KinderCare Learning Companies S1 IPO registration | KLC 18 Oct 21

Exhibit 10.2.1

EXECUTION VERSION

AMENDMENT NO. 1

AMENDMENT NO. 1, dated as of September 19, 2018 (this “Amendment”), by and among KUEHG CORP., a Delaware corporation (“KUEHG”), KC SUB, INC., a Delaware corporation (“KC Sub” and, together with KUEHG, the “Borrowers”), KC HOLDCO, LLC, a Delaware limited liability company (“Holdco”), the Lenders party hereto and CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH (“Credit Suisse AG”), in its capacity as the Administrative Agent under the Credit Agreement (as defined below), which amends that certain Second Lien Credit Agreement dated as of August 22, 2017 (as amended, supplemented, amended and restated or otherwise modified from time to time prior to the date hereof, the “Credit Agreement”) among the Borrowers, Holdco, each Lender from time to time party thereto and Credit Suisse AG, as Administrative Agent and Collateral Agent. Capitalized terms used and not otherwise defined herein shall have the meanings assigned to them in the Credit Agreement.

WHEREAS, the Borrowers desire to amend the Credit Agreement to effect certain amendments to the definition of “Consolidated EBITDA” as set forth therein (such amendments, as more particularly set forth in Section 1 below, the “Consolidated EBITDA Amendments”);

WHEREAS, Section 9.02(b) of the Credit Agreement permits certain amendments to the Credit Agreement, including the Consolidated EBITDA Amendments, with the consent of the Borrowers, Holdco and the Required Lenders;

WHEREAS, in accordance with Sections 9.02(b) of the Credit Agreement, the Borrowers, Holdco, the Lenders party hereto, constituting the Required Lenders, and the Administrative Agent are willing to amend the Credit Agreement as more particularly set forth herein.

NOW, THEREFORE, in consideration of the premises and covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:

Section 1. Consolidated EBITDA Amendments. Effective immediately upon satisfaction of the conditions set forth in Section 2 herein, the Borrowers, Holdco, the Lenders party hereto, constituting the Required Lenders, and the Administrative Agent hereby consent and agree, and the Credit Agreement is hereby amended, as follows:

(a) The following defined terms shall be added to Section 1.01 of the Credit Agreement in alphabetical order:

“Amendment No. 1” means Amendment No. 1, dated as of September 19, 2018, by and among the Borrowers, Holdco, the Lenders party thereto and the Administrative Agent.

“Amendment No. 1 Effective Date” has the meaning assigned to such term in Amendment No. 1.

“Continued Profitability” means, with respect to any location that has achieved Profitability, cumulative positive Consolidated EBITDA since the first day of the two (2) consecutive month period upon the completion of which such location achieved Profitability.

“Run-Rate EBITDA” means, for all locations that have first achieved Profitability in the trailing twelve-month period ended on the date of such measurement, and maintained Continued Profitability, Consolidated EBITDA attributable to such locations for such period, determined after (i) shifting the first month of positive Consolidated EBITDA to the first month of such period and shifting each subsequent month in a similar manner (i.e., shifting the second month of positive Consolidated EBITDA to the second month of such period, etc.) until each month of actual results for such period have been exhausted, and (ii) deeming Consolidated EBITDA for each other month of such period to be the average of Consolidated EBITDA for the months described in clause (i) above.

“Run-Rate EBITDA Adjustment Amount” means, with respect to any location and any given twelve-month period, an amount equal to the excess of Run-Rate EBITDA attributable to such location for such period over Consolidated EBITDA attributable to such location for such period.

“Profitability” means, with respect to any location, two (2) consecutive months of positive Consolidated EBITDA.

(b) The definition of “Consolidated EBITDA” in Section 1.01 of the Credit Agreement is hereby amended as follows:

(1) by deleting the period at the end of clause (1)(r) thereto and replacing it with “; plus”; and

(2) by adding the following clauses (1)(s) – (1)(v) after clause (1)(r):

(s) the amount of any operating losses attributable to any location and incurred within eighteen (18) months after the date on which such location opened and prior to such location first achieving Profitability; provided that (i) the aggregate amount that may be added back pursuant to this clause (s) in such period shall not exceed (x) $500,000 per location or (y) 15% of Consolidated EBITDA for such period (after giving effect to such addbacks) and (ii) the aggregate amount that may be added back pursuant to this clause (s) and clause (t) below in such period shall not exceed 20% of Consolidated EBITDA for such period (after giving effect to such addbacks);

(t) for any location that has achieved Profitability in such period, the Run-Rate EBITDA Adjustment Amount for any portion of such period occurring within twenty-four (24) months after the date on which such location opened (without duplication of any amounts added back pursuant to clause (s) above in such period with respect to such location); provided that the aggregate amount that may be added back pursuant to this clause (t) and clause (s) above in such period shall not exceed 20% of Consolidated EBITDA for such period (after giving effect to such addbacks);

(u) the amount of any difference between cash rent expense and GAAP rent expense for such period, which, for the avoidance of doubt, may be a negative number; and

(v) any addbacks or adjustments (i) set forth in a quality of earnings analysis prepared in connection with any Permitted Acquisition or similar Permitted Investment or (ii) determined on a basis consistent with Article 11 of Regulation S-X promulgated under the Securities Exchange Act and as interpreted by the staff of the SEC (or any successor agency);

(c) The definition of “Loan Documents” in Section 1.01 of the Credit Agreement is hereby amended by replacing the word “and” prior to “the Security Documents” with a comma and adding immediately prior to the period therein, “and Amendment No. 1”.

Section 2. Conditions to Effectiveness. The Consolidated EBITDA Amendments set forth in Section 1 shall be effective immediately upon satisfaction of each of the following conditions:

(a) The Administrative Agent’s receipt of executed counterparts of this Amendment, each of which shall be originals or facsimiles or electronic copies (followed promptly by originals) unless otherwise specified, and each executed by a Responsible Officer of the Borrowers.

(b) The Administrative Agent’s receipt of the following, each of which shall be originals or facsimiles or electronic copies unless otherwise specified:

(1) a certificate signed by a Responsible Officer of the Borrowers certifying as to the satisfaction of the conditions set forth in clauses (d) and (e) of this Section 2; and

(2) a Guarantor Consent and Reaffirmation, dated as of the date hereof and executed by each of the Guarantors, whereby each of the Guarantors consents to this Amendment and reaffirms each Lien granted by it to the Administrative Agent for the benefit of the Secured Parties under each of the Loan Documents to which it is a party.

(c) All reasonable and documented out-of-pocket fees and expenses due to the Administrative Agent and the Lenders, in each case, required to be paid on the Amendment No. 1 Effective Date (including pursuant to Section 3 hereof) shall have been paid.

(d) No Default or Event of Default shall exist, or would result from the Amendment and related Credit Event or from the application of the proceeds therefrom.

(e) The representations and warranties of the Borrowers and each other Loan Party contained in Article III of the Credit Agreement or any other Loan Document shall be true and correct in all material respects on and as of the date hereof (or true and correct in all material respects as of a specified date, if earlier), except that for purposes of this Section 2, the representations and warranties contained in Section 3.04(a) of the Credit Agreement shall be deemed to refer to the most recent financial statements furnished prior to the Amendment No. 1 Effective Date or pursuant to Section 5.01(a) and Section 5.01(b) of the Credit Agreement.

“Amendment No. 1 Effective Date” shall mean (a) for purposes of the Consolidated EBITDA Amendments, the date on which the conditions set forth in this Section 2 have been satisfied. The Administrative Agent shall notify the Borrowers and the Lenders of the Amendment No. 1 Effective Date and such notice shall be conclusive and binding.

Section 3. Fees and Expenses. The Borrowers agree to reimburse the Administrative Agent for its reasonable and documented out-of-pocket expenses incurred by the

Administrative Agent as and when required by Section 9.03 of the Credit Agreement to the extent invoiced at least three (3) Business Days prior to the first date on which each of the conditions set forth in Section 2 has been satisfied.

Section 4. Counterparts. This Amendment may be executed in any number of counterparts and by different parties hereto on separate counterparts, each of which when so executed and delivered shall be deemed to be an original, but all of which when taken together shall constitute a single instrument. Delivery of an executed counterpart of a signature page of this Amendment by facsimile transmission or electronic transmission shall be effective as delivery of a manually executed counterpart hereof. The words “execution,” “signed,” “signature,” “delivery” and words of the like import in or relating to any document to be signed in connection with this Amendment and the transactions contemplated hereby shall be deemed to include Electronic Signatures, deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act or any other similar state laws based on the Uniform Electronic Transactions Act. “Electronic Signature” means an electronic sound, symbol, or process attached to, or associated with, a contract or other record and adopted by a person with the intent to sign, authenticate or accept such contract or record.

Section 5. Governing Law and Waiver of Right to Trial by Jury. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. The jurisdiction and waiver of right to trial by jury provisions in Sections 9.09 and 9.10 of the Credit Agreement are incorporated herein by reference mutatis mutandis.

Section 6. Headings. The headings of this Amendment are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.

Section 7. Effect of Amendment.

(a) On and after the date hereof, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to the “Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit Agreement, mean and are a reference to the Credit Agreement as modified by this Amendment. This Amendment is a Loan Document executed pursuant to the Credit Agreement and shall be construed, administered and applied in accordance with the terms and provisions thereof.

(b) The Credit Agreement, as specifically amended by this Amendment, and each of the other Loan Documents are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed. Without limiting the generality of the foregoing, the Security Documents and all of the Collateral described therein do and shall continue to secure the payment of all of the respective Obligations of Holdco and the Borrowers under the Loan Documents, in each case as the Credit Agreement is amended by this Amendment.

(c) The execution, delivery and effectiveness of this Amendment does not, except as expressly provided herein, operate as a waiver of any right, power or remedy of any Lender or the Administrative Agent under any of the Loan Documents nor constitute a waiver of any provision of any of the Loan Documents and nothing herein can or may be construed as a novation of the Credit Agreement or any other Loan Document.

[Signature Pages Follow]

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written.


KUEHG CORP.

By:		/s/ Paul D. Thompson
		Name: Paul D. Thompson
		Title: Executive Vice President and Chief Financial Officer

KC SUB, INC.

By:		/s/ Paul D. Thompson
		Name: Paul D. Thompson
		Title: Executive Vice President and Chief Financial Officer

KC HOLDCO, LLC

By:		/s/ Paul D. Thompson
		Name: Paul D. Thompson
		Title: Executive Vice President and Chief Financial Officer