Exhibit 10.28


 


REVOLVING LINE OF CREDIT NOTE


 


	
  $25,000,000.00

  	
   

  	
  San
  Francisco, California

  
	
   

  	
   

  	
  May 15, 2009

  



 


FOR VALUE RECEIVED, the undersigned BEBE STORES, INC. (“Borrower”)
promises to pay to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”)
at its office at San Francisco RCBO, 420 Montgomery Street, 9th Floor, San
Francisco, California, or at such other place as the holder hereof may
designate, in lawful money of the United States of America and in immediately
available funds, the principal sum of Twenty Five Million Dollars
($25,000,000.00), or so much thereof as may be advanced and be outstanding,
with interest thereon, to be computed on each advance from the date of its
disbursement as set forth herein.


 


DEFINITIONS:


 


As used herein, the following terms shall have the meanings set forth
after each, and any other term defined in this Note shall have the meaning set
forth at the place defined:


 


(a)                                  “Business Day” means
any day except a Saturday, Sunday or any other day on which commercial banks in
California are authorized or required by law to close.


 


(b)                                 “Daily One Month LIBOR”
means, for any day, the rate of interest equal to LIBOR then in effect for
delivery for a one (1) month period.


 


(c)                                  “Fixed Rate Term”
means a period commencing on a Business Day and continuing for one (1) or
three (3) months, as designated by Borrower, during which all or a portion
of the outstanding principal balance of this Note bears interest determined in
relation to LIBOR; provided however, that no Fixed Rate Term may be selected
for a principal amount less than Two Hundred Fifty Thousand Dollars
($250,000.00); and provided further, that no Fixed Rate Term shall extend
beyond the scheduled maturity date hereof. 
If any Fixed Rate Term would end on a day which is not a Business Day,
then such Fixed Rate Term shall be extended to the next succeeding Business
Day.


 


(d)                                 “LIBOR” means the rate
per annum (rounded upward, if necessary, to the nearest whole 1/8 of 1%) and
determined pursuant to the following formula:


 


	
  LIBOR
  = 

  	
  Base LIBOR

  	
   

  
	
   

  	
  100% - LIBOR Reserve
  Percentage

  	
   

  



 


(i)                                     “Base LIBOR” means the
rate per annum for United States dollar deposits quoted by Bank (A) for
the purpose of calculating effective rates of interest for loans making
reference to LIBOR, as the Inter-Bank Market Offered Rate, with the
understanding that such rate is 


 

















 


quoted by Bank for the purpose of calculating effective rates of interest
for loans making reference thereto, on the first day of a Fixed Rate Term for
delivery of funds on said date for a period of time approximately equal to the
number of days in such Fixed Rate Term and in an amount approximately equal to
the principal amount to which such Fixed Rate Term applies, or (B) for the
purpose of calculating effective rates of interest for loans making reference
to the Daily One Month LIBOR Rate, as the Inter-Bank Market Offered Rate in
effect from time to time for delivery of funds for one (1) month in
amounts approximately equal to the principal amount of such loans.  Borrower understands and agrees that Bank may
base its quotation of the Inter-Bank Market Offered Rate upon such offers or
other market indicators of the Inter-Bank Market as Bank in its discretion
deems appropriate including, but not limited to, the rate offered for U.S. dollar
deposits on the London Inter-Bank Market.


 


(ii)                                  “LIBOR Reserve
Percentage” means the reserve percentage prescribed by the Board of Governors
of the Federal Reserve System (or any successor) for “Eurocurrency Liabilities”
(as defined in Regulation D of the Federal Reserve Board, as amended), adjusted
by Bank for expected changes in such reserve percentage during the applicable
term of this Note.


 


INTEREST:


 


(a)                                  Interest.  The outstanding principal balance of this
Note shall bear interest (computed on the basis of a 360-day year, actual days
elapsed) either (i) at a fluctuating rate per annum determined by Bank to
be one and three-quarters percent (1.75%) above the Daily One Month LIBOR Rate
in effect from time to time, or (ii) at a fixed rate per annum determined
by Bank to be one and three-quarters percent (1.75%) above LIBOR in effect on
the first day of the applicable Fixed Rate Term.  When interest is determined in relation to
the Daily One Month LIBOR Rate, each change in the interest rate shall become effective
each Business Day that the Bank determines that the Daily One Month LIBOR Rate
has changed.  Bank is hereby authorized
to note the date, principal amount and interest rate applicable thereto and any
payments made thereon on Bank’s books and records (either manually or by
electronic entry) and/or on any schedule attached to this Note, which notations
shall be prima facie evidence of the accuracy of the information noted, absent manifest error.


 


(b)                                 Selection of Interest
Rate Options.  At any time any portion of
this Note bears interest determined in relation to LIBOR for a Fixed Rate Term,
it may be continued by Borrower at the end of the Fixed Rate Term applicable
thereto so that all or a portion thereof bears interest determined in relation
to the Daily One Month LIBOR Rate or to LIBOR for a new Fixed Rate Term
designated by Borrower.  At any time any
portion of this Note bears interest determined in relation to the Daily One
Month LIBOR Rate, Borrower may at any time convert all or a portion thereof so
that it bears interest determined in relation to LIBOR for a Fixed Rate Term
designated by Borrower.  At such time as
Borrower requests an advance hereunder or wishes to select an interest rate
determined in relation to the Daily One Month LIBOR Rate or a Fixed Rate Term
for all or a portion of the outstanding principal balance hereof, and at the
end of each Fixed Rate Term, Borrower shall give Bank notice specifying: (i) the
interest rate option selected by Borrower; (ii) the principal amount
subject thereto; and (iii) for each LIBOR selection for a Fixed Rate Term,
the length of the applicable Fixed Rate Term. 
Any such notice may be given by telephone (or such 


 

















 


other
electronic method as Bank may permit) so long as, with respect to each LIBOR
selection for a Fixed Rate Term, (A) if requested by Bank, Borrower
provides to Bank written confirmation thereof not later than three (3) Business
Days after such notice is given, and (B) such notice is given to Bank
prior to 10:00 a.m. on the first day of the Fixed Rate Term, or at a later
time during any Business Day if Bank, at its sole option but without obligation
to do so, accepts Borrower’s notice and quotes a fixed rate to Borrower.  If Borrower does not immediately accept a
fixed rate when quoted by Bank, the quoted rate shall expire and any subsequent
LIBOR request from Borrower shall be subject to a redetermination by Bank of
the applicable fixed rate.  If no
specific designation of interest is made at the time any advance is requested
hereunder or at the end of any Fixed Rate Term, Borrower shall be deemed to
have made a Daily One Month LIBOR Rate interest selection for such advance or
the principal amount to which such Fixed Rate Term applied.


 


(c)                                  Taxes and Regulatory
Costs.  Borrower shall pay to Bank
immediately upon demand, in addition to any other amounts due or to become due
hereunder, any and all (i) withholdings, interest equalization taxes,
stamp taxes or other taxes (except income and franchise taxes) imposed by any
domestic or foreign governmental authority and related in any manner to LIBOR,
and (ii) future, supplemental, emergency or other changes in the LIBOR
Reserve Percentage, assessment rates imposed by the Federal Deposit Insurance
Corporation, or similar requirements or costs imposed by any domestic or
foreign governmental authority or resulting from compliance by Bank with any
request or directive (whether or not having the force of law) from any central
bank or other governmental authority and related in any manner to LIBOR to the
extent they are not included in the calculation of LIBOR.  In determining which of the foregoing are
attributable to any LIBOR option available to Borrower hereunder, any
reasonable allocation made by Bank among its operations shall be conclusive and
binding upon Borrower.


 


(d)                                 Payment of
Interest.  Interest accrued on this Note
shall be payable on the first Business
Day of each month, commencing June 1, 2009.


 


(e)                                  Default Interest.  From and after the maturity date of this
Note, or such earlier date as all principal owing hereunder becomes due and
payable by acceleration or otherwise, the outstanding principal balance of this
Note shall bear interest until paid in full at an increased rate per annum
(computed on the basis of a 360-day year, actual days elapsed) equal to two
percent (2%) above the rate of
interest from time to time applicable to this Note.


 


BORROWING AND REPAYMENT:


 


(a)                                  Borrowing and
Repayment.  Borrower may from time to
time during the term of this Note borrow, partially or wholly repay its
outstanding borrowings, and reborrow, subject to all of the limitations, terms
and conditions of this Note and of any document executed in connection with or
governing this Note; provided however, that the total outstanding borrowings
under this Note shall not at any time exceed the principal amount stated
above.  The unpaid principal balance of
this obligation at any time shall be the total amounts advanced hereunder by
the holder hereof less the amount of principal payments made hereon by or for
Borrower, which balance may be endorsed hereon from time to time by the
holder.  The outstanding principal
balance of this Note shall be due and payable in full on May 15, 2012.


 


(b)                                 Advances.  Advances hereunder, to the total amount of
the principal sum stated above, may be made by the holder at the oral or
written request of (i) Walter Parks (or his successor 


 

















 


as
Chief Financial Officer, as evidenced by a certificate of incumbency delivered,
and in form and content acceptable, to Bank) acting alone, who is authorized to
request advances and direct the disposition of any advances until written
notice of the revocation of such authority is received by the holder at the
office designated above,  The holder
shall have no obligation to verify the
identity of any person requesting an advance, provided such person is believed in good faith by Bank to be the Chief
Financial Officer of Borrower.


 


(c)                                  Application of
Payments.  Each payment made on this Note
shall be credited first, to any interest then due and second, to the
outstanding principal balance hereof. 
All payments credited to principal shall be applied first, to the
outstanding principal balance of this Note which bears interest determined in
relation to the Daily One Month LIBOR Rate, if any, and second, to the
outstanding principal balance of this Note which bears interest determined in
relation to LIBOR, with such payments applied to the oldest Fixed Rate Term
first.


 


PREPAYMENT:


 


(a)                                  Daily One Month LIBOR
Rate.  Borrower may prepay principal on
any portion of this Note which bears interest determined in relation to the
Daily One Month LIBOR Rate at any time, in any amount and without penalty.


 


(b)                                 LIBOR.  Borrower may prepay principal on any portion
of this Note which bears interest determined in relation to LIBOR at any time
and in the minimum amount of Two Hundred Fifty Thousand Dollars ($250,000.00);
provided however, that if the outstanding principal balance of such portion of
this Note is less than said amount, the minimum prepayment amount shall be the entire
outstanding principal balance thereof. 
In consideration of Bank providing this prepayment option to Borrower,
or if any such portion of this Note shall become due and payable at any time
prior to the last day of the Fixed Rate Term applicable thereto by acceleration
or otherwise, Borrower shall pay to Bank immediately upon demand a fee which is
the sum of the discounted monthly differences for each month from the month of
prepayment through the month in which such Fixed Rate Term matures, calculated
as follows for each such month:


 


(i)                                     Determine the amount
of interest which would have accrued each month on the amount prepaid at the
interest rate applicable to such amount had it remained outstanding until the
last day of the Fixed Rate Term applicable thereto.


 


(ii)           Subtract from the
amount determined in (i) above the amount of interest which would have
accrued for the same month on the amount prepaid for the remaining term of such
Fixed Rate Term at LIBOR in effect on the date of prepayment for new loans made
for such term and in a principal amount equal to the amount prepaid.


 


(iii)          If the result obtained
in (ii) for any month is greater than zero, discount that difference by
LIBOR used in (ii) above.


 


Borrower
acknowledges that prepayment of such amount may result in Bank incurring
additional costs, expenses and/or liabilities, and that it is difficult to
ascertain the full extent of such costs, expenses and/or liabilities.  Borrower, therefore, agrees to pay the
above-described prepayment fee 


 

















 


and
agrees that said amount represents a reasonable estimate of the prepayment
costs, expenses and/or liabilities of Bank. 
If Borrower fails to pay any prepayment fee within three (3) Business Days after the due date, the amount
of such prepayment fee shall thereafter bear interest until paid at a rate per
annum two percent (2.00%) above the Daily One Month LIBOR Rate in effect from
time to time (computed on the basis of a 360-day year, actual days elapsed).


 


EVENTS OF DEFAULT:


 


This Note is made pursuant to and is subject to the terms and conditions
of that certain Credit Agreement between Borrower and Bank dated as of May 15, 2009, as amended from time to time
(the “Credit Agreement”).  Any default in
the payment or performance of any obligation under this Note, or any defined
event of default under the Credit Agreement, shall constitute an “Event of
Default” under this Note.


 


MISCELLANEOUS:


 


(a)                                  Remedies.  Upon the occurrence of any Event of Default,
the holder of this Note, at the holder’s option, may declare all sums of
principal and interest outstanding hereunder to be immediately due and payable
without presentment, demand, notice of nonperformance, notice of protest,
protest or notice of dishonor, all of which are expressly waived by Borrower,
and the obligation, if any, of the holder to extend any further credit
hereunder shall immediately cease and terminate.  Borrower shall pay to the holder immediately
upon demand the full amount of all payments, advances, charges, costs and
expenses, including reasonable attorneys’ fees (to include outside counsel fees
and all allocated costs of the holder’s in-house counsel), expended or incurred
by the holder in connection with the enforcement of the holder’s rights and/or
the collection of any amounts which become due to the holder under this Note,
and the prosecution or defense of any action in any way related to this Note,
including without limitation, any action for declaratory relief, whether
incurred at the trial or appellate level, in an arbitration proceeding or
otherwise, and including any of the foregoing incurred in connection with any
bankruptcy proceeding (including without limitation, any adversary proceeding,
contested matter or motion brought by Bank or any other person) relating to
Borrower or any other person or entity;
provided however, that Borrower shall not be liable for such fees if Bank does
not prevail in any such action.


 


(b)                                 Obligations Joint and
Several.  Should more than one person or
entity sign this Note as a Borrower, the obligations of each such Borrower
shall be joint and several.


 


(c)                                  Governing Law.  This Note shall be governed by and construed
in accordance with the laws of the State of California.


 

















 


IN WITNESS WHEREOF, the undersigned has executed this Note as of the date
first written above.


 


	
  BEBE
  STORES, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Walter Parks

  	
   

  
	
   

  	
  Walter Parks

  	
   

  
	
   

  	
  Chief
  Financial Officer, Chief Operating Officer