EXHIBIT 2
Conformed Copy
MERGER AGREEMENT AMENDMENT
AMENDMENT, dated as of December 27, 1996 (this "Amendment"), to the
Agreement and Plan of Merger between KCLC Acquisition Corp. ("Newco") and
KinderCare Learning Centers, Inc. (the "Company"), dated as of October 3, 1996
(the "Merger Agreement").
W I T N E S S E T H :
WHEREAS, pursuant to the Merger Agreement, Newco and the Company have
approved the terms and conditions of the business combination between Newco and
the Company to be effected by the merger (the "Merger") of Newco with and into
the Company; and
WHEREAS, Newco and the Company have agreed that certain provisions of
the Merger Agreement be amended in the manner provided for in this Amendment.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Defined Terms. Capitalized terms used but not defined herein
shall have the meanings given to them in the Merger Agreement.
2. Amendments to Merger Agreement.
------------------------------
(a) Definitions. As used in the Merger Agreement,
(i) the term "Agreement" shall mean the merger agreement among
the parties hereto, dated as of October 3, 1996, and the amendments
thereto entered into on the date hereof,
(ii) the term "Merger" shall mean the merger of Newco with and
into the Company pursuant to the terms and conditions of the
Agreement (as amended as of the date hereof) and
(iii) the term "Voting Agreement" shall mean the voting
agreement between Newco, on the one hand, and the Stockholder and the
Funds, on the other hand, as such agreement has been amended as of
the date hereof.
(b) Amendment to Article 2.
(i) Section 2.1(a) of the Merger Agreement is hereby amended by
deleting the amount 7,345,679 which appears in the fifth line thereof
and substituting in lieu thereof the amount 7,828,947.
(ii) Section 2.1(c)(ii) of the Merger Agreement is hereby
amended by deleting the amount $20.25 which appears in the fourth
line thereof and substituting in lieu thereof the amount $19.00.
(iii) Section 2.4(a) of the Merger Agreement is hereby amended
by deleting the amount 1,296,296 which appears in the fifth line
thereof and substituting in lieu thereof the amount 1,381,579.
3. Representations and Warranties of the Company. The Company
hereby represents and warrants to Newco that:
(a) The Company has all necessary corporate power and authority to
execute and deliver this Amendment, to perform its obligations hereunder
and to consummate the transactions contemplated hereby. The execution,
delivery and performance of this Amendment by the Company and the
consummation by the Company of the transactions contemplated hereby have
been duly and validly authorized by all necessary corporate action and no
other corporate proceedings on the part of the Company are necessary to
authorize this Amendment or to consummate the transactions so contemplated
(other than, with respect to the Merger, the approval of the Agreement (as
amended hereby) by the holders of a majority of the outstanding shares of
Company Common Stock if and to the extent required by the DGCL, and the
filing of appropriate merger documents as required by the DGCL). This
Amendment has been duly and validly executed and delivered by the Company
and, assuming the due authorization, execution and delivery hereof by
Newco, constitutes a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms. The Board
of Directors of the Company has approved this Amendment and the
transactions contemplated hereby (including but not limited to the Merger)
so as to render inapplicable hereto and thereto the limitation on business
combinations contained in Section 203 of the DGCL (or any similar
provision). The Board of Directors of the Company has approved the Voting
Agreement (as amended) and the transactions contemplated thereby so as to
render inapplicable thereto the limitation on business combinations
contained in Section 203 of the DGCL (or any similar provision). As a
result of the foregoing actions, the only vote required to authorize the
Merger is the affirmative vote of a majority of the outstanding shares of
Company Common Stock.
(b) The Company has received the opinion of the Financial Adviser,
dated the date of this Amendment, to the effect that the consideration to
be received in the Merger by the Company's stockholders is fair to the
holders of the Company Common Stock from a financial point of view. The
aggregate fees payable to the Financial Advisor will not exceed $2.75
million.
(c) The Board of Directors of the Company, at a meeting duly called
and held, has by unanimous vote of those directors present (who
constituted 100% of the directors then in office) (i) determined that the
Agreement (as amended by this Amendment) and the transactions contemplated
thereby, including the Merger, and the Voting Agreement and the
transactions contemplated thereby, taken together, are fair to and in the
best interests of the stockholders of the Company, and (ii) resolved to
recommend that the holders of the shares of Company Common Stock approve
the Agreement (as amended by this Amendment) and the transactions
contemplated therein, including the Merger.
4. Representations and Warranties of Newco. Newco hereby represents
and warrants to the Company that:
(a) Newco has all necessary corporate power and authority to enter
into this Amendment, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution, delivery
and performance of this Amendment by Newco and the consummation by Newco
of the transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of Newco other than filing and
recordation of appropriate merger documents as required by the DGCL. This
Amendment has been duly executed and delivered by Newco and, assuming due
authorization, execution and delivery by the Company, constitutes a legal,
valid and binding obligation of Newco enforceable against it in accordance
with its terms.
(b) Attached as Annexes A-1, A-2 and A-3 hereto are true and
complete copies of the letters addressed to the Company, dated the date
hereof, which amend, modify and/or supplement the letters attached as
Annexes A-1, A-2 and A-3 to the Disclosure Schedules issued in connection
with the financing of the transactions contemplated by the Merger
Agreement. The terms and conditions of the letters attached as Annexes A-
1 to A-3 of the Disclosure Schedule, as supplemented by Annexes A-1 to A-3
hereto, are satisfactory to Newco.
5. Miscellaneous.
-------------
(a) Except as expressly amended, modified and supplemented hereby,
the provisions of the Merger Agreement are and shall remain in full force
and effect.
(b) This Amendment shall be governed by, and construed in accordance
with, the laws of the State of Delaware, regardless of the laws that might
otherwise govern under applicable principles of conflicts of laws thereof.
(c) This Amendment may be executed in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which
when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, Newco and the Company have caused this Amendment
to be executed as of the date first written above by their respective officers
thereunto duly authorized.
KINDERCARE LEARNING CENTERS, INC.
By:/s/ Philip L. Maslowe
Title: Executive Vice President
and Chief Financial Officer
KCLC ACQUISITION CORP.
By:/s/ Nils P. Brous
Title: Vice President