GUARANTEE
GUARANTEE dated as of July 1, 2003, made by each of the Persons listed
on Annex A hereto (the "Guarantors") in favor of CITICORP NORTH AMERICA, INC.,
as administrative agent (in such capacity, the "Administrative Agent") for the
lenders (the "Lenders") from time to time parties to the Revolving Credit
Agreement dated as of July 1, 2003 (as the same may be amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), among KinderCare
Learning Centers, Inc., a Delaware corporation (the "Borrower"), the Lenders,
Citibank, N.A., as Letter of Credit Issuer, the Administrative Agent, Credit
Suisse First Boston, acting through its Cayman Islands Branch, as Syndication
Agent, and UBS AG, Cayman Islands Branch, as Documentation Agent.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, (a) pursuant to the Credit Agreement, the Lenders have
severally agreed to make Loans to the Borrower and the Letter of Credit Issuer
has agreed to issue Letters of Credit for the account of the Borrower
(collectively, the "Extensions of Credit") upon the terms and subject to the
conditions set forth therein and (b) one or more Lenders or affiliates of
Lenders may from time to time enter into Hedge Agreements with the Borrower;
WHEREAS, each Guarantor is a Domestic Subsidiary of the Borrower;
WHEREAS, the proceeds of the Extensions of Credit will be used in part
to enable the Borrower to make valuable transfers to the Guarantors in
connection with the operation of their respective businesses;
WHEREAS, the Borrower and the Guarantors are engaged in related
businesses, and each Guarantor will derive substantial direct and indirect
benefit from the making of the Extensions of Credit; and
WHEREAS, it is a condition precedent to the obligation of the Lenders
and the Letter of Credit Issuer to make their respective Extensions of Credit to
the Borrower under the Credit Agreement that the Guarantors shall have executed
and delivered this Guarantee to the Administrative Agent for the ratable benefit
of the Secured Parties;
1
NOW, THEREFORE, in consideration of the premises and to induce the
Agents, the Lenders and the Letter of Credit Issuer to enter into the Credit
Agreement and to induce the Lenders and the Letter of Credit Issuer to make
their respective Extensions of Credit to the Borrower under the Credit Agreement
and to induce one or more Lenders or affiliates of Lenders to enter into Hedge
Agreements with the Borrower, the Guarantors hereby agree with the
Administrative Agent, for the ratable benefit of the Secured Parties, as
follows:
1. Defined Terms. (a) Unless otherwise defined herein, terms defined
in the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement.
(b) As used herein, the term "Obligations" means the collective
reference to (i) the due and punctual payment of (x) the principal of and
premium, if any, and interest at the applicable rate provided in the Credit
Agreement (including interest accruing during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding) on the Loans, when and as due, whether
at maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, (y) each payment required to be made by the Borrower under the Credit
Agreement in respect of any Letter of Credit, when and as due, including
payments in respect of reimbursement of disbursements made by the Letter of
Credit Issuer, interest thereon and obligations to provide cash collateral in
connection therewith, and (z) all other monetary obligations, including fees,
costs, expenses and indemnities, whether primary, secondary, direct, contingent,
fixed or otherwise (including monetary obligations incurred during the pendency
of any bankruptcy, insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable in such proceeding), of the Borrower
or any other Credit Party to any of the Secured Parties under the Credit
Agreement and the other Credit Documents, (ii) the due and punctual performance
of all covenants, agreements, obligations and liabilities of the Borrower under
or pursuant to the Credit Agreement and the other Credit Documents, (iii) the
due and punctual payment and performance of all the covenants, agreements,
obligations and liabilities of each other Credit Party under or pursuant to this
Guarantee or the other Credit Documents, and (iv) unless otherwise agreed in
writing by the applicable Lender (or affiliate of a Lender) party thereto, the
due and punctual payment and performance of all obligations of each Credit Party
under each Hedge Agreement that (x) is in effect on the Closing Date with a
counterparty that is a Lender or an affiliate of a Lender as of the Closing Date
or (y) is entered into after the Closing Date with any counterparty that is a
Lender or an affiliate of a Lender at the time such Hedge Agreement is entered
into.
(c) As used herein, the term "Secured Parties" means (i) the Lenders,
(ii) the Letter of Credit Issuer, (iii) the Swingline Lender, (iv) the
Administrative Agent, (v) the Syndication Agent, (vi) the Documentation Agent,
(vii) each counterparty to a Hedge Agreement entered into with the Borrower the
obligations under which constitute Obligations, (viii) the beneficiaries of each
indemnification obligation undertaken by any Credit Party under any Credit
Document and (ix) any successors, indorsees, transferees and assigns of each of
the foregoing.
2
(d) References to "Lenders" in this Guarantee shall be deemed to
include affiliates of Lenders that may from time to time enter into Hedge
Agreements with the Borrower.
(e) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Guarantee shall refer to this Guarantee as a whole and
not to any particular provision of this Guarantee, and Section references are to
Sections of this Guarantee unless otherwise specified. The words "include",
"includes" and "including" shall be deemed to be followed by the phrase "without
limitation".
(f) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
2. Guarantee. (a) Subject to the provisions of Section 2(b), each of
the Guarantors hereby, jointly and severally, unconditionally and irrevocably,
guarantees, as primary obligor and not merely as surety, to the Administrative
Agent, for the ratable benefit of the Secured Parties, the prompt and complete
payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations.
(b) Anything herein or in any other Credit Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Credit Documents shall in no event exceed the amount that can be
guaranteed by such Guarantor under applicable federal and state laws relating to
the insolvency of debtors.
(c) Each Guarantor further agrees to pay any and all expenses
(including all fees, other charges and disbursements of counsel) that may be
paid or incurred by the Administrative Agent or any Secured Party in enforcing,
or obtaining advice of counsel in respect of, any rights with respect to, or
collecting, any or all of the Obligations and/or enforcing any rights with
respect to, or collecting against, such Guarantor under this Guarantee.
(d) Each Guarantor agrees that the Obligations may at any time and
from time to time exceed the amount of the liability of such Guarantor hereunder
without impairing this Guarantee or affecting the rights and remedies of the
Administrative Agent or any Secured Party hereunder.
(e) No payment or payments made by the Borrower, any of the
Guarantors, any other guarantor or any other Person or received or collected by
the Administrative Agent or any Secured Party from the Borrower, any of the
Guarantors, any other guarantor or any other Person by virtue of any action or
proceeding or any set-off or appropriation or application at any time or from
time to time in reduction of or in payment of the Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of any Guarantor
hereunder, which shall, notwithstanding any such payment or payments other than
payments made by such Guarantor in respect of the Obligations or payments
received or collected from such Guarantor in respect of the Obligations, remain
liable for the Obligations up to the maximum liability of such Guarantor
hereunder until the Obligations are paid in full, the Commitments are terminated
and no Letters of Credit shall be outstanding.
3
(f) Each Guarantor agrees that whenever, at any time or from time to
time, it shall make any payment to the Administrative Agent or any Secured Party
on account of its liability hereunder, it will notify the Administrative Agent
in writing that such payment is made under this Guarantee for such purpose.
3. Right of Contribution. Each Guarantor hereby agrees that to the
extent that a Guarantor shall have paid more than its proportionate share of any
payment made hereunder, such Guarantor shall be entitled to seek and receive
contribution from and against any other Guarantor hereunder who has not paid its
proportionate share of such payment. Each Guarantor's right of contribution
shall be subject to the terms and conditions of Section 5. The provisions of
this Section 3 shall in no respect limit the obligations and liabilities of any
Guarantor to the Administrative Agent and the Secured Parties, and each
Guarantor shall remain liable to the Administrative Agent and the Secured
Parties for the full amount guaranteed by such Guarantor hereunder.
4. Right of Set-off. After the occurrence and during the continuance
of an Event of Default, in addition to any rights and remedies of the Secured
Parties provided by law, each Secured Party shall have the right, without prior
notice to any Guarantor, any such notice being expressly waived by the
Guarantors to the extent permitted by applicable law, upon any amount becoming
due and payable on the Obligations (whether at the stated maturity, by
acceleration or otherwise) to set-off and appropriate and apply against such
amount any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Secured Party or any
branch or agency thereof to or for the credit or the account of any Guarantor.
Each Secured Party agrees promptly to notify the applicable Guarantor and the
Administrative Agent after any such set-off and application made by such Secured
Party; provided that the failure to give such notice shall not affect the
validity of such set-off and application.
5. No Subrogation. Notwithstanding any payment or payments made by any
of the Guarantors hereunder or any set-off or appropriation and application of
funds of any of the Guarantors by the Administrative Agent or any Secured Party,
no Guarantor shall be entitled to be subrogated to any of the rights of the
Administrative Agent or any Secured Party against the Borrower or any other
Credit Party or any collateral security or guarantee or right of offset held by
the Administrative Agent or any Secured Party for the payment of the
Obligations, nor shall any Guarantor seek or be entitled to seek any
contribution or reimbursement from the Borrower or any other Guarantor in
respect of payments made by such Guarantor hereunder, until all amounts owing to
the Administrative Agent and the Secured Parties by the Credit Parties on
account of the Obligations are paid in full, the Commitments are terminated and
no Letters of Credit shall be outstanding. If any amount shall be paid to any
Guarantor on account of such subrogation rights at any time when all the
Obligations shall not have been paid in full, such amount shall be held by such
Guarantor in trust for the Administrative Agent and
4
the Secured Parties, segregated from other funds of such Guarantor, and shall,
forthwith upon receipt by such Guarantor, be turned over to the Administrative
Agent in the exact form received by such Guarantor (duly indorsed by such
Guarantor to the Administrative Agent, if required), to be applied against the
Obligations, whether due or to become due, in such order as the Administrative
Agent may determine.
6. Amendments, etc. with Respect to the Obligations; Waiver of Rights.
Each Guarantor shall remain obligated hereunder notwithstanding that, without
any reservation of rights against any Guarantor and without notice to or further
assent by any Guarantor, (a) any demand for payment of any of the Obligations
made by the Administrative Agent or any Secured Party may be rescinded by such
party and any of the Obligations continued, (b) the Obligations, or the
liability of any other party upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by the Administrative
Agent or any Secured Party, (c) the Credit Agreement, the other Credit
Documents, the Letters of Credit and any other documents executed and delivered
in connection therewith and the Hedge Agreements and any other documents
executed and delivered in connection therewith may be amended, modified,
supplemented or terminated, in whole or in part, as the Administrative Agent (or
the Required Lenders, as the case may be, or, in the case of any Hedge
Agreement, the Lender party thereto) may deem advisable from time to time, and
(d) any collateral security, guarantee or right of offset at any time held by
the Administrative Agent or any Secured Party for the payment of the Obligations
may be sold, exchanged, waived, surrendered or released. Neither the
Administrative Agent nor any Secured Party shall have any obligation to protect,
secure, perfect or insure any Lien at any time held by it as security for the
Obligations or for this Guarantee or any property subject thereto. When making
any demand hereunder against any Guarantor, the Administrative Agent or any
Secured Party may, but shall be under no obligation to, make a similar demand on
the Borrower or any other Guarantor or guarantor, and any failure by the
Administrative Agent or any Secured Party to make any such demand or to collect
any payments from the Borrower or any other Guarantor or guarantor or any
release of the Borrower or any other Guarantor or guarantor shall not relieve
any Guarantor in respect of which a demand or collection is not made or any
Guarantor not so released of its several obligations or liabilities hereunder,
and shall not impair or affect the rights and remedies, express or implied, or
as a matter of law, of the Administrative Agent or any Secured Party against any
Guarantor. For the purposes hereof, "demand" shall include the commencement and
continuance of any legal proceedings.
7. Guarantee Absolute and Unconditional. Each Guarantor waives any and
all notice of the creation, contraction, incurrence, renewal, extension,
amendment, waiver or accrual of any of the Obligations, and notice of or proof
of reliance by the Administrative Agent or any Secured Party upon this Guarantee
or acceptance of this Guarantee, the Obligations or any of them, shall
conclusively be deemed to have been created, contracted or incurred, or renewed,
extended, amended, waived or accrued, in reliance upon this Guarantee; and all
dealings between the Borrower and any of the Guarantors, on the one hand, and
the Administrative Agent and the Secured Parties, on
5
the other hand, likewise shall be conclusively presumed to have been had or
consummated in reliance upon this Guarantee. Each Guarantor waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment to
or upon the Borrower or any of the Guarantors with respect to the Obligations.
Each Guarantor understands and agrees that this Guarantee shall be construed as
a continuing, absolute and unconditional guarantee of payment without regard to
(a) the validity, regularity or enforceability of the Credit Agreement, any
other Credit Document, any Letter of Credit or any Hedge Agreement, any of the
Obligations or any other collateral security therefor or guarantee or right of
offset with respect thereto at any time or from time to time held by the
Administrative Agent or any Secured Party, (b) any defense, set-off or
counterclaim (other than a defense of payment or performance) that may at any
time be available to or be asserted by the Borrower against the Administrative
Agent or any Secured Party or (c) any other circumstance whatsoever (with or
without notice to or knowledge of the Borrower or such Guarantor) that
constitutes, or might be construed to constitute, an equitable or legal
discharge of the Borrower for the Obligations, or of such Guarantor under this
Guarantee, in bankruptcy or in any other instance. When pursuing its rights and
remedies hereunder against any Guarantor, the Administrative Agent and any
Secured Party may, but shall be under no obligation to, pursue such rights and
remedies as it may have against the Borrower or any other Person or against any
collateral security or guarantee for the Obligations or any right of offset with
respect thereto, and any failure by the Administrative Agent or any Secured
Party to pursue such other rights or remedies or to collect any payments from
the Borrower or any other Person or to realize upon any such collateral security
or guarantee or to exercise any such right of offset, or any release of the
Borrower or any such other Person or any such collateral security, guarantee or
right of offset, shall not relieve such Guarantor of any liability hereunder,
and shall not impair or affect the rights and remedies, whether express, implied
or available as a matter of law, of the Administrative Agent and any Secured
Party against such Guarantor. This Guarantee shall remain in full force and
effect and be binding in accordance with and to the extent of its terms upon
each Guarantor and the successors and assigns thereof, and shall inure to the
benefit of the Administrative Agent and the Secured Parties, and their
respective successors, indorsees, transferees and assigns, until all the
Obligations and the obligations of each Guarantor under this Guarantee shall
have been satisfied by payment in full, the Commitments shall be terminated and
no Letters of Credit shall be outstanding, notwithstanding that from time to
time during the term of the Credit Agreement and any Hedge Agreement the Credit
Parties may be free from any Obligations. A Guarantor shall automatically be
released from its obligations hereunder and the Guarantee of such Guarantor
shall be automatically released upon the consummation of any transaction
permitted by the Credit Agreement as a result of which such Guarantor ceases to
be a Domestic Subsidiary of the Borrower. In connection with any such release,
the Administrative Agent shall execute and deliver to any Guarantor, at such
Guarantor's expense, all documents that such Guarantor shall reasonably request
to evidence such termination or release. Any execution and delivery of documents
pursuant to the preceding sentence of this Section 7 shall be without recourse
to or warranty by the Administrative Agent.
8. Reinstatement. This Guarantee shall continue to be effective, or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
any of the
6
Obligations is rescinded or must otherwise be restored or returned by the
Administrative Agent or any Secured Party upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the Borrower or any Guarantor, or
upon or as a result of the appointment of a receiver, intervenor or conservator
of, or trustee or similar officer for, the Borrower or any Guarantor or any
substantial part of its property, or otherwise, all as though such payments had
not been made.
9. Payments. Each Guarantor hereby guarantees that payments hereunder
will be paid to the Administrative Agent without set-off or counterclaim in
Dollars at the Administrative Agent's Office.
10. Representations and Warranties; Covenants. (a) Each Guarantor
hereby represents and warrants that the representations and warranties set forth
in Section 8 of the Credit Agreement as they relate to such Guarantor or in the
other Credit Documents to which such Guarantor is a party, each of which is
hereby incorporated herein by reference, are true and correct, and the
Administrative Agent and each Secured Party shall be entitled to rely on each of
them as if they were fully set forth herein.
(b) Each Guarantor hereby covenants and agrees with the Administrative
Agent and each Secured Party that, from and after the date of this Guarantee
until the Obligations are paid in full, the Commitments are terminated and no
Letter of Credit remains outstanding, such Guarantor shall take, or shall
refrain from taking, as the case may be, all actions that are necessary to be
taken or not taken so that no violation of any provision, covenant or agreement
contained in Section 9 or 10 of the Credit Agreement, and so that no Default or
Event of Default, is caused by any act or failure to act of such Guarantor or
any of its Subsidiaries.
11. Authority of Agent. Each Guarantor acknowledges that the rights
and responsibilities of the Administrative Agent under this Guarantee with
respect to any action taken by the Administrative Agent or the exercise or
non-exercise by the Administrative Agent of any option, right, request, judgment
or other right or remedy provided for herein or resulting or arising out of this
Guarantee shall, as between the Administrative Agent and the Secured Parties, be
governed by the Credit Agreement and by such other agreements with respect
thereto as may exist from time to time among them, but, as between the
Administrative Agent and such Guarantor, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Secured Parties with full
and valid authority so to act or refrain from acting, and no Guarantor shall be
under any obligation, or entitlement, to make any inquiry respecting such
authority.
12. Notices. All notices, requests and demands pursuant hereto shall
be made in accordance with Section 13.2 of the Credit Agreement; provided that
any such notice, request or demand to or upon any Guarantor shall be addressed
to such Guarantor at the notice address set forth under its signature below.
13. Counterparts. This Guarantee may be executed by one or more of the
parties hereto on any number of separate counterparts (including by facsimile or
other electronic transmission), and all of such counterparts taken together
shall be deemed to
7
constitute one and the same instrument. A set of the counterparts of this
Guarantee signed by all the parties hereto shall be lodged with the
Administrative Agent.
14. Severability. Any provision of this Guarantee that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
15. Integration. This Guarantee and the other Credit Documents
represent the agreement of each Guarantor and the Administrative Agent and the
Secured Parties with respect to the subject matter hereof and there are no
promises or representations by the Administrative Agent or any Secured Party
relative to the subject matter hereof not reflected herein or therein.
16. Amendments in Writing; No Waiver; Cumulative Remedies. (a) None of
the terms or provisions of this Guarantee may be waived, amended, supplemented
or otherwise modified except by a written instrument executed by each affected
Guarantor(s) and the Administrative Agent in accordance with Section 13.1 of the
Credit Agreement.
(b) Neither the Administrative Agent nor any Secured Party shall by
any act (except by a written instrument pursuant to Section 16(a)), delay,
indulgence, omission or otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any Default or Event of Default or in any
breach of any of the terms and conditions hereof. No failure to exercise, nor
any delay in exercising, on the part of the Administrative Agent or any Secured
Party, any right, remedy, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. A waiver by the
Administrative Agent or any Secured Party of any right or remedy hereunder on
any one occasion shall not be construed as a bar to any right or remedy that the
Administrative Agent or any Secured Party would otherwise have on any future
occasion.
(c) The rights, remedies, powers and privileges herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of any
other rights or remedies provided by law.
17. Section Headings. The Section headings used in this Guarantee are
for convenience of reference only and are not to affect the construction hereof
or be taken into consideration in the interpretation hereof.
18. Successors and Assigns. This Guarantee shall be binding upon the
successors and assigns of each Guarantor and shall inure to the benefit of the
Administrative Agent and the Secured Parties and their successors and assigns,
except that no Guarantor may assign, transfer or delegate any of its rights or
obligations under this Guarantee without the prior written consent of the
Administrative Agent.
8
19. WAIVER OF JURY TRIAL. EACH GUARANTOR HEREBY AND, BY ACCEPTANCE OF
THE BENEFITS HEREOF, THE ADMINISTRATIVE AGENT AND EACH SECURED PARTY IRREVOCABLY
AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS GUARANTEE, ANY OTHER CREDIT DOCUMENT OR ANY LETTER OF CREDIT
AND FOR ANY COUNTERCLAIM THEREIN.
20. Submission to Jurisdiction; Waivers. Each Guarantor hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Guarantee, any other Credit Document or any
Letter of Credit, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the courts of
the State of New York, the courts of the United States of America for the
Southern District of New York and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to such
Guarantor at its address referred to in Section 12 or at such other address
of which the Administrative Agent shall have been notified pursuant
thereto; (d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to
in this Section 20 any special, exemplary, punitive or consequential
damages.
21. GOVERNING LAW. THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
22. Additional Guarantors. Pursuant to Section 9.11 of the Credit
Agreement, (a) any Domestic Subsidiary (other than any Unrestricted Subsidiary,
Acquisition Subsidiary, Real Estate Financing Entity or, to the extent permitted
pursuant to Sections 10.1(j) or 10.1(k) of the Credit Agreement, any Restricted
Subsidiary or any acquired Person (as defined in Section 10.1(k) of the Credit
Agreement)) formed or otherwise purchased or acquired after the date of this
Guarantee and (b) any Subsidiary that is not a Domestic Subsidiary on the date
of this Guarantee but subsequently becomes
9
a Domestic Subsidiary (other than any Unrestricted Subsidiary, Acquisition
Subsidiary or Real Estate Financing Entity) is required, in each case promptly
after such formation, purchase, acquisition or transformation, to execute a
supplement to this Guarantee, substantially in the form of Annex B hereto, in
order to become a Guarantor. Upon execution and delivery by the Administrative
Agent and any such Subsidiary of an instrument substantially in the form of
Annex B hereto, such Subsidiary shall become a Guarantor hereunder with the same
force and effect as if originally named as a Guarantor herein. The execution and
delivery of such instrument shall not require the consent of any Guarantor
hereunder. The rights and obligations of each Guarantor hereunder shall remain
in full force and effect notwithstanding the addition of any new Guarantor as a
party to this Guarantee.
10
IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee
to be duly executed and delivered by its duly authorized officer as of the day
and year first above written.
EACH SUBSIDIARY GUARANTOR LISTED ON
ANNEX A HERETO,
By: /s/ XXX X. XXXXXXXXX
------------------------------------
Name: Xxx X. Xxxxxxxxx
Title: Senior Vice President
and General Counsel
Address for Notices for each Guarantor:
000 XX Xxxxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxx 00000
Attention: Xxx Xxxxxxxxx, Esq.
Fax: (000) 000-0000
With a copy to:
KINDERCARE LEARNING CENTERS, INC.
In care of Kohlberg Kravis Xxxxxxx
& Co., L.P.
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxx
Fax: 000-000-0000
11
ANNEX A
TO THE GUARANTEE AGREEMENT
SUBSIDIARY GUARANTORS
KinderCare Real Estate, LLC
KC Development, LLC
KC Distance Learning, Inc.
Mini-Skools, Inc.
Mulberry Child Care Centers, Inc.
12
ANNEX B
TO THE GUARANTEE AGREEMENT
SUPPLEMENT NO. [ ] dated as of [ ], to the Guarantee dated as of July
1, 2003 (as the same may be amended, supplemented or otherwise modified from
time to time the "Guarantee"), made by each of the Persons listed on Annex A
thereto (the "Guarantors") in favor of Citicorp North America, Inc., as
administrative agent (in such capacity, the "Administrative Agent") for the
lenders (the "Lenders") from time to time parties to the Credit Agreement dated
as of July 1, 2003 (as the same may be amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among KinderCare Learning
Centers Inc., a Delaware corporation, the Lenders, the Administrative Agent,
Credit Suisse First Boston, acting through its Cayman Islands Branch, as
Syndication Agent, and UBS AG, Cayman Islands Branch, as Documentation Agent.
A. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Guarantee.
B. The Guarantors have entered into the Guarantee in order to induce the
Agents, the Lenders and the Letter of Credit Issuer to enter into the Credit
Agreement and to induce the Lenders and the Letter of Credit Issuer to make
their respective Extensions of Credit to the Borrower under the Credit Agreement
and to induce one or more Lenders or affiliates of Lenders to enter into Hedge
Agreements with the Borrower. Pursuant to Section 9.11 of the Credit Agreement,
(a) any Domestic Subsidiary (other than any Unrestricted Subsidiary, Acquisition
Subsidiary, Real Estate Financing Entity or, to the extent permitted pursuant to
Sections 10.1(j) or 10.1(k) of the Credit Agreement, any Restricted Subsidiary
or any acquired Person (as defined in Section 10.1(k) of the Credit Agreement))
formed or otherwise purchased or acquired after the date of the Guarantee and
(b) any Subsidiary that is not a Domestic Subsidiary on the date of the
Guarantee but subsequently becomes a Domestic Subsidiary (other than any
Unrestricted Subsidiary, Acquisition Subsidiary or Real Estate Financing Entity)
is required, in each case promptly after such formation, purchase, acquisition
or transformation, to execute a supplement to the Guarantee, substantially in
the form of Annex B thereto, in order to become a Guarantor. Section 22 of the
Guarantee provides that such Subsidiaries shall become Guarantors under the
Guarantee by execution and delivery of an instrument substantially in the form
of this Supplement. Each undersigned Subsidiary (each, a "New Guarantor") is
executing this Supplement in accordance with the requirements of the Credit
Agreement to become a Guarantor under the Guarantee in order to induce the
Lenders and the Letter of Credit Issuer to make additional Extensions of Credit
and as consideration for Extensions of Credit previously made.
1
Accordingly, the Administrative Agent and the New Guarantors agree as
follows:
1. In accordance with Section 22 of the Guarantee, each New Guarantor by
its signature below becomes a Guarantor under the Guarantee with the same force
and effect as if originally named therein as a Guarantor and each New Guarantor
hereby (a) agrees to all the terms and provisions of the Guarantee applicable to
it as a Guarantor thereunder and (b) represents and warrants that the
representations and warranties made by it as a Guarantor thereunder are true and
correct on and as of the date hereof. In furtherance of the foregoing, each New
Guarantor does hereby, jointly and severally, unconditionally and irrevocably,
guarantee, as primary obligor and not merely as surety, to the Administrative
Agent, for the ratable benefit of the Secured Parties, the prompt and complete
payment and performance when due (whether at stated maturity, by acceleration or
otherwise) of the Obligations. Each reference to a "Guarantors" in the Guarantee
shall be deemed to include the New Guarantor. The Guarantee is hereby
incorporated herein by reference.
2. Each New Guarantor represents and warrants to the Administrative Agent
and the other Secured Parties that this Supplement has been duly authorized,
executed and delivered by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and subject to general principles of
equity.
3. This Supplement may be executed by one or more of the parties hereto on
any number of separate counterparts (including by facsimile or other electronic
transmission), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. This Supplement shall become effective
as to each New Guarantor when the Administrative Agent shall have received
counterparts of this Supplement that, when taken together, bear the signatures
of such New Guarantor and the Administrative Agent.
4. Except as expressly supplemented hereby, the Guarantee shall remain in
full force and effect.
5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
6. Any provision of this Supplement that is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
7. All notices, requests and demands pursuant hereto shall be made in
accordance with Section 12 of the Guarantee; provided that any such notice,
request or demand to or upon any New Guarantor shall be addressed to such New
Guarantor at the notice address set forth under its signature below.
2
IN WITNESS WHEREOF, the New Guarantors and the Administrative Agent have
duly executed this Supplement to the Guarantee as of the day and year first
above written.
[Name of New Guarantor],
by: /s/
------------------------------------
Name:
Title:
Address:
CITICORP NORTH AMERICA, INC., as
Administrative Agent,
by: /s/
------------------------------------
Name:
Title:
Address:
3
