Exhibit 10.49
SEVENTH AMENDMENT TO
LOAN AND SECURITY AGREEMENT FLEET RETAIL FINANCE INC.
ADMINISTRATIVE AGENT
AND COLLATERAL AGENT
As of September 4, 2002
THIS SEVENTH AMENDMENT is made in consideration of the mutual covenants
contained herein and benefits to be derived herefrom to the August 24, 2000 Loan
and Security Agreement (as amended and in effect, the "LOAN AGREEMENT") between
Fleet Retail Finance Inc., a Delaware corporation with its
principal executive offices at 00 Xxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx, as Administrative Agent and as Collateral Agent for
the ratable benefit of a syndicate of lenders (defined therein as
the "Revolving Credit Lenders"), and
The Revolving Credit Lenders
On the one hand
and
The Gymboree Corporation, a Delaware corporation with its principal
executive offices at 000 Xxxxxxx Xxxxxxxxx, Xxxxxxxxxx, Xxxxxxxxxx
00000, as agent for the following and as agent for any other Person
which becomes a Borrower as provided in Section 2:2-23 of the Loan
Agreement:
The Gymboree Corporation (a Delaware corporation); and Gymboree
Manufacturing, Inc., Gymboree Operations, Inc., Gymboree Play
Programs, Inc., Gymboree Retail Stores, Inc., The Gymboree Stores,
Inc., and Gym-Xxxx, Inc. (each a California corporation with its
principal executive offices at 000 Xxxxxxx Xxxxxxxxx, Xxxxxxxxxx,
California 94010);
on the other,
WITNESSETH:
SECTION 1. CAPITALIZED TERMS: All capitalized terms used herein and not
otherwise defined shall have the same meaning herein as in the Loan Agreement.
SECTION 2. AMENDMENTS OF LOAN AGREEMENT:
Subject to the satisfaction of the Conditions to Effectiveness of the
Seventh Amendment set forth in Section 4, below, the Loan Agreement is hereby
amended as follows:
a. Article 1 of the Loan Agreement is hereby amended as follows:
i. the definition of "Availability Reserves" is hereby amended
by inserting the following at the end thereof:
(vi) Daylight Overdraft Reserve.
ii. the definition of "Eligible Investments" is hereby deleted
in its entirety and the following substituted in its stead:
"ELIGIBLE INVESTMENTS": Each of the following: (a) Marketable direct
or guaranteed obligations of the United States of America or
any state thereof which mature within one (1) year from the
date of purchase by the Borrower; (b) demand deposits,
certificates of deposit, bankers acceptances and time deposits
of United States banks having total assets in excess of
$1,000,000,000.00; (c) securities commonly known as
"commercial paper" issued by a corporation organized and
existing under the laws of the United States of America or any
state thereof that at the time of purchase have been rated and
the ratings for which are not less than "P 1" if rated by
Xxxxx'x Investors Services, Inc., and not less than "A 1" if
rated by Standard and Poor's, and (d) amounts invested by
Fleet National Bank on behalf of the Borrowers in money market
funds (or similar type funds acceptable to the Administrative
Agent) as long as Fleet manages or otherwise retains control
of such investments, which investments, in each instance ((a)
through (d)), are subject to a prior perfected security
interest in favor of the Collateral Agent.
iii. The definition of "Revolving Credit Ceiling" is hereby
deleted in its entirety, and the following substituted in its stead:
"REVOLVING CREDIT CEILING": $60,000,000.00, as of the effective date
of the Seventh Amendment.
iv. by adding the following new definitions thereto:
(1) "DAYLIGHT OVERDRAFT RESERVE": Shall mean that amount
determined by the Administrative Agent from time to time
in its reasonable discretion as being appropriate to
cover daylight overdrafts in the Operating Account
during the period in which no Revolving Credit Loans
remain outstanding. As of the effective date of the
Seventh Amendment, the amount of the Daylight Overdraft
Reserve shall be $2,000,000.00.
Page 2
(2) "SEVENTH AMENDMENT": Shall mean that certain Seventh
Amendment to Loan and Security Agreement dated
September 4, 2002 by and among the Borrowers, the Agent
and the Revolving Credit Lenders.
b. Article 2 of the Loan Agreement is hereby amended as follows:
i. Section 2-12 of the Loan Agreement is hereby deleted in its
entirety, and the following substituted in its stead:
2-12. INTEREST ON REVOLVING CREDIT LOANS: THE PRICING GRID.
The Eurodollar Margin and the Base Margin shall be determined from
the following Pricing Grid. Commencing as of the effective date of
the Seventh Amendment, the Eurodollar Margin and the Base Margin
shall be established at Tier II. Commencing August 3, 2002, the
Eurodollar Margin and the Base Margin shall be set, quarterly, as
of the first day of each Fiscal quarter, as provided in the
following Pricing Grid:
TIER AVERAGE AVAILABILITY FOR MOST EURODOLLAR BASE MARGIN
RECENTLY COMPLETED FISCAL QUARTER MARGIN
I Equal to or greater than $20 MM 175 Basis Zero
Points
II Equal to or greater than $10MM and 200 Basis Zero
less than $20MM Points
III Less than $10 MM 225 Basis Zero
Points
provided that, for purposes of calculating the Eurodollar Margin and
the Base Margin, Average Availability shall be determined without
regard to any Daylight Overdraft Reserve established from time to
time.
ii. Section 6-4 is hereby amended by deleting the second (2nd)
sentence therefrom in its entirety, and substituting the following in its
stead:
Provided Availability is not less than $15,000,000.00, Inventory, as
reported on the Borrowing Base Certificate, may be rolled forward on a
monthly basis. If after giving effect to any request for any loan, credit,
advance or financial accommodations under the Revolving Credit,
Availability would be less than $15,000,000.00, then prior to the making
of such loan, credit, advance or financial accommodation, the Borrowing
Base Certificate which the Lead Borrower is required to provide to the
Administrative Agent pursuant to this Agreement shall report Inventory
rolled forward as of the most recent week end. Further, if Availability
shall at any time be less than $15,000,000.00 for three (3) consecutive
days, Inventory, as reported on the Borrowing Base Certificate shall be
rolled forward on a weekly basis, unless and until the Administrative
Agent determines otherwise.
iii. Section 6-5 is hereby deleted in its entirety, and the
following substituted in its stead:
6-5. INTENTIONALLY OMITTED.
Page 3
iv. Section 6-10(d) is hereby amended by deleting the
following from the first (1st) line thereof:
Four (4)
and substituting the following in its stead:
Two (2)
v. Section 6-12(b) is hereby deleted in its entirety, and the
following substituted in its stead:
(b) The Borrowers shall not incur Consolidated Capital
Expenditures during any fiscal year in excess of $25 Million.
vi. EXHIBIT 2:2-24 of the Loan Agreement is amended to read as
Schedule 2:2-24 annexed hereto and incorporated herein by reference.
SECTION 3. RATIFICATION OF LOAN DOCUMENTS. NO CLAIMS AGAINST ANY LENDER:
(a) Except as provided herein, all terms and conditions of the Loan
Agreement and of the other Loan Documents remain in full force and effect. The
Lead Borrower and each Borrower hereby ratifies, confirms, and re-affirms all
and singular the terms and conditions, including execution and delivery, of the
Loan Documents.
(b) There is no basis nor set of facts on which any amount (or any
portion thereof) owed by any Borrower under the Loan Agreement could be reduced,
offset, waived, or forgiven, by rescission or otherwise; nor is there any claim,
counterclaim, off set, or defense (or other right, remedy, or basis having a
similar effect) available to any Borrower with regard to thereto; nor is there
any basis on which the terms and conditions of any of the Liabilities could be
claimed to be other than as stated on the written instruments which evidence
such Liabilities. To the extent that any Borrower or any such guarantor has (or
ever had) any such claims against the Agent or any Lender, each hereby
affirmatively WAIVES and RELEASES the same.
SECTION 4. CONDITIONS TO EFFECTIVENESS OF SEVENTH AMENDMENT:
The effectiveness of this Seventh Amendment is conditioned on the
satisfaction of each of the following:
(a) This Seventh Amendment shall have been duly executed and
delivered by each of the Borrowers, the Revolving Credit Lenders and the Agents
and shall be in full force and effect.
(b) The Borrowers shall have paid all reasonable attorneys' fees and
Page 4
expenses incurred by the Agents in connection with the preparation, negotiation
and execution of this Seventh Amendment.
SECTION 5. MISCELLANEOUS:
(a) The parties acknowledge that Back Bay Capital Funding LLC, as
Term Lender, has been paid in full and is no longer a party to the Loan
Agreement.
(b) This Seventh Amendment may be executed in several counterparts
and by each party on a separate counterpart, each of which when so executed and
delivered shall be an original, and all of which together shall constitute one
instrument.
(c) This Seventh Amendment expresses the entire understanding of the
parties with respect to the transactions contemplated hereby. No prior
negotiations or discussions shall limit, modify, or otherwise affect the
provisions hereof.
(d) Any determination that any provision of this Seventh Amendment
or any application hereof is invalid, illegal, or unenforceable in any respect
and in any instance shall not affect the validity, legality, or enforce ability
of such provision in any other instance, or the validity, legality, or enforce
ability of any other provisions of this Seventh Amendment.
(e) The Borrower shall pay on demand all reasonable costs and
expenses of the Agents, including, without limitation, reasonable attorneys'
fees in connection with the preparation, negotiation, execution, and delivery of
this Seventh Amendment.
(f) This Seventh Amendment shall be construed, governed, and
enforced pursuant to the laws of The Commonwealth of Massachusetts and shall
take effect as sealed instrument.
Except as amended hereby and by the First, Second, Third, Fourth, Fifth
Amendments, and all letter agreements concerning the Loan Agreement, all terms
and conditions of the Loan Agreement, as previously amended to date, shall
remain in full force and effect.
THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT:
FLEET RETAIL FINANCE INC.
By /s/ Xxxxx X. Xxxxxxx
--------------------------------------
Name Xxxxx X. Xxxxxxx
-----------------------------------
Title Director
-----------------------------------
Page 5
THE REVOLVING CREDIT LENDERS:
FLEET RETAIL FINANCE INC.
By /s/ Xxxxx Xxxxxxx
--------------------------------------
Name Xxxxx Xxxxxxx
-----------------------------------
Title Director
-----------------------------------
THE CIT GROUP / BUSINESS CREDIT, INC.
By /s/ Xxxxxxx Xxxxxxx
--------------------------------------
Name Xxxxxxx Xxxxxxx
-----------------------------------
Title Vice President
-----------------------------------
FOOTHILL CAPITAL CORPORATION
By /s/ Xxx Xxxx
--------------------------------------
Name Xxx Xxxx
-----------------------------------
Title Assistant Vice President
-----------------------------------
Page 6
THE GYMBOREE CORPORATION
("LEAD BORROWER")
By /s/ Xxxxx XxXxxxxxx
------------------------------------
Print Name: Xxxxx XxXxxxxxx
------------------------------------
Title: CFO
------------------------------------
"BORROWERS":
GYMBOREE MANUFACTURING, INC.
By /s/ Xxxxx XxXxxxxxx
------------------------------------
Print Name: Xxxxx XxXxxxxxx
------------------------------------
Title: CFO
------------------------------------
GYMBOREE OPERATIONS, INC.
By /s/ Xxxxx XxXxxxxxx
------------------------------------
Print Name: Xxxxx XxXxxxxxx
------------------------------------
Title: CFO
------------------------------------
GYMBOREE PLAY PROGRAMS, INC.
By /s/ Xxxxx XxXxxxxxx
------------------------------------
Print Name: Xxxxx XxXxxxxxx
------------------------------------
Title: CFO
------------------------------------
GYMBOREE RETAIL STORES, INC.
By /s/ Xxxxx XxXxxxxxx
------------------------------------
Print Name: Xxxxx XxXxxxxxx
------------------------------------
Title: CFO
------------------------------------
Page 7
THE GYMBOREE STORES, INC.
By /s/ Xxxxx XxXxxxxxx
------------------------------------
Print Name: Xxxxx XxXxxxxxx
------------------------------------
Title: CFO
------------------------------------
GYM-XXXX, INC.
By /s/ Xxxxx XxXxxxxxx
------------------------------------
Print Name: Xxxxx XxXxxxxxx
------------------------------------
Title: CFO
------------------------------------
Page 8
