
Borrowers under the Agreement, and the Bank is willing to grant that request
subject to certain of the addition terms and conditions set forth in this
Amendment.
D. The Bank and the Borrowers desire to amend the Agreement in
order to memorialize the terms and conditions under which GI and GIL are added
as Borrowers under the Agreement.
E. The Bank and the Borrowers also desire to amend the Agreement in
order to increase the Commitment, extend the availability period, and amend
certain covenants.
AGREEMENTS
1. Definitions. Capitalized terms used but not defined in this
Amendment shall have the meaning given to them in the Agreement.
2. Amendments. The Agreement is hereby amended as follows:
2.1 In Paragraph 1.1(a), the amount "$100,000,000" is
substituted for the amount $75,000,000."
2.2 The following proviso is added to Paragraph 1.1(c), and it
reads in its entirety as follows:
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It is provided, however, that:
(i) the outstanding amounts of any letters of credit issued for the
account of GI, including amounts drawn on such letters of credit and not
yet reimbursed, may not exceed Ten Million Dollars ($10,000,000) (the "GI
L/C Limit");
(ii) the outstanding amount of any letters of credit issued for the
account of GIL, including amounts drawn on such letters of credit and not
yet reimbursed, may not exceed Ten Million Dollars ($10,000,000) (the "GIL
L/C Limit");
(iii) the outstanding amount of any standby letters of credit,
including amounts drawn on such letters of credit and not yet reimbursed,
may not exceed Five Hundred Thousand Dollars ($500,000); and
(iv) the outstanding amounts of any letters of credit issued for the
accounts of TGC or GMI, including amounts drawn on such letters of credit
and not yet reimbursed, may not at any time exceed the Commitment, minus
the sum of the GI L/C Limit and the GIL L/C Limit.
(In calculating the amounts described above, the Bank will use Equivalent
Amounts for letters of credit denominated in Canadian Dollars or Irish
Punts. "Equivalent Amount" means the equivalent in U.S. Dollars of another
currency calculated at the spot rate for the purchase of such other
currency with U.S. Dollars quoted by Bank's Foreign Exchange Trading Center
in San Francisco, California, at approximately 8:00 a.m. San Francisco time
two (2) banking days (as determined by Bank with respect to such currency)
prior to the relevant date.)
2.3 In Paragraph 1.2, the date "May 31, 1999" is substituted for
the date "May 31, 1998."
2.4 The first paragraph of Paragraph 1.3 is amended to read in
its entirety as follows:
1.3 Letters of Credit. This line of credit may be used for
financing:
(i) commercial letters of credit with a maximum maturity of
180 days but not to extend more than 180 days beyond the Expiration
Date. Each commercial letter of credit will require drafts payable at
sight or up to the earlier of 180 days after sight or 180 days after
the Expiration Date.
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(ii) standby letters of credit with a maximum maturity not
to extend beyond the Expiration Date. The standby letters of credit may
include a provision providing that the maturity date will be
automatically extended each year for an additional year unless the Bank
gives written notice to the contrary.
Each commercial letter of credit issued for the account of GI may be
denominated in U.S. Dollars or Canadian Dollars. Each commercial letter of
credit issued for the account of GIL may be denominated in U.S. Dollars or
Irish Punts. All other letters of credit issued pursuant to this Agreement
will be denominated in U.S. Dollars.
The letters of credit outstanding from the Bank for the account of any one
or more of the Borrowers that are not already outstanding under this
Agreement shall, as of the date of that certain Amendment No. 1 to Amended
and Restated Line of Credit Agreement among the Bank and the Borrowers, be
deemed to be outstanding under this Agreement, and shall be subject to all
the terms and conditions stated in this Agreement.
2.5 Paragraph 1.3(c) is amended to read in its entirety as follows:
(c) to sign the Bank's form Application and Agreement for Commercial
Letter of Credit or Application and Agreement in its entirety as follows:
2.6 A new Paragraph 3.9 is added to the Agreement, and it reads in
its entirety as follows:
3.9 Taxes. If any payments to the Bank under this Agreement are
made from outside the United States, the Borrowers will not deduct any
foreign taxes from any payments they make to the Bank. If any such taxes
are imposed on any payments made by the Borrowers (including payments under
this paragraph), the Borrowers will pay the taxes and will also pay to the
Bank, at the time interest is paid, any additional amount which the Bank
specifies as necessary to preserve the after-tax yield to Bank would have
received if such taxes have not been imposed. The Borrowers will confirm
that they have paid the taxes by giving the Bank official tax receipts (or
notarized copies) within 30 days after the due date.
2.7 In Paragraphs 5.1 and 5.4, the word "jurisdiction" is
substituted for the word "state."
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2.8 The final sentence of the definition of "Subsidiary" in Paragraph
5.1 is amended to read in its entirety as follows:
The term "Subsidiary" shall include GMI, GI, or GIL in the event that GMI,
GI, or GIL is no longer a "Borrower" under this Agreement.
2.9 Paragraph 6.1 is amended to read in its entirety as follows:
6.1 Use of Line of Credit. To request commercial or standby
letters of credit only for use in the usual course of business and to
request standby letters of credit only for the account of TGC.
2.10 In the lead-in of Paragraph 6.2, the second parenthetical phrase
is amended to read in its entirety as follows:
(other than guarantees by TGC of the obligations of Gymboree U.K. Ltd.
under store or distributor center leases and guarantees by TGC of the
obligations of any one or more of the other Subsidiaries under store or
distributor center leases)
2.11 In Paragraph 6.4, the word "or" immediately before clause (c) is
deleted, the amount "Sixty-Five Million Dollars ($65,000,000)" is substituted
for the amount "Thirty-Five Million Dollars ($35,000,000)" in clause (c), and
the word "or" immediately followed by the following clause (d) is added:
(d) Fifty Million Dollars ($50,000,000) in the Borrowers' fiscal
year ending January 31, 1999, and in each fiscal year thereafter
2.12 In Paragraph 6.5, the second and final sentence is amended to
read in its entirety as follows:
It is provided, however, that the Borrowers and the Subsidiaries may
take any of the actions otherwise prohibited by this paragraph so long
as they do not spend in the aggregate more than Thirty Million Dollars
($30,000,000) between February 1, 1997, and the Expiration Date in
connection with any such actions.
2.13 The last sentence of Paragraph 7.1 (a) is amended to read in its
entirety as follows:
The statements shall be prepared on a consolidated basis and shall
contain no material adverse difference from TGC's annual TGC-prepared
financial statements, which latter statements TGC agrees to prepare
on a
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consolidating basis and provide to the Bank also within 120 days of TGC's
fiscal year end. TGC further agrees that its annual TGC-prepared financial
statements will include, without limitation, a balance sheet and an income
statement.
2.14 The following new subparagraph (g) is added to Paragraph 7.1:
(g) Within the periods provided in (b) above, a compliance
certificate of TGC signed by an authorized financial officer of TGC setting
forth (i) the information and computations (in sufficient detail) to
establish that TGC is in compliance with all financial covenants at the end
of the period covered by the financial statements then being furnished and
(ii) whether there existed as of the date of such financial statements and
whether there exists as of the date of the certificate, any default under
this Agreement and, if any such default exists, specifying the nature
thereof and the action the Borrowers are taking and propose to take with
respect thereto.
2.15 The first sentence of Paragraph 7.2 is amended to read in its
entirety as follows:
To maintain on a consolidated basis tangible net worth equal to at least
the amounts indicated each period specified below:
Period Amounts
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From May 1, 1997 $100,000,000
through January 30, 1998
From January 31, 1998 $100,000,000 plus 50%
through January 30, 1999 of net income after income taxes
(without subtracting losses)
earned in the fiscal year ending
January 31, 1998
On January 31, 1999 $100,000,000 plus 50% of net income
after income taxes (without
subtracting losses) earned in the
fiscal year January 31, 1998 plus
50% of net income after income
taxes (without subtracting losses)
earned in the
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fiscal year ending
January 31, 1999
2.16 In Paragraph 7.4, the amounts "Fifteen Million Dollars
($15,000,000)" and "Thirty-Five Million Dollars ($35,000,000)" are
substituted for the amounts "Twenty Million Dollars ($20,000,000)" and
"Forty Million Dollars ($40,000,000)," respectively.
2.17 In Paragraph 9.8, the phrase "the other Borrowers" is
substituted for the phrase "the other Borrower" in each case in which the
latter phrase appears.
3. GI's and GIL's Acknowledgement. GI and GIL hereby acknowledge
that by executing this Amendment and thereby becoming Borrowers under the
Agreement, GI and GIL promise and agree to perform or to be subject to, as
applicable, each and every covenant, agreement, term, and obligation of the
Agreement including, without limitation, those which pertain to the joint and
several liability of each Borrower to the Bank for the payment of all
obligations under the Agreement and under any instrument or agreement
required under the Agreement.
4. Representations and Warranties. When the Borrowers sign this
Amendment, the Borrowers represent and warrant to the Bank that: (a) there is
no event which is, or with notice or lapse of time or both would be, a default
under the Agreement, (b) the representations and warranties in the Agreement
are true as of the date of this Amendment as if made on the date of this
Amendment, (c) this Amendment is within each Borrower's powers, has been duly
authorized, and does not conflict with any of either Borrower's organizational
papers, and (d) this Amendment does not conflict with any law, agreement, or
obligation by which either Borrower is bound.
5. Condition Precedent. This Amendment will be effective when the
Bank receives, in form and content acceptable to the Bank, evidence that the
execution, delivery, and performance by GI and GIL of this Agreement and any
instrument or agreement required under this Agreement have been duly authorized.
6. Effect of Amendment. Except as provided in this Amendment, all of
the terms and conditions of the Agreement shall remain in full force and
effect. Further, nothing in this Amendment shall release TGC or GMI from any of
its obligations under the Agreement.
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This Amendment is executed as of the date stated at the beginning of
this Amendment.
Bank of America National Trust
and Savings Association
By
---------------------------------
Title
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By
---------------------------------
Title
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The Gymboree Corporation
By /s/ XXXXX X. XXXXXX
---------------------------------
Xxxxx X. Xxxxxx
Title Senior Vice President,
Chief Financial Officer,
Chief Accounting Officer
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By /s/ XXXXXX X. XXXXXX
---------------------------------
Xxxxxx X. Xxxxxx
Title Vice President, Treasurer
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Gymboree Manufacturing, Inc.
By /s/ XXXXX X. XXXXXX
---------------------------------
Xxxxx X. Xxxxxx
Title Senior Vice President,
Chief Financial Officer,
Chief Accounting Officer
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By /s/ XXXXXX X. XXXXXX
---------------------------------
Xxxxxx X. Xxxxxx
Title Vice President, Treasurer
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Gymboree, Inc.
By /s/ XXXXX X. XXXXXX
---------------------------------
Xxxxx X. Xxxxxx
Title Senior Vice President,
Chief Financial Officer,
Chief Accounting Officer
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By /s/ XXXXXX X. XXXXXX
---------------------------------
Xxxxxx X. Xxxxxx
Title Vice President, Treasurer
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Gymboree Industries Limited
By /s/ XXXXX X. XXXXXX
---------------------------------
Xxxxx X. Xxxxxx
Title Senior Vice President,
Chief Financial Officer,
Chief Accounting Officer
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By /s/ XXXXXX X. XXXXXX
---------------------------------
Xxxxxx X. Xxxxxx
Title Vice President, Treasurer
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