EXHIBIT 4.6
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PLEDGE AGREEMENT
From
DISCOVERY ZONE, INC.,
as Pledgor
to
STATE STREET BANK AND TRUST COMPANY,
as Collateral Agent
Dated as of July 22, 1997
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PLEDGE AGREEMENT
This PLEDGE AGREEMENT (together with any amendments, replacements and
supplements hereafter entered into, the "Pledge Agreement"), dated as of July
22, 1997, between Discovery Zone, Inc., a Delaware corporation (together with
its successors and assigns, the "Pledgor"), and State Street Bank and Trust
Company, as Trustee under the Indenture (as defined below), acting as
Collateral Agent hereunder (together with its successors and assigns, in such
capacity, the "Collateral Agent"), is made for the ratable benefit of the
Holders. As used herein, all capitalized terms not otherwise defined herein
shall have the meanings set forth in the Indenture, dated as of July 22, 1997
(together with all amendments and supplements thereto, the "Indenture"),
among the Pledgor, each of the Subsidiary Guarantors and the Collateral
Agent, relating to the Pledgor's 13 1/2% Senior Secured Notes due 2002 (the
"Initial Notes") and 13 1/2% Senior Secured Notes due 2002, Series B to be
issued in exchange for the Initial Notes pursuant to the Registration Rights
Agreement, the Purchase Agreement and the Indenture ("Exchange Notes" and,
together with the Initial Notes, the "Notes"), as amended from time to time
in accordance with the terms thereof.
W I T N E S S E T H:
WHEREAS, the Pledgor has issued or will issue $85 million aggregate
principal amount of Notes pursuant to the Indenture;
WHEREAS, the Pledgor is or, as of the Issue Date (assuming that the
Confirmation Order (as defined in the Purchase Agreement) has become a Final
Order (as defined in the Purchase Agreement) and the Approved Plan (as defined
in the Purchase Agreement) has become Effective (as defined in the Purchase
Agreement)), will be the legal and beneficial owner of the issued and
outstanding shares of Capital Stock set forth on Schedule A attached hereto; and
WHEREAS, in order to secure the payment and performance in full of the
Obligations of the Pledgor under the Indenture and the Notes, the parties hereto
desire to set forth their mutual understanding and certain agreements regarding
the terms and conditions of the pledge of the Pledged Collateral (as defined
below) made by the Pledgor to the Collateral Agent for the ratable benefit of
the Holders.
NOW, THEREFORE, in consideration of the premises and other benefits to
the Pledgor, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
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Section 1. PLEDGE. As collateral security for the complete
payment and performance in full of the Obligations of the Pledgor under the
Indenture, the Notes and the Collateral Agreements (as contemplated by Article
Eight of the Indenture), the Pledgor hereby pledges, assigns, transfers, sets
over and delivers unto the Collateral Agent, and hereby grants unto the
Collateral Agent for the ratable benefit of the Holders and unto their
respective successors and assigns, a continuing first priority security interest
in all of the right, title and interest of the Pledgor in, to and under any and
all of the following described property, rights and interests (collectively, the
"Pledged Collateral"):
(a) all of the issued and outstanding shares of Capital Stock
identified on Schedule A attached hereto of the Subsidiaries and all other
wholly-owned subsidiaries of the Pledgor therein set forth (the "Pledged
Subsidiaries");
(b) all other shares of Capital Stock or other equity securities
issued, or in the future issued by the Pledged Subsidiaries now or hereafter
owned or acquired by the Pledgor in any manner, and the certificates
representing such securities, and any present or future options, warrants or
other rights to subscribe for or purchase any property described in Section 1(a)
or any notes, bonds, debentures or other evidences of indebtedness that are at
any time convertible, exchangeable or exercisable into Capital Stock or other
equity securities of the Pledged Subsidiaries or have or at any time could by
their terms have voting rights with respect to any matter affecting the Pledged
Subsidiaries and all securities, certificates and instruments representing or
evidencing ownership of any of the property described in Section 1(a) and this
Section 1(b) hereof;
(c) all shares of Capital Stock, other equity securities of any
entity issued to the Pledgor or any other security described in Section 1(b) if,
at the time of issuance, the entity is or as a result of such issuance becomes a
Subsidiary under the Indenture (the property described in Section 1(a), Section
1(b) and this Section 1(c) being referred to herein collectively as the "Pledged
Securities");
(d) any additional property of the kind or type described in
this Section 1 required to be supplied under the terms of this Pledge Agreement;
and
(e) all proceeds and products of the Pledged Securities,
including without limitation dividends, distributions, cash, instruments and
other property or securities, now or hereafter at any time or from time to time
received or receivable or otherwise distributed or distributable in respect of
or in exchange for any or all of the Pledged Securities;
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TO HAVE AND TO HOLD the Pledged Collateral, together with all rights,
titles, interests, powers, privileges and preferences pertaining or incidental
thereto, unto the Collateral Agent for the benefit of the Holders and unto their
respective successors and assigns.
Section 2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
PLEDGOR. The Pledgor hereby represents and warrants (as of the date of
execution hereof as to the Pledged Collateral existing on such date and as of
the date of acquisition as to the Pledged Collateral acquired subsequently),
covenants and agrees that:
(a) As of the Issue Date (assuming that the Confirmation Order
has become a Final Order and the Approved Plan has become Effective), the
Pledgor will be the legal and beneficial owner of the Pledged Collateral, will
hold the Pledged Collateral free and clear of all Liens (except for the security
interest granted hereunder to the Collateral Agent for the ratable benefit of
Holders of Notes and except for Liens for taxes not yet payable and except for
Permitted Liens), and has not made and will not make any other pledge,
assignment, mortgage, hypothecation or transfer of the Pledged Collateral except
for Permitted Liens.
(b) The Pledged Securities have been or, upon the Issue Date
(assuming that the Confirmation Order has become a Final Order and the Approved
Plan has become Effective), will be duly authorized and validly issued and are
fully paid and non-assessable.
(c) Upon delivery of physical certificates evidencing the
Pledged Securities to the Collateral Agent, and the continued possession thereof
by the Collateral Agent, the Collateral Agent will have a continuing perfected
first priority security interest in the Pledged Securities, securing the
Obligations.
(d) As of the Issue Date (assuming that the Confirmation Order
has become a Final Order and the Approved Plan has become Effective), the
Pledgor will have the requisite corporate power and authority to pledge the
Pledged Collateral in accordance herewith and will defend its title thereto
against the claims of all persons whomsoever and shall maintain and preserve the
security interest granted hereunder with respect to the Pledged Collateral as
long as this Pledge Agreement shall remain in full force and effect, subject to
the Permitted Liens.
(e) Neither the execution and delivery of this Pledge Agreement
by the Pledgor, the performance by the Pledgor of its obligations hereunder, nor
the transactions herein contemplated will violate the Pledgor's or any Pledged
Subsidiary's Certificate of Incorporation or bylaws, each as will be in effect
as of the Issue Date (assuming that the Confirmation
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Order has become a Final Order and the Approved Plan has become Effective),
violate the terms of any agreement, indenture, mortgage, deed of trust,
equipment lease, instrument or other document to which the Pledgor or any
Pledged Subsidiary is a party, violate any law, order, rule or regulation
applicable to the Pledgor or any Pledged Subsidiary of any court or any
government, regulatory body or administrative agency or other governmental body
having jurisdiction over the Pledgor or any Pledged Subsidiary or their
properties, or result in or require the creation or imposition of any Lien
(other than the Lien contemplated hereby), upon or with respect to any of the
property now owned or hereafter acquired by the Pledgor or any Pledged
Subsidiary, which violation or conflict would have a material adverse effect on
the financial condition, business, assets or liabilities of the Pledgor or any
Pledged Subsidiary, taken as a whole, or on the value of the Pledged Collateral
or on the security interests hereunder.
(f) The Pledged Securities, described in Schedule A attached
hereto, include all of the issued and outstanding shares of Capital Stock of the
Pledged Subsidiaries, and, as of the date of execution hereof, there are no
outstanding options, warrants or other rights to subscribe for or purchase any
property described in Section 1(a) or any notes, bonds, debentures or other
evidences of indebtedness that are at any time convertible into Capital Stock of
the Pledged Subsidiaries or have or at any time could by their terms have voting
rights with respect to any matters affecting the Pledged Subsidiaries.
(g) Other than the occurrence of the Issue Date (assuming that
the Confirmation Order has become a Final Order and the Approved Plan has become
Effective), no consent or approval which has not been obtained prior to the date
hereof of any other person or entity, no authorization, approval or other action
(other than delivery of physical certificates evidencing the Pledged Securities)
by, and no notice to or filing with, any governmental body (other than UCC
filings), regulatory authority or securities exchange, was or is necessary as a
condition to the validity of the pledge hereunder of the Pledged Collateral, and
such pledge is effective to vest in the Collateral Agent the rights of the
Collateral Agent in the Pledged Collateral as set forth herein. Except under
the Indenture and this Pledge Agreement, there are no restrictions on the
transferability of any of the Pledged Collateral transferred or delivered by the
Pledgor hereunder or, except for restrictions related to federal and state
securities laws governing the sale of "restricted stock" or "control stock,"
with respect to the foreclosure, transfer or disposition thereof by the
Collateral Agent.
(h) The Pledgor shall deliver to the Collateral Agent
concurrently with the execution of this Pledge Agreement or, to the extent
acquired subsequent to the date of execution hereof, immediately upon the
Pledgor's acquisition thereof, all certificates and instruments representing the
Pledged Securities,
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and each other item of Pledged Collateral (including all certificates,
instruments and notes representing any such Pledged Collateral). Any and all
Pledged Securities so delivered to the Collateral Agent shall be accompanied by
undated duly executed powers in blank and by such other instruments of transfer
or documents as the Collateral Agent may reasonably request. The Collateral
Agent shall hold the certificates representing the Pledged Securities delivered
to it in its own name or in the name of its nominee, all in form and substance
satisfactory to the Collateral Agent. The Pledgor hereby acknowledges that the
Collateral Agent may, in its discretion, appoint one or more financial
institutions to act as the Collateral Agent's agent in holding in custodial
accounts instruments or other financial assets in which the Collateral Agent is
granted a security interest hereunder, including, without limitation,
certificates of deposit and other instruments evidencing short term obligations.
(i) The Collateral Agent shall at all times have full and free
access during normal business hours to all of the books, correspondence and
records of the Pledgor relating to the Pledged Collateral (other than
information that is privileged and confidential) and the Collateral Agent and
its representatives may examine the same, make abstracts therefrom and make
photocopies thereof, and the Pledgor agrees to render to the Collateral Agent,
at the Pledgor's costs and expense, such clerical and other assistance as may be
requested by the Collateral Agent with regard thereto.
(j) The Pledgor shall not permit any of the Pledged Subsidiaries
to issue any securities of the type required to be pledged hereunder unless such
securities are promptly pledged and delivered hereunder to the Collateral Agent
in accordance with Section 2(h).
(k) If, while this Pledge Agreement is in effect, any stock
dividend, stock split, reclassification, readjustment, reorganization, merger,
consolidation, exchange offer, tender offer or other change in the capital
structure, including the creation of any subscription or other rights relating
to the Pledged Securities, is declared or made, by any of the Pledged
Subsidiaries or any other issuer of Pledged Collateral, all substituted and
additional securities or interest issued with respect to the Pledged Collateral
and evidenced by certificates shall be endorsed in blank by the Pledgor promptly
upon receipt thereof or otherwise appropriately transferred to the Collateral
Agent in negotiable form, and all certificates or instruments evidencing such
securities shall be delivered to the Collateral Agent to be held under the terms
of this Pledge Agreement in the same manner as, and as a part of, the Pledged
Collateral. All Pledged Securities shall be evidenced by one or more
certificates. Any securities that may be issued upon exercise of any
subscription or other rights relating to the Pledged
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Securities shall be endorsed in blank and delivered to the Collateral Agent with
any necessary powers.
(l) The Pledgor shall pay and discharge all taxes, assessments
and governmental charges or levies against any Pledged Collateral prior to
delinquency thereof and shall keep all Pledged Collateral free of all unpaid
charges whatsoever, unless contested in good faith by appropriate proceedings,
properly instituted and diligently conducted, and adequate reserves have been
set aside in accordance with GAAP.
(m) The Pledgor shall promptly notify the Collateral Agent in
writing of any material changes in any fact or circumstance represented or
warranted by the Pledgor with respect to any material portion of the Pledged
Collateral, of any impairment of the Pledged Collateral and of any claim, action
or proceeding affecting title to all or any of the Pledged Collateral.
(n) The chief executive offices and principal places of business
of the Pledgor are located at 000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxx Xxxxxxxxxx,
Xxxxxxx 00000 and 00 Xxxx Xxxxxx, Xxxxx Xxxxxx, Xxx Xxxx 00000. The Pledgor
shall not relocate its principal place of business or chief executive office to
another county or state or change its name, identity or corporate structure
unless the Pledgor (i) gives at least thirty (30) days' prior written notice to
the Collateral Agent, which notice shall specify such new name, identity,
corporate structure or new location and provide such other information as the
Collateral Agent may reasonably request and (ii) takes all action reasonably
satisfactory to the Collateral Agent to maintain the security interest of the
Collateral Agent in the Collateral.
(o) Upon Pledgor acquiring or forming any subsidiary, the
Pledgor shall amend Schedule A attached hereto to include such subsidiary and
such subsidiary shall thenceforth be treated hereunder for all purposes as a
Pledged Subsidiary and all shares of Capital Stock or other equity securities of
such subsidiary issued to Pledgor shall be treated hereunder for all purposes as
Pledged Collateral.
Section 3. ADMINISTRATION OF THE PLEDGED COLLATERAL. The
Collateral Agent shall administer the Pledged Collateral in accordance with the
provisions hereof and of the Indenture.
Section 4. RELEASE AND SUBSTITUTION OF PLEDGED COLLATERAL. The
Pledged Collateral shall not be released from the security interest created
hereunder and no property shall be substituted for any of the Pledged
Collateral, except in accordance with the provisions of Article Ten of the
Indenture and in accordance with the provisions of Section 18 hereof. The
Collateral Agent shall return the physical certificates and related stock powers
evidencing Pledged Collateral in its
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possession when so permitted by the Indenture and this Pledge Agreement.
Section 5. VOTING RIGHTS, DIVIDENDS, ETC.
(a) Until an Event of Default (as defined below) shall have
occurred and be continuing:
(i) except as otherwise provided in Sections 5(b) and (c)
and Section 6 of this Pledge Agreement, the Pledgor shall be entitled to
exercise any and all voting or consensual rights and powers, including
subscription rights, accruing to an owner of the Pledged Collateral or any part
thereof for any purpose not inconsistent with the terms of this Pledge Agreement
or any agreement giving rise to any of the Indenture Obligations;
(ii) except as otherwise provided in this Pledge Agreement,
the Pledgor shall be entitled to retain and use any and all dividends,
distributions or other payments which are permitted by the Indenture and paid in
cash or property (other than securities which are subject to this Pledge
Agreement) and the Collateral Agent, upon receipt of any of the foregoing, shall
promptly pay or distribute the same to the Pledgor; and
(iii) the Collateral Agent shall execute and deliver to the
Pledgor or cause to be executed and delivered to the Pledgor, all such proxies,
powers of attorney, dividend orders and other instruments as the Pledgor may
reasonably request for the purpose of enabling it to exercise the voting or
consensual rights and powers which the Pledgor is entitled to exercise pursuant
to the foregoing Section 5(a)(i) or to receive the dividends, distributions or
other payments which the Pledgor is authorized to retain pursuant to the
foregoing Section 5(a)(ii).
(b) Upon the occurrence and during the continuation of an Event
of Default, (i) upon notice from the Collateral Agent, all rights of the Pledgor
to exercise the voting or consensual rights and powers which the Pledgor would
otherwise be entitled to exercise pursuant to Section 5(a)(i), and (ii) all
rights of the Pledgor to receive the dividends, distributions and other payments
which the Pledgor would otherwise be authorized to receive and retain pursuant
to Section 5(a)(ii), shall automatically cease, and all such rights shall
thereupon become vested in the Collateral Agent, which shall then have the sole
and exclusive right and authority to exercise, in its sole discretion, all such
voting and consensual rights and powers and to receive and retain as Pledged
Collateral all such dividends, distributions and other payments.
(c) Upon the occurrence and during the continuation of an Event
of Default, the Collateral Agent shall have the sole and exclusive right and
authority to receive and retain as Pledged Collateral all dividends,
distributions and
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other payments which are paid on the Pledged Collateral (other than dividends,
distributions or other payments permitted by the Indenture and paid on the
shares of common stock of the company issuing such shares) in cash or property.
Any and all money and other property paid over to or received by the Collateral
Agent pursuant to the provisions of Section 5(b) or this Section 5(c) shall be
retained by the Collateral Agent as additional Pledged Collateral hereunder and
shall be administered and applied in accordance with the provisions of this
Pledge Agreement and the Indenture. All dividends and interest payments which
are received by the Pledgor contrary to the provisions of Section 5(b) or this
Section 5(c) shall be received in trust for the benefit of the Collateral Agent,
shall be segregated from other funds of the Pledgor and shall be forthwith paid
over to the Collateral Agent as Pledged Collateral in the same form as so
received (with any necessary endorsement).
Section 6. DEFAULT; REMEDIES.
(a) Defined. For purposes of this Pledge Agreement, as provided
in the preamble to this Pledge Agreement, the terms "Default" and "Event of
Default" shall have the respective meanings provided in the Indenture.
(b) Exercise of Remedies Under the Pledge Agreement. If an
Event of Default shall have occurred and be continuing, the Collateral Agent
shall commence the taking of such actions (or refrain from taking actions)
toward collection or enforcement of this Pledge Agreement and the Pledged
Collateral (or any portion thereof), including, without limitation, action
toward foreclosure upon any Pledged Collateral, as it deems appropriate in
accordance with and subject to the applicable terms of the Indenture or within
three (3) Business Days after written instructions from the Requisite Holders
(as defined in Section 6(f) below), to the extent allowed by law (and subject to
the applicable terms of the Indenture and pursuant to the terms hereof). If any
Event of Default that was the basis for the commencement of such action shall
have been cured or waived, and, in the case where there has been an
acceleration, rescission of such acceleration shall have occurred, in each case
in accordance with the terms of the Indenture, any direction to the Collateral
Agent to take any action in connection with the aforementioned notice shall be
deemed rescinded upon notification by that percentage of Holders necessary to
effect such waiver with respect to such Event of Default as provided for in the
Indenture. The Collateral Agent shall have no obligation to take any collection
or enforcement action except upon satisfaction of the conditions set forth in
Section 7.01 and Section 7.02 of the Indenture.
(c) Remedies Generally. If an Event of Default shall have occurred
and be continuing, the Collateral Agent itself or by its agents or attorneys may
exercise any or all of its rights and remedies hereunder or under the Indenture,
or any other
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instrument or agreement securing, evidencing or relating to the Indenture
Obligations, the Notes or under applicable laws (including all of the rights and
remedies of a secured creditor under the Uniform Commercial Code then in effect
in the State of New York, the "UCC"), retain possession of the Pledged
Collateral or sell, assign, transfer, or dispose of, endorse and deliver the
whole or, from time to time, any part of the Pledged Collateral at public or
private sale or sales, at any exchanges, brokers board or at any of the
Collateral Agent's offices or elsewhere, for cash, upon credit or for other
property, for immediate or future delivery, and, to the extent permitted by
applicable law, for such price or prices and on such other terms as the
Collateral Agent may deem commercially reasonable. Upon consummation of any
such sale, the Collateral Agent shall have the right to assign, transfer,
endorse and deliver to the purchaser or purchasers thereof the Pledged
Collateral so sold. Each such purchaser at any such sale shall hold the
property sold absolutely free from any claim or right on the part of the
Pledgor, and the Pledgor hereby waives (to the full extent permitted by law) all
rights of redemption, stay or appraisal which the Pledgor now has or may at any
time in the future have under any rule of law or statute now existing or
hereafter enacted. The Collateral Agent shall give the Pledgor ten (10) days'
written notice (which the Pledgor agrees shall be deemed to be reasonable
notification within the meaning of Section 9-504(3) of the UCC) in accordance
with Section 19 of the Collateral Agent's intention to make any such public or
private sale. Any such sale shall be held at such time or times and at such
place or places as the Collateral Agent may fix. At any such sale, the Pledged
Collateral, or portion thereof to be sold, may be sold as an entirety or in
separate portions, as the Collateral Agent may, in its sole discretion,
determine. The Collateral Agent shall not be obligated to make any sale of the
Pledged Collateral if it shall determine not to do so, regardless of the fact
that notice of sale of the Pledged Collateral may have been given. The
Collateral Agent may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time by announcement
at the time and place fixed for sale, and such sale may, without further notice,
be made at the time and place to which the same was so adjourned. In case sale
of all or any part of the Pledged Collateral is made on credit for future
delivery, the Pledged Collateral so sold may be retained by the Collateral Agent
until the sale price is paid by the purchaser or purchasers thereof, but the
Collateral Agent shall not incur any liability in case any such purchaser or
purchasers shall fail to take up and pay for the Pledged Collateral so sold and,
in case of any such failure, such Pledged Collateral may be sold again upon like
notice. As an alternative to exercising the power of sale herein conferred upon
it, the Collateral Agent may proceed by suit or suits at law or in equity to
exercise its remedies regarding the Pledged Collateral and sell the Pledged
Collateral or any portion thereof pursuant to judgment or decree of a court or
courts having competent jurisdiction. If under mandatory requirements of
applicable law,
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the Collateral Agent shall be required to make disposition of the Pledged
Collateral within a period of time that does not permit the giving of notice to
the Pledgor as hereinbefore provided, the Collateral Agent need give the Pledgor
only such notice of disposition as shall be reasonably practicable in view of
such mandatory requirements of law.
(d) Remedies; Obtaining the Pledged Collateral Upon Default.
The Pledgor agrees that if any Event of Default shall have occurred and be
continuing, then and in every such case, and in addition to the rights and
remedies available to a secured party under any applicable provision of the UCC,
or any other applicable law, the Collateral Agent may:
(i) personally, or by agents or attorneys, immediately
take possession of the Pledged Collateral or any part thereof from the Pledgor
or any other person who then has possession of any part thereof, with or without
notice or process of law, in accordance with applicable law, and for that
purpose may enter upon the Pledgor's premises where any of the Pledged
Collateral is located and remove the same;
(ii) instruct the obligor or obligors on any agreement,
instrument or other obligation constituting Pledged Collateral to make any
payment or render any performance required by the terms of such agreement,
instrument or obligation directly to the Collateral Agent or its designee;
(iii) sell or otherwise liquidate, or direct the Pledgor
to sell or otherwise liquidate, any or all investments made in whole or in part
with the Pledged Collateral or any part thereof, and take possession of the
proceeds of any such sale or liquidation; and
(iv) take possession of the Pledged Collateral or any
part thereof by directing the Pledgor in writing to deliver the same to the
Collateral Agent at any place or places designated by the Collateral Agent, in
which event the Pledgor shall at its own expense:
(A) forthwith cause the same to be moved to the place
or places so designated by the Collateral Agent and there delivered to the
Collateral Agent;
(B) store and keep any Pledged Collateral so delivered
to the Collateral Agent at such place or places pending further action by the
Collateral Agent as provided in this Section 6(d); and
(C) while any such Pledged Collateral shall be so
stored and kept, provide such guard, security and maintenance services as shall
be necessary to protect the same and to preserve and maintain such Pledged
Collateral in good condition; it being understood that the Pledgor's obligation
so
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to deliver the Pledged Collateral is of the essence of this Pledge Agreement and
that, accordingly, upon application to a court of equity having jurisdiction,
the Collateral Agent shall be entitled to a decree requiring specific
performance by the Pledgor of such obligation.
(e) Preventing Impairment of the Pledged Collateral. Regardless
of whether or not there shall have occurred any Default or Event of Default, the
Collateral Agent may institute and maintain or cause in the name of the Pledgor
or of the Collateral Agent, or any of them, to be instituted and maintained,
such suits and proceedings as the Collateral Agent may be advised by counsel
shall be necessary or expedient to prevent any impairment of the security
interest in or perfection of the Pledged Collateral in contravention of the
terms of the Indenture. The Pledgor agrees not to knowingly take or permit to
be taken any action which would impair the Pledged Collateral or the Collateral
Agent's rights in the Pledged Collateral.
(f) Requisite Holders. For purposes of this Section 6,
"Requisite Holders" means the Holder or Holders of a majority in principal
amount of the outstanding Notes or as otherwise provided in Article Six of the
Indenture.
Section 7. COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT. The
Pledgor hereby constitutes and appoints the Collateral Agent its
attorney-in-fact for the purpose of carrying out the provisions, but subject to
the terms and conditions, of this Pledge Agreement and taking any action and
executing any instrument, including, without limitation, any financing statement
or continuation statement, and taking any other action to maintain the validity,
perfection, priority and enforcement of the security interest intended to be
created hereunder, that the Collateral Agent may reasonably deem necessary or
advisable to accomplish the purposes hereof, which appointment is irrevocable
and coupled with an interest; provided, however, that nothing herein contained
shall be construed as requiring or obligating the Collateral Agent to make any
commitment or to make any inquiry as to the nature or sufficiency of any payment
received by it, or to present or file any claim or notice, or to take any action
with respect to the Pledged Collateral or any part thereof or the monies due or
to become due in respect thereof or any property covered thereby, and no action
taken or omitted shall give rise to any defense, counterclaim or right of action
against the Collateral Agent, unless the Collateral Agents actions are taken or
omitted to be taken with gross negligence or bad faith or constitute willful
misconduct.
Section 8. PURCHASE OF PLEDGED COLLATERAL BY COLLATERAL AGENT OR
HOLDERS. At any sale of the Pledged Collateral, whether pursuant to power of
sale or otherwise hereunder, the Collateral Agent or any Holder may, to the
extent permitted by applicable law, bid for and purchase, free from any right of
redemption, stay or appraisal (all such rights being
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hereby waived and released by the Pledgor to the extent permitted by law), the
Pledged Collateral or any part thereof or an interest therein and upon
compliance with the terms of such sale, may hold, retain, exploit, resell or
otherwise dispose of such property without further accountability to the Pledgor
for the proceeds of such sale (except in the event that there is a surplus of
such proceeds in excess of the Pledgor's Obligations under the Indenture and the
Notes, in which case, the Collateral Agent shall account to the Pledgor for such
surplus). The Pledgor will execute and deliver or cause to be executed and
delivered, such instruments, endorsements, assignments, waivers, certificates
and other documents and take such further action as the Collateral Agent shall
request in connection with any such sale.
Section 9. DISPOSITION OF PROCEEDS. The proceeds of any sale of
the whole or any part of the Pledged Collateral, together with any other monies
held by the Collateral Agent under the provisions of this Pledge Agreement,
shall be applied by the Collateral Agent in accordance with the provisions of
the Indenture.
Section 10. WAIVER OF CLAIMS. Except as otherwise provided in this
Pledge Agreement, THE PLEDGOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, NOTICE OF JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL
AGENT'S TAKING POSSESSION OR THE COLLATERAL AGENT'S DISPOSITION OF ANY OF THE
PLEDGED COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICES AND
HEARINGS FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT THAT THE
PLEDGOR WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED
STATES OR OF ANY STATE, and, to the full extent permitted by applicable law, the
Pledgor hereby further waives:
(a) all damages occasioned by such taking of possession or
disposition except any damages which are the direct result of the Collateral
Agent's negligence, bad faith or willful misconduct;
(b) all other requirements as to the time, place and terms of
sale or other requirements, with respect to the enforcement of the Collateral
Agent's rights and powers hereunder; and
(c) except as provided in Section 6(c) hereof, all rights of
redemption, appraisement, valuation, stay, marshalling of assets, extension or
moratorium, existing at law or in equity, by statute or otherwise, now or
hereafter in force, in order to prevent or delay the enforcement of this Pledge
Agreement or the sale or other disposition of the Pledged Collateral or any
portion thereof, and the Pledgor, for itself and all who may claim under it,
insofar as it now or hereafter lawfully may, hereby waives all such rights.
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Any sale of, or the exercise of any options to purchase, or any other
realization upon, any Pledged Collateral shall operate to divest all right,
title, interest, claim and demand, at law or in equity, of the Pledgor therein
and thereto, and shall be a perpetual bar both at law and in equity against the
Pledgor and against any and all persons claiming or attempting to claim the
Pledged Collateral so sold, optioned or realized upon, or any part thereof,
through and under the Pledgor.
Section 11. REMEDIES CUMULATIVE; NO WAIVER. Each right, power and
remedy of the Collateral Agent provided for herein or in the Indenture or in
another agreement pursuant to which a Lien is created in favor of the Collateral
Agent for the benefit of any Holder, or now or hereafter existing at law or in
equity, by statute or otherwise, shall be cumulative and concurrent and shall be
in addition to every other right, power or remedy of the Collateral Agent or any
Holder provided for herein or in the Indenture, the Notes or in another
agreement pursuant to which a Lien is created in favor of the Collateral Agent
for the benefit of any Holder or now or hereafter existing at law or in equity,
by statute or otherwise. No failure on the part of the Collateral Agent or any
Holder to exercise, and no delay in exercising, any right, power or remedy
hereunder or under the Indenture, the Notes or under another agreement pursuant
to which a Lien is created in favor of the Collateral Agent for the benefit of
any Holder or now or hereafter existing at law or in equity, by statute or
otherwise, shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy. No notice
to or demand on the Pledgor hereunder shall, of itself, entitle the Pledgor to
any other or further notice or demand in the same, similar or other
circumstances.
Section 12. ADDITIONAL PLEDGED COLLATERAL. Without notice or
consent of the Pledgor and without impairment of the security interests and
rights created by this Pledge Agreement, the Collateral Agent may accept from
any Person or Persons additional collateral or other security for the
Obligations of any Pledged Subsidiary or the Pledgor's Obligations under the
Indenture. Neither the creation of the security interests created hereunder nor
the acceptance of any such additional collateral or security shall prevent the
Collateral Agent from resorting to such additional collateral or security or to
the Pledged Collateral, in any order, without affecting the Collateral Agent's
rights hereunder.
Section 13. FURTHER ASSURANCES. The Pledgor agrees that it shall,
at its own expense, promptly file or record such notices, financing statements,
continuation statements or other documents and take all further action as may be
necessary to perfect, maintain and protect the perfection of the security
interests of the Collateral Agent hereunder or to enable the
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Collateral Agent to exercise and enforce its rights and remedies hereunder with
respect to the Pledged Collateral, and as the Collateral Agent may reasonably
request, such instruments to be in form and substance satisfactory to the
Collateral Agent, and that it shall, at its own expense, do such further acts
and things and execute and deliver to the Collateral Agent such additional
conveyances, assignments, endorsements, agreements and instruments as the
Collateral Agent may at any time request in connection with the administration
and enforcement of this Pledge Agreement or relative to the Pledged Collateral
or any part thereof or in order to assure and confirm unto the Collateral Agent
its rights, powers and remedies hereunder.
Section 14. INDEMNIFICATION AND EXPENSES.
(a) The Pledgor agrees to indemnify the Collateral Agent from
and against any and all claims, losses and liabilities arising or resulting from
or relating to this Pledge Agreement (including, without limitation, enforcement
of this Pledge Agreement), except claims, losses or liabilities resulting from
the Collateral Agent's gross negligence, bad faith or willful misconduct, as
determined by a final judgment of a court of competent jurisdiction. The
indemnification of the Collateral Agent set forth in the immediately preceding
sentence is cumulative and not exclusive of any indemnity of the Collateral
Agent set forth in the Indenture or provided for under the TIA.
(b) The Pledgor will pay upon demand to the Collateral Agent the
amount of any and all out-of-pocket expenses, including the reasonable fees and
charges of its counsel and of any experts and agents, that the Collateral Agent
may incur in connection with the custody, preservation, use or operation of, or
the sale of, collection from or other realization upon, any of the Pledged
Collateral, the exercise or enforcement of any of the rights of the Collateral
Agent or the Holders hereunder or the failure by the Pledgor to perform or
observe any of the provisions hereof, and all amounts so incurred by the
Collateral Agent shall be entitled to the benefits of Section 7.07 of the
Indenture.
Section 15. REGISTRATION RIGHTS, ETC.
(a) If the Collateral Agent determines that the registration of
any of the securities included in the Pledged Collateral under, or other
compliance with, the Securities Act or any similar Federal or state law is
desirable, upon or at any time after an Event of Default and acceleration of the
Notes in accordance with Section 6.02 of the Indenture, the Pledgor will use its
best efforts to cause such registration or compliance to be effectively made, at
no expense to the Collateral Agent or to the Holders, and to continue any such
registration effective for such time as may be necessary in the opinion of the
Collateral Agent. The Pledgor will reimburse the Collateral Agent upon demand
for any expenses incurred by the Collateral Agent
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(including reasonable attorneys' fees) incurred in connection therewith, which
obligation to pay such expenses shall be secured hereunder.
(b) If the Pledgor is unable to effect a public sale of any or
all of the Pledged Collateral or if the Collateral Agent determines that it is
desirable to sell the Pledged Collateral in one or more private sales, the
Collateral Agent may limit such sales to a restricted group of purchasers who
will be obliged to agree, among other things, to acquire such securities for
their own account for investment and not with a view to distribution or resale.
The Pledgor acknowledges and agrees that any such private sale may result in
prices and other terms less favorable to the seller than if such sale were a
public sale and, notwithstanding such circumstances, agrees that any such
private sale shall be deemed to have been made in a commercially reasonable
manner. The Collateral Agent shall be under no obligation to delay a sale of
any of the Pledged Collateral for the period of time necessary to permit the
issuer of such securities to register such securities for public sale under the
Securities Act or under applicable state securities laws even if such issuer
would agree to do so.
(c) The Pledgor further agrees to do or use all reasonable
efforts to cause to be done, to the extent the Pledgor may legally do so, all
such other acts and things as may be necessary to make such sale or sales of all
or any part of the Pledged Collateral valid and binding and in compliance with
any and all applicable laws, rules and regulations and orders and decrees of any
and all courts having jurisdiction over such sales, all at the Pledgor's
expense. The Pledgor further agrees that a breach of any of the covenants
contained in this Pledge Agreement will cause irreparable injury to the
Collateral Agent, as secured party, for which the Collateral Agent would have no
adequate remedy at law in respect of such breach and, as a consequence, agrees
that each and every covenant contained in this Section 15 shall be specifically
enforceable against the Pledgor and, to the full extent permitted by applicable
law, the Pledgor waives and agrees not to assert as a defense against an action
for specific performance of such covenant that Pledgor's failure to perform such
covenants will not cause irreparable injury to the Collateral Agent or the
Holders or that the Collateral Agent on behalf of the Holders has an adequate
remedy at law in respect of such breach.
Section 16. PLEDGOR'S INDENTURE OBLIGATIONS ABSOLUTE. The
liability of the Pledgor under this Pledge Agreement shall remain in full force
and effect without regard to, and shall not be released, suspended, discharged,
terminated or otherwise affected by: any change in the time, place or manner of
payment of all or any of the Pledgor's Obligations under the Indenture or the
Notes, or in any other term of the Indenture, the Notes or any Collateral
Agreement, any waiver, indulgence, renewal, extension, amendment or modification
of or
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addition, consent or supplement to or deletion from or any other action or
inaction under or in respect of the Indenture, the Notes or any Collateral
Agreement, or any assignment or transfer thereof; any lack of validity or
enforceability, in whole or in part, of the Indenture, the Notes or any
Collateral Agreement; any furnishing of any additional security for such
Obligations or any acceptance thereof or any release or nonperfection of any
security interest in property; any limitation on any party's liability or
obligations under the Indenture, the Notes or any Collateral Agreement; any
bankruptcy, insolvency, reorganization, composition, adjustment, dissolution,
liquidation or other like proceeding relating to the Pledgor or any Person other
than the Pledgor, or any action taken with respect to this Pledge Agreement by
any trustee or receiver, or by any court, in any such proceeding, whether or not
the Pledgor shall have notice or knowledge of any of the foregoing; or any
exchange, release or amendment or waiver of or consent to departure from any
other agreement pursuant to which a Lien is created in favor of the Collateral
Agent for the benefit of the Holder, pursuant to which a person other than the
Pledgor has granted a security interest.
Section 17. WAIVER. To the extent permitted by applicable law, the
Pledgor hereby waives promptness, diligence, notice of acceptance and any other
notice with respect to this Pledge Agreement and any requirement that the
Collateral Agent protect, secure, perfect or insure any security interest or any
property subject thereto or exhaust any right or take any action against the
Pledgor or any other person or entity; provided, however, that the Collateral
Agent shall in any event take such care in the handling of any Pledged
Securities in its possession as it takes with respect to its own property of a
similar nature in its possession.
Section 18. TERMINATION. Upon complete payment and performance in
full and satisfaction of all of the Pledgor's Obligations under the Indenture,
the Notes and the Collateral Agreements (as contemplated by Article Eight of the
Indenture), this Pledge Agreement shall terminate, subject to the applicable
terms of the Indenture, and the Collateral Agent shall assign and redeliver to
the Pledgor all of the Pledged Collateral hereunder that has not been sold,
disposed of, retained or applied by the Collateral Agent in accordance with the
terms hereof and the Indenture. Such reassignment and redelivery shall be
without warranty by, or recourse to, the Collateral Agent, and shall be at the
expense of the Pledgor. At such time, this Pledge Agreement shall no longer
constitute a Lien upon or a grant of any security interest in any of the Pledged
Collateral, and the Collateral Agent shall, at the Pledgor's expense deliver to
the Pledgor written acknowledgment thereof and of cancellation of this Pledge
Agreement in a form reasonably requested by the Pledgor; provided, however, that
this Pledge Agreement shall continue to be effective or be reinstated, as the
case may be, if at any time any payment of any of the Pledgor's Obligations
under the Indenture, the Notes or the Collateral Agreements is
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rescinded or must otherwise be returned upon the insolvency, bankruptcy or
reorganization of the Pledgor, all as though such payment had not been made; and
provided, further, however, this Pledge Agreement shall no longer constitute a
Lien upon or a grant of any security interest in any of the Pledged Collateral
that has been released in accordance with the provisions of Section 10.05 of the
Indenture.
Section 19. NOTICES. Except as otherwise expressly provided
herein, all notices, requests and demands to or upon the respective parties
hereto to be effective shall be in writing (including by telecopy, telex, or
cable communication), and shall be deemed to have been duly given or made when
delivered by hand, or five days after being deposited in the United States mail,
postage prepaid, or, in the case of telex notice, when sent, answer-back
received, or in the case of telecopy notice, when sent, or in the case of a
nationally recognized overnight courier service, one business day after delivery
to such courier service, addressed, in the case of each party hereto to the
following address, or to such other address as may be designated by any party in
a written notice to the other party hereto:
IF TO DISCOVERY ZONE LIMITED:
Discovery Zone, Inc.
000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
WITH A COPY TO:
Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
IF TO DISCOVERY ZONE (PUERTO RICO), INC.:
Discovery Zone, Inc.
000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attention: President
WITH A COPY TO:
Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
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IF TO DZ PARTY, INC.:
Discovery Zone, Inc.
000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attention: President
WITH A COPY TO:
Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
IF TO DISCOVERY ZONE LICENSING, INC.:
Discovery Zone, Inc.
000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attention: President
WITH A COPY TO:
Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
IF TO THE COLLATERAL AGENT:
State Street Bank and Trust Company
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Corporate Trust Department
WITH A COPY TO:
Peabody & Xxxxxx
00 Xxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Section 20. BINDING AGREEMENT; ASSIGNMENT. This Pledge Agreement
shall be binding upon and inure to the benefit of the Collateral Agent, the
Pledgor and their respective successors and permitted assigns. Neither this
Pledge Agreement nor any interest herein or in the Pledged Collateral, or any
part thereof, may be assigned by the Pledgor without the prior written consent
of the Collateral Agent, except as expressly permitted herein or in the
Indenture. This Pledge Agreement shall be deemed to be automatically assigned
by the Collateral Agent to any person who succeeds to the Collateral Agent in
accordance with Section 7.08 or Section 7.09 of the Indenture, and its
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assignee shall have all rights and powers of, and act as, the Collateral Agent
hereunder.
Section 21. GOVERNING LAW. This Pledge Agreement shall be
construed in accordance with, and this Pledge Agreement and the transactions
described herein shall be governed by, the laws of the State of New York as to
all issues, including (without limitation) issues of validity, interpretation,
effect, performance and remedies.
Section 22. AMENDMENTS. This Pledge Agreement may not be amended
or modified, except in accordance with Article Nine of the Indenture.
Section 23. SEVERABILITY. In the event that any provisions
contained in this Pledge Agreement shall for any reason be held to be illegal or
invalid under the laws of any jurisdiction, such illegality or invalidity shall
in no way impair the effectiveness of any other provision hereof, or of such
provision under the laws of any other jurisdiction; provided, that in the
construction and enforcement of such provision under the laws of the
jurisdiction in which such holding of illegality or invalidity exists, and to
the extent only of such illegality or invalidity, this Pledge Agreement shall be
construed and enforced as though such illegal or invalid provision had not been
contained herein.
Section 24. HEADINGS. Section headings used herein are inserted
for convenience only and shall not in any way affect the meaning or construction
of any provision of this Pledge Agreement.
Section 25. COUNTERPARTS. This Pledge Agreement may be executed in
any number of counterparts, each of which when so executed and delivered shall
be an original, and all of which shall together constitute but one and the same
instrument. A complete set of counterparts shall be lodged with the Collateral
Agent.
Section 26. COOPERATION OF PLEDGED SUBSIDIARIES. The Pledgor shall
cause the Pledged Subsidiaries to take all actions necessary to facilitate the
Pledgor's compliance with the terms hereof. If any entity issues shares of
Capital Stock or other equity securities to a Pledged Subsidiary and, at the
time of such issuance, the entity is, or as a result of such issuance becomes, a
Pledged Subsidiary under the Indenture, the Pledgor shall cause such Pledged
Subsidiary to enter into a supplement hereto, substantially in the form of this
Pledge Agreement, pursuant to which such Pledged Subsidiary shall pledge,
assign, transfer, set over and deliver unto the Collateral Agent, and grant unto
the Collateral Agent for the ratable benefit of the Holders and their respective
successors and assigns, a continuing security interest in all of the right,
title and interest of the Pledged Subsidiary in, to and under any and all of
such Capital
-19-
Stock or other equity securities as collateral security for the indefeasible
payment and performance in full of the Pledgor's Obligations under the
Indenture, the Notes and the Collateral Agreements. Such Capital Stock or
equity security shall thereafter be included as "Pledged Securities" hereunder,
such Pledged Subsidiary shall thereafter be included as a "Pledgor" hereunder,
and such entity shall thereafter be included as one of the "Pledged
Subsidiaries" hereunder.
Section 27. CONFIDENTIALITY. The parties agree that they and their
employees have maintained and will maintain, in confidence, all data, summaries,
reports or information of all kinds, whether oral or written, provided pursuant
to this Pledge Agreement or acquired or delivered in any manner from the other
party's personnel or files (the "CONFIDENTIAL INFORMATION"), and that they have
not and will not reveal the same to any persons not employed by the other party
except: at the written direction of such party; to the extent necessary to
comply with applicable law, reporting requirements imposed by the Securities and
Exchange Commission, or the valid order of a court of competent jurisdiction, in
which event the disclosing party shall so notify the other party as promptly as
practicable (and, if possible, prior to making any disclosure) and shall seek
confidential treatment of such information, or in connection with any
arbitration proceeding; as part of its normal reporting or review procedure to
its parent company, its auditors and its attorneys, and such parent company,
auditors and attorneys agree to be bound by the provisions of this Section; in
order to enforce any of its rights pursuant to, or in any other dispute with
respect to, this Agreement; if, at the time of disclosure to the recipient, the
Confidential Information is in the public domain; if, after disclosure to the
recipient, the Confidential Information becomes part of the public domain by
written publication through no fault of the recipient; or to any one or more
Holders and their representatives and agents.
Section 28. NO ASSUMPTION OF DUTIES; REASONABLE CARE. The rights
and powers granted to the Collateral Agent hereunder are being granted in order
to preserve and protect the security interest of the Collateral Agent and the
Holders in and to the Pledged Collateral granted hereby and shall not be
interpreted to, and shall not impose any duties on the Collateral Agent in
connection therewith other than those expressly provided herein or imposed under
applicable law and no implied covenants, functions, responsibilities, duties,
obligations, or liabilities shall be read into this Pledge Agreement or
otherwise exist against the Collateral Agent. Except as provided by applicable
law or by the Indenture, the Collateral Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Pledged Collateral in its
possession if the Pledged Collateral is accorded treatment substantially equal
to that which the Collateral Agent accords similar property held by the
Collateral Agent for similar accounts, it being understood that the Collateral
Agent in its capacity as such shall not have any
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responsibility for (a) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities or other matters relative to any Pledged
Collateral, whether or not the Collateral Agent has or is deemed to have
knowledge of such matters, (b) taking any necessary steps to preserve rights
against any parties with respect to any Pledged Collateral or (c) investing or
reinvesting any of the Pledged Collateral, provided, however, that nothing
contained in this Pledge Agreement shall relieve the Collateral Agent of any
responsibilities as a securities intermediary under applicable law.
Section 29. AUTHORITY OF THE COLLATERAL AGENT.
(a) The Collateral Agent shall have and be entitled to exercise
all powers hereunder that are specifically granted to the Collateral Agent by
the terms hereof, together with such powers as are reasonably incident thereto.
The Collateral Agent may perform any of its duties hereunder or in connection
with the Pledged Collateral by or through agents or employees and shall be
entitled to retain counsel and to act in reliance upon the advice of counsel
concerning all such matters. Except as otherwise expressly provided in this
Pledge Agreement or the Indenture, neither the Collateral Agent nor any
director, officer, employee, attorney or agent of the Collateral Agent shall be
liable to the Pledgor for any action taken or omitted to be taken by the
Collateral Agent, in its capacity as Collateral Agent, hereunder, except for its
own bad faith, gross negligence or willful misconduct, and the Collateral Agent
shall not be responsible for the validity, effectiveness or sufficiency hereof
or of any document or security furnished pursuant hereto. The Collateral Agent
and its directors, officers, employees, attorneys and agents shall be entitled
to rely on any communication, instrument or document believed by it or them to
be genuine and correct and to have been signed or sent by the proper person or
persons. The Collateral Agent shall have no duty to cause any financing
statement or continuation statement to be filed in respect of the Pledged
Collateral.
(b) The Pledgor acknowledges that the rights and
responsibilities of the Collateral Agent under this Pledge Agreement with
respect to any action taken by the Collateral Agent or the exercise or
non-exercise by the Collateral Agent of any option, right, request, judgment or
other right or remedy provided for herein or resulting or arising out of this
Pledge Agreement shall, as between the Collateral Agent and the Holders, be
governed by the Indenture and by such other agreements with respect thereto as
may exist from time to time among them, but, as between the Collateral Agent and
the Pledgor, the Collateral Agent shall be conclusively presumed to be acting as
agent for the Holders with full and valid authority so to act or refrain from
acting, and the Pledgor shall not be obligated or entitled to make any inquiry
respecting such authority.
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IN WITNESS WHEREOF, the Pledgor and the Collateral Agent have caused
this Pledge Agreement to be duly executed and delivered by its officer thereunto
duly authorized as of the date first above written.
DISCOVERY ZONE, INC.
By:/s/ Xxxxx Xxxxxxxxx
---------------------------
Name: Xxxxx Xxxxxxxxx
Title: Chief Executive Officer
and President
STATE STREET BANK AND TRUST COMPANY,
as Collateral Agent
By: /s/ Xxxx Xxx Xxxxxx
---------------------------
Name: Xxxx Xxx Xxxxxx
Title:
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
On the 22nd day of July, 1997 before me personally came Xxxxxx X.
Xxxxxx, to me known, who being by me duly sworn, did depose and say that he
is the Sr. Vice President of DISCOVERY ZONE, INC., the corporation described in
and which executed the foregoing instrument; and that he signed his name
thereto by order of the Board of Directors of said corporation.
/s/ Xxxxx X. Xxxxxxxx
----------------------------------
Notary Public
[SEAL]
Schedule A
SUBSIDIARY SHARES OF CAPITAL STOCK PLEDGED
1. Discovery Zone Limited 1
2. Discovery Zone (Puerto Rico), Inc. 1
3. DZ Party, Inc. 1
4. Discovery Zone, Licensing, Inc. 1,000
