1
EXHIBIT 10.29
THE GYMBOREE CORPORATION
SUMMARY OF TERMS AND CONDITIONS
MARCH 9, 1999
THIS SUMMARY OF TERMS AND CONDITIONS ("TERM SHEET") INDICATES OUR COMMITMENT TO
EXTEND CREDIT AS DESCRIBED IN GENERAL TERMS BELOW ("CREDIT FACILITY"). HOWEVER,
IT DOES NOT ATTEMPT TO DESCRIBE ALL OF THE TERMS AND CONDITIONS THAT WOULD
PERTAIN TO THE CREDIT FACILITY. INSTEAD, IT IS INTENDED TO OUTLINE BASIC
BUSINESS PARAMETERS TO FACILITATE OUR FURTHER DISCUSSIONS.
BORROWER: The Gymboree Corporation, and certain subsidiaries
("TGC")
GUARANTORS: As required in the existing Agreement.
LENDER: Bank of America National Trust and Savings Association
(in such capacity, the "Bank").
PURPOSE: To finance merchandise importation (through commercial
and usance L/Cs), working capital (through funded
advances) and rent guarantees (through SBLCs).
CREDIT FACILITY: $100 million revolving Credit Facility with a maturity
date of 3/31/2001, with the following quarterly usage
limits:
$ 68 million through 4/30/99
$100 million from 5/1/99 through 7/31/99
$ 80 million from 8/1/99 through 12/31/99
$ 68 million from 1/1/2000 through 4/30/2000
$100 million from 5/1/2000 through 7/31/2000
$ 80 million from 8/1/2000 through 3/31/2001
In addition, the following sub-limits will apply:
(A) Commercial L/C sub-limit (with tenors on Commercial
L/C's up to 180 days from issuance, drafts payable at
sight): difference between the usage limit above, the
$25 million Funded Advance/Usance L/C facility and
outstanding Standby Letters of Credit.
(B) $25 million Funded Advances and Usance Letters of
Credit sub-limit (with tenors on Usance Letters of
Credit up to 180 days from issuance, with drafts
payable at up to 180 days from sight).
(C) $10 million Standby Letter of Credit sub-limit
(with tenors up to one year from issuance).
REPAYMENT: Sub-limit (A) & (C): Upon negotiation of documents.
Sub-limit (B) Funded Advances: Interest monthly with
principal due at maturity.
Sub-limit (B) Usance L/C: At maturity.
2
MATURITY/EXPIRATION: Availability under the Credit Facility through
3/31/2001, with no instruments to mature later than
9/30/2001.
INTEREST RATES: Interest rates on the Funded Advance sub-limit
(B) of the Credit Facility will be as follows:
(i) Bank of America's Reference Rate or
(ii) LIBOR plus the applicable margin determined
by the attached Variable Pricing Grid.
COMMITMENT FEE: An up front commitment fee of $50,000 per annum,
payable semi-annually in advance. Payable on acceptance
of this commitment or 3/12/99, whichever is earlier,
and semiannually thereafter.
UNUSED COMMITMENT
FEE: A fee of 0.10% per annum, calculated on the unused
portion of sub-limit (B) (outstanding Usance Letters of
Credit would not reduce the unused portion for purposes
of calculating this fee), and payable quarterly in
arrears.
OTHER FEES: Commercial L/Cs, Usance L/Cs and SBLCs at pricing
agreed to with Bank's trade finance group.
An early Termination fee of 1/16% will be charged on
any portion of the Credit Facility canceled by TGC
prior to maturity which is not refinanced by the Bank.
ALLOCATIONS: TGC must specify in advance any portion of sub-limit
(B) which it will use for usance L/C's. TGC, upon at
least five days written notice to the Bank, may request
reallocation from any unused allocation of sub-limit
(B).
FINANCIAL COVENANTS: TANGIBLE NET WORTH
------------------
TGC to maintain a minimum tangible worth, measured at
each of TGC's fiscal quarter ends as follows:
(in millions)
----------------------------------------------------------
1/31/99 4/30/99 7/31/99 10/31/99 1/31/2000
Projected 169 174 173 176 188
COVENANT 166 168 166 168 179
Starting 1/31/2000, TGC to maintain an actual starting
Tangible Net Worth (of at least $183 Million) plus 80%
of TGC's consolidated positive quarterly Net Income
(which shall not be reduced by any quarterly losses).
Tangible Net Worth defined as the gross book value of
TGC's assets (excluding goodwill, patents, trademarks,
trade names, organization expense, treasury stock,
unamortized debt discount and expense, deferred
research and development costs, deferred marketing
expenses, and other like intangibles, and monies from
subsidiaries, affiliates, officers, directors, or
shareholders of TGC but including the aggregate book
value of TGC's lease rights up to a maximum aggregate
value of $2.5 million for all such lease rights), less
total
2
3
liabilities (including but not limited to accrued and
deferred income taxes, and excluding liabilities
related to redeemable preferred stock) and any reserves
against assets, less any proceeds of equity capital
raised during the year.
SEASONAL CLEAN DOWN
TGC to maintain a ratio of cash plus short-term
investments, including credit card receivables up to $5
million, to total letters of credit (commercial, usance
and standby) outstanding plus borrowings under the
Funded Advance facility, of at least 0.85:1, for the
last two fiscal month-ends of fiscal years 1999 and
2000. In addition the following will apply in the event
the ratio is less than 1.00:1:
o TGC must pay a fee of $10,000 per reporting period
that the ratio is less than 0.90:1 but greater than
or equal to 0.85:1.
o TGC must pay a fee of $5,000 per reporting period
that the ratio is less than 1.00:1 but greater than
or equal to 0.90:1.
LIMITATIONS ON CAPITAL EXPENDITURES
TGC shall not incur capital expenditures in excess of
$40 million for the fiscal year 1999, without the prior
written consent of the Bank. Additionally, TGC shall
not commit to capital expenditures in excess of $20
million for each of the fiscal years 2000 and 2001,
without the prior written consent of the Bank.
TGC shall not enter into any joint venture, merger,
acquisition or purchase of a business or its assets
during any fiscal year, for consideration over $5
million, without the Bank's prior consent.
REPORTING COVENANTS: CPA audited FYE consolidated financial statements
(including 10-K) due within 120 days of FYE, with an
unqualified opinion. CPA management letter within 30
days of receipt. TGC prepared consolidating schedules
including Balance Sheet, Income Statement and Statement
of Cash Flows.
Quarterly TGC prepared consolidated and consolidating
financial statements (Balance Sheet, Income Statement
and Statement of Cash Flows), 10-Q and Compliance
Certificate, due within 45 days of period end.
Monthly TGC prepared consolidated financial statements
(Balance Sheet, Income Statement and Statement of Cash
Flows), due within 30 days of month-end except for the
final month of the fiscal year, which will be due
within 60 days of month-end.
Annual TGC prepared projections (Balance Sheet, Income
Statement and Statement of Cash Flows) for the upcoming
fiscal year within 60 days of FYE; revised projections,
including all material adjustments made to the
projections, as they occur.
REPRESENTATIONS AND
WARRANTIES: All representations and warranties remain materially
unchanged from the existing credit facility
3
4
OTHER TERMS AND
CONDITIONS: A new Amended and Restated Loan Agreement will be
documented which will contain language reflecting a
Syndicated Credit with the Bank as Agent and permitting
assignments under the Agreement. All other terms and
conditions remain materially unchanged from the
existing credit facility.
4
5
VARIABLE PRICING GRID
If at the end of any fiscal quarter, TGC's Tangible Net Worth (as defined) is
equal to or greater than I below, the applicable margin for the following
quarter will be 75 BASIS POINTS.
If at the end of any fiscal quarter, TGC's Tangible Net worth is less than I.,
but greater than or equal to II. below, the applicable margin for the following
quarter will be 87.5 BASIS POINTS.
If at the end of any fiscal quarter, TGC's Tangible Net worth is less than II.,
but greater than or equal to III. below, the applicable margin for the following
quarter will be 100 BASIS POINTS.
Tangible Net Worth as defined in the Summary of Terms and Conditions.
(in millions of dollars)
QUARTER-ENDED: I. II. III.
04/30/1999 174 171 168
07/31/1999 173 171 166
10/31/1999 176 172 168
01/31/2000 187 183 179
04/30/2000 191 187 Min TNW Cov.
07/31/2000 191 187 Min TNW Cov.
10/31/2000 193 189 Min TNW Cov.
01/31/2001 203 198 Min TNW Cov.
ab
5