Document:

EXHIBIT 10.2

 

AMENDED AND RESTATED PLEDGE AGREEMENT

 

THIS AMENDED AND RESTATED PLEDGE AGREEMENT (this “Pledge Agreement”), dated as of June 16, 2006, is by and among the parties identified as “Pledgors” on the signature pages hereto and such other parties as may become Pledgors hereunder after the date hereof (individually a “Pledgor”, and collectively the “Pledgors”) and BANK OF AMERICA, N.A., as collateral agent (in such capacity, the “Collateral Agent”) for the holders of the Secured Obligations referenced below.

 

W I T N E S S E T H

 

WHEREAS, senior credit facilities have been established in favor of RehabCare Group, Inc., a Delaware corporation (the “Borrower”), pursuant to the terms of that certain credit agreement, dated as of October 12, 2004 (as amended, modified and supplemented, the “Existing Credit Agreement”), among the Borrower, the subsidiaries and affiliates of the Borrower identified therein, as guarantors, the lenders identified therein and Bank of America, N.A., as administrative agent;

 

WHEREAS, the Borrower has requested certain modifications to the existing senior credit facilities, including, among other things, an increase in the revolving credit commitments and extension of the tenor therefore and consent to the Symphony Acquisition and the Midland Acquisition;

 

WHEREAS, the Lenders have agreed to make the requested modifications to the existing credit facilities pursuant to the terms of that certain Amended and Restated Credit Agreement, dated as of the date hereof (as amended, modified and supplemented, the “Credit Agreement”), by and among the Borrower, the Guarantors, the Lenders and Bank of America, N.A., as Administrative Agent and Collateral Agent; and

 

WHEREAS, this Pledge Agreement is given in amendment to, restatement of and substitution for the pledge agreement provided in connection with the Existing Credit Agreement.

 

NOW, THEREFORE, in consideration of these premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

	
             
 	
            1.
 	
            Definitions and Interpretive Provisions.  
 

 

 (a)         Definitions.  Capitalized terms used and not otherwise defined herein shall have the meanings provided in the Credit Agreement.  In addition, the following terms, which are defined in the UCC as in effect in the State of North Carolina on the date hereof, are used herein as so defined:  Accession, Financial Asset, Proceeds and Security.  As used herein:

 

“Borrower” has the meaning provided in the recitals hereto.

 

“Collateral Agent” has the meaning provided in the introductory paragraph hereto, or any successor collateral agent.

 

“Credit Agreement” has the meaning provided in the recitals hereto.

 

“Existing Credit Agreement” has the meaning provided in the recitals hereto.

 

CHAR1\887016v3

 

 

 

“Non-Voting Equity” has the meaning provided in the recitals hereto.

 

“Pledge Agreement” has the meaning provided in the recitals hereto, as the same may be amended and modified from time to time.

 

	
             
 	
            “Pledged Collateral” has the meaning provided in Section 2 hereof.
 

 

	
             
 	
            “Pledged Shares” has the meaning provided in Section 2 hereof.
 

 

“Pledgors” has the meaning provided in the recitals hereto, together with their respective successors and assigns.

 

“Secured Obligations” means the Obligations (as defined in the Credit Agreement) and, without duplication, all costs and expenses incurred in connection with enforcement and collection of such Secured Obligations, including reasonable attorneys’ fees and disbursements.

 

	
             
 	
            “Securities Act” means the Securities Act of 1933, as amended.
 

 

	
             
 	
            “UCC” means the Uniform Commercial Code.
 

 

	
             
 	
            “Voting Equity” has the meaning provided in Section 2 hereof.
 

 

(b)           Interpretive Provisions, etc.  Each of the terms and provisions of Section 1.02 of the Credit Agreement (as the same may be amended or modified as provided therein) are incorporated herein by reference to the same extent and with the same effect as if fully set forth herein.  

 

2.           Pledge and Grant of Security Interest.  To secure the prompt payment and performance in full when due, whether by lapse of time, acceleration, mandatory prepayment or otherwise, of the Secured Obligations, each Pledgor hereby grants, pledges and assigns to the Collateral Agent, for the benefit of the holders of the Secured Obligations, a continuing security interest in, and a right to set-off against, any and all right, title and interest of such Pledgor in and to the following, whether now owned or existing or owned, acquired, or arising hereafter (collectively, the “Pledged Collateral”):

 

(a)           Pledged Shares.  (i) one hundred percent (100%) (or, if less, the full amount owned by such Pledgor) of the issued and outstanding Capital Stock owned by such Pledgor of each Domestic Subsidiary set forth on Schedule 2(a) attached hereto and (ii) sixty-five (65%) (or, if less, the full amount owned by such Pledgor) of the issued and outstanding shares of Capital Stock entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) (“Voting Equity”) and one hundred percent (100%) (or, if less, the full amount owned by such Pledgor) of the issued and outstanding Capital Stock not entitled to vote (within the meaning of Treas. Reg. Section
1.956-2(c)(2)) (“Non-Voting Equity”) owned by such Pledgor of each Foreign Subsidiary set forth on Schedule 2(a) attached hereto, in each case together with the certificates (or other agreements or instruments), if any, representing such Capital Stock, and all options and other rights, contractual or otherwise, with respect thereto (collectively, together with the Capital Stock described in Section 2(b) and 2(c) below, the “Pledged Shares”), including the following:

 

(A)          all shares, securities, membership interests or other equity interests representing a dividend on any of the Pledged Shares, or representing a distribution or return of capital upon or in respect of the Pledged Shares, or resulting from a stock split, revision, reclassification or other exchange therefor, and any subscriptions, warrants, 

 

2

CHAR1\887016v3

 

 

rights or options issued to the holder of, or otherwise in respect of, the Pledged Shares; and

 

 (B)        without affecting the obligations of the Pledgors under any provision prohibiting such action hereunder or under the Credit Agreement, in the event of any consolidation or merger involving the issuer of any Pledged Shares and in which such issuer is not the surviving entity, all Capital Stock of the successor entity formed by or resulting from such consolidation or merger.

 

(b)           Additional Shares.  (i) one hundred percent (100%) (or, if less, the full amount owned by such Pledgor) of the issued and outstanding Capital Stock owned by such Pledgor of any Person that hereafter becomes a Domestic Subsidiary and (ii) sixty-five percent (65%) (or, if less, the full amount owned by such Pledgor) of the Voting Equity and one hundred percent (100%) (or, if less, the full amount owned by such Pledgor) of the Non-Voting Equity owned by such Pledgor of any Person that hereafter becomes a Foreign Subsidiary, including the certificates (or other agreements or instruments) representing such Capital Stock.

 

(c)           Accessions and Proceeds.  All Accessions and all Proceeds of any and all of the foregoing.

 

Without limiting the generality of the foregoing, it is hereby specifically understood and agreed that a Pledgor may from time to time hereafter deliver additional Capital Stock to the Collateral Agent as collateral security for the Secured Obligations.  Upon delivery to the Collateral Agent, such additional Capital Stock shall be deemed to be part of the Pledged Collateral of such Pledgor and shall be subject to the terms of this Pledge Agreement whether or not Schedule 2(a) is amended to refer to such additional Capital Stock.

 

3.           Security for Secured Obligations.  The security interest created hereby in the Pledged Collateral of each Pledgor constitutes continuing collateral security for all of the Secured Obligations.

 

	
             
 	
            4.
 	
            Delivery of the Pledged Collateral.  Each Pledgor hereby agrees that:
 

 

 (a)         Such Pledgor shall deliver to the Collateral Agent (i) simultaneously with or prior to the execution and delivery of this Pledge Agreement, all certificates representing the Pledged Shares of such Pledgor and (ii) promptly upon the receipt thereof by or on behalf of a Pledgor, all other certificates and instruments constituting Pledged Collateral of a Pledgor.  Prior to delivery to the Collateral Agent, all such certificates and instruments constituting Pledged Collateral of a Pledgor shall be held in trust by such Pledgor for the benefit of the Collateral Agent pursuant hereto.  All such certificates shall be delivered in suitable form for transfer by delivery or shall be accompanied by duly executed instruments of transfer or assignment in blank, substantially in the form provided in
Exhibit 4(a) attached hereto.

 

 (b)         Additional Securities.  If such Pledgor shall receive by virtue of its being or having been the owner of any Pledged Collateral, any (i) certificate, including any certificate representing a dividend or distribution in connection with any increase or reduction of capital, reclassification, merger, consolidation, sale of assets, combination of shares or other equity interests, stock splits, spin-off or split-off, promissory notes or other instruments; (ii) option or right, whether as an addition to, substitution for, or an exchange for, any Pledged Collateral or otherwise; (iii) dividends payable in securities; or (iv) distributions of securities in connection with a partial or total liquidation, dissolution or reduction of capital, capital surplus or paid-in
surplus, then such Pledgor shall receive such certificate, instrument, option, right or distribution in trust for the benefit of the Collateral Agent, shall segregate it from such Pledgor’s other property and shall deliver it forthwith to the Collateral Agent in the exact form received 

 

3

CHAR1\887016v3

 

 

together with any necessary endorsement and/or appropriate stock power duly executed in blank, substantially in the form provided in Exhibit 4(a), to be held by the Collateral Agent as Pledged Collateral and as further collateral security for the Secured Obligations.

 

 (c)         Financing Statements.  Each Pledgor authorizes the Collateral Agent to prepare and file such UCC or other applicable financing statements as may be reasonably requested by the Collateral Agent in order to perfect and protect the security interest created hereby in the Pledged Collateral of such Pledgor.

 

5.           Representations and Warranties.  Each Pledgor hereby represents and warrants to the Collateral Agent, for the benefit of the holders of the Secured Obligations, that so long as any of the Secured Obligations remains outstanding and until all of the commitments relating thereto have been terminated:

 

 (a)         Authorization of Pledged Shares.  The Pledged Shares are duly authorized and validly issued, are fully paid and nonassessable and are not subject to the preemptive rights of any Person.

 

 (b)         Title.  Each Pledgor has good and indefeasible title to the Pledged Collateral of such Pledgor and will at all times be the legal and beneficial owner of such Pledged Collateral free and clear of any Lien, other than Permitted Liens.  There exists no “adverse claim” within the meaning of Section 8-102 of the UCC with respect to the Pledged Shares of such Pledgor.

 

 (c)         Exercising of Rights.  The exercise by the Collateral Agent of its rights and remedies hereunder will not violate any Law or governmental regulation or any material contractual restriction binding on or affecting a Pledgor or any of its property.

 

 (d)         Pledgor’s Authority.  No authorization, approval or action by, and no notice or filing with any Governmental Authority or with the issuer of any Pledged Shares is required either (i) for the pledge made by a Pledgor or for the granting of the security interest by a Pledgor pursuant to this Pledge Agreement (except as have been already obtained or made) or (ii) for the exercise by the Collateral Agent or the holders of the Secured Obligations of their rights and remedies hereunder (except as may be required by Laws affecting the offering and sale of securities).

 

(e)           Security Interest/Priority.  This Pledge Agreement creates a valid security interest in favor of the Collateral Agent for the benefit of the holders of the Secured Obligations, in the Pledged Collateral.  The delivery to the Collateral Agent of certificates evidencing the Pledged Collateral, together with duly executed stock powers in respect thereof, will perfect and establish the first priority of the Collateral Agent’s security interest in any certificated Pledged Collateral that constitutes a Security.  The filing of appropriate UCC financing statements in the appropriate filing offices in the jurisdiction of organization of the applicable Pledgor or obtaining “control” over such interests in accordance with the provisions of Section 8-106
of the UCC will perfect and establish the first priority of the Collateral Agent’s security interest in any uncertificated Pledged Collateral that constitutes a Security.  The filing of appropriate UCC financing statements in the appropriate filing offices in the jurisdiction of organization of the applicable Pledgor will perfect and establish the first priority of the Collateral Agent’s security interest in any Pledged Collateral that does not constitute a Security.  Except as set forth in this subsection (e), no action is necessary to perfect the security interests granted by the Pledgors under this Pledge Agreement.

 

 (f)          Partnership and Membership Interests.  Except as previously disclosed to the Collateral Agent, none of the Pledged Shares consisting of partnership or limited liability company interests (i) is dealt in or traded on a securities exchange or in a securities market, (ii) by its terms expressly provides 

 

4

CHAR1\887016v3

 

 

that it is a security governed by Article 8 of the UCC, (iii) is an investment company security, (iv) is held in a securities account or (v) constitutes a Security or a Financial Asset.

 

 (g)         No Other Interests.  No Pledgor owns any Capital Stock in any Subsidiary other than as set forth on Schedule 2(a) attached hereto.

 

6.           Covenants.  Each Pledgor hereby covenants, that so long as any of the Secured Obligations remains outstanding and until all of the commitments relating thereto have been terminated, such Pledgor shall:

 

 (a)         Defense of Title.  Warrant and defend title to and ownership of the Pledged Collateral of such Pledgor at its own expense against the claims and demands of all other parties claiming an interest therein, keep the Pledged Collateral free from all Liens, except for Permitted Liens, and not sell, exchange, transfer, assign, lease or otherwise dispose of Pledged Collateral of such Pledgor or any interest therein, except as permitted under the Credit Agreement and the other Credit Documents.

 

 (b)         Further Assurances.  Promptly authorize or execute and deliver at its expense all further instruments and documents and take all further action that may be necessary and desirable or that the Collateral Agent may reasonably request in order to (i) perfect and protect the security interest created hereby in the Pledged Collateral of such Pledgor (including any and all action necessary to satisfy the Collateral Agent that the Collateral Agent has obtained a first priority perfected security interest in all Pledged Collateral); (ii) enable the Collateral Agent to exercise and enforce its rights and remedies hereunder in respect of the Pledged Collateral of such Pledgor; and (iii) otherwise effect the purposes of this Pledge Agreement, including and if requested by the
Collateral Agent, delivering to the Collateral Agent irrevocable proxies in respect of the Pledged Collateral of such Pledgor.

 

 (c)         Amendments.  Not make or consent to any amendment or other modification or waiver with respect to any of the Pledged Collateral of such Pledgor or enter into any agreement or allow to exist any restriction with respect to any of the Pledged Collateral of such Pledgor other than pursuant hereto or as may be permitted under the Credit Agreement.

 

 (d)         Compliance with Securities Laws.  File all reports and other information now or hereafter required to be filed by such Pledgor with the United States Securities and Exchange Commission and any other state, federal or foreign agency in connection with the ownership of the Pledged Collateral of such Pledgor.

 

 (e)         Issuance or Acquisition of Capital Stock.  Not, without executing and delivering, or causing to be executed and delivered, to the Collateral Agent such agreements, documents and instruments as the Collateral Agent may require, issue or acquire any Capital Stock consisting of an interest in a partnership or a limited liability company that (i) is dealt in or traded on a securities exchange or in a securities market, (ii) by its terms expressly provides that it is a security governed by Article 8 of the UCC, (iii) is an investment company security, (iv) is held in a securities account or (v) constitutes a Security or a Financial Asset.

 

7.           Advances and Performance by Holders of the Secured Obligations.  On failure of any Pledgor to perform any of the covenants and agreements contained herein, the Collateral Agent may, at its sole option and in its sole discretion, perform the same and in so doing may expend such sums as the Collateral Agent may reasonably deem advisable in the performance thereof, including the payment of any insurance premiums, the payment of any taxes, a payment to obtain a release of a Lien or potential Lien, expenditures made in defending against any adverse claim and all other expenditures that the Collateral Agent or the holders of the Secured Obligations may make for the protection of the security hereof or may be 

 

5

CHAR1\887016v3

 

 

compelled to make by operation of Law.  All such sums and amounts so expended shall be repayable by the Pledgors on a joint and several basis (subject to Section 26 hereof) promptly upon timely notice thereof and demand therefor, shall constitute additional Secured Obligations and shall bear interest from the date said amounts are expended at the Default Rate for Revolving Loans that are Base Rate Loans.  No such performance of any covenant or agreement by the Collateral Agent or the holders of the Secured Obligations on behalf of any Pledgor, and no such advance or expenditure therefor, shall relieve the Pledgors of any default under the terms of this Pledge Agreement, the other Credit Documents or any other documents relating to the Secured Obligations.  The holders of the Secured Obligations may make any payment hereby authorized in accordance with any bill,
statement or estimate procured from the appropriate public office or holder of the claim to be discharged without inquiry into the accuracy of such bill, statement or estimate or into the validity of any tax assessment, sale, forfeiture, tax lien, title or claim except to the extent such payment is being contested in good faith by a Pledgor in appropriate proceedings and against which adequate reserves are being maintained in accordance with GAAP.  

 

	
             
 	
            8.
 	
            Remedies.
 

 

 (a)         General Remedies.  Upon the occurrence of an Event of Default and during the continuation thereof, the Collateral Agent and the holders of the Secured Obligations shall have, in addition to the rights and remedies provided herein, in the Credit Documents, in any other documents relating to the Secured Obligations, or by Law (including levy of attachment and garnishment), the rights and remedies of a secured party under the UCC of the jurisdiction applicable to the affected Pledged Collateral.

 

 (b)         Sale of Pledged Collateral.  Upon the occurrence of an Event of Default and during the continuation thereof, without limiting the generality of this Section 8 and without notice, the Collateral Agent may, in its sole discretion, sell or otherwise dispose of or realize upon the Pledged Collateral, or any part thereof, in one or more parcels, at public or private sale, at any exchange or broker’s board or elsewhere, at such price or prices and on such other terms as the Collateral Agent may deem commercially reasonable, for cash, credit or for future delivery or otherwise in accordance with applicable Law.  To the extent permitted by Law, any holder of the Secured Obligations may in such event, bid for the purchase of
such securities.  Each Pledgor agrees that, to the extent notice of sale shall be required by Law and has not been waived by such Pledgor, any requirement of reasonable notice shall be met if notice, specifying the place of any public sale or the time after which any private sale is to be made, is personally served on or mailed, postage prepaid, to such Pledgor, in accordance with the notice provisions of Section 11.02 of the Credit Agreement at least ten days before the time of such sale.  The Collateral Agent shall not be obligated to make any sale of Pledged Collateral of such Pledgor regardless of notice of sale having been given.  The Collateral 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.

 

 (c)         Private Sale.  Upon the occurrence of an Event of Default and during the continuation thereof, the Pledgors recognize that the Collateral Agent may deem it impracticable to effect a public sale of all or any part of the Pledged Shares or any of the securities constituting Pledged Collateral and that the Collateral Agent may, therefore, determine to make one or more private sales of any such Pledged Collateral to a restricted group of purchasers who will be obligated to agree, among other things, to acquire such Pledged Collateral for their own account, for investment and not with a view to the distribution or resale thereof.  Each Pledgor acknowledges that any such private sale may be at prices and on terms less favorable to the seller than the prices and other terms
that might have been obtained at a public sale and, notwithstanding the foregoing, agrees that such private sale shall be deemed to have been made in a commercially reasonable manner and that the Collateral Agent shall have no obligation to delay sale of any such Pledged Collateral for the period of time necessary to permit the issuer of such Pledged 

 

6

CHAR1\887016v3

 

 

Collateral to register such Pledged Collateral for public sale under the Securities Act.  Each Pledgor further acknowledges and agrees that any offer to sell such Pledged Collateral that has been (i) publicly advertised on a bona fide basis in a newspaper or other publication of general circulation in the financial community of New York, New York (to the extent that such offer may be advertised without prior registration under the Securities Act), or (ii) made privately in the manner described above shall be deemed to involve a “public sale” under the UCC, notwithstanding that such sale may not constitute a “public offering” under the Securities Act, and the Collateral Agent may, in such event, bid for the purchase of such Pledged Collateral.

 

 (d)         Retention of Pledged Collateral.  To the extent permitted under applicable Law, in addition to the rights and remedies hereunder, upon the occurrence of an Event of Default, the Collateral Agent may, after providing the notices required by Sections 9-620 and 9-621 of the UCC or otherwise complying with the requirements of applicable Law of the relevant jurisdiction, accept or retain all or any portion of the Pledged Collateral in satisfaction of the Secured Obligations.  Unless and until the Collateral Agent shall have provided such notices, however, the Collateral Agent shall not be deemed to have accepted or retained any Pledged Collateral in satisfaction of any Secured Obligations for any reason.

 

 (e)         Deficiency.  In the event that the Proceeds of any sale, collection or realization are insufficient to pay all amounts to which the Collateral Agent or the holders of the Secured Obligations are legally entitled, the Pledgors shall be jointly and severally liable for the deficiency (subject to Section 26 hereof), together with interest thereon at the Default Rate for Revolving Loans that are Base Rate Loans, together with reasonable costs of collection and reasonable attorneys’ fees and disbursements.  Any surplus remaining after the full payment and satisfaction of the Secured Obligations shall be returned to the Pledgors or to whomsoever a court of competent jurisdiction shall determine to be entitled thereto.

 

	
             
 	
            9.
 	
            Rights of the Collateral Agent.
 

 

 (a)         Power of Attorney.  In addition to other powers of attorney contained herein, each Pledgor hereby designates and appoints the Collateral Agent, on behalf of the holders of the Secured Obligations, and each of its designees or agents, as attorney-in-fact of such Pledgor, irrevocably and with power of substitution, with authority to take any or all of the following actions upon the occurrence and during the continuation of an Event of Default:

 

 (i)          to demand, collect, settle, compromise and adjust, and give discharges and releases concerning the Pledged Collateral, all as the Collateral Agent may reasonably deem appropriate;

 

 (ii)         to commence and prosecute any actions at any court for the purposes of collecting any of the Pledged Collateral and enforcing any other right in respect thereof;

 

 (iii)        to defend, settle or compromise any action brought and, in connection therewith, give such discharge or release as the Collateral Agent may reasonably deem appropriate;

 

 (iv)        to pay or discharge taxes, liens, security interests or other encumbrances levied or placed on or threatened against the Pledged Collateral;

 

 (v)         to direct any parties liable for any payment in connection with any of the Pledged Collateral to make payment of any and all monies due and to become due thereunder directly to the Collateral Agent or as the Collateral Agent shall direct;

 

 

7

CHAR1\887016v3

 

 

 

 (vi)        to receive payment of and receipt for any and all monies, claims, and other amounts due and to become due at any time in respect of or arising out of any Pledged Collateral;

 

 (vii)       to sign and endorse any drafts, assignments, proxies, stock powers, verifications, notices and other documents relating to the Pledged Collateral;

 

 (viii)     to authorize or to execute and deliver all assignments, conveyances, statements, financing statements, renewal financing statements, security and pledge agreements, affidavits, notices and other agreements, instruments and documents that the Collateral Agent may reasonably deem appropriate in order to perfect and maintain the security interests and liens granted in this Pledge Agreement and in order to fully consummate all of the transactions contemplated therein;

 

 (ix)        to exchange any of the Pledged Collateral or other property upon any merger, consolidation, reorganization, recapitalization or other readjustment of the issuer thereof and, in connection therewith, deposit any of the Pledged Collateral with any committee, depository, transfer agent, registrar or other designated agency upon such terms as the Collateral Agent may reasonably deem appropriate;

 

 (x)         to vote for a shareholder resolution, or to sign an instrument in writing, sanctioning the transfer of any or all of the Pledged Collateral into the name of the Collateral Agent or one or more of the holders of the Secured Obligations or into the name of any transferee to whom the Pledged Collateral or any part thereof may be sold pursuant to Section 8 hereof; and

 

 (xi)        to do and perform all such other acts and things as the Collateral Agent may reasonably deem appropriate or convenient in connection with the Pledged Collateral.

 

This power of attorney is a power coupled with an interest and shall be irrevocable for so long as any of the Secured Obligations shall remain outstanding and until all of the commitments relating thereto shall have been terminated.  The Collateral Agent shall be under no duty to exercise or withhold the exercise of any of the rights, powers, privileges and options expressly or implicitly granted to the Collateral Agent in this Pledge Agreement, and shall not be liable for any failure to do so or any delay in doing so.  The Collateral Agent shall not be liable for any act or omission or for any error of judgment or any mistake of fact or Law in its individual capacity or its capacity as attorney-in-fact except acts or omissions resulting from its gross negligence or willful misconduct.  This power of attorney is conferred on the Collateral Agent solely to protect, preserve
and realize upon its security interest in the Pledged Collateral.

 

 (b)         Assignment by the Collateral Agent.  The Collateral Agent may from time to time assign the Secured Obligations and any portion thereof and/or the Pledged Collateral and any portion thereof in connection with its resignation as Collateral Agent pursuant to Article X of the Credit Agreement, and the assignee shall be entitled to all of the rights and remedies of the Collateral Agent under this Pledge Agreement in relation thereto.

 

 (c)         The Collateral Agent’s Duty of Care.  Other than the exercise of reasonable care to assure the safe custody of the Pledged Collateral while being held by the Collateral Agent hereunder, the Collateral Agent shall have no duty or liability to preserve rights pertaining thereto, it being understood and agreed that the Pledgors shall be responsible for preservation of all rights in the Pledged Collateral, and the Collateral Agent shall be relieved of all responsibility for the Pledged Collateral upon surrendering it or tendering the surrender of it to the Pledgors.  The Collateral Agent shall be deemed to have exercised reasonable care in the custody and preservation of the Pledged Collateral in its possession 

 

8

CHAR1\887016v3

 

 

if such Pledged Collateral is accorded treatment substantially equal to that which the Collateral Agent accords its own property, which shall be no less than the treatment employed by a reasonable and prudent agent in the industry, it being understood that the Collateral Agent shall not have responsibility for (i) ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters relating to any Pledged Collateral, whether or not the Collateral Agent has or is deemed to have knowledge of such matters, or (ii) taking any necessary steps to preserve rights against any parties with respect to any of the Pledged Collateral.

 

	
             
 	
            (d)
 	
            Voting Rights in Respect of the Pledged Collateral.
 

 

 (i)          So long as no Event of Default shall have occurred and be continuing, to the extent permitted by Law, each Pledgor may exercise any and all voting and other consensual rights pertaining to the Pledged Collateral of such Pledgor or any part thereof for any purpose not inconsistent with the terms of this Pledge Agreement or the Credit Agreement; and

 

 (ii)         Upon the occurrence and during the continuance of an Event of Default and following the Collateral Agent’s delivery to such Pledgor of notice of its intent to exercise such rights, all rights of a Pledgor to exercise the voting and other consensual rights that it would otherwise be entitled to exercise pursuant to clause (i) of this subsection shall cease and all such rights shall thereupon become vested in the Collateral Agent, which shall then have the sole right to exercise such voting and other consensual rights.

 

	
             
 	
            (e)
 	
            Dividend Rights in Respect of the Pledged Collateral.
 

 

 (i)          So long as no Event of Default shall have occurred and be continuing and subject to Section 4(b) hereof, each Pledgor may receive and retain any and all dividends (other than stock dividends and other dividends constituting Pledged Collateral addressed herein) or interest paid in respect of the Pledged Collateral to the extent they are allowed under the Credit Agreement.

 

	
             
 	
            (ii)
 	
            Upon the occurrence and during the continuance of an Event of Default:
 

 

(A)          all rights of a Pledgor to receive the dividends and interest payments that it would otherwise be authorized to receive and retain pursuant to clause (i) of this subsection shall cease and all such rights shall thereupon be vested in the Collateral Agent, which shall then have the sole right to receive and hold as Pledged Collateral such dividends and interest payments; and

 

(B)          all dividends and interest payments that are received by a Pledgor contrary to the provisions of clause (A) of this subsection shall be received in trust for the benefit of the Collateral Agent, shall be segregated from other property or funds of such Pledgor, and shall be forthwith paid over to the Collateral Agent as Pledged Collateral in the exact form received, to be held by the Collateral Agent as Pledged Collateral and as further collateral security for the Secured Obligations.

 

10.         Rights of Required Lenders.  All rights of the Collateral Agent hereunder, if not exercised by the Collateral Agent, may be exercised by the Required Lenders.

 

11.         Application of Proceeds.  Upon the occurrence and during the continuation of an Event of Default, any payments in respect of the Secured Obligations and any Proceeds of the Pledged Collateral, when received by the Collateral Agent or any of the holders of the Secured Obligations in cash or its 

 

9

CHAR1\887016v3

 

 

equivalent, will be applied in reduction of the Secured Obligations in the order set forth in the Credit Agreement or other document relating to the Secured Obligations, and each Pledgor irrevocably waives the right to direct the application of such payments and Proceeds and acknowledges and agrees that the Collateral Agent shall have the continuing and exclusive right to apply and reapply any and all such payments and Proceeds in the Collateral Agent’s sole discretion, notwithstanding any entry to the contrary upon any of its books and records.

 

12.         Release of Pledged Collateral.  Upon request, the Collateral Agent shall promptly deliver to the Borrower (at the Borrower’s expense) appropriate release documentation to the extent the release of Pledged Collateral is permitted under, and on the terms and conditions set forth in, the Credit Agreement; provided that any such release, or the substitution of any of the Pledged Collateral for other Collateral, will not alter, vary or diminish in any way the force, effect, lien, pledge or security interest of this Pledge Agreement as to any and all Pledged Collateral not expressly released or substituted, and this Pledge Agreement shall continue as a first priority lien (subject to Permitted Liens) on any and all Pledged
Collateral not expressly released or substituted. 

 

13.         Costs and Expenses.  At all times hereafter, whether or not upon the occurrence of an Event of Default, the Pledgors agree to promptly pay upon demand any and all reasonable costs and expenses (including reasonable attorneys’ fees and disbursements) of the Collateral Agent and the holders of the Secured Obligations (a) as required under Section 11.04 of the Credit Agreement and (b) as necessary to protect the Pledged Collateral or to exercise any rights or remedies under this Pledge Agreement or with respect to any of the Pledged Collateral.  All of the foregoing costs and expenses shall constitute Secured Obligations hereunder.

 

	
             
 	
            14.
 	
            Continuing Agreement.
 

 

(a)           This Pledge Agreement shall be a continuing agreement in every respect and shall remain in full force and effect so long as any of the Secured Obligations remains outstanding and until all of the commitments relating thereto have been terminated (other than any obligations with respect to the indemnities and the representations and warranties set forth in the Credit Documents).  Upon such payment and termination, this Pledge Agreement shall be automatically terminated and the Collateral Agent and the holders of the Secured Obligations shall, upon the request and at the expense of the Pledgors, forthwith release all of its liens and security interests hereunder and shall authorize or execute and deliver all UCC termination statements and/or other documents reasonably requested by the
Pledgors evidencing such termination.  Notwithstanding the foregoing, all releases and indemnities provided hereunder shall survive termination of this Pledge Agreement.

 

(b)           This Pledge Agreement shall continue to be effective or be automatically reinstated, as the case may be, if at any time payment, in whole or in part, of any of the Secured Obligations is rescinded or must otherwise be restored or returned by the Collateral Agent or any holder of the Secured Obligations as a preference, fraudulent conveyance or otherwise under any bankruptcy, insolvency or similar Law, all as though such payment had not been made; provided that in the event payment of all or any part of the Secured Obligations is rescinded or must be restored or returned, all reasonable costs and expenses (including reasonable attorneys’ fees and disbursements) incurred by the Collateral Agent or any holder of the Secured Obligations in defending and enforcing such reinstatement
shall be deemed to be included as a part of the Secured Obligations.

 

15.         Amendments and Waivers.  This Pledge Agreement and the provisions hereof may not be amended, waived, modified, changed, discharged or terminated except by written agreement of (a) the Pledgors and (b) the Collateral Agent (with the consent or at the direction of the Required Lenders under the Credit Agreement).

 

10

CHAR1\887016v3

 

 

 

16.         Successors in Interest.  This Pledge Agreement shall create a continuing security interest in the Collateral and shall be binding upon each Pledgor, its successors and assigns, and shall inure, together with the rights and remedies of the Collateral Agent and the holders of the Secured Obligations hereunder, to the benefit of the Collateral Agent and the holders of the Secured Obligations and their successors and permitted assigns; provided, however, that none of the Pledgors may assign its rights or delegate its duties hereunder without the prior written consent of the Required Lenders under the Credit Agreement.  To the fullest extent permitted by Law, each Pledgor hereby releases the Collateral Agent and each holder of
the Secured Obligations, their respective successors, assigns, officers, attorneys, employees and agents, from any liability for any act or omission or any error of judgment or mistake of fact or of Law relating to this Pledge Agreement or the Collateral, except for any liability arising from the gross negligence or willful misconduct of the Collateral Agent or such holder, as determined by a final and nonappealable judgment of a court of competent jurisdiction.

 

17.         Notices.  All notices required or permitted to be given under this Pledge Agreement shall be given as provided in Section 11.02 of the Credit Agreement.

 

18.         Counterparts.  This Pledge Agreement may be executed in any number of counterparts, each of which where so executed and delivered shall be an original, but all of which shall constitute one and the same instrument.  It shall not be necessary in making proof of this Pledge Agreement to produce or account for more than one such counterpart.

 

19.         Headings.  The headings of the sections and subsections hereof are provided for convenience only and shall not in any way affect the meaning or construction of any provision of this Pledge Agreement.

 

	
             
 	
            20.
 	
            Governing Law; Submission to Jurisdiction; Venue.
 

 

(a)           THIS PLEDGE AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NORTH CAROLINA APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE COLLATERAL AGENT SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

 

(b)           ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS PLEDGE AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NORTH CAROLINA SITTING IN CHARLOTTE, NORTH CAROLINA OR OF THE UNITED STATES FOR THE WESTERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS PLEDGE AGREEMENT, EACH PLEDGOR AND THE COLLATERAL AGENT CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS.  EACH PLEDGOR AND THE COLLATERAL AGENT IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, THAT IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS
PLEDGE AGREEMENT OR ANY OTHER DOCUMENT RELATED HERETO.  EACH PLEDGOR AND THE COLLATERAL AGENT WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.

 

21.         Waiver of Right to Trial by Jury.  TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY TO THIS PLEDGE AGREEMENT HEREBY EXPRESSLY WAIVES ANY 

 

11

CHAR1\887016v3

 

 

RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS PLEDGE AGREEMENT OR ANY OTHER CREDIT DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS PLEDGE AGREEMENT OR ANY OTHER DOCUMENT RELATED HERETO, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS PLEDGE AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

22.         Severability.  If any provision of this Pledge Agreement is determined to be illegal, invalid or unenforceable, such provision shall be fully severable and the remaining provisions shall remain in full force and effect and shall be construed without giving effect  to the illegal, invalid or unenforceable provisions.

 

23.         Entirety.  This Pledge Agreement, the other Credit Documents and the other documents relating to the Secured Obligations represent the entire agreement of the parties hereto and thereto, and supersede all prior agreements and understandings, oral or written, if any, including any commitment letters or correspondence relating to the Credit Documents, any other documents relating to the Secured Obligations, or the transactions contemplated herein and therein.

 

24.         Survival.  All representations and warranties of the Pledgors hereunder shall survive the execution and delivery of this Pledge Agreement, the other Credit Documents and the other documents relating to the Secured Obligations, the delivery of the Notes and the extension of credit thereunder or in connection therewith.

 

25.         Other Security.  To the extent that any of the Secured Obligations are now or hereafter secured by property other than the Pledged Collateral (including real and other personal property owned by a Pledgor), or by a guarantee, endorsement or property of any other Person, then the Collateral Agent shall have the right to proceed against such other property, guarantee or endorsement upon the occurrence of any Event of Default, and the Collateral Agent shall have the right, in its sole discretion, to determine which rights, security, liens, security interests or remedies the Collateral Agent shall at any time pursue, relinquish, subordinate, modify or take with respect thereto, without in any way modifying or affecting any of them or the Secured Obligations or any of the
rights of the Collateral Agent or the holders of the Secured Obligations under this Pledge Agreement, under any of the other Credit Documents or under any other document relating to the Secured Obligations.

 

	
             
 	
            26.
 	
            Joint and Several Obligations of Pledgors.
 

 

 (a)         Subject to subsection (c) of this Section 26, each of the Pledgors is accepting joint and several liability hereunder in consideration of the financial accommodation to be provided by the holders of the Secured Obligations, for the mutual benefit, directly and indirectly, of each of the Pledgors and in consideration of the undertakings of each of the Pledgors to accept joint and several liability for the obligations of each of them.

 

 (b)         Subject to subsection (c) of this Section 26, each of the Pledgors jointly and severally hereby irrevocably and unconditionally accepts, not merely as a surety but also as a co-debtor, joint and several liability with the other Pledgors with respect to the payment and performance of all of the Secured 

 

12

CHAR1\887016v3

 

 

Obligations arising under this Pledge Agreement, the other Credit Documents and any other documents relating to the Secured Obligations, it being the intention of the parties hereto that all the Secured Obligations shall be the joint and several obligations of each of the Pledgors without preferences or distinction among them.

 

 (c)          Notwithstanding any provision to the contrary contained herein, in any other of the Credit Documents or in any other documents relating to the Secured Obligations, the obligations of each Pledgor that is a Guarantor under the Credit Agreement and the other Credit Documents shall be limited to an aggregate amount equal to the largest amount that would not render such obligations subject to avoidance under Section 548 of the Bankruptcy Code of the United States or any other applicable Debtor Relief Law (including any comparable provisions of any applicable state Law).

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

13

CHAR1\887016v3

 

 

 

                Each of the parties hereto has caused a counterpart of this Pledge Agreement to be duly executed and delivered as of the date first above written.

 

	
            PLEDGORS:
 	
            REHABCARE GROUP, INC.,
 

a Delaware Corporation

AMERICAN VITALCARE, INC.,

a California corporation

MANAGED ALTERNATIVE CARE, INC.,

a California corporation

PHASE 2 CONSULTING, INC.,

a Delaware corporation

REHABCARE GROUP OF CALIFORNIA, INC.,

a Delaware corporation

REHABCARE GROUP EAST, INC.,

a Delaware corporation

REHABCARE GROUP MANAGEMENT SERVICES, INC.,

a Delaware corporation

REHABCARE SANTA MONICA, INC.,

a Delaware corporation

REHABCARE TEXAS HOLDINGS, INC.,

a Delaware corporation

SALT LAKE PHYSICAL THERAPY ASSOCIATES, INC.,

a Utah corporation

STARMED MANAGEMENT, INC.,

a Delaware corporation

REHABCARE GROUP OF VIRGINIA LLC,

a Virginia limited liability company

REHABCARE HOSPITAL HOLDINGS, L.L.C.,

a Delaware limited liability company

LOUISIANA SPECIALTY HOSPITAL, L.L.C., 

a Delaware limited liability company

WEST GABLES REHABILITATION HOSPITAL, L.L.C., 

a Delaware limited liability company

LAFAYETTE SPECIALTY HOSPITAL, L.L.C.,

a Delaware limited liability company

TULSA SPECIALTY HOSPITAL, L.L.C., 

a Delaware limited liability company

CLEAR LAKE REHABILITATION HOSPITAL, L.L.C., 

a Delaware limited liability company

 

By:                                          
                    

	
             
 	
            Name:  Jay W. Shreiner
 	
             

	
             
 	
            Title:
 	
            Senior Vice President and
 
	
             
 	
            Chief Financial Officer
 	
             

					

 

 

REHABCARE GROUP, INC.

AMENDED AND RESTATED PLEDGE AGREEMENT

 

 

 

 

REHABCARE GROUP OF TEXAS, L.P.,

a Texas limited liability company

REHABCARE GROUP OF ARLINGTON, LP, 

a Texas limited partnership

REHABCARE GROUP OF AMARILLO, LP, 

a Texas limited partnership

 

	
             
 	
            By:
 	
            RehabCare Group, Inc.,
 	
             

	
             
 	
            a Delaware corporation, as its General Partner
 

 

By:                                          
                    

	
             
 	
            Name:
 
	
             
 	
            Title:
 	
             

 

 

REHABCARE GROUP, INC.

AMENDED AND RESTATED PLEDGE AGREEMENT

 

 

 

Accepted and agreed to as of the date first above written.

 

BANK OF AMERICA, N.A.,

as Collateral Agent

 

By:                                          
                    

	
            Name:
 
	
            Title:
 	
             

 

REHABCARE GROUP, INC.

AMENDED AND RESTATED PLEDGE AGREEMENT

 

 

 

SCHEDULES AND EXHIBITS

 

 

	
            Schedule 2(a)
 	
            Pledged Shares
 	
             

	
            Exhibit 4(a)
 	
            Form of Irrevocable Stock Power
 

 

 

CHAR1\887016v3

 

 

 

Schedule 2(a)

 

PLEDGED SHARES

 

	
             

Pledgor
  	
             

Issuer
  	
            Number of

Shares
  	
            Certificate

Number
  	
            Percentage Ownership
  
	
             
 	
             
 	
             
 	
             
 	
             
 
	
            RehabCare Group, Inc.
 	
            RehabCare Group East, Inc.
 	
            500
 	
            1
 	
            100%
 
	
            RehabCare Group, Inc. 
 	
            RehabCare Group Management Services, Inc.
 	
            500
 	
            1
 	
            100%
 
	
            RehabCare Group, Inc. 
 	
            Salt Lake Physical Therapy Associates, Inc.
 	
            36,586
 	
            6
 	
            100%
 
	
            RehabCare Group East, Inc.
 	
            RehabCare Texas Holdings, Inc.
 	
            500
 	
            1
 	
            100%
 
	
            RehabCare Group, Inc.

RehabCare Texas Holdings, Inc.
 	
            RehabCare Group of Texas, L.P.
 	
            N/A
 	
            N/A
 	
            1%

99%
 
	
            StarMed Management, Inc.
 	
            RehabCare Group of California, Inc.
 	
            500
 	
            2
 	
            100%
 
	
            RehabCare Group East, Inc.
 	
            StarMed Management, Inc.
 	
            500
 	
            1
 	
            100%
 
	
            RehabCare Group of California, Inc. 
 	
            Managed Alternative Care, Inc.
 	
            10,000
 	
            4
 	
            100%
 
	
            RehabCare Group of California, Inc.
 	
            American VitalCare, Inc.
 	
            100
 	
            6
 	
            100%
 
	
            RehabCare Group of California, Inc.
 	
            RehabCare Santa Monica, Inc.
 	
            1,000
 	
            1
 	
            100%
 
	
            RehabCare Santa Monica, Inc.
 	
            RHB LLC
 	
            N/A
 	
            N/A
 	
            100%
 
	
            RehabCare Group East, Inc.
 	
            RehabCare Group of Virginia LLC
 	
            N/A
 	
            N/A
 	
            100%
 
	
            RehabCare Group, Inc.
 	
            Phase 2 Consulting, Inc.
 	
            100
 	
            1
 	
            100%
 
	
            RehabCare Group East, Inc.
 	
            Rehabcare Hospital Holdings, L.L.C.                                                
 	
            N/A
 	
            N/A
 	
            100%
 
	
            Rehab Care Group, Inc.

RehabCare Texas Holdings, Inc.
 	
            RehabCare Group of Arlington, LP
 	
            N/A
 	
            N/A
 	
            1%

99%
 
	
            Rehab Care Group, Inc.

RehabCare Texas Holdings, Inc.
 	
            RehabCare Group of Amarillo, LP
 	
            N/A
 	
            N/A
 	
            1%

99%
 
	
            RehabCare Group, Inc.
 	
            Salt Lake Rehabilitation, LLC                                                
 	
            N/A
 	
            N/A
 	
            100%
 
	
            RehabCare Hospital Holdings, L.L.C.
 	
            West Gables Rehabilitation, L.L.C.
 	
            N/A
 	
            N/A
 	
            100%
 
	
            RehabCare Hospital Holdings, L.L.C.
 	
            Lafayette Specialty Hospital, L.L.C.
 	
            N/A
 	
            N/A
 	
            100%
 

 

 

CHAR1\887016v3

 

 

 

 

	
            RehabCare Hospital Holdings, L.L.C.
 	
            Tulsa Specialty Hospital, L.L.C.                                                
 	
            N/A
 	
            N/A
 	
            100%
 
	
            RehabCare Hospital Holdings, L.L.C.
 	
            Clear Lake Rehabilitation Hospital, L.L.C.
 	
            N/A
 	
            N/A
 	
            100%
 
	
            RehabCare Hospital Holdings, L.L.C.
 	
            Louisiana Specialty Hospital, L.L.C.
 	
            N/A
 	
            N/A
 	
            100%
 

 

 

CHAR1\887016v3

 

 

 

Exhibit 4(a)

 

FORM OF IRREVOCABLE STOCK POWER

 

 

	
             
 	
            FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers to
 

 

 

the following shares of capital stock of ____________________[ISSUER], a ____________ corporation: 

 

 

	
            No. of Shares
 	
            Certificate No.
 
	
             
 	
             
 
	
             
 	
             
 

 

 

and irrevocably appoints __________________________________ its agent and attorney-in-fact to transfer all or any part of such capital stock and to take all necessary and appropriate action to effect any such transfer.  The agent and attorney-in-fact may substitute and appoint one or more persons to act for him.  The effectiveness of a transfer pursuant to this stock power shall be subject to any and all transfer restrictions referenced on the face of the certificates evidencing such interest or in the certificate of incorporation or bylaws of the subject corporation, to the extent they may from time to time exist.

 

	
             
 	
            [HOLDER]
 

 

	
             
 	
            By:                                          
                    
 
	
             
 	
            Name:
 	
             

	
             
 	
            Title:
 	
             

				

 

 

 

 

 

CHAR1\887016v3<PAGE>

                                                                   EXHIBIT 10.72

                            INDEMNIFICATION AGREEMENT

     This Indemnification Agreement ("AGREEMENT") is made effective as of the
____ day of ______, 2006 ("Effective Date") by and between THE GYMBOREE
CORPORATION, a Delaware corporation (the "COMPANY"), and ______________
("INDEMNITEE").

                                    RECITALS

     A. The Company and Indemnitee recognize the continuing difficulty in
obtaining directors' and officers' liability insurance, the increases in the
cost of such insurance and the general reductions in the coverage of such
insurance.

     B. The Company and Indemnitee further recognize the substantial increase in
corporate litigation in general, subjecting officers and directors to expensive
litigation risks at the same time as the availability and coverage of liability
insurance has been limited.

     C. The Company's Certificate of Incorporation and Bylaws contain certain
provisions providing for indemnification of the Company's directors and officers
to the fullest extent permitted by the Delaware General Corporation Law.

     D. To attract and retain the services of highly qualified individuals, such
as Indemnitee, to serve as officers and directors of the Company and to
indemnify its officers and directors so as to provide them with the maximum
protection permitted by law, the Company and Indemnitee now agree that they
should enter into this Indemnification Agreement.

                                    AGREEMENT

     1. Construction of Certain Phrases. As used in this Agreement:

          (a) The term "Company" shall include, without limitation and in
addition to the resulting corporation, any constituent corporation (including
any constituent of a constituent) absorbed in a consolidation or merger which,
if its separate existence had continued, would have had power and authority to
indemnify its directors, officers, and employees or agents, so that if
Indemnitee is or was a director, officer, employee or agent of such constituent
corporation, or is or was serving at the request of such constituent corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, Indemnitee shall stand in the same
position under the provisions of this Agreement with respect to the resulting or
surviving corporation as Indemnitee would have with respect to such constituent
corporation if its separate existence had continued.

          (b) The term "Corporate Status" shall mean the fact that a person
shall be, is or was, or shall have been, a director, officer, employee or agent
of the Company, or any subsidiary of the Company or by reason of the fact that
such person shall serve, is or was serving, or shall have served, at the request
of the Company as a director, officer, employee or agent of

<PAGE>

another corporation, partnership, joint venture, trust or other enterprise,
including service with respect to an employee benefit plan.

          (c) The term "Disinterested Director" shall mean a director of the
Company who is not and was not a party to or threatened with a Proceeding in
respect of which indemnification is sought by Indemnitee.

          (d) The term "Expenses" shall include, without limitation, all direct
and indirect costs of any type or nature whatsoever (including, without
limitation, all attorneys' fees and related disbursements, appeal bonds, other
out-of-pocket costs and reasonable compensation for time spent by Indemnitee for
which Indemnitee is not otherwise compensated by the Company or any third party,
provided that the rate of compensation and estimated time involved is approved
by the Board, which approval shall not be unreasonably withheld), actually and
reasonably incurred by Indemnitee in connection with either the investigation,
defense or appeal of a Proceeding or establishing or enforcing a right to
indemnification under this Agreement.

          (e) The term "Independent Legal Counsel" shall mean a law firm, or a
member of a law firm, that is experienced in matters of corporate law and
neither presently is, nor in the past five years has been, retained to
represent: (A) the Company or Indemnitee in any matter (other than jointly with
respect to the rights of Indemnitee under this Agreement or other indemnities,
under similar indemnity agreements); or (B) any other party to the action, suit
or proceeding giving rise to a claim for indemnification hereunder; provided,
however, Independent Legal Counsel shall not include any firm or person who,
under the applicable standards of professional conduct then prevailing, would
have a conflict of interest in representing either the Company or Indemnitee in
an action to determine Indemnitee's rights under this Agreement.

          (f) The term "Proceeding" shall include any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative in which Indemnitee is or was a party or is threatened to be made
a party to by reason of Indemnitee's Corporate Status.

          (g) References to "other enterprises" shall include, without
limitation, employee benefit plans.

          (h) References to "fines" shall include any excise taxes assessed on
Indemnitee with respect to an employee benefit plan.

          (i) References to "serving at the request of the Company" shall
include, without limitation, any service as a director, officer, employee or
agent of the Company which imposes duties on, or involves services by, such
director, officer, employee or agent with respect to an employee benefit plan,
its participants, or beneficiaries; and if Indemnitee acted in good faith and in
a manner Indemnitee reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan, Indemnitee shall be
deemed to have acted in a manner "not opposed to the best interests of the
Company" as referred to in this Agreement.

                                       2

<PAGE>

     2. Indemnification.

          (a) Third Party Proceedings. The Company shall indemnify Indemnitee if
Indemnitee is or was a party or is threatened to be made a party to any
Proceeding (other than an action by or in the right of the Company) by reason of
Indemnitee's Corporate Status, against Expenses, liabilities, losses, judgments,
fines and amounts paid in settlement actually and reasonably incurred by
Indemnitee in connection with such Proceeding if Indemnitee acted in good faith
and in a manner Indemnitee reasonably believed to be in or not opposed to the
best interests of the Company, and, with respect to any criminal Proceeding, had
no reasonable cause to believe Indemnitee's conduct was unlawful. The
termination of any Proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that Indemnitee did not act in good faith and in a manner which
Indemnitee reasonably believed to be in or not opposed to the best interests of
the Company, and, with respect to any criminal Proceeding, that Indemnitee had
reasonable cause to believe that Indemnitee's conduct was unlawful.

          (b) Proceedings By or in the Right of the Company. The Company shall
indemnify Indemnitee if Indemnitee was or is a party or is threatened to be made
a party to any Proceeding by or in the right of the Company or any subsidiary of
the Company to procure a judgment in its favor by reason of Indemnitee's
Corporate Status, against Expenses actually and reasonably incurred by
Indemnitee in connection with the defense or settlement of such Proceeding if
Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to
be in or not opposed to the best interests of the Company and its stockholders,
except that no indemnification shall be made in respect of any claim, issue or
matter in such Proceeding as to which Indemnitee shall have been adjudged to be
liable to the Company unless and only to the extent that the court in which such
Proceeding is or was pending shall determine upon application that, in view of
all the circumstances of the case, Indemnitee is fairly and reasonably entitled
to indemnity for Expenses which such court shall deem proper.

          (c) Mandatory Payment of Expenses. To the extent that Indemnitee has
been successful on the merits or otherwise in defense of any Proceeding referred
to in Section 2(a) or Section 2(b) or the defense of any claim, issue or matter
therein, Indemnitee shall be indemnified against Expenses actually and
reasonably incurred by Indemnitee in connection therewith.

          (d) Other Payment of Expenses. Other than for indemnification of
Expenses by the Company pursuant to Section 2(c) or otherwise ordered by a court
of law, Indemnitee shall be indemnified by the Company against Expenses actually
and reasonably incurred by Indemnitee only if authorized in a specific case upon
a determination that indemnification of Indemnitee is proper in the
circumstances because Indemnitee has met the applicable standard of conduct set
forth in Section 2(a) or Section 2(b), as applicable, which determination shall
be made by one of the following methods (as chosen by the Company): (i) by a
majority vote of the Disinterested Directors, even though less than a quorum,
(ii) by a majority vote of a committee of Disinterested Directors designated by
a majority vote of Disinterested Directors, even though less than a quorum,
(iii) if there are no Disinterested Directors or if the Disinterested Directors
so

                                       3

<PAGE>

direct, by Independent Legal Counsel, reasonably acceptable to Indemnitee and
the Company, in a written opinion applying the applicable standard of conduct
set forth in Section 2(a) or Section 2(b), as applicable, or (iv) by the
stockholders of the Company applying the applicable standard of conduct set
forth in Section 2(a) or Section 2(b), as applicable; provided, that, in any
case, all requirements of applicable law have been met.

     3. Expenses; Indemnification Procedure.

          (a) Advancement of Expenses. The Company shall advance all Expenses
incurred by Indemnitee in connection with the investigation, defense, settlement
or appeal of any Proceeding referenced in Section 2(a) or Section 2(b) hereof
(including amounts actually paid in settlement of any such Proceeding).
Indemnitee hereby undertakes to repay such amounts advanced only if, and to the
extent that, it shall ultimately be determined that Indemnitee is not entitled
to be indemnified by the Company as authorized hereby. The advances to be made
hereunder shall be paid by the Company to Indemnitee no later than ten (10) days
following delivery of a written request therefor by Indemnitee to the Company
which request provides adequate documentation supporting such advances.

          (b) Notice/Cooperation by Indemnitee. Indemnitee shall, as a condition
precedent to the right to be indemnified under this Agreement, give the Company
notice in writing as soon as practicable of any claim made against Indemnitee
for which indemnification will or could be sought under this Agreement. Notice
to the Company shall be directed to the Chief Executive Officer of the Company
at the address shown on the signature page of this Agreement (or such other
address as the Company shall designate in writing to Indemnitee). Omission of
such Notice does not relieve the Company from any obligation that it may have to
Indemnitee under this Agreement or otherwise unless and only to the extent that
such omission can be shown to have prejudiced the Company. Notice shall be
deemed received five business days after the date postmarked if sent by domestic
certified or registered mail, properly addressed; otherwise notice shall be
deemed received when such notice shall actually be received by the Company. In
addition, Indemnitee shall give the Company such information and cooperation as
the Company may reasonably require and as shall be within Indemnitee's power.

          (c) Procedure.

               (i) Any indemnification provided for in Section 2 shall be made
as soon as is practicable, but in no event no later than forty-five (45) days
after receipt of the written request of Indemnitee accompanied by adequate
documentation supporting such request. If a claim under this Agreement
(including a claim for the advancement of Expenses under Section 3), under any
statute, or under any provision of the Company's Certificate of Incorporation or
Bylaws, as such are amended from time to time, providing for indemnification, is
not paid in full by the Company within forty-five (45) days after a written
request for payment thereof has first been received by the Company, Indemnitee
may, but need not, at any time thereafter bring an action against the Company to
recover the unpaid amount of the claim (an "ENFORCEMENT ACTION") and, subject to
Section 12 of this Agreement, Indemnitee shall also be entitled to be paid for
the Expenses of bringing an Enforcement Action. It shall be a defense to any
such

                                       4

<PAGE>

Enforcement Action (other than an action brought to enforce a claim for
advancement of Expenses incurred in connection with any action, suit or
proceeding in advance of its final disposition) that Indemnitee has not met the
standards of conduct which make it permissible under applicable law for the
Company to indemnify Indemnitee for the amount claimed, but the burden of
proving such defense shall be on the Company, and Indemnitee shall be entitled
to receive interim payments of Expenses pursuant to Section 3(a) unless and
until such defense may be finally adjudicated by court order or judgment from
which no further right of appeal exists. It is the parties' intention that if
the Company contests Indemnitee's right to indemnification, the question of
Indemnitee's right to indemnification shall be for the court to decide, and
neither the failure of the Company (including its Board of Directors, any
committee or subgroup of the Board of Directors, Independent Legal Counsel or
its stockholders) to have made a determination that indemnification of
Indemnitee is proper in the circumstances because Indemnitee has met the
applicable standard of conduct required by applicable law, nor an actual
determination by the Company (including its Board of Directors, any committee or
subgroup of the Board of Directors, Independent Legal Counsel or its
stockholders) that Indemnitee has not met such applicable standard of conduct,
shall be a defense to an Enforcement Action or create a presumption that
Indemnitee has or has not met the applicable standard of conduct. In addition,
in an Enforcement Action, the Company shall conclusively be presumed to have
entered into this Agreement and assumed the obligations imposed on it to induce
Indemnitee to accept the position of, or to continue as a director and/or
officer of, the Company.

               (ii) During the interval between the Company's receipt of a
request under paragraph (b) of this Section 3, and the later to occur of (x)
payment in full to Indemnitee of the indemnification or advances required by
Section 2 and Section 3 or (y) a determination (if required) pursuant to this
Agreement and applicable law that Indemnitee is not entitled to indemnification
hereunder, the Company shall take all necessary steps (whether or not such steps
require expenditures to be made by the Company at that time), to stay (pending a
final determination of Indemnitee's entitlement to indemnification and, if
Indemnitee is so entitled, the payment thereof) the execution, enforcement or
collection of any judgments, penalties, fines or any other amounts for which
Indemnitee may be liable (and as to which Indemnitee has requested
indemnification hereunder) in order to avoid Indemnitee being or becoming in
default with respect to any such amounts (such necessary steps to include, but
not be limited to, the procurement of a surety bond to achieve such stay or a
loan to Indemnitee of amounts for which Indemnitee may be liable and as to which
a stay of execution as aforesaid cannot be obtained), promptly after receipt of
Indemnitee's written request therefor together with a written undertaking by
Indemnitee to repay promptly following receipt of a statement therefor from the
Company, amounts (if any) expended by the Company for such purpose, if it is
ultimately determined (if such determination is required) that Indemnitee is not
entitled to be indemnified against such judgments, penalties, fines or other
amounts.

                                       5

<PAGE>

          (d) Notice to Insurers. If, at the time of the receipt of a notice of
a claim pursuant to Section 3(b) hereof, the Company has director and officer
liability insurance in effect, the Company shall give prompt notice of the
commencement of such action, suit or proceeding to the insurers in accordance
with the procedures set forth in the respective policies. The Company shall
thereafter take all necessary or desirable action to cause such insurers to pay,
on behalf of Indemnitee, all amounts payable as a result of such action, suit or
proceeding in accordance with the terms of such policies.

          (e) Selection of Counsel. In the event the Company shall be obligated
under Section 3(a) hereof to pay the Expenses of any action, suit or proceeding
against Indemnitee, the Company, if appropriate, shall be entitled to assume the
defense of such Proceeding, with counsel approved by Indemnitee, upon the
delivery to Indemnitee of written notice of its election so to do. After
delivery of such notice, approval of such counsel by Indemnitee and the
retention of such counsel by the Company, the Company will not be liable to
Indemnitee under this Agreement for any fees of counsel subsequently incurred by
Indemnitee with respect to the same Proceeding, provided that (i) Indemnitee
shall have the right to employ counsel in any such Proceeding at Indemnitee's
expense; and (ii) if (A) the employment of counsel by Indemnitee has been
previously authorized by the Company, (B) Indemnitee shall have reasonably
concluded that there may be a conflict of interest between the Company and
Indemnitee in the conduct of any such defense, (C) the Company shall not, in
fact, have employed counsel to assume the defense of such action, suit or
proceeding or (D) the Company is not financially or legally able to perform its
indemnification obligations, then the fees and expenses of Indemnitee's counsel
shall be at the expense of the Company. The Company shall not be entitled to
assume the defense of any Proceeding brought by or on behalf of the Company
against Indemnitee or as to which Indemnitee shall have made the conclusion
provided for in (ii) (B) or (D) above.

     4. Additional Indemnification Rights; Nonexclusivity.

          (a) Scope. Notwithstanding any other provision of this Agreement, the
Company hereby agrees to indemnify Indemnitee to the fullest extent permitted by
law, notwithstanding that such indemnification is not specifically authorized by
the other provisions of this Agreement, the Company's Certificate of
Incorporation or Bylaws, as such are amended from time to time, or by statute.
In the event of any change, after the Effective Date, in any applicable law,
statute or rule which narrows the right of a Delaware corporation to indemnify a
member of its board of directors or an officer, such changes, to the extent not
otherwise required by such law, statute or rule to be applied to this Agreement
shall have no effect on this Agreement or the parties' rights and obligations
hereunder. In the event of any change, after the Effective Date, in any
applicable law, statute, or rule which expands the right of a Delaware
corporation to indemnify a member of its board of directors or an officer, it is
the intent of the parties hereto that Indemnitee shall, without the necessity of
amending this Agreement, be entitled to the full benefit of such expanded
indemnification rights. Indemnitee's rights under this Agreement are contractual
rights which may not be diminished, modified or restricted by any subsequent
change in the Company's Certificate of Incorporation, Bylaws or corporate
policies, as such are amended from time to time.

                                       6

<PAGE>

          (b) Nonexclusivity. The indemnification provided by this Agreement
shall not be deemed exclusive of any rights to which Indemnitee may be entitled
under the Company's Certificate of Incorporation, or Bylaws, as such may be
amended from time to time, any agreement, any vote of stockholders or
disinterested Directors, the Corporation Law of the State of Delaware, or
otherwise, both as to action in Indemnitee's official capacity and as to action
in another capacity while holding such office. The indemnification provided
under this Agreement shall continue as to Indemnitee for any action taken or not
taken while serving in an indemnified capacity even though Indemnitee may have
ceased to serve in such capacity at the time of any action, suit or other
covered proceeding.

     5. Partial Indemnification. If Indemnitee is entitled under any provision
of this Agreement to indemnification by the Company for some or a portion of the
Expenses, judgments, fines or penalties actually or reasonably incurred in the
investigation, defense, appeal or settlement of any Proceeding, but not,
however, for the total amount thereof, the Company shall nevertheless indemnify
Indemnitee for the portion of such Expenses, judgments, fines or penalties to
which Indemnitee is entitled.

     6. Mutual Acknowledgement. Both the Company and Indemnitee acknowledge that
in certain instances, federal law or public policy may override applicable state
law and prohibit the Company from indemnifying Indemnitee under this Agreement
or otherwise. For example, the Company and Indemnitee acknowledge that the
Securities and Exchange Commission (the "SEC") has taken the position that
indemnification is not permissible for liabilities arising under certain federal
securities laws, and federal legislation prohibits indemnification for certain
ERISA violations. Indemnitee understands and acknowledges that the Company has
undertaken or may be required in the future to undertake with the SEC to submit
the question of indemnification to a court in certain circumstances for a
determination of the Company's right under public policy to indemnify
Indemnitee.

     7. Officer and Director Liability Insurance. The Company shall, from time
to time, make the good faith determination whether or not it is practicable for
the Company to obtain and maintain a policy or policies of insurance with
reputable insurance carriers to provide the officers and directors of the
Company with coverage for losses caused by wrongful acts, or to ensure the
Company's ability to perform its indemnification obligations under this
Agreement. Among other considerations, the Company will weigh the costs of
obtaining such insurance coverage against the protection afforded by such
coverage. In all policies of director and officer liability insurance,
Indemnitee, so long as he or she is a director or officer of the Company, shall
be named as an insured in such a manner as to provide Indemnitee the same rights
and benefits as are accorded to the most favorably insured of the Company's
directors, if Indemnitee is a director; or of the Company's officers, if
Indemnitee is not a director of the Company but is an officer. Notwithstanding
the foregoing, the Company shall have no obligation to obtain or maintain such
insurance if the Company determines in good faith that such insurance is not
reasonably available, if the premium costs for such insurance are
disproportionate to the amount of coverage provided, if the coverage provided by
such insurance is limited by exclusions so as to provide an insufficient benefit
or if Indemnitee is covered by similar insurance maintained by a subsidiary or
parent of the Company.

                                       7

<PAGE>

     8. Severability. Nothing in this Agreement is intended to require or shall
be construed as requiring the Company to do or fail to do any act in violation
of applicable law. The Company's inability, pursuant to court order, to perform
its obligations under this Agreement shall not constitute a breach of this
Agreement. The provisions of this Agreement shall be severable as provided in
this Section 8. If this Agreement or any portion hereof shall be invalidated on
any ground by any court of competent jurisdiction, then the Company shall
nevertheless indemnify Indemnitee to the full extent permitted by any applicable
portion of this Agreement that shall not have been invalidated, and the balance
of this Agreement not so invalidated shall be enforceable in accordance with its
terms.

     9. Exceptions. Any other provision herein to the contrary notwithstanding,
the Company shall not be obligated pursuant to the terms of this Agreement:

          (a) Claims Initiated by Indemnitee. To indemnify or advance Expenses
to Indemnitee with respect to actions, suits, proceedings or claims initiated or
brought voluntarily by Indemnitee and not by way of defense, except with respect
to actions, suits or proceedings brought to establish or enforce a right to
indemnification and/or the advancement of Expenses under this Agreement or any
other statute or law or otherwise as required under Section 145 of the General
Corporation Law of the State of Delaware, but such indemnification or
advancement of Expenses may be provided by the Company in specific cases if the
Board of Directors has approved the initiation or bringing of such suit;

          (b) Lack of Good Faith. To indemnify Indemnitee for any Expenses
incurred by Indemnitee with respect to any action instituted by Indemnitee to
enforce or interpret this Agreement, if a court of competent jurisdiction
determines that each of the material assertions made by Indemnitee in such
action was not made in good faith or was frivolous;

          (c) Insured Claims. To indemnify Indemnitee for Expenses or
liabilities of any type whatsoever (including, but not limited to, judgments,
fines, ERISA excise taxes or penalties, and amounts paid in settlement) which
have been paid directly to Indemnitee by an insurance carrier under a policy of
officers' and directors' liability insurance maintained by the Company or by
plaintiff;

          (d) Claims Under Section 16(b). To indemnify Indemnitee for Expenses
or the payment of profits arising from the purchase and sale by Indemnitee of
securities in violation of Section 16(b) of the Securities Exchange Act of 1934,
as amended, or any similar successor statute;

          (e) Settlement. To indemnify Indemnitee for any amounts paid in
settlement of any Proceeding effected without the written consent of the
Company; provided, however, the Company shall not settle any Proceeding in any
manner which would impose any penalty or limitation on Indemnitee without the
written consent of Indemnitee; provided further, that neither the Company nor
Indemnitee shall unreasonably withhold or delay written consent to any proposed
settlement; or

                                       8

<PAGE>

          (f) Indemnification Unlawful. To indemnify Indemnitee if a final
decision by a court having jurisdiction on the matter shall determine that such
indemnification is not lawful.

     10. No Employment Rights. Nothing contained in this Agreement is intended
to create in Indemnitee any right to continued employment.

     11. Counterparts. This Agreement, and any modification, amendment or waiver
of this Agreement, may be executed in one or more counterparts, each of which
shall constitute an original.

     12. Successors and Assigns. This Agreement shall be binding upon the
Company and its successors and assigns, and shall inure to the benefit of
Indemnitee and Indemnitee's estate, heirs, legal representatives and assigns.

     13. Attorneys' Fees. In the event that any action is instituted by
Indemnitee under this Agreement to enforce or interpret any of the terms hereof,
Indemnitee shall be entitled to be paid all court costs and Expenses, incurred
by Indemnitee with respect to such action, unless as a part of such action, the
court of competent jurisdiction determines that each of the material assertions
made by Indemnitee as a basis for such action were not made in good faith or
were frivolous. In the event of an action instituted by or in the name of the
Company under this Agreement or to enforce or interpret any of the terms of this
Agreement, Indemnitee shall be entitled to be paid all court costs and Expenses
incurred by Indemnitee in defense of such action (including with respect to
Indemnitee's counterclaims and cross-claims made in such action), unless as a
part of such action the court determines that each of Indemnitee's material
defenses to such action were made in bad faith or were frivolous.

     14. Notice. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand and receipted for by the party addressee, on the date of such
receipt, (ii) if mailed by domestic certified or registered mail with postage
prepaid, on the third business day after the date postmarked, or (iii) if sent
for overnight delivery by a recognized express courier, on the following
business day after delivery to such courier. Addresses for notice to either
party are as shown on the signature page of this Agreement, or as subsequently
modified by written notice.

     15. Choice of Law. This Agreement shall be governed by and its provisions
construed in accordance with the laws of the State of Delaware, without giving
effect to principles of conflict of law.

                                       9

<PAGE>

     16. Modification. This Agreement constitutes the entire agreement between
the parties hereto with respect to the subject matter hereof. All prior
negotiations, agreements and understandings between the parties with respect
thereto are superseded hereby. This Agreement may not be modified or amended
except by an instrument in writing signed by or on behalf of the parties hereto.

     17. Subrogation. In the event of payment under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights of
recovery of Indemnitee, who shall execute all documents required and shall do
all acts that may be necessary to secure such rights and to enable the Company
to effectively bring suit to enforce such rights.

     IN WITNESS WHEREOF, the parties hereto have executed this Indemnification
Agreement as of the date first above written.

                                        THE GYMBOREE CORPORATION

                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                        Address: 500 Howard Street
                                                 San Francisco, California 94105
                                                 Attn: Chief Executive Officer

AGREED TO AND ACCEPTED BY
INDEMNITEE:

-------------------------------------
(signature)

-------------------------------------

-------------------------------------
(address)

                                       10

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00105-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00105-of-00352.parquet"}]]