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Exhibit 10.17
AMENDMENT NO. 2 TO
AMENDED AND RESTATED LINE OF CREDIT AGREEMENT
This Amendment No. 2 (the "Amendment") dated as of August 11, 1997,
is among Bank of America National Trust and Savings Association (the "Bank"),
The Gymboree Corporation ("TGC"), Gymboree Manufacturing, Inc. ("GMI"),
Gymboree, Inc. ("GI"), Gymboree Industries Limited ("GIL"), and Gymboree U.K.,
Ltd. ("GUKL"). (TGC, GMI, GI, GIL, and GUKL are hereinafter referred to
collectively as the "Borrowers" and individually as a "Borrowers").
RECITALS
A. The Bank, TGC, and GMI entered into a certain Amended and
Restated Line of Credit Agreement dated as of October 27, 1995, as previously
amended (the "Agreement"). GI and GIL were added as Borrowers pursuant to
Amendment No. 1 to Amended and Restated Line of Credit Agreement dated as of
July 17, 1997.
B. TGC has a wholly-owned English subsidiary, GUKL.
C. TGC, GMI, GI, and GIL have requested the Bank to add GUKL as a
Borrower under the Agreement for the limited purpose of making available to
GUKL the new foreign exchange facility added to the Agreement by this
Amendment. The Bank is willing to grant that request subject to certain of the
additional 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 GUKL is added as
a Borrower under the Agreement.
E. The Bank and the Borrowers also desire to amend the Agreement
in order to add a foreign exchange facility to the Agreement and to adjust
certain within-line limitations applicable to standby letters of credit issued
under the Agreement in conjunction with making standby letters of credit
available to GIL.
AGREEMENT
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 Clause (iii) of the proviso at the end of Paragraph 1.1(c)
is amended to read in its entirety as follows:
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(iii) the outstanding amount of any standby letters of credit,
including amounts drawn on such letters credit and not yet reimbursed, may
not exceed One Million Dollars ($1,000,000); provided further that the
outstanding amount of any such letters of credit, including amounts drawn
on such letters of credit and not yet reimbursed, issued for the accounts
of TGC or GIL, respectively, may not exceed Five Hundred Thousand Dollars
($500,000).
2.2 A new Paragraph 1.4 is added to the Agreement, and it reads in
its entirety as follows:
1.4 Foreign Exchange Facility.
(a) During the availability period, the Bank at its discretion
may enter into spot and forward foreign exchange contracts with any one
more of the Borrowers. The foreign exchange contract limit will be Ten
Million U.S. Dollars (U.S. $10,000,000), and the settlement limit will be
five Million U.S. Dollars (U.S. $5,000,000). The "foreign exchange contract
limit" is the maximum limit on the net difference between the total foreign
exchange contracts outstanding less the total foreign exchange contracts
for which the borrowers have already compensated the Bank. The "settlement
limit" is the maximum limit on the gross total amount of all sale and
purchase contracts on which delivery is to be effected and settlement
allowed on any one banking day.
(b) The Bank shall not be obligated to permit the Borrowers to
enter into any foreign exchange contracts which would exceed the settlement
limit. However, if the Bank decides, in its discretion, to waive the
settlement limit for foreign exchange contracts which will settle on any
particular banking day, the Bank shall not be required to make any U.S.
Dollar or foreign currency settlement payment to the Borrowers until the
Bank receives evidence satisfactory to it that the Borrowers have paid the
Bank all of the Borrowers' U.S. Dollar and foreign currency settlement
payments. The Bank shall not be liable for interest or other damages caused
by any such failure to pay or deliver or any such delay in payment or
delivery.
(c) The Borrowers will pay the Bank on demand the Bank's then
standard foreign exchange contract fees for each contract.
(d) Foreign exchange contracts will be in form and substance
satisfactory to the Bank.
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(e) No foreign exchange contracts will mature later than 180
days after the Expiration Date, and in addition no foreign exchange
contract shall have a tenor longer than 180 days.
(f) The Borrowers understand the risks of, and are financially
able to bear any losses resulting from, entering into foreign exchange
contracts. The Bank shall not be liable for any loss suffered by the
Borrowers as a result of the Borrowers' foreign exchange trading. The
Borrowers will enter into each foreign exchange contract in reliance
only upon the Borrowers' own judgment. The Borrowers acknowledge that
in entering into foreign exchange contracts with the Borrowers, the
Bank is not acting as a fiduciary. The Borrowers understand that
neither the Bank nor any Borrower has any obligation to enter into any
particular foreign exchange contract with the other.
(g) The Borrowers hereby request the Bank to rely upon and
execute the Borrowers' telephonic instructions regarding foreign
exchange contracts, and the Borrowers agree that the Bank shall incur
no liability for its acts or omissions which result from interruption
of communications, misunderstood communications or instructions from
unauthorized persons, unless caused by the wilful misconduct of the
Bank or its officers or employees. The Borrowers agree to protect the
Bank and hold it harmless from any and all loss, damage, claim,
expense (including the reasonable fees of outside counsel and the
allocated costs of staff counsel) or inconvenience, however arising,
which the Bank suffers or incurs or might suffer or incur, based on or
arising out of said acts or omissions.
(h) The Borrowers agree to promptly review all confirmations
sent to the Borrowers by the Bank. The Borrowers understand that these
confirmations are not legal contracts but only evidence of the valid
and binding oral contract which the Borrowers have already entered
into with the Bank. The Borrowers agree to promptly execute and return
to the Bank confirmations which accurately reflect the terms of a
foreign exchange contract, and immediately contact the Bank if the
Borrowers believe a confirmation is not accurate. In the event of a
conflict, inconsistency or ambiguity between the provisions of this
Agreement and the provisions of confirmation, the provisions of this
Agreement will prevail.
(i) The Borrowers agree that the Bank may electronically record
all telephonic conversations with the Borrowers relating to foreign
exchange contracts
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and that such tape recordings may be submitted in evidence to any court or
in any other proceedings relating to such contracts. The Borrowers agree
that in the event of a conflict, inconsistency or ambiguity between the
terms of a foreign exchange contract as reflected in a tape recording and
the terms stated on a confirmation, the terms reflected in the tape
recording shall control.
(j) The Borrowers hereby authorize the Bank to debit the
Borrowers' accounts with the Bank for payments due from the Borrowers to
the Bank with respect to any foreign exchange contract.
(k) In addition to any other rights or remedies which the Bank
may have under this Agreement or otherwise, upon the occurrence of an event
of default under this Agreement, or if the Borrowers' aggregate realized or
unrealized xxxx-to-market losses on foreign exchange contracts exceed One
Million Dollars $1,000,000 (the "Revaluation Limit"), the Bank may:
(1) Suspend performance of its obligations to the
Borrowers under any foreign exchange contract;
(2) Declare all foreign exchange contracts, interest and
any other amounts which are payable by the Borrowers to the Bank
immediately due and payable; and
(3) Without notice to the Borrowers, close out any or all
foreign exchange contracts or positions of the Borrowers with the
Bank.
The Bank shall not be under any obligation to exercise any such rights or
remedies or to exercise them at a time or in a manner beneficial to the
Borrowers. The Borrowers shall be liable for any amounts owing to the Bank
after exercise of any such rights and remedies.
(l) The Borrowers agree to enter into a Foreign Exchange Master
Agreement with the Bank (as amended, modified or renewed, the "FEMA") by no
later than September 23, 1997. All foreign exchange transactions entered into
between each Borrower and the Bank shall be subject to the provisions of this
Agreement and the FEMA. In the event of any conflict or inconsistency between
the provisions of this Agreement and the provisions of the FEMA, the provisions
of the FEMA shall control. The occurrence of an Event of Default under the FEMA
shall also constitute a default under this Agreement.
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2.3 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, GIL, or GUKL in the
event that GMI, GI, GIL, or GUKL is no longer a "Borrower" under
this Agreement.
2.4 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
accounts of TGC or GIL.
2.5 In the lead-in of Paragraph 6.2, "GUKL" is substituted
for "Gymboree U.K. Ltd." in the second parenthetical phrase.
3. GUKL's Acknowledgment. GUKL hereby acknowledges that by
executing this Amendment and thereby becoming a Borrower under the Agreement
for the limited purpose of entering into spot and forward foreign exchange
contracts with the Bank, GUKL promises and agrees 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 acceptance to the Bank, evidence that
the execution, delivery, and performance by GUKL of this Amendment and any
instrument or agreement required under the Agreement, as amended by this
Amendment, 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
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Amendment shall release TGC, GMI, GI, or GIL from any of its obligations under
the Agreement.
This Amendment is executed as of the date stated at the beginning of
this Amendment.
Bank of America National Trust
and Savings Association
By
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Title
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By
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Title
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The Gymboree Corporation
By /s/ XXXXX X. XXXXXX
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Xxxxx X. Xxxxxx
Title Senior Vice President,
Chief Financial Officer,
Chief Accounting Officer
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By /s/ XXXXXX X. XXXXXX
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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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