THIRTEENTH AMENDMENT TO CREDIT AGREEMENT

This THIRTEENTH AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated as of
August 24, 2010, 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, (ix) that certain Ninth Amendment to Credit Agreement dated as of
November 21, 2007, (x) that certain Tenth Amendment to Credit Agreement dated as
of August 8, 2008, (xi) that certain Eleventh Amendment to Credit Agreement
dated as of July 31, 2009 and (xii) that certain Twelfth Amendment to Credit
Agreement dated as of June 4, 2010 (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 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,

(a)           Section 1.01 of the Credit Agreement shall be amended by amending
and restating the definition “Applicable Rate” to read in full as follows:

“Applicable Rate” means, (a) prior to the Thirteenth 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) in conjunction with financial statements
provided pursuant to Section 6.01(a) or (b):

 

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Pricing
Level
 
Consolidated Adjusted
Leverage Ratio
 
Unused Line
Fee (%)
   
Eurodollar Rate Loans/
Letters of Credit (%)
   
Base Rate
Loans (%)
                               
1
 
> 3.00:1.00
    0.650       3.00       0.750  
2
 
> 2.50:1.00 but < 3.00:1.00
    0.550       2.50       0.500  
3
 
> 2.00:1.00 but < 2.50:1.00
    0.450       2.25       0.250  
4
 
< 2.00:1.00
    0.350       2.00       0.000  

and (b) at all times from and after the Thirteenth 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) in conjunction with financial statements provided
pursuant to Section 6.01(a) or (b):

Pricing
Level
 
Consolidated Adjusted
Leverage Ratio
   
Unused Line
Fee (%)
   
Eurodollar Rate Loans
(%)
   
Base Rate
Loans (%)
   
Letters of
Credit (%)
                                         
1
 
> 3.00:1.00
      0.60       3.00       0.750       1.500  
2
 
> 2.50:1.00 but < 3.00:1.00
      0.50       2.25       0.250       1.250  
3
 
> 2.00:1.00 but < 2.50:1.00
      0.40       2.00       0.000       1.125  
4
 
< 2.00:1.00
      0.30       1.75       0.000       1.000  

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) in conjunction with financial statements
provided pursuant to Section 6.01(a) or (b); 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)           The definition of “Applicable SLC Rate” is hereby deleted in its
entirety from Section 1.01 of the Credit Agreement.

(c)           Section 1.01 of the Credit Agreement shall be amended by amending
and restating the definition “Scheduled Maturity Date” to read in full as
follows:

“Scheduled Maturity Date” means September 1, 2011.

(c)           A new definition of “Thirteenth Amendment Date” is hereby added to
Section 1.01 of the Credit Agreement in the appropriate alphabetical order to
read as follows:

“Thirteenth Amendment Date” means the “Effective Date” as defined in that
Thirteenth Amendment to Credit Agreement dated as of August 24, 2010 among the
Borrowers and the Lender.

 

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(e)           Section 2.03(h)(i) of the Credit Agreement shall be amended to
read as follows:
 
(i)           Standby Letters of Credit.  The applicable Borrower shall pay to
the Lender a letter of credit fee for each Standby Letter of Credit equal to the
Applicable Rate times the daily maximum amount available to be drawn under such
Letter of Credit (whether or not such maximum amount is then in effect under
such Letter of Credit). Such letter of credit fees shall be computed on a
quarterly basis in arrears, and shall be due and payable on the first Business
Day after the end of each March, June, September and December, commencing with
the first such date to occur after the issuance of such Letter of Credit, on the
Maturity Date and thereafter on demand. If there is any change in the Applicable
Rate during any quarter, the daily maximum amount of each Letter of Credit shall
be computed and multiplied by the Applicable Rate separately for each period
during such quarter that such Applicable Rate was in effect. Such fees shall be
fully earned when paid and are non-refundable.
 
4.           Representations and Warranties. Each Borrower hereby represents and
warrants to the Lender as follows:
 
(a)           No Default has occurred and is continuing.

(b)           The execution, delivery and performance by the Borrowers of this
Amendment 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 January 30, 2010 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.

5.           Effective Date.

(a)           This Amendment will become effective as of the date shown first
above (the “Effective Date”), provided each of the conditions precedent set
forth in this Section 5 has been satisfied:

 

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(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 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.

(iii)          The Lender shall have received such documents and certifications
as the Lender may reasonably require to evidence that each Borrower is duly
organized or formed, validly existing, in good standing and qualified to engage
in business in each jurisdiction where its ownership, lease or operation of
properties or the conduct of its business requires such qualification, except to
the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect.

(iv)          The Borrowers shall have paid (A) to the Lender an upfront fee of
0.10% times the Commitment, and (B) to the Lender’s counsel, all reasonable
attorneys’ fees and expenses incurred by the Lender in connection with the
development, preparation, negotiation and delivery of this Amendment and the
other Amendment Documents.

(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.

 

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(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.  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.

(f)           Each Borrower covenants to pay to or reimburse the Lender, upon
demand, for all reasonable fees and expenses incurred in connection with the
development, preparation, negotiation, execution and delivery of this Amendment
and the other Amendment Documents.

(g)          This Amendment shall constitute a “Loan Document” under and as
defined in the Credit Agreement.

[Remainder of page intentionally left blank]

 

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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/ Jeffrey P. Harris
   
Name:
Jeffrey P. Harris
 
Title:
Chief Financial Officer
       
GYMBOREE MANUFACTURING, INC.,
 
as a Borrower
       
By:
/s/ Jeffrey P. Harris
   
Name:
Jeffrey P. Harris
 
Title:
Chief Financial Officer
       
GYM-MARK, INC.,
 
as a Borrower
       
By:
/s/ Jeffrey P. Harris
   
Name:
Jeffrey P. Harris
 
Title:
Chief Financial Officer
       
GYMBOREE RETAIL STORES, INC.,
 
as a Borrower
       
By:
/s/ Jeffrey P. Harris
   
Name:
Jeffrey P. Harris
 
Title:
Chief Financial Officer
       
GYMBOREE PLAY PROGRAMS, INC.,
 
as a Borrower
       
By:
/s/ Jeffrey P. Harris
   
Name:
Jeffrey P. Harris
 
Title:
Chief Financial Officer
     

 
THE GYMBOREE CORPORATION
THIRTEENTH AMENDMENT TO CREDIT AGREEMENT

 

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GYMBOREE OPERATIONS, INC.,
 
as a Borrower
       
By:
/s/ Jeffrey P. Harris
   
Name:
Jeffrey P. Harris
 
Title:
Chief Financial Officer
       
GYMBOREE, INC. (CANADA)
 
as a Borrower
       
By:
/s/ Jeffrey P. Harris
   
Name:
Jeffrey P. Harris
 
Title:
Chief Financial Officer
     
LENDER:
BANK OF AMERICA, N.A., as the Lender
       
By:
Brandon J. Kirkbride
   
Name:
Brandon J. Kirkbride
 
Title:
Vice President

 
THE GYMBOREE CORPORATION
THIRTEENTH AMENDMENT TO CREDIT AGREEMENT

 

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