GUARANTEE
GUARANTEE dated as of September 2, 1999, made by KINDERCARE LEARNING
CENTERS, INC., a Delaware corporation (the "Company") and the other parties
hereto, as joint and several guarantors hereunder (together with the Company and
any other Subsidiary of the Company that may become a party hereto as provided
herein, the "Guarantors" and individually, a "Guarantor"), in favor of the
Beneficiaries (as hereinafter defined).
Preliminary Statement
The Guarantors wish to induce (i) THE KINDERCARE REALTY TRUST 1999
(the "Lessor") to enter into the Lease and the other Operative Agreements to
which it is a party; (ii) the Lenders to enter into the Credit Agreement and the
other Operative Agreements to which they are party; and (iii) SCOTIABANC INC.
(the "Investor") to enter into the Participation Agreement (as hereinafter
defined) and the other Operative Agreements to which they are party.
NOW, THEREFORE, in consideration of the premises contained herein and
to induce (i) the Lessor to enter into the Lease and the other Operative
Agreements to which it is a party; (ii) the Lenders to enter into the Credit
Agreement and the other Operative Agreements to which they are party; and (iii)
the Investor to enter into the Participation Agreement and the other Operative
Agreements to which it is a party, the Guarantors hereby agree for the benefit
of the Lessor, the Agent, for the ratable benefit of the Lenders, and the
Investor and their respective successors and assigns (individually a
"Beneficiary", collectively, the "Beneficiaries"), as follows:
1. Defined Terms. (a) Capitalized terms not otherwise defined herein
(including in the Preliminary Statement) shall have the meanings ascribed to
them in Annex A to the Participation Agreement dated as of the date hereof among
Kindercare Learning Centers, Inc. (the "Lessee"), the Lessor, the Investor, the
Trust Company, The Chase Manhattan Bank, as agent (the "Agent") and the several
banks and financial institutions from time to time party thereto (the
"Lenders"), as the same may from time to time be amended, supplemented or
otherwise modified (the "Participation Agreement").
(b) As used herein, the following terms shall have the following
meanings:
"Contribution Obligations" means the collective reference to the
outstanding amount of the Investor Contributions and the Investor Yield with
respect thereto and all rights of the Investor to receive distributions under
the Trust Agreement and any of the other Operative Agreements.
"Guaranteed Obligations" means the collective reference to (i)
the Note Obligations, (ii) the Contribution Obligations and (iii) the Lease
Obligations and, with respect to each such obligation, interest accruing thereon
at the applicable rate provided in the Operative
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Agreements after maturity and interest accruing at the then applicable rate
provided in the Operative Agreements after the filing of any petition in
bankruptcy, or the commencement of an insolvency, reorganization or like
proceeding, whether or not a claim for post-filing or post-petition interest is
allowed in such proceeding and whether such obligations are direct or indirect,
absolute or contingent, due or to become due, or now existing or hereinafter
incurred, which may arise, under, out of or in connection with any of the
Operative Agreements, any other document made, delivered or given in connection
therewith, in each case whether on account of principal, interest, Investor
Contributions or Investor Yield, reimbursement obligations, fees, indemnities,
costs, expenses, or payment obligations (including, without limitation, all fees
and disbursements of counsel to any of the Beneficiaries).
"Lease Obligations" means the collective reference to the payment
obligations and undertakings applicable to the Lessee contained in or arising
under the Lease or any of the other Operative Agreements to which the Lessee is
a party, including, but not limited to, the full and punctual payment by the
Lessee, when due, of any and all Rent, the payments required pursuant to Section
17.2 of the Lease, the Purchase Option Price and the Maximum Residual Guarantee
Amount.
"Note Obligations" means the collective reference to the unpaid
principal of and interest on the Notes and all other payment obligations and
liabilities of the Lessor to the Agent and the Lenders under the Notes, the
Credit Agreement and any of the other Operative Agreements.
2. Guarantee. (a) Subject to the provisions of paragraph 2(b), (c) and
(d), the Guarantors hereby, jointly and severally, unconditionally and
irrevocably guaranty to the Beneficiaries and their respective successors,
endorsees, transferees and assigns the prompt and complete payment when due
(whether at the stated maturity, by acceleration or otherwise) of the Guaranteed
Obligations.
(b) Anything to the contrary notwithstanding, (i) if a Construction
Risk Event has occurred and if no other Lease Event of Default or Lease Default
has occurred and is continuing at such time, the obligations of the Guarantors
hereunder shall be limited to the Note Obligations in the amount of the
Non-Completion Amount and (ii)(A) if no Lease Event of Default or Lease Default
on the Maturity Date has occurred and is continuing, the obligations of the
Guarantors hereunder shall be limited to the unpaid principal of and interest on
the Tranche A Notes and (B) if any (x) Lease Event of Default or (y) on the
Maturity Date, any Lease Default (other than or in addition to a Construction
Risk Event) has occurred and is continuing, the Guarantors shall be liable for
the Guaranteed Obligations.
(c) Without affecting any of the Construction Agent's obligations
under Section 5.4 of the Agency Agreement, anything to the contrary
notwithstanding, this Guarantee shall not include any Construction Period
Amount.
(d) Anything herein or in any other Operative Agreement to the
contrary notwithstanding, the maximum liability of each Guarantor hereunder and
under the other Operative Agreement shall in no event exceed the amount which
can be guaranteed by such Guarantor under applicable federal and state laws
relating to the insolvency of debtors.
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(e) Each Guarantor further agrees to pay any and all expenses
(including, without limitation, all fees and disbursements of counsel) which may
be paid or incurred by any Agent, Lender or Investor in enforcing, or obtaining
advice of counsel in respect of, any rights with respect to, or collecting, any
or all of the Guaranteed Obligations and/or enforcing any rights with respect
to, or collecting against, such Guarantor under this Guarantee. This Guarantee
shall remain in full force and effect until the Guaranteed Obligations are paid
in full and the Commitments are terminated, notwithstanding that from time to
time prior thereto the Borrower may be free from any Guaranteed Obligations.
(f) Each Guarantor agrees that the Guaranteed 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 Agent or any Beneficiary hereunder.
(g) 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 Agent or any Beneficiary 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 Guaranteed 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 Guaranteed Obligations or
payments received or collected from such Guarantor in respect of the Guaranteed
Obligations), remain liable for the Guaranteed Obligations up to the maximum
liability of such Guarantor hereunder until the Guaranteed Obligations are paid
in full and the Commitments are terminated.
3. Right of Set-off. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence and during the continuance of an Event of
Default, the Agent and each Beneficiary is hereby authorized at any time or from
time to time, without presentment, demand, protest or other notice of any kind
to the Borrower, any Guarantor or to any other Person, any such notice being
hereby expressly waived, to set off and to appropriate and apply any and all
deposits (general or special) and any other Indebtedness at any time held or
owing by the Agent or such Beneficiary (including, without limitation, by
branches and agencies of the Agent or such Beneficiary wherever located) to or
for the credit or the account of such Guarantor against and on account of the
obligations and liabilities of such Guarantor hereunder or under any of the
other Operative Agreements, and all other claims of any nature or description
arising out of or connected with this Guarantee or any other Operative
Agreement, irrespective of whether the Agent or such Beneficiary shall have made
any demand hereunder and although said obligations, liabilities or claims, or
any of them, shall be contingent or unmatured.
4. No Subrogation. Notwithstanding any payment or payments made by the
Guarantors hereunder or any set-off or application of funds of the Guarantors by
any Beneficiary, no Guarantor shall be entitled to exercise or enforce any
subrogation rights of the Agent or any Beneficiary against the Borrower or any
other Person or any collateral security or guarantee or right of offset held by
the Agent or any Beneficiary for the payment of the Guaranteed Obligations, nor
shall any Guarantor seek or be entitled to seek any contribution or
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reimbursement from the Borrower or any other Person in respect of payments made
by such Guarantor hereunder, until all amounts owing to the Agent and the
Beneficiaries by the Borrower on account of the Guaranteed Obligations and all
amounts owing hereunder are paid in full and the Commitments are terminated. If
any amount shall be paid to any Guarantor on account of such subrogation rights
at any time when all of the Guaranteed Obligations and all amounts owing
hereunder shall not have been paid in full or the Commitments shall not have
been terminated, such amount shall be held by such Guarantor in trust for the
Agent and the Beneficiaries, segregated from other funds of such Guarantor, and
shall, forthwith upon receipt by such Guarantor, be turned over to the Agent in
the exact form received by such Guarantor (duly indorsed by such Guarantor to
the Agent, if required), to be applied against the Guaranteed Obligations,
whether matured or unmatured, in such order as the Agent may determine.
5. Amendments, etc. with respect to the Guaranteed Obligations; Waiver
of Rights. The Guarantors shall remain obligated hereunder notwithstanding that,
without any reservation of rights against the Guarantors and without notice to
or further assent by the Guarantors, any demand for payment of any of the
Guaranteed Obligations made by the Agent or any Beneficiary may be rescinded by
such party and any of the Guaranteed Obligations continued, and the Guaranteed
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 Agent or any Beneficiary, and the Credit Agreement, the Participation
Agreement and the other Operative Agreements may be amended, modified,
supplemented or terminated, in whole or in part, as the Agent (or the Required
Lenders or Required Investors, as the case may be) may deem advisable from time
to time in accordance with the terms thereof, and any collateral security,
guarantee or right of offset at any time held by the Agent or any Beneficiary
for the payment of the Guaranteed Obligations may be sold, exchanged, waived,
surrendered or released. Neither the Agent nor any Beneficiary shall have any
obligation to protect, secure, perfect or insure any Lien at any time held by it
as security for the Guaranteed Obligations or for this Guarantee or any property
subject thereto. When making any demand hereunder against the Guarantors, the
Agent or any Beneficiary may, but shall be under no obligation to, make a
similar demand on the Borrower or any other guarantor, and any failure by the
Agent or any Beneficiary to make any such demand or to collect any payments from
the Borrower or any other guarantor or any release of the Borrower or such other
guarantor shall not relieve the Guarantors from their obligations under this
Guarantee, and shall not impair or affect the rights and remedies, express or
implied, or as a matter of law, of the Agent or any Beneficiary against the
Guarantors. For the purposes hereof "demand" shall include the commencement and
continuance of any legal proceedings.
6. Guarantee Absolute and Unconditional. Each Guarantor waives any and
all notice of the creation, renewal, extension or accrual of any of the
Guaranteed Obligations and notice of or proof of reliance by the Agent or any
Beneficiary upon this Guarantee or acceptance of this Guarantee, the Guaranteed
Obligations, and any of them, shall conclusively be deemed to have been created,
contracted or incurred, or renewed, extended, amended or waived, in reliance
upon this Guarantee; and all dealings between the Borrower and such Guarantor,
on the one hand, and the Agent and the Beneficiaries, on 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
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to or upon the Borrower or such Guarantor with respect to the Guaranteed
Obligations except for notices specifically required by the Operative
Agreements. Each Guarantor understands and agrees that this Guarantee shall be
construed as a continuing, absolute and unconditional guarantee and surety of
payment without regard to (a) the validity, regularity or enforceability of the
Credit Agreement or any other Operative Agreement, any of the Guaranteed
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 Agent
or any Beneficiary, (b) any defense, set-off or counterclaim (other than a
defense of payment or performance) which may at any time be available to or be
asserted by the Borrower or such Guarantor against the Agent or any Beneficiary,
or (c) any other circumstance whatsoever (with or without notice to or knowledge
of the Borrower or such Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of the Borrower for the Guaranteed
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 Agent and any Beneficiary 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 Guaranteed
Obligations or any right of offset with respect thereto, and any failure by the
Agent or any Beneficiary to pursue such other rights or remedies or to collect
any payments from the Borrower or any such 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 Agent and the
Beneficiaries 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
such Guarantor and the successors and assigns thereof, and shall inure to the
benefit of the Agent and the Beneficiaries, and their respective successors,
indorsees, transferees and assigns, until all the Guaranteed Obligations and the
obligations of such Guarantor under this Guarantee shall have been satisfied by
payment in full and the Commitments and Investor Commitments shall be
terminated, notwithstanding that from time to time during the term of the Credit
Agreement, Lease and other Operative Agreements the Borrower may be free from
any Guaranteed Obligations.
7. 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 Guaranteed Obligations is rescinded or must otherwise be restored or
returned by the Agent or any Beneficiary upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the Borrower or the Guarantors, 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 the Guarantors or any
substantial part of its property, or otherwise, all as though such payments had
not been made.
8. Payments. The Guarantors hereby guarantee that payments hereunder
will be paid to the Agent without set-off or counterclaim in Dollars at the
office of the Agent located at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
9. Representations and Warranties. In order to induce the Lenders to
enter into the Credit Agreement and to make the Loans, the Investor to enter
into the Participation Agreement and make the Investor Contribution and the
Lessor to enter into the Lease, the
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Company hereby represents and warrants to the Beneficiaries that each of the
representations and warranties of the Company set forth in the Participation
Agreement is true and correct in all material respects and agrees that each of
such representations and warranties shall survive the execution and delivery of
this Guarantee, the Credit Agreement, the Lease, the Participation Agreement and
the making of the Loans and Investor Contribution.
10. Covenants. (a) The Company hereby covenants and agrees that so
long as this Guarantee is in effect and until the Commitments have terminated
and the Guaranteed Obligations and all amounts owing hereunder are paid in full,
the Company will, and will cause its Subsidiaries to, comply with all of the
covenants set forth in Section 9 and Section 10 of the Corporate Credit
Agreement, as such covenants exist on the date hereof, which covenants are
hereby expressly incorporated by reference in this Guarantee as though set forth
in full in this Guarantee, mutatis mutandis. Capitalized terms used in said
Section 9 and Section 10 shall have the meanings given to such terms in Section
1 of the Corporate Credit Agreement, except that all references in said Sections
to the "Borrower" shall mean the "Company", to the "Administrative Agent" shall
mean the "Agent", to the "Lenders" shall mean the "Investors and Lenders party
to the Participation Agreement" to the "Credit Documents" shall mean the
"Operative Agreements". The covenants set forth in said Section 9 and Section 10
are incorporated herein as they exist on the date hereof and no amendment,
supplement, waiver or other modification, including termination or replacement
of the Corporate Credit Agreement, shall be effective for purposes of this
Section 10(a) without the majority consent of the Lenders and Investors,
collectively, each Lender and Investor having a vote proportionate to its share
of the sum of Commitments plus Investor Commitments.
(b) The Company will cause any entity that becomes a guarantor to the
Corporate Credit Agreement after the Initial Closing Date to execute a
supplement to this Guarantee, in form and substance reasonably satisfactory to
the Agent, in order to become a Guarantor.
11. Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made (a) when delivered by hand, (b) one Business Day
after delivery to a nationally recognized courier service specifying overnight
delivery, (c) three Business Days after being deposited in the mail, postage
prepaid, or (d) in the case of telecopy notice, when sent, confirmation of
receipt received, addressed as follows:
(a) if to the Agent or any Lender or Investor, at its address or
telecopy number for notices provided in Section 9.2 of the Credit
Agreement; and
(b) if to any Guarantor, at its address or telecopy number for notices
set forth below:
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The Company
and the other
Guarantors: KinderCare Learning Centers, Inc.
000 XX Xxxxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxx 00000
Attention: Chief Financial Officer
Fax: (000) 000-0000
With a copy to: KinderCare Learning Centers, Inc.
000 Xxxxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxx 00000
Attention: General Counsel
Fax: (000) 000-0000
Stoel Rives LLP
000 XX Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxx 00000
Attn: Xxxx X. Xxxxxx
Fax: (000) 000-0000
KinderCare Learning Centers, Inc.
x/x Xxxxxxxx Xxxxxx Xxxxxxx & Co., L.P.
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxx
Fax: (000) 000-0000
The Agent, each Beneficiary and each Guarantor may change its address
and transmission numbers for notices by notice in the manner provided in this
Section 11.
12. Severability. Any provision of this Guarantee which 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.
13. Integration. This Guarantee and the other Operative Agreements
represents the agreement of the Guarantors with respect to the subject matter
hereof and there are no promises or representations by the Agent or any
Beneficiary relative to the subject matter hereof not reflected herein or in the
other Operative Agreements.
14. 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 the Guarantors
and the Agent as provided in Section 9.1 of the Credit Agreement and the
Required Investors.
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(b) Neither the Agent nor any Lender shall not by any act (except by a
written instrument pursuant to Section 14(a) hereof), 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 Agent or any Beneficiary, any right, power or
privilege hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
A waiver by the Agent or any Beneficiary of any right or remedy hereunder on any
one occasion shall not be construed as a bar to any right or remedy which the
Agent or such Beneficiary would otherwise have on any future occasion.
(c) The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
15. 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.
16. Successors and Assigns. This Guarantee shall be binding upon the
successors and assigns of the Guarantors and shall inure to the benefit of the
Agent and the Beneficiaries and their successors and assigns.
17. SUBMISSION TO JURISDICTION; WAIVERS. (a) EACH GUARANTOR HEREBY
IRREVOCABLY AND UNCONDITIONALLY:
(i) SUBMITS FOR ITSELF AND ITS PROPERTY IN ALL LEGAL ACTIONS OR
PROCEEDINGS RELATING TO THIS GUARANTEE OR ANY OTHER OPERATIVE AGREEMENT TO
WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN
RESPECT THEREOF TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE SUPREME
COURT OF THE STATE OF NEW YORK, AND THE APPELLATE COURTS THEREOF AND WAIVES
THE RIGHT TO REMOVE ANY SUCH ACTION OR PROCEEDING TO ANY FEDERAL COURT;
(ii) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
SUCH COURT, WAIVES ANY OBJECTION THAT IT MAY HAVE NOW OR HEREAFTER TO THE
VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT AND WAIVES ANY
OBJECTION THAT SUCH ACTION OR PROCEEDING IN ANY SUCH COURT WAS BROUGHT IN
AN INCONVENIENT FORUM AND AGREES NOT TO PLEAD, CLAIM OR ASSERT THE SAME;
(iii) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING
IN ANY SUCH COURT MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED
OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE
PREPAID TO, OR BY PERSONAL SERVICE AT, ITS ADDRESS SET FORTH HEREIN OR SUCH
OTHER ADDRESS
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OF WHICH THE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT HERETO, WHETHER OR NOT
SUCH ADDRESS BE WITHIN THE JURISDICTION OF ANY SUCH COURT;
(iv) 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 OF THE AGENT TO XXX IN ANY OTHER JURISDICTION; AND
(v) 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 17 ANY SPECIAL, EXEMPLARY, OR PUNITIVE DAMAGES.
(b) EACH GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL
BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTEE OR ANY
OTHER OPERATIVE AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.
(c) EACH GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES THE
RIGHT TO ASSERT, ARGUE OR RAISE, IN ANY ACTION BROUGHT BY THE AGENT AGAINST EACH
GUARANTOR UNDER THIS GUARANTEE, THAT THE AGENT OR THE BENEFICIARIES STRUCTURED
THE TRANSACTION CONTEMPLATED BY THE OPERATIVE AGREEMENTS IN SUCH A MANNER
PRIMARILY TO CIRCUMVENT THE CALIFORNIA ONE-FORM-OF-ACTION AND ANTI-DEFICIENCY
LAWS, INCLUDING CALIFORNIA CODE OF CIVIL PROCEDURE xx.xx. 580a, 580b, 580d AND
726.
(d) Each Guarantor hereby waives all of the Guarantors' rights of
subrogation and reimbursement and any other rights and defenses available to
each Guarantor by reason of California Civil Code Sections 2787 to 2855,
inclusive, including (a) any defenses each Guarantor may have to the obligations
undertaken by each Guarantor in this Guaranty by reason of an election of
remedies by any Beneficiary, and (b) any rights or defenses each Guarantor may
have by reason of protection afforded to Borrower with respect to the
obligations guaranteed hereby pursuant to the antideficiency or other laws of
the State of California limiting or discharging Borrower's indebtedness,
including California Code of Civil Procedure Section 580a, 580b, 580d or 726.
Each Guarantor's waiver of defenses under clause (c) above is made even though
an election of remedies by Beneficiary, such as a nonjudicial foreclosure with
respect to security for a guaranteed obligation, destroys each Guarantor's
rights of subrogation and reimbursement against Borrower by the operation of
California Code of Civil Procedure Section 580d or otherwise. The foregoing
waivers shall not be deemed a waiver of the defense that the Obligations have
been paid or the Commitments reduced.
18. GOVERNING LAW. AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING
5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT EXCLUDING TO THE
MAXIMUM EXTENT
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PERMITTED BY LAW ALL OTHER CHOICE OF LAW AND CONFLICTS OF LAW RULES).
19. Authority of Agent. Each Guarantor acknowledges that the rights
and responsibilities of the Agent under this Guarantee with respect to any
action taken by the Agent or the exercise or non-exercise by the 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 Agent and the
any Beneficiary, 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 Agent and each Guarantor, the Agent shall be conclusively
presumed to be acting as agent for the Lenders 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.
20. Third Party Beneficiaries. Each Guarantor expressly acknowledges
and agrees that, to the extent not a direct beneficiary hereof, each Indemnified
Person shall be a third party beneficiary of this Guarantee.
21. 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 4 hereof. The provisions
of this Section shall in no respect limit the obligations and liabilities of any
Guarantor to Beneficiaries and each Guarantor shall remain liable to the
Beneficiaries for the full amount guaranteed by such Guarantor hereunder.
IN WITNESS WHEREOF, the undersigned have caused this Guarantee to be
duly executed and delivered by their respective duly authorized officer as of
the day and year first above written.
KINDERCARE LEARNING CENTERS, INC.
By: XXX X. XXXXXXX
-------------------------------------
Title: Vice President
Financial Control & Planning
KINDERCARE REAL ESTATE CORP.
By: XXX X. XXXXXXX
-------------------------------------
Title: Vice President & Treasurer
KC DEVELOPMENT CORP.
By: XXX X. XXXXXXX
-------------------------------------
Title: Vice President & Treasurer
