1
EXHIBIT 10.46
================================================================================
FOURTH AMENDMENT TO
LOAN AND SECURITY AGREEMENT FLEET RETAIL FINANCE INC.
ADMINISTRATIVE AGENT
AND COLLATERAL AGENT
================================================================================
As of August 3, 2001
THIS FOURTH 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 ( the "LOAN AGREEMENT") between
Fleet Retail Finance Inc., a Delaware corporation with
its principal executive offices at 40 Broad Street, Boston,
Massachusetts, as Administrative Agent and as Collateral Agent
for the ratable benefit of (i) a syndicate of lenders (defined
therein as the "Revolving Credit Lenders") and (ii) Back Bay
Capital Funding LLC (defined therein as the "Term Lender") a
Delaware limited liability company,
and
The Revolving Credit Lenders
and
The Term Lender
On the one hand
and
The Gymboree Corporation, a Delaware corporation with its
principal executive offices at 700 Airport Boulevard,
Burlingame, California 94010, 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-Mark, Inc. (each a California corporation
with its principal executive offices at 700 Airport Boulevard,
Burlingame, California 94010);
on the other,
WITNESSETH:
SECTION 1. AMENDMENT OF LOAN AGREEMENT:
Subject to the satisfaction of the Conditions to Effectiveness of
Amendment set forth in Section 2, below, the Loan Agreement is amended as
follows:
ARTICLE 1 of the Loan Agreement is amended so that the following
Definitions, included therein, read as follows:
2
"EXCESS AVAILABILITY BREACH": Excess Availability, on each of not less
than five (5) consecutive days, is less than the following:
Any day other than between August 3, 2001 and October 31, 2001:
$5 Million. Any day between (and including) August 3, 2001 and
October 31, 2001:$2.5 Million.
""REVOLVING CREDIT CEILING":
----------------------- -------------------- ----------------------
From To Ceiling ($Millions)
----------------------- -------------------- ----------------------
Closing October 8, 2000 75.0
October 9, 2000 October 15, 2000 87.5
October 16, 2000 October 22, 2000 86.5
October 23, 2000 October 29, 2000 84.5
October 30, 2000 November 5, 2000 81.5
November 6, 2000 November 12, 2000 77.5
November 13, 2000 November 24, 2000 84.0
November 25, 2000 August 2, 2001 75.0
August 3, 2001 Maturity Date 85.0
"SWINGLINE LOAN CEILING": $5 Million (subject to increase as provided in
Section 16:16-4(d)).
ARTICLE 1 of the Loan Agreement is amended so that the following
Definition is added thereto in alphabetical order:
"FOURTH AMENDMENT FEE LETTER": The letter dated as of August 3, 2001 and
styled "Fourth Amendment Fee Letter" between the Administrative Agent and the
Lead Borrower, as such may be amended from time to time hereafter.
"TERM LOAN EARLY TERMINATION FEE": Defined in Section 3-3(c).
SECTION 2-18(b)(i) of the Loan Agreement is amended to read as follows:
(i) The aggregate Stated Amount of all L/C's then
outstanding, does not exceed Eighty Five Million Dollars
($85,000,000.00).
SECTION 3-3(b) of the Loan Agreement is amended by the addition of the
following subsection thereto:
Page 2
3
(vi) The payment of the relevant Term Loan Early
Termination Fee (as provided in Section 3-3(c)) on account of
such prepayment.
SECTION 3-3 of the Loan Agreement is amended by the addition of the
following Section thereto:
(c) The Borrowers shall pay the Administrative Agent, for the
account of the Term Lender, the following fee (the "TERM LOAN EARLY TERMINATION
FEE") consisting of the following percentage of the principal of the Term Loan
(which, for such purpose, shall include any accrued and unpaid PIK Interest
which has not yet been added to such principal) which becomes due or payable or
which is paid for any reason after the effective date of the Fourth Amendment to
this Agreement and prior to the Maturity Date except that no Term Loan Early
Termination Fee shall be due and payable in the event of a prepayment in
connection with a refinancing of the Term Loan agented or provided by Back Bay
Capital Funding LLC it being understood that Back Bay Capital Funding LLC has
not agreed to provide or to entertain a request to provide any such refinancing:
--------------------------------- ------------------------------ ---------------
Prepayment From Through and Including Percentage
--------------------------------- ------------------------------ ---------------
Date of Fourth Amendment to January 31, 2002 1.5%
this Agreement
February 1, 2002 January 31, 2003 0.75%
February 1, 2003 Maturity Date Nil
SECTION 6-12 of the Loan Agreement is amended to read as follows:
6-12. FINANCIAL PERFORMANCE COVENANTS.
(a) The Borrowers shall observe and comply with the financial
performance covenants set forth below. The Administrative Agent may determine
compliance with such covenants based upon financial reports and statements
provided by the Lead Borrower to the Administrative Agent (whether or not such
financial reports and statements are required to be furnished pursuant to this
Agreement) as well as by reference to interim financial information and
appraisals of Collateral provided to, or developed by, the Administrative Agent.
(b) The Borrowers shall not incur:
(i) Consolidated Capital Expenditures for their Fiscal
year ending in January 2002 in excess of $15 Million.
(ii) Consolidated Capital Expenditures for their Fiscal
year ending in January 2003 in excess of the aggregate of
(A) $18 Million
Plus
Page 3
4
(B) Fifty Percent (50%) of the excess of the
Borrowers' EBITDA for their Fiscal year ending in
January 2002 over $27 Million.
(iii) Consolidated Capital Expenditures for any Fiscal
quarter in excess of $5 Million without requisite Consent of the
Lenders.
(c) The Borrowers shall not suffer or permit the occurrence of
any Excess Availability Breach.
EXHIBIT 2:2-24 is amended to read in as EXHIBIT 2:2-24 annexed to this
Fourth Amendment.
SECTION 2. CONDITIONS TO EFFECTIVENESS OF AMENDMENT:
The effectiveness of this Amendment is conditioned on the
satisfaction of each of the following:
(a) The delivery to the Administrative Agent of Certificates
executed respectively by the President and by the Chief Financial Officer of the
Lead Borrower and stating that at the delivery of such Certificates, no Borrower
is in Default.
(b) The delivery of an opinion of counsel to the Borrowers which
confirms the due execution, binding effect, and enforce ability of this Fourth
Amendment and absence of conflict of this Fourth Amendment with any agreement to
which the Borrowers' Representative or any Borrower is a party or by which any
is bound (which opinion may be subject to the same qualifications as had been
included in such counsel's opinion rendered in connection with the execution of
the Loan Agreement).
(b) The execution of the Fourth Amendment Fee Letter and the
payment of the fees provided for therein.
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. MISCELLANEOUS:
(a) Terms used in the Fourth Amendment which are defined in the
Loan Agreement are used as so defined.
(b) This Fourth Amendment may be executed in several
counterparts and by each
Page 4
5
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 Fourth 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 Fourth
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 Fourth 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 Fourth Amendment.
(f) This Fourth 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 Amendment, the Second
Amendment, and the Third Amendment, 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/ Sally A. Sheehan
-------------------------------------
Name Sally A. Sheehan
-----------------------------------
Title Director
----------------------------------
THE REVOLVING CREDIT LENDERS:
FLEET RETAIL FINANCE INC.
By /s/ Sally A. Sheehan
-------------------------------------
Name Sally A. Sheehan
-----------------------------------
Title Director
----------------------------------
THE CIT GROUP / BUSINESS CREDIT, INC.
By /s/ Michael Gardner
-------------------------------------
Name Michael Gardner
-----------------------------------
Title Vice President
----------------------------------
Page 5
6
FOOTHILL CAPITAL CORPORATION
By /s/ Eileen Quinn
-------------------------------------
Name Eileen Quinn
-----------------------------------
Title Vice President
----------------------------------
THE TERM LENDER:
BACK BAY CAPITAL FUNDING LLC
By /s/ Michael L. Pizette
-------------------------------------
Name Michael L. Pizette
-----------------------------------
Title Managing Director
----------------------------------
Page 6
7
THE GYMBOREE CORPORATION
(" LEAD BORROWER")
By /s/ Alison L. May
-------------------------
Print Name: Alison L. May
-------------------------
Title: EVP, COO, CFO
-------------------------
"BORROWERS":
GYMBOREE MANUFACTURING, INC.
By /s/ Alison L. May
-------------------------
Print Name: Alison L. May
-------------------------
Title: EVP, COO, CFO
-------------------------
GYMBOREE OPERATIONS, INC.
By /s/ Alison L. May
-------------------------
Print Name: Alison L. May
-------------------------
Title: EVP, COO, CFO
-------------------------
GYMBOREE PLAY PROGRAMS, INC.
By /s/ Alison L. May
-------------------------
Print Name: Alison L. May
-------------------------
Title: EVP, COO, CFO
-------------------------
GYMBOREE RETAIL STORES, INC.
By /s/ Alison L. May
-------------------------
Print Name: Alison L. May
-------------------------
Title: EVP, COO, CFO
-------------------------
Page 7
8
THE GYMBOREE STORES, INC.
By /s/ Alison L. May
-------------------------
Print Name: Alison L. May
-------------------------
Title: EVP, COO, CFO
-------------------------
GYM-MARK, INC.
By /s/ Alison L. May
-------------------------
Print Name: Alison L. May
-------------------------
Title: EVP, COO, CFO
-------------------------
Page 8
9
EXHIBIT 2:2-24
REVOLVING CREDIT LENDERS AND COMMITMENTS
ALL DOLLAR AMOUNTS ARE MILLIONS
------------------------------------------------------------------------------------------------------
REVOLVING REVOLVING
REVOLVING REVOLVING CREDIT CREDIT
CREDIT CREDIT DOLLAR PERCENTAGE
FROM TO CEILING ($) LENDER COMMITMENT ($) COMMITMENT
------------------------------------------------------------------------------------------------------
Closing October 8, 2000 75.0
------------------------------------------------------------------------------------------------------
Fleet(1) 27.5 36.67%
------------------------------------------------------------------------------------------------------
CIT(2) 20.0 26.67%
------------------------------------------------------------------------------------------------------
Foothill(3) 27.5 36.67%
------------------------------------------------------------------------------------------------------
October 9, 2000 October 15, 2000 87.5
------------------------------------------------------------------------------------------------------
Fleet 32.1 36.67%
------------------------------------------------------------------------------------------------------
CIT 23.3 26.67%
------------------------------------------------------------------------------------------------------
Foothill 32.1 36.67%
------------------------------------------------------------------------------------------------------
October 16, 2000 October 22, 2000 86.5
------------------------------------------------------------------------------------------------------
----------
(1) "Fleet" refers to Fleet Retail Finance Inc.
(2) "CIT" refers to The CIT Group / Business Credit Inc.
(3) "Foothill" refers to Foothill Capital Corporation
10
------------------------------------------------------------------------------------------------------
REVOLVING REVOLVING
REVOLVING REVOLVING CREDIT CREDIT
CREDIT CREDIT DOLLAR PERCENTAGE
FROM TO CEILING ($) LENDER COMMITMENT ($) COMMITMENT
------------------------------------------------------------------------------------------------------
Fleet 31.7 36.67%
------------------------------------------------------------------------------------------------------
CIT 23.1 26.67%
------------------------------------------------------------------------------------------------------
Foothill 31.7 36.67%
------------------------------------------------------------------------------------------------------
October 23, 2000 October 29, 2000 84.5
------------------------------------------------------------------------------------------------------
Fleet 31.0 36.67%
------------------------------------------------------------------------------------------------------
CIT 22.5 26.67%
------------------------------------------------------------------------------------------------------
Foothill 31.0 36.67%
------------------------------------------------------------------------------------------------------
October 30, 2000 November 5, 2000 81.5
------------------------------------------------------------------------------------------------------
Fleet 29.9 36.67%
------------------------------------------------------------------------------------------------------
CIT 21.7 26.67%
------------------------------------------------------------------------------------------------------
Foothill 29.9 36.67%
------------------------------------------------------------------------------------------------------
November 6, 2000 November 12, 2000 77.5
------------------------------------------------------------------------------------------------------
Fleet 28.4 36.67%
------------------------------------------------------------------------------------------------------
CIT 20.7 26.67%
------------------------------------------------------------------------------------------------------
Foothill 28.4 36.67%
------------------------------------------------------------------------------------------------------
11
------------------------------------------------------------------------------------------------------
REVOLVING REVOLVING
REVOLVING REVOLVING CREDIT CREDIT
CREDIT CREDIT DOLLAR PERCENTAGE
FROM TO CEILING ($) LENDER COMMITMENT ($) COMMITMENT
------------------------------------------------------------------------------------------------------
November 13, 2000 November 24, 2000 84.0
------------------------------------------------------------------------------------------------------
Fleet 30.8 36.67%
------------------------------------------------------------------------------------------------------
CIT 22.4 26.67%
------------------------------------------------------------------------------------------------------
Foothill 30.8 36.67%
------------------------------------------------------------------------------------------------------
November 25, 2000 August 2, 2001 75.0
------------------------------------------------------------------------------------------------------
Fleet 27.5 36.67%
------------------------------------------------------------------------------------------------------
CIT 20.0 26.67%
------------------------------------------------------------------------------------------------------
Foothill 27.5 36.67%
------------------------------------------------------------------------------------------------------
August 3, 2001 Maturity Date 85.0
------------------------------------------------------------------------------------------------------
Fleet 31.2 36.706%
------------------------------------------------------------------------------------------------------
Foothill 30.0 35.294
------------------------------------------------------------------------------------------------------
CIT 23.8 28.0
------------------------------------------------------------------------------------------------------