EXHIBIT 99(c)(2)
FIRST SUPPLEMENTAL INDENTURE
FIRST SUPPLEMENTAL INDENTURE, dated as of February 3, 1997 (this
"First Supplemental Indenture"), among Toys "R" Us, Inc., a Delaware corporation
("Toys "R" Us"), Baby Superstore, Inc., a South Carolina corporation (the
"Company"), and The Bank of New York, as successor in interest to Nationsbank of
Georgia, National Association, as Trustee (the "Trustee").
W I T N E S S E T H:
WHEREAS, the Company and the Trustee executed and delivered an
Indenture, dated as of October 3, 1995 (the "Indenture"), to provide for the
issuance of the 4-7/8% Convertible Subordinated Notes due October 1, 2000 of the
Company (the "Securities");
WHEREAS, on the date hereof, pursuant to an Agreement and Plan of
Merger, dated as of October 1, 1996, and as amended and restated as of December
26, 1996, among Toys "R" Us, BSST Acquisition Corp., a South Carolina
corporation and direct wholly owned subsidiary of Toys "R" Us ("Sub"), the
Company and Xxxx X. Xxxx ("Xxxx"), (a) Sub is being merged with and into the
Company, with the Company continuing as the surviving corporation and a wholly
owned subsidiary of Toys "R" Us (the "Merger") and (b) (i) each outstanding
share of common stock, without par value, of the Company ("Baby Superstore
Common Stock"), other than shares owned by Xxxx, is being converted into 0.8121
of a share of common stock, par value $.01 per share, of Toys "R" Us ("Toys "R"
Us Common Stock") and (ii) each share of Baby Superstore Common Stock owned by
Xxxx is being converted into 0.5150 of a share of Toys "R" Us Common Stock;
WHEREAS, in accordance with Section 1211 of the Indenture, Toys "R"
Us and the Company desire to provide for certain adjustments with respect to the
consideration into which the Securities are convertible;
WHEREAS, Section 901 of the Indenture permits the Company, when
authorized by a resolution of the Board of Directors of the Company, and the
Trustee, at any time and from time to time, to enter into one or more indentures
supplemental to the indenture, in form satisfactory to the
Trustee, (i) to make provisions with respect to the conversion rights of Holders
pursuant to Section 1211 of the Indenture and (ii) to make any provisions with
respect to matters arising under the Indenture which are not inconsistent with
the provisions of the Indenture;
WHEREAS, Toys "R" Us desires to assume, jointly and severally, with
the Company, the due and punctual payment of the principal of, and premium, if
any, and interest on, the Securities when due; and
WHEREAS, Toys "R" Us and the Company have requested that the Trustee
execute and deliver this First Supplemental Indenture pursuant to Section 901 of
the Indenture, and all requirements necessary to make this First Supplemental
Indenture a valid instrument in accordance with its terms have been performed
and the execution and delivery of this First Supplemental Indenture have been
duly authorized in all respects by each of Toys "R" Us and the Company.
NOW, THEREFORE, Toys "R" Us and the Company covenant and agree with
the Trustee as follows:
ARTICLE I
CONVERSION
SECTION 1.01. Conversion of Securities. In accordance with the
provisions of Section 1211 of the Indenture, following the Merger, a Holder of a
Security shall have the right to convert such Security into shares of Toys "R"
Us Common Stock at a price of $66.34 per share of Toys "R" Us Common Stock (the
"Adjusted Conversion Price").
SECTION 1.02. Certain Adjustments. In accordance with the provisions
of Section 1211 of the Indenture, following the Merger, upon the occurrence of
an event with respect to Toys "R" Us which would have required an adjustment to
the Conversion Price pursuant to Article Twelve of the Indenture if such event
had occurred with respect to the Company prior to the Merger, the Adjusted
Conversion Price shall be adjusted in a manner as nearly equivalent as may be
practicable to the adjustment to the Conversion Price which would have been
required pursuant to Article Twelve of the Indenture if such event had occurred
with respect to the Company prior to the Merger.
ARTICLE II
ASSUMPTION
SECTION 2.01. Assumption. (a) Toys "R" Us hereby irrevocably and
unconditionally assumes, jointly and severally with the Company, the due and
punctual payment of the principal of, and premium, if any, and interest on, the
Securities when due, whether at maturity, by acceleration, by redemption or
otherwise, and all other monetary obligations of the Company under the Indenture
and the Securities.
(b) Toys "R" Us does not hereby assume responsibility for or
guarantee the performance by the Company of any other of the covenants,
agreements or obligations of the Company under the Securities or the Indenture.
(c) Payment by either the Company or Toys "R" Us of the principal
of, and premium, if any, and interest on, any Security shall discharge the
obligation of both the Company and Toys "R" Us to make such payment.
SECTION 2.02. Subordination. (a) The obligations of Toys "R" Us
under Section 2.01 shall be subordinate and junior in right of payment to the
Toys "R" Us Senior Indebtedness (as defined in Section 2.02(b)) to the same
extent and in the same manner that the Securities are subordinate and junior in
right of payment to the Senior Indebtedness of the Company pursuant to Article
Thirteen of the Indenture.
(b) As used herein, "Toys "R" Us Senior Indebtedness" means the
principal of and premium, if any, and unpaid interest on, and any other
reasonable fees or costs related to, (a) indebtedness of Toys "R" Us (including
indebtedness of others guaranteed by Toys "R" Us), other than the obligations of
Toys "R" Us under Section 2.01, whether outstanding on the date hereof or
hereafter created, incurred, assumed or guaranteed, (i) for money owing to banks
or their subsidiaries or their affiliates, (ii) for money borrowed other than
from banks evidenced by notes, bonds, debentures or other similar instruments or
(iii) arising under a lease of property, equipment or other assets, which
indebtedness, pursuant to generally accepted accounting principles then in
effect, is classified upon the financial statements of Toys "R" Us as a
liability or
obligation of Toys "R" Us, unless, in each case, the instrument creating or
evidencing the same or pursuant to which the same is outstanding provides that
such indebtedness is not superior in right of payment to the obligations of Toys
"R" Us under Section 2.01, and (b) renewals, extensions, modifications and
refundings of any such indebtedness; provided, however, that Toys "R" Us Senior
Indebtedness shall not include (i) indebtedness to a subsidiary or other
Affiliate of the Company, (ii) any indebtedness that is subordinated or junior
in any respect to any indebtedness of the Company other than Toys "R" Us Senior
Indebtedness and (iii) any trade payable.
ARTICLE III
MISCELLANEOUS
SECTION 3.01. Definitions. Capitalized terms used but not defined in
this First Supplemental Indenture shall have the meanings ascribed thereto in
the Indenture.
SECTION 3.02. Confirmation of Indenture. The Indenture, as
supplemented and amended by this First Supplemental Indenture, is in all
respects ratified and confirmed, and the Indenture, this First Supplemental
Indenture and all indentures supplemental thereto shall be read, taken and
construed as one and the same instrument.
SECTION 3.03. Concerning the Trustee. The Trustee assumes no duties,
responsibilities or liabilities by reason of this First Supplemental Indenture
other than as set forth in the Indenture.
SECTION 3.04. Governing Law. This First Supplemental Indenture, the
Indenture and the Securities shall be governed by and construed in accordance
with the internal laws of the State of New York.
SECTION 3.05. Separability. In case any one or more of the
provisions contained in this First Supplemental Indenture shall for any reason
be held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this
First Supplemental Indenture, but this First Supplemental Indenture shall be
construed as if such invalid, illegal or unenforceable provision had never been
contained herein.
4
SECTION 3.06. Counterparts. This First Supplemental Indenture may be
executed in any number of counterparts each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.
SECTION 3.07. Effectiveness. This First Supplemental Indenture shall
become effective upon the effectiveness of the Merger.
5
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and attested, as of the day and year first above written.
TOYS "R" US, INC.
By: /S/ XXXXX XXXXXXXXX
Name: XXXXX XXXXXXXXX
Title: EXECUTIVE VP & CFO
BABY SUPERSTORE, INC.
By: /S/ XXXXX XXXXXXXXX
Name: XXXXX XXXXXXXXX
Title: EXECUTIVE VP & CFO
THE BANK OF NEW YORK
By: /s/ XXXXXX XXXXXXXX
Name: XXXXXX XXXXXXXX
Title: AGENT
6
NYFS11...:\93\77893\0010\1738\INDN116V.24E
