Unassociated Document


    
      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/ Lynda
              Gustafson
	 	 	
              
                
                  

                

                Name:
                  Lynda Gustafson 

              

              Title:
                Vice President, Corporate Controller

               

            
	 	 	 
	 	
              GYMBOREE
                MANUFACTURING, INC.,
                

              as
                a Borrower

            
	 	 	 
	 	 	 
	 	By: 	/s/ Lynda
              Gustafson
	 	 	
              
                
                  
Name:
                  Lynda Gustafson 

              

              Title:
                Vice President, Corporate Controller

               

            
	 	 	 
	 	
              GYM-MARK,
                INC.,

              as
                a Borrower

            
	 	 	 
	 	 	 
	 	By:	/s/ Lynda
              Gustafson 
	 	 	
              
                
                  
Name:
                  Lynda Gustafson 

              

              Title:
                Vice President, Corporate Controller

               

            
	 	 	 
	 	
              GYMBOREE
                RETAIL STORES, INC.,

              as
                a Borrower

            
	 	 	 
	 	 	 
	 	By:	/s/ Lynda
              Gustafson 
	 	 	
              
                
                  

                

              

              Name:
                Lynda Gustafson 

              Title:
                Vice President, Corporate Controller

               

            
	 	 	 
	 	
              GYMBOREE
                PLAY PROGRAMS, INC.,

              as
                a Borrower

            
	 	 	 
	 	 	 
	 	By:	/s/ Lynda
              Gustafson
	 	 	
              
                
                  
Name:
                  Lynda Gustafson 

              

              Title:
                Vice President, Corporate
                Controller

            


    

    



    
      
        
          Signature
            Page One to Tenth Amendment to Credit Agreement

           

        

         

      

      
         

        
          

        

      

      
         

        
        

      

    



    
      	 	
              GYMBOREE
                OPERATIONS, INC.,

              as
                a Borrower

            
	 	 	 
	 	 	 
	 	By:	/s/ Lynda
              Gustafson
	 	 	
              
                
Name:
                Lynda Gustafson 

              Title:
                Vice President, Corporate Controller

               

            
	 	 	 
	 	
              GYMBOREE,
                INC. (CANADA),

              as
                a Borrower

            
	 	 	 
	 	 	 
	 	By: 	/s/ Lynda
              Gustafson
	 	 	
              
                
                  
Name:
                  Lynda Gustafson 

              

              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/ Alex J.
              McCombs
	 	 	
              
                
                  
Name:
                  Alex J. McCombs

              

              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. 

            


      	 	
              315
                Montgomery Street

              13th
                Floor

              San
                Francisco CA 94104

            


    


    
      	
            	
              Attn:

            	
              Mr.
                Alex McCombs

            


    

    


     

    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