SUPPLEMENTAL INDENTURE, dated as of November 7, 1996, by and
between KinderCare Learning Centers, Inc., a Delaware corporation (the
"Company"), and AmSouth Bank of Alabama, as trustee (the "Trustee").
W I T N E S S E T H :
WHEREAS, the Company and the Trustee have heretofore executed
and delivered an Indenture, dated as of June 2, 1994 (the "Indenture"),
providing for the issuance of 10-3/8% Senior Securities due 2001 (the
"Securities") of the Company;
WHEREAS, there is currently outstanding under the Indenture
$70,000,000 aggregate principal amount of the Securities;
WHEREAS, Section 902 of the Indenture provides that the
Company and the Trustee may, with the consent of the Holders of not less than a
majority in aggregate principal amount of the outstanding Securities, (i) enter
into a supplemental indenture for the purpose of amending the Indenture or (ii)
waive compliance with certain provisions of the Indenture;
WHEREAS, the Company has offered to purchase for cash all of
the outstanding Securities upon the terms and subject to the conditions set
forth in the Offer to Purchase and Consent Solicitation Statement dated October
16, 1996, as the same may be amended, supplemented or modified (the "Offer");
WHEREAS, the Offer is conditioned upon, among other things,
certain proposed amendments to the Indenture (the "Proposed Amendments") having
been approved by a majority in aggregate principal amount of the outstanding
Securities (and a supplemental indenture in respect thereof having been
executed and delivered) with the effectiveness of such Proposed Amendments with
respect to the Securities being subject only to the acceptance for payment by
the Company of the Securities representing a majority in aggregate principal
amount of the outstanding Securities pursuant to the Offer (the "Acceptance");
WHEREAS, the Company has received and delivered to the Trustee
the requisite consents to effect the Proposed Amendments under the Indenture;
WHEREAS, the Company has been authorized by a resolution of
its Board of Directors to enter into this Supplemental Indenture and to waive
compliance with certain provisions of the Indenture as described herein; and
WHEREAS, all other acts and proceedings required by law, by
the Indenture and by the certificate of incorporation and by-laws of the
Company to make this Supplemental Indenture a valid and binding agreement for
the purposes expressed herein, in accordance with its terms, have been duly
done and performed;
NOW, THEREFORE, in consideration of the premises and the
covenants and agreements contained herein, and for other good and valuable
consideration the receipt of which is hereby acknowledged, and for the equal
and proportionate benefit of the Holders of the Securities, the Company and the
Trustee hereby agree as follows:
ARTICLE ONE
Section 101. Definitions.
-----------
Capitalized terms used in this Supplemental Indenture and not
otherwise defined herein shall have the meanings assigned to such terms in the
Indenture.
ARTICLE TWO
Section 201. Waiver of Compliance with Sections 1008 and 1011.
------------------------------------------------
Effective immediately upon execution of this Supplemental
Indenture, the Company and the Trustee waive compliance with the provisions of
Sections 1008 and 1011 of the Indenture and any events of default with respect
thereto set forth in Section 501(c); including, without limitation, (i) the
execution and delivery of the Seventh Amendment to the Credit Agreement, dated
as of October 11, 1996, among the Company, The Toronto-Dominion Bank, Houston
Agency, as Facing Bank, the Lenders, as defined therein, and Toronto Dominion
(Texas), Inc., as Agent (the "Amendment") which amends the New Credit Facility
by providing an additional $50,000,000 facility, (ii) the execution and
delivery of related documents amending certain security documents granted by
the Company and certain of its Subsidiaries in connection with the New Credit
Facility, (iii) the borrowing of up to $50,000,000 pursuant to the Amendment's
new facility in connection with the Acceptance, and (iv) the granting of Liens
to secure the Amendment's new facility.
ARTICLE THREE
Section 301. Amendment of Section 101.
------------------------
Effective upon, and subject only to, the Acceptance, the
provisions of Section 101 of the Indenture are amended by:
(a) deleting the following definitions: "Acquired
Indebtedness"; "Average Life to Stated Maturity"; "Consolidated Fixed Charge
Coverage Ratio"; "Consolidated Net Income"; "Permitted Indebtedness";
"Permitted Investments"; "Permitted Subsidiary Indebtedness"; "Qualified
Capital Stock"; and "Unrestricted Subsidiary Indebtedness"; and
(b) adding the following definition after the definition
of "Maturity" and prior to the definition of "Mini-Skools":
"'Merger Agreement' means the Agreement and Plan of
Merger between KCLC Acquisition Corp. and KinderCare
Learning Centers, Inc., dated as of October 3, 1996,
as the same may be amended, supplemented or modified."
Section 302. Amendment of Section 102.
------------------------
Effective upon, and subject only to, the Acceptance, the
provisions of Section 102 of the Indenture are amended by
deleting references to the terms: "incur"; "refinancing" and "Restricted
Payments".
Section 303. Amendment of Section 404.
------------------------
Effective upon, and subject only to, the Acceptance, the
provisions of Section 404 of the Indenture are amended by amending and
restating Section 404 as follows:
"Section 404. Conditions to Defeasance or Covenant Defeasance.
-----------------------------------------------
The following shall be the conditions to application of either
Section 402 or Section 403 to the Defeased Securities:
(1) The Company shall irrevocably have deposited
or caused to be deposited with the Trustee as trust funds in trust for
the purpose of making the following payments, specifically pledged as
security for, and dedicated solely to, the benefit of the Holders of
such Securities, (a) United States dollars in an amount, (b) U.S.
Government Obligations which through the scheduled payment of principal
and interest in respect thereof in accordance with their terms will
provide, not later than one day before the due date of any payment,
money in an amount, or (c) a combination thereof, in such amounts as
will be sufficient, as reflected in the written report of a nationally
recognized firm of independent public accountants or a nationally
recognized investment banking firm delivered to the Trustee, to pay
and discharge (and which shall be applied by the Trustee to pay and
discharge) the principal of, premium, if any, and interest on, the
Defeased Securities on the Stated Maturity (or on any date after June
1, 1998 (such date being referred to as the 'Defeasance Redemption
Date'), if prior to electing either defeasance or covenant defeasance,
the Company has delivered to the Trustee an irrevocable notice to
redeem all of the outstanding Securities on the Defeasance Redemption
Date) of such principal or installment of interest; provided that the
Trustee (or such qualifying trustee) shall have been irrevocably
instructed to apply such United States dollars or the proceeds of such
U.S. Government Obligations to said payments with respect to the
Securities. For this purpose, 'U.S. Government Obligations' means
securities that are (i) direct obligations of the United States of
America for the timely payment of which its full faith and credit is
pledged or (ii) obligations of a Person controlled or supervised by
and acting as an agency or instrumentality of the United States of
America the timely payment of which is unconditionally guaranteed as
a full faith and credit obligation by the United States of America,
which, in either case, are not callable or redeemable at the option
of the issuer thereof, and shall also include a depository receipt
issued by a bank (as defined in Section 3(a)(2) of the Securities
Act), as custodian with respect to any such U.S. Government
Obligation or a specific payment of principal of or interest on any
such U.S. Government Obligation held by such custodian for the
account of the holder of such depository receipt, provided that
(except as required by law) such custodian is not authorized to make
any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the
U.S. Government Obligation or the specific payment of principal of or
interest on the U.S. Government Obligation evidenced by such
depository receipt.
(2) In the case of an election under Section 402,
the Company shall have delivered to the Trustee an Opinion of
Independent Counsel in the United States to the effect that (A) the
Company has received from, or there has been published by, the
Internal Revenue Service a ruling or (B) since the date of this
Indenture, there has been a change in the applicable federal income
tax law, ineither case to the effect that the Holders of the
Outstanding Securities will not recognize income, gain or loss for
federal income tax purposes as a result of such defeasance and will
be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
defeasance had not occurred.
(3) [intentionally omitted].
(4) No Default or Event of Default shall have
occurred and be continuing on the date of such deposit or insofar as
subsections 501(g) and (h) are concerned, at any time during the
period ending on the 91st day after the date of deposit.
(5) Such defeasance or covenant defeasance shall
not cause the Trustee to have a conflicting interest with respect to
any securities of the Company.
(6) Such defeasance or covenant defeasance shall
not result in a breach or violation of, or constitute a Default under,
this Indenture or any other material agreement or instrument to which
the Company is a party or by which it is bound.
(7) The Company shall have delivered to the
Trustee an Opinion of Independent Counsel in the United States to the
effect that (A) the trust funds will not be subject to any rights of
holders of Senior Indebtedness, including without limitation, those
arising under this Indenture and (B) after the 91st day following the
deposit, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally.
(8) The Company shall have delivered to the
Trustee an Officers' Certificate stating that the deposit was not made
by the Company with the intent of preferring the holders of the
Securities over the other creditors of the Company or with the intent
of defeating, hindering, delaying or defrauding creditors of the
Company or others.
(9) No event or condition shall exist that would
prevent the Company from making payments of the principal of, premium,
if any, and interest on the Securities on the date of such deposit or
at any time ending on the 91st day after the date of such deposit.
(10) The Company shall have delivered to the
Trustee (a) an Officers' Certificate and an Opinion of Independent
Counsel, each to the effect that all conditions precedent provided for
relating to defeasance under Section 402 have been complied with as
contemplated by this Section 404, and (b) an Officers' Certificate to
the effect that all conditions precedent provided for relating to
covenant defeasance under Section 403 have been complied with as
contemplated by this Section 404.
Opinions of Counsel required to be delivered under
this Section may have qualifications customary for opinions of the
type required and counsel delivering such Opinions of Counsel may
rely on certificates of the Company or government or other officials
customary for opinions of the type required, which certificates shall
be limited to matters of fact, including that various financial
covenants have been complied with."
Section 304. Amendment to Section 801.
------------------------
Effective upon, and subject only to, the Acceptance, the
provisions of Section 801 of the Indenture are amended by:
(a) deleting clause (a)(iii) thereof in its entirety and
inserting in lieu thereof the phrase "[intentionally omitted]";
(b) deleting clause (a)(iv) thereof in its entirety and
inserting in lieu thereof the phrase "[intentionally omitted]";
(c) deleting clause (a) (vi) thereof in its entirety and
inserting in lieu thereof the phrase "[intentionally omitted]";
(d) deleting clause (b) (iii) thereof in its entirety and
inserting in lieu thereof the phrase "[intentionally omitted]"; and
(e) adding a new paragraph at the end of Section 801 as
follows:
"Notwithstanding the foregoing or any other provision
contained in this Indenture, the consummation of the transactions
contemplated by the Merger Agreement shall be expressly permitted
under this Indenture and shall not be deemed to constitute a breach,
violation or other contravention of this Section 801 or any other
provision contained in this Indenture."
Section 305. Amendment of Section 1008.
-------------------------
Effective upon, and subject only to, the Acceptance, the
provisions of Section 1008 of the Indenture are amended by deleting the text of
such Section in its entirety and inserting in lieu thereof the phrase
"[intentionally omitted]".
Section 306. Amendment of Section 1009.
-------------------------
Effective upon, and subject only to, the Acceptance, the
provisions of Section 1009 of the Indenture are amended by deleting the text of
such Section in its entirety and inserting in lieu thereof the phrase
"[intentionally omitted]".
Section 307. Amendment of Section 1010.
-------------------------
Effective upon, and subject only to, the Acceptance, the
provisions of Section 1010 of the Indenture are amended by deleting the text of
such Section in its entirety and inserting in lieu thereof the phrase
"[intentionally omitted]".
Section 308. Amendment of Section 1011.
-------------------------
Effective upon, and subject only to, the Acceptance, the
provisions of Section 1011 of the Indenture are amended by deleting the text of
such Section in its entirety and inserting in lieu thereof the phrase
"[intentionally omitted]".
Section 309. Amendment of Section 1012.
-------------------------
Effective upon, and subject only to, the Acceptance, the
provisions of Section 1012 of the Indenture are amended by deleting the text of
such Section in its entirety and inserting in lieu thereof the phrase
"[intentionally omitted]".
Section 310. Amendment of Section 1014.
-------------------------
Effective upon, and subject only to, the Acceptance, the
provisions of Section 1014 of the Indenture are amended by deleting the text of
such Section in its entirety and inserting in lieu thereof the phrase
"[intentionally omitted]".
Section 311. Amendment of Section 1016.
-------------------------
Effective upon, and subject only to, the Acceptance, the
provisions of Section 1016 of the Indenture are amended by deleting the text of
such Section in its entirety and inserting in lieu thereof the phrase
"[intentionally omitted]".
Section 312. Amendment of Section 1017.
-------------------------
Effective upon, and subject only to, the Acceptance, the
provisions of Section 1017 of the Indenture are amended by deleting the text of
such Section in its entirety and inserting in lieu thereof the phrase
"[intentionally omitted]".
ARTICLE FOUR
Section 401. Continuing Effect of Indenture.
------------------------------
Except as expressly provided herein, all of the terms,
provisions and conditions of the Indenture and the Securities outstanding
thereunder shall remain in full force and effect.
Section 402. Construction of Supplemental Indenture.
--------------------------------------
The Supplemental Indenture is executed as and shall constitute
an indenture supplemental to the Indenture and shall be construed in connection
with and as part of the Indenture. This Supplemental Indenture shall be
governed by and construed in accordance with the laws of the State of New York.
Section 403. Trust Indenture Act Controls.
----------------------------
If any provision of this Supplemental Indenture limits,
qualifies or conflicts with another provision of this Supplemental Indenture or
the Indenture that is required to be included by the Trust Indenture Act of
1939 as in force at the date as of which this Supplemental Indenture is
executed, the provision required by said Act shall control.
Section 404. Trustee Disclaimer.
------------------
The recitals contained in this Supplemental Indenture shall be
taken as the statements of the Company, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of this Supplemental Indenture.
Section 405. Counterparts.
------------
This Supplemental Indenture may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed, and their respective corporate
seals to be hereunto affixed and attested, all as of the day and year first
above written.
KINDERCARE LEARNING CENTERS, INC.
[Seal] By /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Title: Executive Vice President
and Chief Financial Officer
By /s/ Xxxxxxx X. Xxxxx
--------------------------------
Title: Vice President/General Counsel/
Corporate Secretary
Attest:
/s/ Xxxxxx X. Xxxxx
------------------------------
Title: Vice President/Treasurer
AMSOUTH BANK OF ALABAMA,
as Trustee
[Seal] By /s/ T. Xxxxxxxx Xxxxx
------------------------------------
Title: Vice President and Corporate Trust
Officer
Attest:
/s/ Xxxx Xxx Xxxxxx
------------------------------------
Title: Assistant Vice President
and Corporate Trust Officer
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
On the 7th day of November 1996, before me personally came
Xxxxxx Xxxxxxx and Xxxxxxx Xxxxx, to me known, who, being by me duly sworn,
did depose and say that he/she is Executive Vice President/CFO and Vice
President/General Counsel/Corporate Secretary of KinderCare Learning Centers,
Inc., the corporation described in and which executed the foregoing
instrument; that he/she knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
authority of the Board of Directors of said corporation, and that he/she
signed his/her name thereto by like authority.
/s/ Xxxxxxxx X. Xxxxxxxx
-----------------------------
Notary Public, State of New York
STATE OF ALABAMA )
) SS.:
COUNTY OF JEFFERSON )
On the 7th day of November, 1996, before me personally came
Xxxxx Xxxxx, to me known, who, being by me duly sworn, did depose and say
that he/she is Vice President and Corporate Trust Officer of AmSouth Bank
of Alabama, an Alabama banking corporation described in and which executed
the foregoing instrument; that he/she knows the seal of said Alabama banking
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said Alabama
banking corporation, and that he/she signed his/her name thereto by like
authority.
/s/ Xxxxxxx Xxxx Xxxxxxxx
-----------------------------
Notary Public, State of Alabama
