TENTH AMENDMENT TO CREDIT AGREEMENT
EXECUTION
VERSION
TENTH
AMENDMENT TO CREDIT AGREEMENT
This
TENTH AMENDMENT TO CREDIT AGREEMENT (this “Amendment”),
dated
as of August 8, 2008, is entered into by and among THE GYMBOREE CORPORATION,
a
Delaware corporation (the “Company”),
each
other Borrower named in the signature pages hereof (together with the Company,
each a “Borrower”
and,
collectively, the “Borrowers”),
and
BANK OF AMERICA, N.A. (the “Lender”).
RECITALS
A. The
Borrowers and the Lender are parties to a Credit Agreement, dated as of August
11, 2003 as amended by (i) that certain Waiver and First Amendment to Credit
Agreement dated as of December 6, 2004, (ii) that certain Second Amendment
to
Credit Agreement dated as of July 25, 2005, (iii) that certain Third Amendment
to Credit Agreement dated as of March 30, 2006, (iv) that certain Fourth
Amendment to Credit Agreement dated as of July 5, 2006, (v) that certain Fifth
Amendment to Credit Agreement dated as of February 7, 2007, (vi) that
certain Sixth Amendment to Credit Agreement dated as of April 24, 2007,
(vii) that certain Seventh Amendment to Credit Agreement dated as of June
12, 2007, (viii) that certain Eighth Amendment to Credit Agreement dated as
of July 31, 2007, and (ix) that certain Ninth Amendment to Credit Agreement
dated as of November 21, 2007 (collectively, and as the same may be further
amended, restated, extended, supplemented or otherwise modified from time to
time, the “Credit
Agreement”),
pursuant to which the Lender has extended certain credit facilities to the
Borrowers.
B. The
Borrowers have requested that the Lender agree to certain amendments to the
Credit Agreement, and the Lender has agreed to such request, subject to the
terms and conditions of this Amendment.
NOW,
THEREFORE, for valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto hereby agree as follows:
1. Defined
Terms.
Unless
otherwise defined herein, capitalized terms used herein shall have the meanings,
if any, assigned to such terms in the Credit Agreement (as amended hereby).
As
used herein, “Amendment
Documents”
means
this Amendment, the Restated Note, the Credit Agreement (as amended by this
Amendment), and each certificate and other document executed and delivered
by
the Borrowers pursuant to Section
5
hereof.
2. Interpretation.
The
rules of interpretation set forth in Sections
1.02,
1.03,
1.04,
1.05,
and
1.06
of the
Credit Agreement shall be applicable to this Amendment and are incorporated
herein by this reference.
3. Amendments
to Credit Agreement.
Subject
to the terms and conditions hereof, and with effect from and after the Effective
Date, the Credit Agreement shall be amended as follows:
(a) Section
1.01
of the
Credit Agreement shall be amended by amending and restating the definition
“Applicable Rate” to read as follows:
“Applicable
Rate”
means
(a) prior to the Tenth Amendment Date, the following percentages per annum,
based upon the Consolidated Adjusted Leverage Ratio as set forth in the most
recent Compliance Certificate received by the Lender pursuant to Section
6.02(a):
Pricing
Level
|
Consolidated
Adjusted Leverage Ratio
|
Unused
Line Fee (%)
|
Eurodollar
Rate Loans/ Letters of Credit (%)
|
Base
Rate Loans (%)
|
1
|
>
3.00:1.00
|
0.500
|
1.500
|
0.250
|
2
|
>
2.50:1.00 but <
3.00:1.00
|
0.400
|
1.250
|
0.000
|
3
|
>
2.00:1.00 but <
2.50:1.00
|
0.300
|
1.000
|
0.000
|
4
|
<
2.00:1.00
|
0.200
|
0.750
|
0.000
|
and
(b)
at all times from and after the Tenth Amendment Date, the following percentages
per annum, based upon the Consolidated Adjusted Leverage Ratio as set forth
in
the most recent Compliance Certificate received by the Lender pursuant to
Section 6.02(a):
Pricing
Level
|
Consolidated
Adjusted Leverage Ratio
|
Unused
Line Fee (%)
|
Eurodollar
Rate Loans/ Letters of Credit (%)
|
Base
Rate Loans (%)
|
1
|
>
3.00:1.00
|
0.600
|
1.750
|
0.250
|
2
|
>
2.50:1.00 but <
3.00:1.00
|
0.500
|
1.500
|
0.000
|
3
|
>
2.00:1.00 but <
2.50:1.00
|
0.400
|
1.250
|
0.000
|
4
|
<
2.00:1.00
|
0.300
|
1.000
|
0.000
|
Any
increase or decrease in the Applicable Rate resulting from a change in the
Consolidated Adjusted Leverage Ratio shall become effective as of the first
Business Day immediately following the date a Compliance Certificate is
delivered pursuant to Section
6.02(a);
provided,
however,
that if
a Compliance Certificate is not delivered when due in accordance with such
Section, then Pricing Level 1 shall apply as of the first Business Day after
the
date on which such Compliance Certificate was required to have been
delivered.
(b) Section
1.01
of the
Credit Agreement shall be amended by amending and restating the definition
“Commitment” to read as follows:
“Commitment”
means
the obligation of the Lender to make Loans and other Credit Extensions hereunder
in an aggregate principal amount at any time not to exceed $80,000,000; as
such
amount may be adjusted from time to time in accordance with Section
2.05
of this
Agreement.
(c) Section
1.01
of the
Credit Agreement shall be further amended by adding the definition “Increase
Effective Date”,
in
appropriate alphabetical order, to read as follows:
“Increase
Effective Date”
has
the
meaning specified in Section
2.12.
2
(d) Section
1.01
of the
Credit Agreement shall be further amended by amending and restating “Scheduled
Maturity Date” to read in full as follows:
“Scheduled
Maturity Date”
means
August 11, 2009.
(e) Section
1.01
of the
Credit Agreement shall be further amended by adding the definition “Tenth
Amendment Date”,
in
appropriate alphabetical order, to read as follows:
“Tenth
Amendment Date”
means
the “Effective Date” as defined in that Tenth Amendment to Credit Agreement
dated as of August 8, 2008 among the Borrowers and the Lender.
(f) The
Credit Agreement shall be further amended by adding Section
2.12
thereto,
to read as follows:
2.12 Option
to Increase Commitment.
From and
after the Tenth Amendment Date, the Company may, upon written notice to the
Lender, on not more than two occasions, request an increase in the Commitment
by
up to $20,000,000 in the aggregate. Upon such request, the Commitment shall
be
increased by the amount specified in such notice, not to exceed $20,000,000
in
the aggregate for all such requests together, effective as of the date specified
in such request (not to be earlier than three Business Days after the date
such
request is received by Lender) (the “Increase
Effective Date”).
As a
condition precedent to any such increase, the Company shall deliver to the
Lender (a) a certificate of the Company signed by a Responsible Officer of
the
Company in the form of Exhibit F
hereto
and attaching the resolutions adopted by each Loan Party approving or consenting
to such increase or authorizing a Responsible Officer of the Company to approve
such increase, and (b) an upfront expansion fee equal to 0.035% times the amount
of the requested increase in Commitment.
(g) The
Credit Agreement shall be further amended at Section
7.12,
by
amending and restating the table contained therein to read as follows:
Fiscal
Year Ending Nearest
|
Amount
($)
|
January
31, 2004
|
$40,000,000
|
January
31, 2005
|
$75,000,000
|
January
31, 2006
|
$50,000,000
|
January
31, 2007
|
$50,000,000
|
January
31, 2008
|
$70,000,000
|
January
31, 2009 and thereafter
|
$65,000,000
|
(h) The
Credit Agreement shall be further amended by adding Exhibit
F
thereto,
in the form attached hereto as Annex
I.
3
4. Representations
and Warranties.
Each
Borrower hereby represents and warrants to the Lender as follows:
(a) No
Default has occurred and is continuing (or would result from the amendment
to
the Credit Agreement contemplated hereby).
(b) The
execution, delivery and performance by the Borrowers of this Amendment and
the
Restated Note have been duly authorized by all necessary corporate and other
action and do not and will not require any registration with, consent or
approval of, or notice to or action by, any Person (including any Governmental
Authority) in order to be effective and enforceable.
(c) The
Amendment Documents constitute the legal, valid and binding obligations of
the
Borrowers party thereto, enforceable against each such Borrower in accordance
with their respective terms, without defense, counterclaim or
offset.
(d) All
representations and warranties of the Borrowers contained in Article
V
of the
Credit Agreement are true and correct on and as of the Effective Date, except
to
the extent that any such representation and warranty specifically relates to
an
earlier date, in which case they are true and correct as of such earlier
date.
(e) Each
Borrower is entering into this Amendment on the basis of its own investigation
and for its own reasons, without reliance upon the Lender or any other
Person.
(f) There
has
occurred since February 2, 2008 no event or circumstance that has resulted
or
could reasonably be expected to result in a Material Adverse
Effect.
(g) The
Obligations of each Borrower under the Credit Agreement and each other Loan
Document are not subject to any defense, counterclaim, set-off, right of
recoupment, abatement or other claim.
(h) As
of
January 2008, the Borrower Gymboree Stores, Inc. was merged with and into
Gymboree Retail Stores, Inc., and the Borrower Gymboree Logistics Partnership
was dissolved, in each case in accordance with applicable law.
5. Effective
Date.
(a) This
Amendment will become effective when each of the conditions precedent set forth
in this Section
5
has been
satisfied (the “Effective
Date”):
(i) The
Lender shall have received from each Borrower a duly executed original (or,
if
elected by the Lender, an executed facsimile copy) counterpart to this
Amendment.
(ii) The
Lender shall have received from the Company a certificate signed by the
assistant secretary of each Borrower, dated the Effective Date, in form and
substance satisfactory to the Lender, and certifying evidence of the
authorization of the execution, delivery and performance by each Borrower of
the
Amendment Documents to which it is party.
4
(iii) The
Company shall have paid to the Lender a supplemental upfront fee of
$28,000.
(iv) The
Company shall have paid to the Lender all amounts owing as of the Effective
Date
under Section
2.04(b)
and
Section
3.05,
if
any.
(v) The
Lender shall have received, in form and substance satisfactory to it, such
additional approvals, consents, opinions, documents and other information as
the
Lender shall request.
(b) From
and
after the Effective Date, the Credit Agreement is amended as set forth, herein.
Except as expressly amended pursuant hereto, the Credit Agreement shall remain
unchanged and in full force and effect and is hereby ratified and confirmed
in
all respects.
6. Reservation
of Rights.
Each
Borrower acknowledges and agrees that neither the execution nor the delivery
by
the Lender of this Amendment shall (a) be deemed to create a course of dealing
or otherwise obligate the Lender to execute similar amendments under the same
or
similar circumstances in the future or (b) be deemed to create any implied
waiver of any right or remedy of the Lender with respect to any term or
provision of any Loan Document (including any term or provision relating to
the
occurrence of a Material Adverse Effect).
7. Miscellaneous.
(a) Except
as
herein expressly amended, all terms, covenants and provisions of the Credit
Agreement are and shall remain in full force and effect and all references
therein to such Credit Agreement shall henceforth refer to the Credit Agreement
as amended by this Amendment. This Amendment shall be deemed incorporated into,
and a part of, the Credit Agreement.
(b) This
Amendment shall be binding upon and inure to the benefit of the parties hereto
and thereto and their respective successors and assigns. No third party
beneficiaries are intended in connection with this Amendment.
(c) THIS
AMENDMENT IS SUBJECT TO THE PROVISIONS OF SECTIONS
9.19,
9.20
and
9.23
OF THE
CREDIT AGREEMENT RELATING TO GOVERNING LAW, VENUE, WAIVER OF RIGHT TO TRIAL
BY
JURY AND JUDICIAL REFERENCE, THE PROVISIONS OF WHICH ARE BY THIS REFERENCE
INCORPORATED HEREIN IN FULL.
5
(d) This
Amendment may be executed in any number of counterparts, each of which shall
be
deemed an original, but all such counterparts together shall constitute but
one
and the same instrument. Each of the parties hereto understands and agrees
that
this document (and any other document required herein) may be delivered by
any
party hereto or thereto either in the form of an executed original or an
executed original sent by facsimile transmission to be followed promptly by
mailing of a hard copy original, and the receipt by the Lender of a facsimile
transmitted document purportedly bearing the signature of a Borrower shall
bind
such Borrower with the same force and effect as the delivery of a hard copy
original. Any failure by the Lender to receive the hard copy executed original
of such document shall not diminish the binding effect of receipt of the
facsimile transmitted executed original of such document of the party whose
hard
copy page was not received by the Lender.
(e) This
Amendment, together with the Credit Agreement, contains the entire and exclusive
agreement of the parties hereto with reference to the matters discussed herein
and therein. This Amendment supersedes all prior drafts and communications
with
respect thereto. This Amendment may not be amended except in accordance with
the
provisions of Section
9.01
of the
Credit Agreement.
(f) If
any
term or provision of this Amendment shall be deemed prohibited by or invalid
under any applicable law, such provision shall be invalidated without affecting
the remaining provisions of this Amendment or the Credit Agreement,
respectively.
(g) Each
Borrower covenants to pay to or reimburse the Lender, upon demand, for all
costs
and expenses (including Attorney Costs and the non-duplicative allocated costs
of in-house counsel) incurred in connection with the development, preparation,
negotiation, execution and delivery of this Amendment.
(h) This
Amendment shall constitute a “Loan
Document”
under
and as defined in the Credit Agreement.
[Remainder
of page intentionally left blank]
6
IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed as of the date first above written.
THE
GYMBOREE CORPORATION,
as
a Borrower
|
||
By: | /s/ Xxxxx Xxxxxxxxx | |
Name:
Xxxxx Xxxxxxxxx
Title:
Vice President, Corporate Controller
|
||
GYMBOREE
MANUFACTURING, INC.,
as
a Borrower
|
||
By: | /s/ Xxxxx Xxxxxxxxx | |
Name: Xxxxx Xxxxxxxxx Title:
Vice President, Corporate Controller
|
||
GYM-XXXX,
INC.,
as
a Borrower
|
||
By: | /s/ Xxxxx Xxxxxxxxx | |
Name: Xxxxx Xxxxxxxxx Title:
Vice President, Corporate Controller
|
||
GYMBOREE
RETAIL STORES, INC.,
as
a Borrower
|
||
By: | /s/ Xxxxx Xxxxxxxxx | |
Name:
Xxxxx Xxxxxxxxx
Title:
Vice President, Corporate Controller
|
||
GYMBOREE
PLAY PROGRAMS, INC.,
as
a Borrower
|
||
By: | /s/ Xxxxx Xxxxxxxxx | |
Name: Xxxxx Xxxxxxxxx Title:
Vice President, Corporate
Controller
|
Signature
Page One to Tenth Amendment to Credit Agreement
GYMBOREE
OPERATIONS, INC.,
as
a Borrower
|
||
By: | /s/ Xxxxx Xxxxxxxxx | |
Name: Xxxxx Xxxxxxxxx Title:
Vice President, Corporate Controller
|
||
GYMBOREE,
INC. (CANADA),
as
a Borrower
|
||
By: | /s/ Xxxxx Xxxxxxxxx | |
Name: Xxxxx Xxxxxxxxx Title:
Vice President, Corporate
Controller
|
Signature
Page Two to Tenth Amendment to Credit Agreement
LENDER
BANK
OF AMERICA, N.A.,
as the Lender
|
||
By: | /s/ Xxxx X. XxXxxxx | |
Name: Xxxx X. XxXxxxx Title:
Senior Vice President
|
Signature
Page Three to Tenth Amendment to Credit Agreement
ANNEX
I
EXHIBIT
F
FORM
OF REQUEST TO INCREASE COMMITMENT
Date:_________
To:
|
Bank
of America, N.A.
|
000
Xxxxxxxxxx Xxxxxx
00xx
Xxxxx
Xxx
Xxxxxxxxx XX 00000
|
Attn:
|
Xx.
Xxxx XxXxxxx
|
Ladies
and Gentlemen:
Reference
is made to that certain Credit Agreement, dated as of August 11, 2003 (as
amended, restated, extended, supplemented or otherwise modified in writing
from
time to time, the “Agreement;”
the
terms defined therein being used herein as therein defined), among The Gymboree
Corporation, a Delaware corporation (the “Company”),
the
additional co-borrowers named therein and Bank of America, N.A. (the
“Lender”).
Pursuant
to Section
2.12
of the
Agreement, on behalf of the Company, the undersigned Responsible Officer hereby
requests that the Lender increase the Commitment on a one-time basis by
[$________], with effect from [_________].
The
undersigned Responsible Officer hereby certifies as of the date hereof that
he/she is the [_______________] of the Company, and that, as such, he/she is
authorized to execute and deliver this Certificate to the Lender on the behalf
of the Company, and that:
1. Attached
hereto is a true, correct and complete copy of the resolutions authorizing
the
Company to increase the Commitment, which resolutions were adopted by the Board
of Directors of the Company at a meeting duly called, convened and held on
[___________] at which a quorum was present and acting throughout. Such
resolutions have not been amended, rescinded or modified since their adoption
and are in full force and effect as of this date.
2. Each
of
the Loan Parties has, by all necessary corporate or other organizational action,
approved or consented to the increase of the Commitment by the amount stated
herein, and such approvals or consents are in full force and effect as of this
date.
3. Attached
hereto as Schedule
1
is the
duly executed Consent and Agreement of the Borrowers to the delivery of this
request and to the increase in the Commitment.
4. Before
and after giving effect to the increase of the Commitment:
F-1
(a) the
representations and warranties of the Company and each Borrower contained in
Article V
of the
Agreement, or which are contained in any document furnished at any time under
or
in connection with the Loan Documents, are and shall be true and correct on
and
as of the date hereof, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they are and
shall be true and correct as of such earlier date, and except that for purposes
of this Certificate, the representations and warranties contained in subsections
(a) and (b) of Section
5.05
of the
Agreement shall be deemed to refer to the most recent statements furnished
pursuant to clauses (a) and (b), respectively, of Section
6.01
of the
Agreement; and
(b) as
of the
date hereof, no Default or Event of Default exists.
IN
WITNESS WHEREOF,
the
undersigned has executed this Certificate as of __________, ____.
THE GYMBOREE CORPORATION | ||
By:
|
|
|
Name:
|
|
|
Title:
|
|
F-2