EXECUTION COPY
PLEDGE AGREEMENT
PLEDGE AGREEMENT dated as of July 1, 2003, among KINDERCARE LEARNING
CENTERS, INC., a Delaware corporation (the "Borrower"), the undersigned
Subsidiaries of the Borrower listed on Annex A hereto (each a "Subsidiary
Pledgor" and, collectively, the "Subsidiary Pledgors"; the Borrower and the
Subsidiary Pledgors, collectively, the "Pledgors") and 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 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, (a) each Subsidiary Pledgor is a Domestic Subsidiary of the
Borrower and (b) each Subsidiary Pledgor has, pursuant to the Guarantee dated as
of the date hereof, unconditionally and irrevocably guaranteed, 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;
WHEREAS, the proceeds of the Extensions of Credit will be used in part
to enable the Borrower to make valuable transfers to the Subsidiary Pledgors in
connection with the operation of their respective businesses;
WHEREAS, the Borrower and the Subsidiary Pledgors are engaged in
related businesses, and each Pledgor 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 Borrower and the Subsidiary
Pledgors shall have executed and delivered this Pledge Agreement to the
Administrative Agent for the ratable benefit of the Secured Parties;
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
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with the Borrower, the Pledgors 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 and all terms defined in the Uniform Commercial Code from
time to time in effect in the State of New York (the "NY UCC") and not defined
herein shall have the meanings specified therein; the term "instrument" shall
have the meaning specified in Article 9 of the NY UCC.
(b) As used herein, the term "Equity Interests" means shares of
capital stock, partnership interests, membership interests in a limited
liability company, beneficial interests in a trust or other equity ownership
interests in a Person of whatever nature, and any warrants, options or other
rights entitling the holder thereof to purchase or acquire any of the foregoing.
(c) 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
Pledge Agreement 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.
(d) As used herein, the term "Material Foreign Subsidiary" shall mean
any Foreign Subsidiary that is a Material Subsidiary.
(e) 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.
(e) References to "Lenders" in this Pledge Agreement shall be deemed
to include affiliates of Lenders that may from time to time enter into Hedge
Agreements with the Borrower.
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(f) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Pledge Agreement shall refer to this Pledge Agreement
as a whole and not to any particular provision of this Pledge Agreement, and
Section references are to Sections of this Pledge Agreement unless otherwise
specified. The words "include", "includes" and "including" shall be deemed to be
followed by the phrase "without limitation".
(g) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
2. Pledge. As collateral security for the payment and performance, as
the case may be, in full of the Obligations, each Pledgor hereby assigns and
pledges to the Administrative Agent, for the ratable benefit of the Secured
Parties, and hereby grants to the Administrative Agent, for the ratable benefit
of the Secured Parties, a security interest in all of such Pledgor's right,
title and interest in, to and under (a) the Equity Interests owned by it and
listed on Schedule 1 hereto and any other Equity Interests obtained in the
future by such Pledgor and the certificates representing all such Equity
Interests, including for the avoidance of doubt, any certificates obtained by
each Pledgor representing Equity Interests in Minority Investments (the "Pledged
Stock"), provided that the Pledged Stock shall not include (i) any Equity
Interests in a Foreign Subsidiary (x) that is not held directly by the Borrower
and (y) that does not constitute a Material Foreign Subsidiary, (ii) more than
65% of the issued and outstanding voting Equity Interests of any Foreign
Subsidiary, (iii) any Equity Interests in a Minority Investment with an
aggregate fair market value of less than or equal to $10,000,000 (determined at
the time of the initial acquisition of such Equity Interests and at the time of
any acquisition of additional Equity Interests in such Minority Investment) or
(iv) any Equity Interests not required to be pledged hereunder in accordance
with Sections 10.1(j) or 10.1(k) of the Credit Agreement, (b)(i) any debt
securities in the future issued to such Pledgor evidencing Indebtedness in
excess of $5,000,000 received by such Pledgor in connection with any disposition
of assets pursuant to Section 10.4(b) of the Credit Agreement and (ii) any
promissory notes and any other instruments evidencing such debt securities (the
debt securities, promissory notes and other instruments referred to in clauses
(b)(i) and (ii) are referred to hereinafter as the "Pledged Debt"), (c) subject
to Section 7, all other property that may be delivered to and held by the
Administrative Agent pursuant to the terms hereof, (d) subject to Section 7, all
payments of principal or interest, dividends, cash, instruments and other
property from time to time received, receivable or otherwise distributed, in
respect of, in exchange for or upon the conversion of the securities referred to
in clauses (a) and (b) above, (e) subject to Section 7, all rights and
privileges of such Pledgor with respect to the securities and other property
referred to in clauses (a), (b), (c) and (d) above, and (f) all Proceeds of any
of the foregoing (the items referred to in clauses (a) through (f) above being
collectively referred to as the "Collateral").
3. Delivery of the Collateral. All certificates or instruments, if
any, representing or evidencing the Collateral shall be promptly delivered to
and held by or on behalf of the Administrative Agent pursuant hereto and shall
be in suitable form for transfer by delivery, or shall be accompanied by duly
executed instruments of transfer or assignment in blank, all in form and
substance reasonably satisfactory to the Administrative Agent. It is expressly
understood and agreed that the Borrower may deliver to the Administrative Agent
or a representative of the Administrative Agent one share of KinderCare Learning
Centres Limited after the date hereof, which the Borrower agrees to deliver
promptly after the date hereof in accordance with this paragraph. The
Administrative Agent shall have the right, at any time after the occurrence and
during the continuance of an Event of Default and without notice to any Pledgor,
to transfer to or to register in the name of the Administrative Agent or any of
its nominees any or all of the Pledged Stock. Each delivery of Collateral shall
be accompanied by a schedule describing the securities theretofore and then
being pledged hereunder, which schedule shall be attached hereto as Schedule 1
and made a part hereof, provided that the failure to attach any such
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schedule hereto shall not affect the validity of such pledge of such securities.
Each schedule so delivered shall supersede any prior schedules so delivered.
4. Representations and Warranties. Each Pledgor represents and
warrants as follows:
(a) Schedule 1 hereto (i) correctly represents as of the date hereof
the issuer, the certificate number, if any, the Pledgor and the record and
beneficial owner, the number and class and the percentage of the issued and
outstanding Equity Interests of such class of all Pledged Stock and (ii)
includes (including after giving effect to any supplements thereto after the
date of this Pledge Agreement) all Equity Interests, debt securities and
promissory notes required to be pledged hereunder.
(b) Such Pledgor is the legal and beneficial owner of the Collateral,
as indicated on Schedule 1, pledged or assigned by such Pledgor hereunder free
and clear of any Lien, except for the Lien created by this Pledge Agreement or
Liens permitted under Section 8.
(c) As of the date of this Pledge Agreement, the Pledged Stock pledged
by such Pledgor hereunder have been duly authorized and validly issued and are
fully paid and non-assessable.
(d) The execution and delivery by such Pledgor of this Pledge
Agreement and the pledge of the Collateral pledged by such Pledgor hereunder
pursuant hereto create a valid and perfected first-priority security interest in
the Collateral (other than with respect to rights of Persons pursuant to
Permitted Liens) securing the payment of the Obligations, in favor of the
Administrative Agent for the ratable benefit of the Secured Parties.
(e) Such Pledgor has full power, authority and legal right to pledge
all the Collateral pledged by such Pledgor pursuant to this Pledge Agreement.
5. Certification of Limited Liability Company, Limited Partnership
Interests and Pledged Debt. The Equity Interests in any Domestic Subsidiary that
is organized as a limited liability company or limited partnership and pledged
hereunder shall be represented by a certificate or certificates and, in the
organizational documents of such Domestic Subsidiary, the applicable Pledgor
shall cause the issuer of such interests to elect to treat such interests as a
"security" within the meaning of Article 8 of the NY UCC and, accordingly, such
interests shall be governed by Article 8 of the NY UCC.
(b) Each Pledgor will cause any Indebtedness for borrowed money owed
to such Pledgor and required to be pledged hereunder to be evidenced by a duly
executed promissory note that is pledged and delivered to the Administrative
Agent pursuant to the terms hereof.
(c) Each Pledgor will promptly notify the Administrative Agent after
such Pledgor becomes aware (x) that any Equity Interests required to be pledged
hereunder in any Minority Investment that is organized as a limited liability
company or limited partnership are or are to be represented by a certificate or
certificates or (y) that, in the organizational documents of such a Minority
Investment, a Minority Investment has elected to treat any Equity Interest in
such Minority Investment as a "security" within the meaning of Article 8 of the
Uniform Commercial Code of any applicable jurisdiction. Following any such
notice,
(i) following receipt by the applicable Pledgor thereof, the
applicable Pledgor shall deliver to the Administrative Agent any
certificates representing any such Equity
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Interests in any such Minority Investment that are required to be
pledged to the Administrative Agent pursuant to Section 2; and
(ii) upon the request of the Administrative Agent, the applicable
Pledgor shall request that any Minority Investment so electing to
treat any Equity Interest in such Minority Investment as a "security"
within the meaning of Article 8 of the Uniform Commercial Code of any
jurisdiction (x) cause the Equity Interests in such Minority
Investment required to be pledged hereunder to be represented by a
certificate or certificates or (y) otherwise agree on terms reasonably
satisfactory to the Administrative Agent to comply, without further
consent by such Pledgor or any other party, with any instructions
originated by the Administrative Agent with respect to such Equity
Interests in accordance with the terms of this Pledge Agreement.
6. Further Assurances. Upon the request of the Administrative Agent,
each Pledgor will execute, acknowledge, deliver and cause to be duly filed any
and all further documents, financing statements, agreements and instruments, and
take all such further actions (including the filing and recording of financing
statements, and other documents), that may be required under any applicable law,
or that the Administrative Agent or the Required Lenders may reasonably request,
in order to effectuate the transactions contemplated by this Pledge Agreement
and in order to grant, preserve, protect and perfect the validity and priority
(other than with respect to rights of Persons pursuant to Permitted Liens) of
the security interests created or intended to be created by this Pledge
Agreement or to enable the Administrative Agent to exercise and enforce its
rights and remedies with respect to any Collateral, all at the expense of such
Pledgor.
7. Voting Rights; Dividends and Distributions; Etc. (a) So long as no
Event of Default shall have occurred and be continuing:
(i) Each Pledgor shall be entitled to exercise any and all voting and other
consensual rights pertaining to the Collateral or any part thereof for any
purpose not prohibited by the terms of this Pledge Agreement or the other Credit
Documents.
(ii) The Administrative Agent shall execute and deliver (or cause to be
executed and delivered) to each Pledgor all such proxies and other instruments
as such Pledgor may reasonably request for the purpose of enabling such Pledgor
to exercise the voting and other rights that it is entitled to exercise pursuant
to paragraph (i) above.
(b) Subject to paragraph (c) below, each Pledgor shall be entitled to
receive and retain and use, free and clear of the Lien of this Pledge Agreement,
any and all dividends, distributions, principal and interest made or paid in
respect of the Collateral to the extent permitted by the Credit Agreement;
provided, however, that any and all noncash dividends, interest, principal or
other distributions that would constitute Pledged Stock or Pledged Debt, whether
resulting from a subdivision, combination or reclassification of the outstanding
Equity Interests of the issuer of any Pledged Stock or received in exchange for
Pledged Stock or Pledged Debt or any part thereof, or in redemption thereof, or
as a result of any merger, consolidation, acquisition or other exchange of
assets to which such issuer may be a party or otherwise, shall be, and shall be
forthwith delivered to the Administrative Agent to hold as, Collateral and
shall, if received by such Pledgor, be received in trust for the benefit of the
Administrative Agent, be segregated from the other property or funds of such
Pledgor and be forthwith (and, in any event, within two Business Days) delivered
to the Administrative Agent as Collateral in the same form as so received (with
any necessary indorsement).
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(c) Upon written notice to each Pledgor by the Administrative Agent
following the occurrence and during the continuance of an Event of Default,
(i) all rights of such Pledgor to exercise or refrain from exercising the
voting and other consensual rights that it would otherwise be entitled to
exercise pursuant to Section 7(a)(i) shall cease, and all such rights shall
thereupon become vested in the Administrative Agent, which shall thereupon have
the sole right to exercise or refrain from exercising such voting and other
consensual rights during the continuance of such Event of Default, provided
that, unless otherwise directed by the Required Lenders, the Administrative
Agent shall have the right from time to time following and during the
continuance of an Event of Default to permit the Pledgors to exercise such
rights. After all Events of Default have been cured or waived and the Borrower
has delivered to the Administrative Agent a certificate to that effect, each
Pledgor will have the right to exercise the voting and consensual rights that
such Pledgor would otherwise be entitled to exercise pursuant to the terms of
Section 7(a)(i) (and the obligations of the Administrative Agent under Section
7(a)(ii) shall be reinstated);
(ii) all rights of such Pledgor to receive the dividends, distributions and
principal and interest payments that such Pledgor would otherwise be authorized
to receive and retain pursuant to Section 7(b) shall cease, and all such rights
shall thereupon become vested in the Administrative Agent, which shall thereupon
have the sole right to receive and hold as Collateral such dividends,
distributions and principal and interest payments during the continuance of such
Event of Default. After all Events of Default have been cured or waived and the
Borrower has delivered to the Administrative Agent a certificate to that effect,
the Administrative Agent shall repay to each Pledgor (without interest) all
dividends, distributions and principal and interest payments that such Pledgor
would otherwise be permitted to receive, retain and use pursuant to the terms of
Section 7(b);
(iii) all dividends, distributions and principal and interest payments that
are received by such Pledgor contrary to the provisions of Section 7(b) shall be
received in trust for the benefit of the Administrative Agent, shall be
segregated from other property or funds of such Pledgor and shall forthwith
(and, in any event, within two Business Days) be delivered to the Administrative
Agent as Collateral in the same form as so received (with any necessary
indorsements); and
(iv) in order to permit the Administrative Agent to receive all dividends,
distributions and principal and interest payments to which it may be entitled
under Section 7(b) above, to exercise the voting and other consensual rights
that it may be entitled to exercise pursuant to Section 7(c)(i) above, and to
receive all dividends, distributions and principal and interest payments that it
may be entitled to under Sections 7(c)(ii) and (iii) above, such Pledgor shall,
if necessary, upon written notice from the Administrative Agent, from time to
time execute and deliver to the Administrative Agent appropriate proxies,
dividend payment orders and other instruments as the Administrative Agent may
reasonably request.
8. Transfers and Other Liens; Additional Collateral; Etc. Each Pledgor
shall:
(a) not (i) sell or otherwise dispose of, or grant any option or
warrant with respect to, any of the Collateral, except as permitted by the
Credit Agreement or (ii) create or suffer to exist any Lien upon or with respect
to any of the Collateral, except for the Lien under this Pledge Agreement and
except for Permitted Liens, provided that in the event such Pledgor sells or
otherwise disposes of Collateral in a manner permitted by the Credit Agreement,
the Administrative Agent shall release such Collateral free and clear of the
Lien under this Pledge Agreement concurrently with the consummation of such
sale;
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(b) (i) except as permitted by the Credit Agreement, cause each issuer
of Pledged Stock not to issue any stock or other securities in addition to or in
substitution for the Pledged Stock issued by such issuer, except to such
Pledgor, and (ii) pledge hereunder, immediately upon its acquisition (directly
or indirectly) thereof, any and all additional shares of stock or other
securities of each such issuer (other than those issuers organized outside of
the United States (with respect to which the Pledgor shall pledge such shares
(other than any shares representing in excess of 65% of the issued and
outstanding voting Equity Interests of such issuer) within 60 Business Days of
such acquisition)) of Pledged Stock; and
(c) defend its and the Administrative Agent's title or interest in and
to all the Collateral (and in the Proceeds thereof) against any and all Liens
(other than the Lien of this Pledge Agreement or Liens permitted under Section
8(a)), however arising, and any and all persons whomsoever.
9. Administrative Agent Appointed Attorney-in-Fact. Each Pledgor
hereby irrevocably appoints, which appointment is irrevocable and coupled with
an interest, the Administrative Agent as such Pledgor's attorney-in-fact, with
full authority in the place and stead of such Pledgor and in the name of such
Pledgor or otherwise, to take any action and to execute any instrument, in each
case after the occurrence and during the continuance of an Event of Default,
that the Administrative Agent may deem reasonably necessary or advisable to
accomplish the purposes of this Pledge Agreement, including to receive, indorse
and collect all instruments made payable to such Pledgor representing any
dividend, distribution or principal or interest payment in respect of the
Collateral or any part thereof and to give full discharge for the same.
10. The Administrative Agent's Duties. The powers conferred on the
Administrative Agent hereunder are solely to protect its interest in the
Collateral and shall not impose any duty upon it to exercise any such powers.
Except for the safe custody of any Collateral in its possession under Section
9-207 of the NY UCC or otherwise and the accounting for moneys actually received
by it hereunder, the Administrative Agent shall have no duty as to any
Collateral, as to ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Pledged Stock, whether or not the Administrative Agent or any Secured Party has
or is deemed to have knowledge of such matters, or as to the taking of any
necessary steps to preserve rights against any parties or any other rights
pertaining to any Collateral. The Administrative Agent shall be deemed to have
exercised reasonable care in the custody and preservation of any Collateral in
its possession if such Collateral is accorded treatment in the same manner to
that which the Administrative Agent accords its own property.
11. Remedies. If any Event of Default shall have occurred and be
continuing:
(a) The Administrative Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party upon
default under the NY UCC (whether or not the NY UCC applies to the affected
Collateral) and also may without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private sale,
at any exchange broker's board or at any of the Administrative Agent's offices
or elsewhere, for cash, on credit or for future delivery, at such price or
prices and upon such other terms as are commercially reasonable irrespective of
the impact of any such sales on the market price of the Collateral. The
Administrative Agent shall be authorized at any such sale (if it deems it
advisable to do so) to restrict the prospective bidders or purchasers of
Collateral to Persons who will represent and agree that they are purchasing the
Collateral for their own account for investment and not with a view to the
distribution or sale thereof, and, upon consummation of any such sale, the
Administrative Agent shall have the right to assign, transfer and deliver to the
purchaser or
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purchasers thereof the Collateral so sold. Each purchaser at any such sale shall
hold the property sold absolutely free from any claim or right on the part of
any Pledgor, and each Pledgor hereby waives (to the extent permitted by law) all
rights of redemption, stay and/or appraisal that it now has or may at any time
in the future have under any rule of law or statute now existing or hereafter
enacted. The Administrative Agent or any Secured Party shall have the right upon
any such public sale, and, to the extent permitted by law, upon any such private
sale, to purchase the whole or any part of the Collateral so sold, and the
Administrative Agent or such Secured Party may subject to (x) the satisfaction
in full in cash of all payments due pursuant to Section 11(b)(i), and (y) the
ratable satisfaction of the Obligations in accordance with Section 11(b)(ii) pay
the purchase price by crediting the amount thereof against the Obligations. Each
Pledgor agrees that, to the extent notice of sale shall be required by law, at
least ten days' notice to such Pledgor of the time and place of any public sale
or the time after which any private sale is to be made shall constitute
reasonable notification. The Administrative Agent shall not be obligated to make
any sale of Collateral regardless of notice of sale having been given. The
Administrative Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned. To
the extent permitted by law, each Pledgor hereby waives any claim against the
Administrative Agent arising by reason of the fact that the price at which any
Collateral may have been sold at such a private sale was less than the price
that might have been obtained at a public sale, even if the Administrative Agent
accepts the first offer received and does not offer such Collateral to more than
one offeree.
(b) Notwithstanding anything in this Section 11(a) to the contrary, to
the extent that the Collateral the subject of any sale consists of the Equity
Interests of any Closing Date Securitization Subsidiary, (i) each prospective
bidder and purchaser of such Equity Interests shall be required to represent to
the Administrative Agent and the Borrower whether or not it qualifies as a
Qualified Transferee and (ii) in the event a prospective bidder or purchaser
represents that it does not qualify as a Qualified Transferee, such sale shall
only be consummated to the extent that the Borrower either (x) consents in
writing thereto or (y) notifies the Administrative Agent in writing that the
sale of such Equity Interests to such prospective bidder or purchaser would not,
after giving effect to such sale, result in 50% or more of the Equity Interests
of such Closing Date Securitization Subsidiary being owned by Persons not
qualifying as Qualified Transferees. The Borrower shall (unless restricted from
doing so by law or court order) promptly respond to any request from the
Administrative Agent for any consent or notice pursuant to clause (ii) of the
immediately preceding sentence. The Administrative Agent shall be entitled to
rely upon, and shall incur no liability for relying upon, any notice,
certificate, statement, instrument, document, other writing or other
representation or determination (whether written or oral) from any prospective
bidder and purchaser of the Equity Interests of any Closing Date Securitization
Subsidiary and/or the Borrower with respect to (x) the status of any such
prospective bidder or purchaser as a Qualified Transferee or (y) whether the
sale of such Equity Interests to any such prospective bidder or purchaser would,
after giving effect to such sale, result in 50% or more of the Equity Interests
of such Closing Date Securitization Subsidiary being be owned by Persons not
qualifying as Qualified Transferees.
(c) The Administrative Agent shall apply the proceeds of any
collection or sale of the Collateral at any time after receipt as follows:
(i) first, to the payment of all costs and expenses incurred by the
Administrative Agent in connection with such collection or sale or otherwise in
connection with this Pledge Agreement, the other Credit Documents or any of the
Obligations, including all court costs and the fees and expenses of its agents
and legal counsel, the repayment of all advances made by the Administrative
Agent hereunder or under any other Credit Document on behalf of any Pledgor and
any other costs or expenses
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incurred in connection with the exercise of any right or remedy hereunder or
under any other Credit Document;
(ii) second, to the Secured Parties, an amount equal to all
Obligations owing to them on the date of any such distribution, and, if such
moneys shall be insufficient to pay such amounts in full, then ratably (without
priority of any one over any other) to such Secured Parties in proportion to the
unpaid amounts thereof; and
(iii) third, any surplus then remaining shall be paid to the Pledgors
or their successors or assigns or to whomsoever may be lawfully entitled to
receive the same or as a court of competent jurisdiction may direct.
Upon any sale of the Collateral by the Administrative Agent (including pursuant
to a power of sale granted by statute or under a judicial proceeding), the
receipt of the Administrative Agent or of the officer making the sale shall be a
sufficient discharge to the purchaser or purchasers of the Collateral so sold
and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Administrative
Agent or such officer or be answerable in any way for the misapplication
thereof.
(c) The Administrative Agent may exercise any and all rights and
remedies of each Pledgor in respect of the Collateral.
(d) All payments received by any Pledgor after the occurrence and
during the continuance of an Event of Default in respect of the Collateral shall
be received in trust for the benefit of the Administrative Agent, shall be
segregated from other property or funds of such Pledgor and shall be forthwith
(and, in any event, within two Business Days) delivered to the Administrative
Agent as Collateral in the same form as so received (with any necessary
indorsement).
12. Amendments, etc. with Respect to the Obligations; Waiver of
Rights. Each Pledgor shall remain obligated hereunder notwithstanding that,
without any reservation of rights against any Pledgor and without notice to or
further assent by any Pledgor, (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 Pledge Agreement or any property subject thereto. When
making any demand hereunder against any Pledgor, 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 Pledgor or pledgor, 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 Pledgor or pledgor or any release of
the Borrower or any other Pledgor or pledgor shall not relieve any Pledgor in
respect of which a demand or collection is not made
9
or any Pledgor 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 Pledgor. For the purposes hereof "demand" shall include the
commencement and continuance of any legal proceedings.
13. Continuing Security Interest; Assignments Under the Credit
Agreement; Release. (a) This Pledge Agreement shall create a continuing security
interest in the Collateral and shall remain in full force and effect and be
binding in accordance with and to the extent of its terms upon each Pledgor 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 (x) all the Obligations shall have
been satisfied by payment in full, (y) the Commitments shall be terminated and
(z) 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; upon clauses (x), (y) and (z) being
satisfied, the Collateral shall be released from the Liens created hereby, all
rights to the Collateral shall revert to the Pledgors and this Pledge Agreement
and all obligations (other than those expressly stated to survive such
termination either herein or in any other Credit Document) of the Administrative
Agent and each Pledgor shall terminate, all without delivery of any instrument
or performance of any act by any party.
(b) A Subsidiary Pledgor shall automatically be released from its
obligations hereunder and all rights to the Collateral pledged hereunder by such
Subsidiary Pledgor shall revert to such Subsidiary Pledgor upon the consummation
of any transaction permitted by the Credit Agreement as a result of which such
Subsidiary Pledgor ceases to be a Domestic Subsidiary of the Borrower, all
without delivery of any instrument or performance of any act by any party.
(c) Upon any sale, disposition or other transfer by any Pledgor of any
Collateral that is permitted under the Credit Agreement, or upon the
effectiveness of any written consent to the release of the security interest
granted hereby in any Collateral pursuant to Section 13.1 of the Credit
Agreement, the obligations of such Pledgor with respect to such Collateral shall
be automatically released and such Collateral shall be sold free and clear of
the Lien and security interest created hereby.
(d) In connection with any termination or release pursuant to
paragraph (a), (b) or (c), the Administrative Agent shall execute and deliver to
any Pledgor, at such Pledgor's expense, all documents that such Pledgor shall
reasonably request to evidence such termination or release. Any execution and
delivery of documents pursuant to this Section 13 shall be without recourse to
or warranty by the Administrative Agent.
Subject to Section 10.2 of the Credit Agreement, it is hereby agreed
and understood that, if the ownership of the Closing Date Securitization
Subsidiaries is restructured after the Closing Date in such a manner that the
Closing Date Securitization Subsidiaries that were owned directly by Borrower on
the Closing Date will be subsequently owned indirectly by the Borrower, then the
Administrative Agent, at the request and sole expense of the Borrower, shall
execute and deliver to the Borrower all releases or other documents reasonably
necessary or desirable for the release of the Liens created by this Pledge
Agreement relating to such Closing Date Securitization Subsidiaries, and the
Borrower will pledge to the Administrative Agent, for the benefit of the Secured
Parties, prior to or concurrently with such release, all of the Equity Interests
of any new directly owned Closing Date Securitization Subsidiaries created after
the Closing Date pursuant to this Pledge Agreement and shall deliver to the
Administrative Agent all Collateral related to such newly created directly owned
Closing Date Securitization Subsidiaries pursuant to the terms hereof.
10
14. Reinstatement. This Pledge Agreement 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 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 other Credit Party, 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 other Credit Party or any substantial part of its property, or
otherwise, all as though such payments had not been made.
15. 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 Subsidiary Pledgor shall be
addressed to such Subsidiary Pledgor at the notice address set forth under its
signature below.
16. Counterparts. This Pledge Agreement 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 constitute one and the same instrument. A set of the
counterparts of this Pledge Agreement signed by all the parties hereto shall be
lodged with the Administrative Agent and the Borrower.
17. Severability. Any provision of this Pledge Agreement 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.
18. Integration. This Pledge Agreement and the other Credit Documents
represent the agreement of each Pledgor 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. 19.
Amendments in Writing; No Waiver; Cumulative Remedies. (a) None of the terms or
provisions of this Pledge Agreement may be waived, amended, supplemented or
otherwise modified except by a written instrument executed by each affected
Pledgor 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 19(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.
11
20. Section Headings. The Section headings used in this Pledge
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
21. Successors and Assigns. This Pledge Agreement shall be binding
upon the successors and assigns of each Pledgor and shall inure to the benefit
of the Administrative Agent and the Secured Parties and their successors and
assigns, except that no Pledgor may assign, transfer or delegate any of its
rights or obligations under this Pledge Agreement without the prior written
consent of the Administrative Agent.
22. WAIVER OF JURY TRIAL. EACH PLEDGOR 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 PLEDGE AGREEMENT, ANY OTHER CREDIT DOCUMENT OR ANY LETTER OF
CREDIT AND FOR ANY COUNTERCLAIM THEREIN.
23. Submission to Jurisdiction; Waivers. Each Pledgor hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Pledge Agreement, 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 Pledgor at its
address referred to in Section 15 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 23 any special, exemplary, punitive or consequential damages.
24. GOVERNING LAW. THIS PLEDGE AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
25. Charge Over Shares. The parties hereby confirm and agree that the
rights and remedies of the Administrative Agent, and the obligations of the
Borrower, set forth in the Charge Over Shares dated the date hereof (the
"Charge") between the Borrower and the Administrative Agent, shall be in
addition to, and not in any way in limitation of, the rights and remedies of the
Administrative
12
Agent, or the obligations of the Borrower, under this Agreement. For purposes of
the definition of the term "Pledge Agreement" in the Credit Agreement and for
purposes of all references to the Pledge Agreement therein the Credit Agreement
or the other Credit Documents, the Charge shall be deemed to be a part of this
Agreement.
26. IRBs. In the event (a) any of the industrial development refunding
revenue bonds (the "IRBs") identified on Schedule 10.1 to the Credit Agreement
are (i) purchased pursuant to section 301(a) of the related indenture or, in the
case of a conversion of the interest rate on such IRBs from a seven-day rate to
a 30-day rate or vice versa, pursuant to section 302(a) of the related indenture
and (ii) not remarketed on the date of the delivery thereof by the holders of
such IRBs and (b) a drawing with respect to such purchases is made under any
Letter of Credit issued for the benefit of such IRBs, such IRBs shall be, at the
time of such drawing, pledged hereunder to the Administrative Agent for the
ratable benefit of the Secured Parties in the same manner as the Pledged Debt is
pledged hereunder. Such pledge of the IRBs shall be made pursuant to a
supplement to this Pledge Agreement containing customary terms and otherwise
reasonably acceptable to the Administrative Agent and the Borrower.
27. Additional Pledgors. Pursuant to Section 9.12 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
Pledge Agreement and (b) any Subsidiary that is not a Domestic Subsidiary on the
date of this Pledge Agreement 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, (i) to execute a supplement to this
Pledge Agreement, substantially in the form of Annex B hereto, in order to
become a Subsidiary Pledgor and (ii) to deliver to the Administrative Agent all
Collateral required to be delivered to the Administrative Agent pursuant to the
terms of this Pledge Agreement, provided that no such Domestic Subsidiary need
execute such a supplement to this Pledge Agreement promptly after such
formation, purchase, acquisition or transformation to the extent such Domestic
Subsidiary owns or holds no Collateral required to be pledged to the
Administrative Agent pursuant to the terms of this Pledge Agreement, provided,
further, that promptly after such time as any such Domestic Subsidiary not
required to execute such a supplement to this Pledge Agreement pursuant to the
immediately preceding proviso acquires any Collateral of the nature required to
be delivered to the Administrative Agent pursuant to the terms of this Pledge
Agreement, such Domestic Subsidiary shall comply with the provisions of clauses
(i) and (ii) above. Upon execution and delivery by the Administrative Agent and
any such Subsidiary of an instrument substantially in the form of Annex B
hereto, any such Subsidiary shall become a Subsidiary Pledgor hereunder with the
same force and effect as if originally named as a Subsidiary Pledgor herein. The
execution and delivery of such instrument shall not require the consent of any
Pledgor hereunder. The rights and obligations of each Pledgor hereunder shall
remain in full force and effect notwithstanding the addition of any new
Subsidiary Pledgor as a party to this Pledge Agreement.
13
IN WITNESS WHEREOF, each of the undersigned has caused this Pledge
Agreement to be duly executed and delivered by its duly authorized officer as of
the day and year first above written.
KINDERCARE LEARNING CENTERS, INC.,
By: /s/ XXX X. XXXXXXXXX
------------------------------------
Name: Xxx X. Xxxxxxxxx
Title: Senior Vice President
and General Counsel
EACH SUBSIDIARY PLEDGOR 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 Pledgor:
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
14
Signature Page to KinderCare Pledge
Agreement
CITICORP NORTH AMERICA, INC., as
Administrative Agent,
By: /s/ XXXXXX X. XXXXX
-------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Managing Director & VP
15
ANNEX A
TO THE PLEDGE AGREEMENT
SUBSIDIARY PLEDGORS
KinderCare Real Estate, LLC
KC Development, LLC
KC Distance Learning, Inc.
Mini-Skools, Inc.
Mulberry Child Care Centers, Inc.
16
SCHEDULE 1
TO THE PLEDGE AGREEMENT
PLEDGED STOCK
Percentage
of Issued
and Certificate
Pledgor/ Class of Stock Number of Outstanding Number
Record and Beneficial or other Equity Shares/Units Interests of (if
Owner Issuer Interest (if applicable) such Class applicable)
------------------- --------------- --------------- --------------- --------------- ---------------
KinderCare Learning KinderCare Real LLC Membership 100 100% 001
Centers, Inc. Estate, LLC Interest
KinderCare Learning KC Development, LLC Membership 100 100% 001
Centers, Inc. LLC Interest
KinderCare Learning KC Distance Common stock 1,000,000/$.0001 100% 3
Centers, Inc. Learning, Inc. par value
KinderCare Learning Mulberry Child Common stock 100/$.01 par 100% 1
Centers, Inc. Care Centers, value
Inc.
KinderCare Learning KC Opco, LLC LLC Membership 100 100% 001
Centers, Inc. Interest
KinderCare Learning KC Propco, LLC Membership 100 100% 001
Centers, Inc. LLC Interest
KinderCare Learning KinderCare Ordinary stock 32,500/1 pound
Centers, Inc. Learning par value 65.00% 5
Centres
Limited
KinderCare Learning Mini-Skools, Common shares 650/$.01 par 65.00% 4
Centers, Inc. Limited value
KinderCare Learning Mini-Skools, Preference 18,115/$.01 65.00% P-4
Centers, Inc. Limited shares par value
17
ANNEX B
TO THE PLEDGE AGREEMENT
SUPPLEMENT NO. [ ] dated as of [ ], to the Pledge Agreement dated as
of July 1, 2003 (as the same may be amended, supplemented or otherwise modified
from time to time, the "Pledge Agreement"), among KINDERCARE LEARNING CENTERS,
INC., a Delaware corporation (the "Borrower"), the Subsidiaries of the Borrower
listed on Annex A thereto (the Borrower and such Subsidiaries are referred to
collectively as the "Pledgors") and 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 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.
A. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Pledge Agreement.
B. The Pledgors have entered into the Pledge Agreement 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 9.12 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
Pledge Agreement and (b) any Subsidiary that is not a Domestic Subsidiary on the
date of the Pledge Agreement 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, (i) to execute a supplement to the
Pledge Agreement, substantially in the form of Annex B thereto, in order to
become a Subsidiary Pledgor and (ii) to deliver to the Administrative Agent all
Collateral required to be delivered to the Administrative Agent pursuant to the
terms of the Pledge Agreement, provided that no such Domestic Subsidiary need
execute such a supplement to the Pledge Agreement promptly after such formation,
purchase, acquisition or transformation to the extent such Domestic Subsidiary
owns or holds no Collateral required to be pledged to the Administrative Agent
pursuant to the terms of the Pledge Agreement, provided, further, that promptly
after such time as any such Domestic Subsidiary not required to execute such a
supplement to the Pledge Agreement pursuant to the immediately preceding proviso
acquires any Collateral of the nature required to be delivered to the
Administrative Agent pursuant to the terms of the Pledge Agreement, such
Domestic Subsidiary shall comply with the provisions of clauses (i) and (ii)
above. Section 27 of the Pledge Agreement provides that such Subsidiaries may
become Subsidiary Pledgors under the Pledge Agreement by execution and delivery
of an instrument in the form of this Supplement. Each undersigned Subsidiary
(each, a "New Pledgor") is executing this Supplement in accordance
1
with the requirements of the Credit Agreement to become a Subsidiary Pledgor
under the Pledge Agreement 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.
Accordingly, the Administrative Agent and the New Pledgors agree as
follows:
1. In accordance with Section 27 of the Pledge Agreement, each New
Pledgor by its signature below becomes a Pledgor under the Pledge Agreement with
the same force and effect as if originally named therein as a Pledgor and each
New Pledgor hereby (a) agrees to all the terms and provisions of the Pledge
Agreement applicable to it as a Pledgor thereunder and (b) represents and
warrants that the representations and warranties made by it as a Pledgor
thereunder are true and correct on and as of the date hereof. In furtherance of
the foregoing, each New Pledgor, as security for the payment and performance, as
the case may be, in full of the Obligations, hereby assigns and pledges to the
Administrative Agent, its successors and assigns, for the ratable benefit of the
Secured Parties, and hereby grants to the Administrative Agent, its successors
and assigns, for the ratable benefit of the Secured Parties, a security interest
in all of such Pledgor's right, title and interest in, to and under the
Collateral of such New Pledgor. Each reference to a "Pledgor" in the Pledge
Agreement shall be deemed to include the New Pledgors. The Pledge Agreement is
hereby incorporated herein by reference.
2. Each New Pledgor represents and warrants to the Administrative
Agent and the other Secured Parties that (a) 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 and (b) Schedule 1 hereto (i) correctly represents as of
the date hereof (A) the issuer, the certificate number, if any, the Pledgor and
recorded and beneficial owner, the number and class and the percentage of the
issued and outstanding Equity Interests of such class of all Pledged Stock
pledged pursuant to this Supplement and (B) the issuer, the initial principal
amount, the Pledgor and holder, date of and maturity date of all Pledged Debt
pledged pursuant to this Supplement and (ii) includes all Equity Interests, debt
securities and promissory notes required to be pledged by the New Pledgors
hereunder. Schedule 1 to the Pledge Agreement is hereby supplemented by Schedule
1 hereto.
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 Pledgor when the Administrative Agent shall have
received counterparts of this Supplement that, when taken together, bear the
signatures of such New Pledgor and the Administrative Agent.
4. Except as expressly supplemented hereby, the Pledge Agreement 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
2
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 15 of the Pledge Agreement; provided that any such
notice, request or demand to or upon any New Pledgor shall be addressed to such
New Pledgor at the notice address set forth under its signature below.
3
IN WITNESS WHEREOF, the New Pledgors and the Administrative Agent have
duly executed this Supplement to the Pledge Agreement as of the day and year
first above written.
[Name of New Pledgor],
by:
-----------------------------------
Name:
Title:
Address:
CITICORP NORTH AMERICA, INC., as
Administrative Agent,
by:
-----------------------------------
Name:
Title:
4
SCHEDULE I TO
SUPPLEMENT NO. [ ]
TO THE PLEDGE AGREEMENT
Pledged Securities of the New Pledgors
--------------------------------------
PLEDGED STOCK
Percentage
of Issued
and
Pledgor/ Class of Stock Number of Outstanding Certificate
Record and or other Shares/Units Interests of Number
Beneficial Owner Issuer Equity Interest (if applicable) such Class (if applicable)
---------------- ------ --------------- --------------- ----------- ---------------
PLEDGED DEBT
Pledgor/Holder Issuer Initial Principal Date of Note Maturity Date
Amount
-------------- ------ ----------------- ------------- -------------
5
