<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 4)*
KINDERCARE LEARNING CENTERS, INC.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $0.01 per share
- --------------------------------------------------------------------------------
(Title of Class of Securities)
494521 30 5
--------------
(CUSIP Number)
Michael E. Cahill, Esq.
Managing Director & General Counsel
The TCW Group, Inc.
865 South Figueroa Street, Suite 1800
Los Angeles, California 90017
(213) 244-0000
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
February 13, 1997
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box .
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
SCHEDULE 13D
CUSIP NO. 494521 30 5 PAGE 2 OF 22 PAGES
----------- --- ----
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
The TCW Group, Inc.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS* / /
Not applicable.
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Nevada
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES -0-
BENEFICIALLY -------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 949,244
REPORTING -------------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
-0-
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
949,244
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
949,244
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/ /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
10.3%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
HC, CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
CUSIP NO. 494521 30 5 PAGE 3 OF 22 PAGES
----------- --- ----
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Trust Company of the West
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
Not applicable.
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
- --------------------------------------------------------------------------------
California 7 SOLE VOTING POWER
NUMBER OF -0-
SHARES -------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY -0-
EACH -------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH -0-
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
-0-
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.0%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO, BK
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
CUSIP NO. 494521 30 5 PAGE 4 OF 22 PAGES
----------- --- ----
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
TCW Asset Management Company
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
Not applicable.
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
California
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES -0-
BENEFICIALLY ---------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 949,244
REPORTING ---------------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
-0-
---------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
949,244
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
949,244
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
10.3%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO, IA
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
CUSIP NO. 494521 30 5 PAGE 5 OF 22 PAGES
----------- --- ----
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
TCW Special Credits
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
Not applicable.
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e)
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
California
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES -0-
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH -0-
REPORTING --------------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
-0-
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
-0-
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.0%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN, IA
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
CUSIP NO. 494521 30 5 PAGE 6 OF 22 PAGES
----------- --- ----
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Oaktree Capital Management, LLC
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
Not Applicable
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
California
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES -0-
BENEFICIALLY ------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 949,244
REPORTING ------------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
-0-
------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
949,244
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
949,244
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
10.3%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IA; OO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
CUSIP NO. 494521 30 5 PAGE 7 OF 22 PAGES
----------- --- ----
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
TCW Special Credits Fund V - The Principal Fund
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
California
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES -0-
BENEFICIALLY -------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 949,244
REPORTING -------------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
-0-
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
949,244
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
949,244
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
10.3%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
CUSIP NO. 494521 30 5 PAGE 8 OF 22 PAGES
----------- --- ----
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
TCW Special Credits Fund II
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
Not Applicable
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
California
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES -0-
BENEFICIALLY -------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH -0-
REPORTING -------------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
-0-
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
-0-
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.0%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
CUSIP NO. 494521 30 5 PAGE 9 OF 22 PAGES
----------- --- ----
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
TCW Special Credits Fund IIb
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
Not Applicable
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
California
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES -0-
BENEFICIALLY -------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH -0-
REPORTING -------------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
-0-
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
-0-
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.0%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
CUSIP NO. 494521 30 5 PAGE 10 OF 22 PAGES
----------- ---- ----
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
TCW Special Credits Fund III
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
Not Applicable
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
California
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES -0-
BENEFICIALLY -------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH -0-
REPORTING -------------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
-0-
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
-0-
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.0%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
CUSIP NO. 494521 30 5 PAGE 11 OF 22 PAGES
----------- ---- ----
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
TCW Special Credits Fund IIIb
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
Not Applicable
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
California
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES -0-
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH -0-
REPORTING --------------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
-0-
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
-0-
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.0%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
CUSIP NO. 494521 30 5 PAGE 12 OF 22 PAGES
----------- ---- ----
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
TCW Special Credits Trust
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
Not Applicable
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
California
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES -0-
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH -0-
REPORTING --------------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
-0-
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
-0-
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.0%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
CUSIP NO. 494521 30 5 PAGE 13 OF 22 PAGES
----------- ---- ----
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
TCW Special Credits Trust IIIb
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
Not Applicable
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
California
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES -0-
BENEFICIALLY ---------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH -0-
REPORTING ---------------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
-0-
---------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
-0-
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.0%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
ITEM 1. SECURITY AND ISSUER
This statement of amendment to Amendment No. 3 of Schedule 13D, filed on behalf
of The TCW Group, Inc. and the several entities included herein (this
"Statement"), relates to the Common Stock, par value $0.01 per share ("Common
Stock"), of KinderCare Learning Centers, Inc., a Delaware corporation (the
"Issuer"). The address of the principal executive office of the Issuer is 2400
Presidents Drive, Montgomery, Alabama 36116.
ITEM 2. IDENTITY AND BACKGROUND
This Statement is filed on behalf of:
(1) The TCW Group, Inc., a Nevada corporation ("TCWG");
(2) Trust Company of the West, a California corporation and wholly-owned
subsidiary of TCWG ("TCW");
(3) TCW Asset Management Company, a California corporation and
wholly-owned subsidiary of TCWG ("TAMCO");
(4) TCW Special Credits, a California general partnership of which TAMCO
is the managing general partner ("Special Credits");
(5) Four California limited partnerships, TCW Special Credits Fund II, TCW
Special Credits Fund IIb, TCW Special Credits Fund III and TCW Special
Credits Fund IIIb (hereinafter referred to as the "Special Credits
Limited Partnerships") of which Special Credits is the general
partner;
(6) TCW Special Credits Fund V, The Principal Fund, a California limited
partnership of which TAMCO is the general partner ("The Principal
Fund");
(7) Two California collective investment trusts, TCW Special Credits Trust
and TCW Special Credits Trust IIIb (hereinafter referred to as the
"Special Credits Trusts") of which TCW is the trustee;
(8) Oaktree Capital Management, LLC, a California limited liability
company ("Oaktree"), manager of The Principal Fund pursuant to a
subadvisory agreement between TAMCO and Oaktree.
Special Credits, the Special Credits Trusts and the Special Credits Limited
Partnerships are hereinafter collectively referred to as the "Special Credits
Entities." TCWG, TCW, TAMCO, the Special Credits Entities and The Principal
Fund are hereinafter collectively referred to as the "TCW Related Entities."
Special Credits is also the investment manager of third party accounts which
invest in similar securities as the Special Credit Entities, three of which
formerly held shares of the Issuer's Common Stock (the "Special Credits
Accounts"), and Oaktree is also the investment manager of other third party
accounts, one of which formerly held shares of the Issuer's Common Stock (the
"Oaktree Account").
TCWG is a holding company of entities involved in the principal business of
providing investment advice and management services. TCW is a trust company
which provides investment management services, including to the Special Credits
Trusts. TAMCO is an investment adviser and provides investment advice and
management services to institutional and individual investors, including The
Principal Fund. Special Credits provides investment advice and management
services to the Special Credits Limited Partnerships and Special Credits
Accounts. The Special Credits Limited Partnerships are investment partnerships
which invest in financially distressed entities. The Special Credits Trusts are
collective investment trusts which invest in financially distressed entities.
The Principal Fund is a limited partnership which invests in entities in which
there is a potential for The Principal Fund to exercise significant influence
over such entities. The address of the principal business and principal office
for the TCW Related Entities is 865 South Figueroa Street, Suite 1800, Los
Angeles, California 90017. Pursuant to a subadvisory agreement between TAMCO
and Oaktree, The Principal Fund is managed by Oaktree, whose business address is
550 South Hope Street, Suite 2200, Los Angeles, California 90071. The principal
business of Oaktree is to provide investment advice and management services to
institutional and individual investors.
<PAGE>
(i) The executive officers of TCWG are listed below. The principal business
address for each executive officer is 865 South Figueroa Street, Suite 1800, Los
Angeles, California, 90017. Each executive officer is a citizen of the United
States of America unless otherwise specified below:
Executive Officers
- ------------------
Robert A. Day Chairman of the Board & Chief Executive Officer
Ernest O. Ellison Vice Chairman of the Board
Marc I. Stern President
Alvin R. Albe, Jr. Executive Vice President, Finance & Administration
Thomas E. Larkin, Jr. Executive Vice President & Group Managing Director
Michael E. Cahill Managing Director, General Counsel & Secretary
David K. Sandie Managing Director, Chief Financial Officer & Assistant
Secretary
Schedule I attached hereto and incorporated herein sets forth with respect to
each director of TCWG his name, residence or business address, citizenship,
present principal occupation or employment and the name, principal business and
address of any corporation or other organization in which such employment is
conducted.
(ii) The executive officers and directors of TCW are listed below. The
principal business address for each executive officer and director is 865 South
Figueroa Street, Suite 1800, Los Angeles, California 90017. Each executive
officer is a citizen of the United States of America unless otherwise specified
below:
Executive Officers & Directors
- ------------------------------
Robert A. Day Chairman of the Board & Chief Executive Officer
Ernest O. Ellison Director & Vice Chairman
Thomas E. Larkin, Jr. Director & President
Alvin R. Albe, Jr. Director & Executive Vice President, Finance &
Administration
Marc I. Stern Director, Executive Vice President, Managing Director &
Chief Investment Officer - International
Michael E. Cahill Managing Director, General Counsel & Secretary
David K. Sandie Managing Director, Chief Financial Officer & Assistant
Secretary
(iii) The executive officers and directors of TAMCO are listed below. The
principal business address for each executive officer, director and portfolio
manager is 865 South Figueroa Street, Suite 1800, Los Angeles, California,
90017. Each executive officer and director is a citizen of the United States of
America unless otherwise specified below:
Executive Officers & Directors
- ------------------------------
Robert A. Day Chairman of the Board & Chief Executive Officer
Thomas E. Larkin, Jr. Director & Vice Chairman of the Board
Marc I. Stern Director, Vice Chairman of the Board & Chief Investment
Officer - International
Ernest O. Ellison Chief Investment Officer - Domestic Fixed Income
Alvin R. Albe, Jr. Director, Executive Vice President, Finance &
Administration
Michael E. Cahill Managing Director, General Counsel & Secretary
David K. Sandie Managing Director, Chief Financial Officer & Assistant
Secretary
(iv) The following sets forth with respect to each general partner of Special
Credits his name, residence or business address, present principal occupation or
employment and the name, principal business and address of any corporation or
other organization in which such employment is conducted for. Each general
partner who is a natural person is a citizen of the United States of America
unless otherwise specified below.
TAMCO is the Managing General Partner. See information in paragraph (iii)
above.
Bruce A. Karsh
President and Principal
Oaktree Capital Management, LLC
550 South Hope Street
22nd Floor
<PAGE>
Los Angeles, California 90071
Howard S. Marks
Chairman and Principal
Oaktree Capital Management, LLC
550 South Hope Street
22nd Floor
Los Angeles, California 90071
Sheldon M. Stone
Principal
Oaktree Capital Management, LLC
550 South Hope Street
22nd Floor
Los Angeles, California 90071
David Richard Masson
Principal
Oaktree Capital Management, LLC
550 South Hope Street
22nd Floor
Los Angeles, California 90071
(v) Special Credits is the sole general partner of the Special Credits
Limited Partnerships. See information in paragraph (iv) above regarding Special
Credits and its general partners.
(vi) TAMCO is the sole general partner of The Principal Fund. See
information in paragraph (iii) above regarding TAMCO and its executive officers
and directors.
(vii) The members and executive officers of Oaktree and the portfolio managers
of the Special Credits Limited Partnerships, the Special Credits Accounts and
The Principal Fund are listed below. The principal address for each member and
executive officer of Oaktree and each Portfolio Manager of the Fund is 550 S.
Hope Street, Los Angeles, California 90071. All individuals listed below are
citizens of the United States of America.
Executive Officers and Members
- ------------------------------
Howard S. Marks Chairman and Principal
Bruce A. Karsh President and Principal
Sheldon M. Stone Principal
David Richard Masson Principal
Larry Keele Principal
David Kirchheimer Managing Director and Chief Financial and
Administrative Officer
Kenneth Liang Managing Director and General Counsel
Portfolio Managers
- ------------------
Stephen A. Kaplan Principal
Bruce A. Karsh President and Principal
During the last five years, neither TCWG, TCW, TAMCO, the Special Credits
Entities, The Principal Fund, Oaktree, nor, to the best of their knowledge, any
of their respective executive officers, directors and general partners (i) has
been convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors); or (ii) has been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such
proceedings was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violation with respect to such laws.
<PAGE>
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
On February 4, 1997, The Principal Fund exercised 858,683 warrants of the
Issuer, constituting all of the Issuer's warrants held by The Principal Fund,
which warrants were convertible into 858,683 shares of the Issuer's Common
Stock. The Principal Fund used $10,733,538 of funds for the exercise of such
warrants, at an exercise price of $12.50 per share, which funds were obtained
from The Principal Fund's working capital.
ITEM 4. PURPOSE OF TRANSACTION
On February 6, 1997, the shareholders of the Issuer approved and adopted that
certain Agreement and Plan of Merger, dated as of October 3, 1996 and as
amended as of December 27, 1996 (the "Merger Agreement"), between the Issuer
and KCLC Acquisition Corp. ("KCLC"), a wholly-owned subsidiary of KLC
Associates, L.P., a partnership organized at the direction of Kohlberg Kravis
Roberts & Co., L.P. (the "KKR Investors"; and, together with their
affiliates, the "KKR Affiliates"). On February 13, 1997 (the "Effective
Date"), and in accordance with the terms of the Merger Agreement, KCLC was
merged with and into the Issuer (the "Merger") with approximately 93.0% of
the issued and outstanding stock of the Issuer at the Effective Date being
converted into cash at $19.00 per share and approximately 7.0% of such shares
being retained by stockholders ("Electing Stockholders") that made a timely
election to retain a portion of their shares of the Issuer's Common Stock,
subject to proration as provided in the Merger Agreement (a "Non-cash
Election"; and the shares retained by an Electing Stockholder in respect of a
Non-cash Election, "Non-cash Election Shares"). As a result of the
consummation of the Merger, the KKR Affiliates now own approximately 85% of
the Issuer's issued and outstanding Common Stock and the Electing
Stockholders now own approximately 15% of the Issuer's issued and outstanding
Common Stock.
The exercise of the 858,683 warrants on February 4, 1997 by The Principal Fund
and the related acquisition of 858,683 shares of the Issuer's Common Stock upon
such exercise was for the purpose of permitting The Principal Fund to make a
Non-Cash Election with respect to the shares into which such warrants were
convertible. The total number of shares of the Issuer's Common Stock as to
which The Principal Fund made a Non-Cash Election (including the 858,683
shares of the Issuer's Common Stock issued upon exercise of warrants) was
3,568,921. Pursuant to the proration provisions of the Merger Agreement, The
Principal Fund received 949,244 shares of the Issuer's Common Stock and
received cash for the other 2,619,677 shares of the Issuer's Common Stock
that were included in the Non-Cash Election.
Oaktree and The Principal Fund (the "Investors") have acquired the Non-cash
Election Shares retained by them for the purpose of continued investment in the
Issuer. Although, after the Effective Date there will be virtually no public
market for the shares of the Issuer, the Investors may from time to time
acquire or sell additional shares of the Issuer's Common Stock in the market or
in privately negotiated transactions, subject to applicable securities laws. No
such transactions are currently contemplated and the occurrence of any such
transaction would be a transaction in the ordinary course of the Investors'
business of providing investment advice and investment management services,
based on continuing evaluations of the Issuer's businesses and prospects,
alternative investment opportunities and all other factors deemed relevant. As
part of their ongoing review of investment alternatives, the Investors, from
time to time, may hold discussions with or make formal proposals to management
or the Board of Directors of the Issuer, the KKR Affiliates, other stockholders
or other third parties regarding such matters. Such actions by the Investors
may include, among others, those rights granted to the Investors pursuant to the
Stockholders' Agreement, dated February 13, 1997, among the Issuer, the KKR
Affiliates and the Investors (the "Stockholders' Agreement") to discuss the
business, operations, properties, financial and other conditions and plans and
prospects of the Issuer (and its subsidiaries), and, subject to certain
limitations therein, to visit and inspect the Issuer's (and its subsidiaries')
properties.
ITEM 5. INTEREST AND SECURITIES OF THE ISSUER
(a) As of the date of this Statement, the Special Credits Limited Partnerships
no longer beneficially own any shares of the Issuer's Common Stock. Special
Credits, for its own benefit and as the general partner of the Special Credits
Limited Partnerships and the investment manager of the Special Credits Accounts
no longer beneficially owns any shares of the Issuer's Common Stock.
As of the date of this statement, the Special Credits Trusts no longer
beneficially own any shares of the Issuer's Common Stock. TCW, as the trustee
of the Special Credits Trusts may no longer be deemed to beneficially own any
shares of the Issuer's Common Stock.
As of the date of this Statement, The Principal Fund beneficially owns 949,244
shares of the Issuer's Common Stock, which is approximately 10.3% of the
outstanding shares of the Issuer's Common Stock.
<PAGE>
TAMCO, as the general partner of The Principal Fund, may be deemed to
beneficially own 949,244 shares of the Issuer's Common Stock held by The
Principal Fund, or approximately 10.3% of the outstanding shares of the Issuer's
Common Stock.
TCWG, as the parent corporation of TCW and TAMCO, may be deemed to beneficially
own shares of the Issuer's Common Stock deemed to be owned by the other TCW
Related Entities, all of which now constitutes 949,244 shares of the Issuer's
Common Stock held by The Principal Fund, or approximately 10.3% of the
outstanding shares of the Issuer's Common Stock. TCWG and TAMCO each disclaim
beneficial ownership of the shares of the Issuer's Common Stock reported herein
and the filing of this Statement shall not be construed as an admission that any
such entity is the beneficial owner of any securities covered by this Statement.
Pursuant to a subadvisory agreement with TAMCO, Oaktree may be deemed to
beneficially own 949,244 shares of the Issuer's Common Stock held by The
Principal Fund, or approximately 10.3% of the outstanding shares of the Issuer's
Common Stock. Oaktree disclaims ownership of the shares of the Issuer's Common
Stock reported herein and the filing of this Statement shall not be construed as
an admission that Oaktree is the beneficial owner of any securities covered by
this statement.
(b) TAMCO, as general partner of The Principal Fund, has discretionary
authority and control over all of the assets of The Principal Fund pursuant to
the limited partnership agreement for such limited partnership. Therefore,
TAMCO has the power to vote and dispose of 949,244 shares of the Issuer's Common
Stock.
TCWG, as the parent of TAMCO, may be deemed to have the power to vote and
dispose of the shares of the Issuer's Common Stock that TAMCO has the power to
vote and dispose, all of which constitutes 949,244 shares of the Issuer's Common
Stock.
Oaktree, as the fund manager of The Principal Fund pursuant to the subadvisory
agreement between TAMCO and Oaktree, may be deemed to have the power to vote and
dispose of the shares of the Issuer's Common Stock that The Principal Fund has
the power to vote and dispose of, all of which constitutes 949,244 shares of the
Issuer's Common Stock.
(c) On February 4, 1997, The Principal Fund exercised 858,683 warrants of the
Issuer, constituting all of the Issuer's warrants held by The Principal Fund,
which warrants were convertible into 858,683 shares of the Issuer's Common
Stock. The Principal Fund used $10,733,538 of funds for the exercise of such
warrants, at an exercise price of $12.50 per share, which funds were obtained
from the Principal Fund's working capital.
As described above, pursuant to the proration provisions of the Merger
Agreement, The Principal Fund received 949,244 shares of the Issuer's Common
Stock and received cash for 2,619,677 shares of the Issuer's Common Stock that
were included in the Non-Cash Election made by The Principal Fund. TAMCO,
Bruce A. Karsh, Howard S. Marks, David Richard Masson and Sheldon M. Stone
received cash for 13,041, 5,015, 3,120, 3,069 and 1,672 shares of the Issuer's
Common Stock, respectively.
(d) None.
(e) On February 13, 1997, the closing contemplated by the Merger Agreement
occurred and the Merger and its related transactions were consummated. In
connection therewith, the Special Credits Limited Partnerships, the Special
Credits Trusts and Special Credits, as investment manager of the Special
Credits Accounts, tendered for cash at $19.00 per share all of the shares of
the Issuer's Common Stock held by such entities. At such time, the Special
Credits Limited Partnerships, the Special Credits Trusts, Special Credits and
TCW ceased to beneficially own any shares of the Issuer's Common Stock.
Accordingly, these respective entities are no longer subject to Section 13(d)
of the Act, and the rules and regulations promulgated thereunder, in respect
of the Issuer.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
TAMCO, as general partner of The Principal Fund, receives a management fee for
its management of The Principal Fund. Pursuant to a subadvisory agreement
between TAMCO and Oaktree, The Principal Fund is managed by Oaktree, who
receives a portion of the management fee received by TAMCO for its management of
The Principal Fund. The Principal Fund's investment strategy is to invest in
entities in which there is a potential for The Principal Fund to exercise
significant influence over management.
As originally contemplated by that certain Voting Agreement, dated October 3,
1996, between Oaktree (on its own behalf and on behalf of the Oaktree Account),
The Principal Fund, Special Credits (on behalf of the Special Credits Accounts),
the Special Credits Limited Partnerships and the Special Credits Trusts, on the
one hand, and KCLC, on the other hand (the "Voting Agreement"), and upon
consummation of the Merger, the Issuer, the KKR Investors and the Investors
entered into the Stockholders' Agreement. Pursuant to the terms of the
Stockholders' Agreement, the Investors are entitled to designate one director to
the Board of Directors of the Issuer,
<PAGE>
who initially will be Mr. Stephen A. Kaplan. In addition, the Stockholders'
Agreement provides that (i) the Investors have the right to participate pro
rata in certain sales of the Issuer's Common Stock by the KKR Affiliates and
(ii) the KKR Affiliates have the right to require the Investors to
participate pro rata in certain sales by the KKR Affiliates. In addition,
the Investors have the right, during the term of the Stockholders' Agreement,
to discuss the business, operations, properties, financial and other
conditions and plans and prospects of the Issuer with the executive officers
and directors of the Issuer (or any subsidiary of the Issuer), which rights
include limited visitation and inspections rights of the Issuer's (or any of
the Issuer's subsidiaries') properties. The Stockholders' Agreement will
terminate no later than its tenth anniversary, and may terminate earlier if
(a) the number of shares of the Issuer's Common Stock held in the aggregate
by the Investors falls below certain ownership levels through sales or other
dilution events (as more fully described therein) or (b) the KKR Affiliates,
in the aggregate, own less than 15% of the outstanding shares of the Issuer's
Common Stock, on a fully diluted basis. The foregoing summary of the
Stockholders' Agreement does not purport to be complete and is subject to,
and qualified in its entirety by reference to, the text of the Stockholders'
Agreement.
Other than the agreements described herein, and except to the extent the
securities referred to in this Statement constitute assets of The Principal
Fund, there are no contracts, understandings or relationships (legal or
otherwise) among or between any member of the TCW Related Entities or, to the
best of their knowledge, their respective executive officers, directors or
general partners, or between or among any of such persons and with respect to
any securities of the Issuer.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
The following are filed herewith as Exhibits to this Statement:
* Exhibit 1.1- Agreement of TCW Related Entities regarding a joint Schedule
13D (and such amendments as may become necessary) with
respect to the Common Stock of KinderCare Learning Centers,
Inc.
* Exhibit 1.2- Voting Agreement, dated October 3, 1996, between the
Subsidiary, on the one hand, and the Stockholders, on the
other hand.
* Exhibit 1.3- Form of Agreement and Plan of Merger between the Subsidiary
and the Issuer.
* Exhibit 1.4- Form of Stockholder's Agreement, to be entered into among
the Issuer, KKR, Oaktree and the Electing Stockholders.
Exhibit 1.5- Stockholder's Agreement, dated February 13, 1997, among the
Issuer, the KKR Investors, Oaktree and The Principal Fund.
- -------------------
* Previously filed with the Commission and hereby incorporated by reference
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of its knowledge and belief, the
undersigned certify that the information set forth in this Statement is true,
complete and correct.
Dated as of day of February, 1997.
THE TCW GROUP, INC.
/s/ Mohan Phansalkar
_______________________________________
Mohan Phansalkar
Authorized Signatory
TRUST COMPANY OF THE WEST
/s/ Bruce A. Karsh
_______________________________________
Bruce A. Karsh
Authorized Signatory
TCW ASSET MANAGEMENT COMPANY
/s/ Bruce A. Karsh
_______________________________________
Bruce A. Karsh
Authorized Signatory
TCW SPECIAL CREDITS
/s/ Bruce A. Karsh
________________________________________
Bruce A. Karsh,
Authorized Signatory of TCW Asset Management Company,
the Managing General Partner of TCW Special Credits
TCW SPECIAL CREDITS FUND II
/s/ Bruce A. Karsh
_______________________________________
Bruce A. Karsh
Authorized Signatory of TCW Asset Management Company,
the Managing General Partner of TCW Special Credits,
the General Partner of TCW Special Credits Fund II
TCW SPECIAL CREDITS FUND IIb
/s/ Bruce A. Karsh
______________________________________
Bruce A. Karsh
Authorized Signatory of TCW Asset Management Company,
the Managing General Partner of TCW Special Credits,
the General Partner of TCW Special Credits Fund IIb
<PAGE>
TCW SPECIAL CREDITS FUND III
/s/ Bruce A. Karsh
_________________________________________
Bruce A. Karsh
Authorized Signatory of TCW Asset Management Company,
the Managing General Partner of TCW Special Credits,
the General Partner of TCW Special Credits Fund III
TCW SPECIAL CREDITS FUND IIIb
/s/ Bruce A. Karsh
_______________________________________
Bruce A. Karsh
Authorized Signatory of TCW Asset Management Company,
the Managing General Partner of TCW Special Credits,
the General Partner of TCW Special Credits Fund IIIb
TCW SPECIAL CREDITS TRUST
/s/ Bruce A. Karsh
______________________________________
Bruce A. Karsh
Authorized Signatory of Trust Company of the West,
the trustee of TCW Special Credits Trust
TCW SPECIAL CREDITS TRUST IIIb
/s/ Bruce A. Karsh
_______________________________________
Bruce A. Karsh
Authorized Signatory of Trust Company of the West,
the trustee of TCW Special Credits Trust IIIb
OAKTREE CAPITAL MANAGEMENT, LLC
/s/ Bruce A. Karsh
_______________________________________
Bruce A. Karsh
Managing Director and General Counsel
TCW SPECIAL CREDITS FUND V - THE PRINCIPAL FUND
/s/ Bruce A. Karsh
______________________________________
Bruce A. Karsh,
Authorized Signatory of TCW Asset Management Company,
the General Partner of TCW Special Credits Fund V - The Principal Fund
<PAGE>
SCHEDULE I
BOARD OF DIRECTORS
OF
THE TCW GROUP, INC.
All of the following individuals are directors of The TCW Group, Inc. Each
director is a citizen of the United States of America unless otherwise
specified below:
HOWARD P. ALLEN CARLA A. HILLS
Former Chairman & CEO 1200 19th Street, N.W.
Southern California Edison 5th Floor
2244 Walnut Grove Blvd. Washington, DC 20036
Rosemead, CA 91770
DR. HENRY A. KISSINGER
JOHN M. BRYAN Chairman
Partner Kissinger Associates, Inc.
Bryan & Edwards 350 Park Ave., 26th Floor
600 Montgomery St., 35th Floor New York, NY 10022
San Francisco, CA 94111
THOMAS E. LARKIN, JR.
ROBERT A. DAY President
Chairman of the Board, Trust Company of the West
Trust Company of the West 865 South Figueroa St., Suite 1800
200 Park Avenue, Suite 2200 Los Angeles, CA 90017
New York, New York 10166
KENNETH L. LAY
DAMON P. DE LASZLO, ESQ. Chairman and Chief Executive Officer
Managing Director of Harwin Enron Corp.
Engineers S.A., Chairman & D.P. 1400 Smith Street
Advisers Holdings Limited Houston, TX 77002-7369
Byron's Chambers
A2 Albany, Piccadilly MICHAEL T. MASIN, ESQ.
London W1V 9RD - England Vice Chairman
(Citizen of United Kingdom) GTE Corporation
One Stamford Forum
WILLIAM C. EDWARDS Stamford, CT 06904
Partner-Bryan & Edwards
3000 Sand Hill Road, Suite 190 EDFRED L. SHANNON, JR.
Menlo Park, CA 94025 Investor/Rancher
1000 S. Fremont Ave.
ERNEST O. ELLISON Alhambra, CA 9l802
Vice Chairman
Trust Company of the West ROBERT G. SIMS
865 South Figueroa St., Suite 1800 Private Investor
Los Angeles, CA 90017 11828 Rancho Bernardo, Box 1236
San Diego, CA 92128
HAROLD R. FRANK
Chairman of the Board MARC I. STERN
Applied Magnetics Corporation President
75 Robin Hill Rd. The TCW Group, Inc.
Goleta, CA 93017 865 S. Figueroa St., Suite 1800
Los Angeles, CA 90017
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequential
Exhibit Page
Number Description Number
- ------- -------------------- ------------
<S> <C> <C>
* 1.1 Agreement of TCW Related Entities regarding a joint Schedule 13D (and
such amendments as may become necessary) with respect to the Common
Stock of KinderCare Learning Centers, Inc. dated as of October 4, 1995.
* 1.2 Voting Agreement, dated October 3, 1996, between the Subsidiary, on the
one hand, and the Stockholders, on the other hand.
* 1.3 Form of Agreement and Plan of Merger between the Subsidiary and the
Issuer.
* 1.4 Form of Stockholder's Agreement, to be entered into among the Issuer,
KKR, Oaktree and the Electing Stockholders.
1.5 Stockholder's Agreement, dated February 13, 1997, among the Issuer, the
KKR Investors, Oaktree and The Principal Fund
</TABLE>
- ----------------------
* Previously filed with the Commission and hereby incorporated by reference
<PAGE>
Exhibit 1.5
Execution Copy
STOCKHOLDERS' AGREEMENT
This Stockholders' Agreement (this "Agreement"), is entered into as
of February 13, 1997 by and among KinderCare Learning Centers, Inc., a
Delaware corporation (the "Company"), TCW Special Credits Fund V The
Principal Fund, a California limited partnership ("Fund V"), Oaktree Capital
Management, LLC, a California limited liability company ("Oaktree"), KLC
Associates, L.P., a Delaware limited partnership, and KKR Partners II, a
Delaware limited partnership (collectively, the "KKR Investors").
RECITALS
WHEREAS, KCLC Acquisition Corp. and the Company have entered into
that certain Agreement and Plan of Merger dated as of October 3, 1996 and as
amended as of December 27, 1996 (the "Merger Agreement"), pursuant to which
the KKR Investors have acquired approximately 85% of the outstanding shares
of common stock, par value $.01 per share, of the Company; and
WHEREAS, pursuant to the terms of the Merger Agreement, Fund V has
retained beneficial ownership of 949,244 shares of Common Stock.
WHEREAS, that certain Voting Agreement entered into by an affiliate of
the KKR Investors, Oaktree, Fund V and certain other affiliates of Oaktree
requires that the parties hereto enter into a stockholders agreement in the form
of this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and for other good and valuable consideration, the parties hereto
agree as follows:
Section 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
AFFILIATE: When used with respect to a specified Person, another
Person that, either directly or indirectly, through one or more intermediaries,
controls, or is controlled by, or is under common control with, the Person
specified.
BOARD: The Board of Directors of the Company.
COMMON STOCK: The Common Stock, par value $.01 per share, of the
Company.
EXEMPT TRANSACTION: Has the meaning set forth in Section 2(c) hereof.
<PAGE>
2
INITIAL OAKTREE SHARES: The shares of Common Stock owned by Fund V
immediately after giving affect to the consummation of the merger contemplated
by the Merger Agreement.
KKR AFFILIATE: With respect to the KKR Investors shall mean a Person
that directly or indirectly through one or more intermediaries controls, is
controlled by or is under common control with the KKR Investors; PROVIDED,
HOWEVER, that KKR Affiliate shall not in any event include the limited partners
of the KKR Investors or the limited partners of the general partner of the KKR
Investors.
KKR HOLDER: The KKR Investors and any Person to whom a KKR Holder
transfers shares of Common Stock which Person is required by this Agreement to
be bound by the provisions of this Agreement.
KKR SHARES: As of any date of determination, the shares of Common
Stock then held by the KKR Holders.
OAKTREE INVESTORS: As of any date of determination, Fund V and any
other investors for which Oaktree is the sole investment manager which then own
shares of Common Stock.
OAKTREE SHARES: As of any date of determination, the shares of Common
Stock then held by the Oaktree Investors.
PERSON: An individual, partnership, limited liability company, joint
venture, corporation, trust or unincorporated organization, a government or any
department, agency or political subdivision thereof or other entity.
PRIVATE SALE: Any sale of securities other than a sale made in a
public distribution pursuant to an effective registration statement under the
Securities Act.
SECURITIES ACT: The Securities Act of 1933, as amended from time to
time and the rules and regulations promulgated thereunder.
Section 2. (a) "TAG-ALONG" RIGHT WITH RESPECT TO PRIVATE SALES BY KKR
HOLDERS. (i) PRIVATE SALES OF SHARES BY KKR HOLDERS. Subject to the last
sentence of Section 3(a), with respect to any proposed Private Sale of any KKR
Shares by a KKR Holder or KKR Holders (collectively, for purposes of this
Section 2, the "KKR Holder") during the term of this Agreement to a Person (a
"Proposed Purchaser"), other than pursuant to an Exempt Transaction (as defined
in Section 2(c)), the Oaktree Investors shall have the right and option, but not
the obligation, to participate in such sale, on the same terms and subject to
the same conditions as the sale by the KKR Holder, for the number of Oaktree
Shares owned by the Oaktree Investors equalling the number derived by
multiplying the total number of KKR Shares which the KKR Holder proposes to sell
(the "Proposed Number of
<PAGE>
3
Shares") by a fraction, the numerator of which is the total number of Oaktree
Shares and the denominator of which is the sum of (A) the total number of
Oaktree Shares, (B) the total number of KKR Shares, and (C) the total number of
shares of Common Stock (determined on a fully diluted basis) owned by Persons
entitled to the benefits of any other "tag-along" rights arising as a result of
such sale.
(ii) NOTICES. The KKR Holder shall notify, or cause to be notified,
Oaktree in writing of each proposed Private Sale subject to Section 2(a)(i)
above. Such notice shall set forth: (A) the Proposed Number of Shares, (B) the
name and address of the Proposed Purchaser, (C) the proposed amount of
consideration, the material terms and conditions of such sale (and if the
proposed consideration is not cash, the notice shall describe the terms of the
proposed consideration) and the proposed closing date of such sale, (D) the
total number of KKR Shares and the total number of shares of Common Stock
(determined on a fully diluted basis) owned by Persons entitled to the benefits
of any other "tag-along" rights arising as a result of such sale and (D) that
the Proposed Purchaser has been informed of the "tag-along" right provided for
in this Section 2(a) and has agreed to purchase Oaktree Shares held by the
Oaktree Investors in accordance with the terms hereof. The "tag-along" right
may be exercised by the Oaktree Investors by delivery of a written notice from
Oaktree to the KKR Holder (the "Tag-Along Notice") within 15 days following
receipt of the notice specified in the preceding sentence. The Tag-Along Notice
shall state the amount of Oaktree Shares that the Oaktree Investors propose to
include in such sale to the Proposed Purchaser. If Oaktree delivers a Tag-Along
Notice to the KKR Holder, the Oaktree Investors participating in the proposed
Private Sale shall (A) prior to closing of any such sale, execute and deliver
(or cause to be executed and delivered) any purchase agreement or other
documentation required by the Proposed Purchaser to consummate the sale
(including without limitation all legal opinions, cross-receipts and
certificates), which purchase agreement and other documentation shall be on
terms no less favorable in respect of any material term to such Oaktree
Investors than those executed by the KKR Holders and (B) at the closing of any
such sale, deliver to the Proposed Purchaser the certificate or certificates
representing the Oaktree Shares to be sold pursuant to such sale by such Oaktree
Investors, duly endorsed for transfer with signatures guaranteed, against
receipt of the purchase price thereof.
(iii) NUMBER OF SHARES TO BE SOLD. If a Tag-Along Notice is received
pursuant to Section 2(a)(ii), the Oaktree Investors shall be permitted to sell
to the Proposed Purchaser up to the number of Oaktree Shares determined as set
forth in Section 2(a)(i) above (the "Proposed Oaktree Shares"), and the KKR
Holder shall be permitted to sell to the Proposed Purchaser up to a number of
shares of Common Stock (the "Proposed KKR Shares") equal to the Proposed Number
of Shares, less the
<PAGE>
4
aggregate number of Proposed Oaktree Shares and all other shares of Common Stock
being sold to such Proposed Purchaser in such transaction pursuant to tag-along
rights arising as a result of such sale; PROVIDED that the KKR Holder shall have
the right to sell a number of additional shares of Common Stock up to the excess
of the Proposed Number of Shares over the number of Proposed KKR Shares, if the
Proposed Purchaser wants to purchase such additional shares. If no Tag-Along
Notice is received by the KKR Holder pursuant to Section 2(a)(ii), the KKR
Holder shall have the right for a 120-day period to sell to the Proposed
Purchaser up to the Proposed Number of Shares on terms and conditions no more
favorable in any material respect to the KKR Holder than those stated in the
Tag-Along Notice.
(b) "TAG-ALONG" RIGHT WITH RESPECT TO PUBLIC SALES BY KKR HOLDERS.
(i) PUBLIC SALES OF SHARES BY KKR HOLDERS. Subject to the last sentence of
Section 3(a), with respect to any proposed sale of any KKR Shares by a KKR
Holder during the term of this Agreement made in a public distribution pursuant
to an effective registration statement under the Securities Act, other than
sales described in clause (iv) of the definition of Exempt Transaction, the
Oaktree Investors shall have the right and option, but not the obligation, to
participate in such public distribution on the same terms and subject to the
same conditions as the sale by the KKR Holder for a number of Oaktree Shares
owned by the Oaktree Investors as determined pursuant to Section 2(b)(iii)
below.
(ii) The KKR Holder shall notify, or cause to be notified, Oaktree in
writing (a "Notice") of each proposed public distribution pursuant to an
effective registration statement under the Securities Act (a "Proposed
Registration"). Such notice may be given before the filing of such registration
statement and need not specify any price or other terms or conditions of such
sale. If within 10 days of the delivery of such Notice to Oaktree, the KKR
Holder receives from Oaktree a written request (a "Request") to register shares
of Common Stock held by the Oaktree Investors (which Request will be
irrevocable), shares of Common Stock will be so registered as and to the extent
provided in this Section 2(b) if KKR Shares are so registered. If Oaktree
delivers a Request to the KKR Holder, the Oaktree Investors will participate in
such public distribution, if any, at the same price and on the same terms and
conditions as the KKR Holder, which price and other terms and conditions will be
determined on behalf of the KKR Holder and the Oaktree Investors by the KKR
Holder in its sole discretion. Nothing in this Agreement shall create any
obligation on the part of the KKR Holder to cause a registration statement to
become effective under the Securities Act or to sell any shares of Common Stock
pursuant to an effective registration statement under the Securities Act.
(iii) The maximum number of shares of Common Stock which will be
registered pursuant to a Request will equal the
<PAGE>
5
number derived by multiplying the total number of KKR Shares which the KKR
Holder proposes to sell in such public distribution by a fraction, the numerator
of which is the total number of Oaktree Shares and the denominator of which is
the sum of (A) the total number of Oaktree Shares, (B) the total number of KKR
Shares, and (C) the total number of shares of Common Stock (determined on a
fully diluted basis) owned by Persons entitled to the benefits of any other
"tag-along" rights arising as a result of such distribution; provided that in
the event that the aggregate number of shares of Common Stock to be sold in any
such public distribution is increased or decreased, then the number of shares of
Common Stock which the Oaktree Investors shall sell in such public distribution
shall be increased or decreased by the product of (i) the number of shares of
Common Stock by which the total number of shares of Common Stock in such public
distribution is increased or decreased and (ii) a fraction the numerator of
which equals the number of Oaktree Shares originally so registered and the
denominator of which is the total number of shares of Common Stock originally so
registered.
(iv) Upon delivery of a Request, the participating Oaktree Investors
will, if requested by the KKR Holder, execute and deliver to the KKR Holder a
custody agreement and power of attorney in form and substance reasonably
satisfactory to the KKR Holder with respect to the shares of Common Stock to be
registered pursuant to this Section 2(b) (a "Custody Agreement and Power of
Attorney"). The custodian and attorney-in-fact under the Custody Agreement and
Power of Attorney will be the KKR Holder or its designee. The Custody Agreement
and Power of Attorney will provide, among other things, that such Oaktree
Investors will deliver to and deposit in custody with the custodian and
attorney-in-fact named therein a certificate or certificates representing such
shares of Common Stock (duly endorsed in blank by the registered owner or owners
thereof or accompanied by duly executed stock powers in blank) and irrevocably
appoint said custodian and attorney-in-fact as such Oaktree Investors' agent and
attorney-in-fact with full power and authority to act under the Custody
Agreement and Power of Attorney on such Oaktree Investors' behalf with respect
to the matters specified therein (including without limitation executing an
underwriting agreement and cross-receipts).
(v) Oaktree, for itself and on behalf of each participating Oaktree
Investor, agrees that it will execute and deliver or cause to be executed and
delivered such other agreements and other documents (such as legal opinions,
cross-receipts and certificates) as the KKR Holder itself is delivering or as
the KKR Holder may otherwise reasonably request to implement the provision of
this Section 2(b).
(c) EXEMPT TRANSACTION DEFINED. As used herein, the term "Exempt
Transaction" shall mean (i) sales by the KKR Investors to any KKR Affiliates,
(ii) sales by any KKR Affiliate to another KKR Affiliate or to the KKR
Investors, (iii) transfers
<PAGE>
6
by the KKR Investors and their respective KKR Affiliates to its partners or
members (and any subsequent sales by such partners or members) in the form of
dividends or distributions (whether upon liquidation or otherwise), (iv)
sales by the KKR Investors which, taken together with all prior sales by the
KKR Investors, equals a number of shares of Common Stock which is less than
10% of the shares of Common Stock then outstanding on a fully diluted basis
or (v) with respect to Section 3 only, sales by any KKR Holders made in a
public distribution pursuant to an effective registration statement under the
Securities Act; PROVIDED that in the case of clauses (i) and (ii) above the
buyer agrees in writing to be bound by the provisions of this Agreement,
including this paragraph (c); PROVIDED, FURTHER that in the case of clause
(iii) above, if the transferee is an Affiliate of Kohlberg Kravis Roberts &
Co., such transferee agrees in writing to be bound by the provisions of this
Agreement, including this paragraph (c).
Section 3. "DRAG-ALONG" RIGHT WITH RESPECT TO OAKTREE SHARES. (a)
SALES BY KKR HOLDERS. In the event that the KKR Holder determines, during the
term of this Agreement, to transfer either (i) at least 50% of the outstanding
shares of Common Stock on a fully diluted basis at the time of such transfer or
(ii) at least 35% of the outstanding shares of Common Stock on a fully diluted
basis at the time of such transfer (provided that such percentage set forth in
this clause (ii) equals 100% of the KKR Shares at the time of such transfer) to
a Proposed Purchaser, other than in an Exempt Transaction (a "Drag-Along Sale"),
then upon the request of the KKR Holders, the Oaktree Investors will transfer to
such Proposed Purchaser all of the Oaktree Shares at the same price and upon the
same terms and conditions in respect of any material term as such transfer by
the KKR Holders. In the event that the KKR Holders own at least 15% of the
outstanding shares of the Common Stock on a fully diluted basis and have signed
an agreement, with respect to all KKR Shares, to vote in favor of or tender in
connection with (a "Transaction Agreement") a business combination transaction
entered into by the Company, then, upon the request of the KKR Holders, the
Oaktree Investors will execute a Transaction Agreement with the same terms and
conditions in all material respects as the Transaction Agreement signed by the
KKR Holder. In the event that both Sections 2 and 3 hereto apply to a single
transaction, the "drag-along" rights set forth in this Section 3 will have
priority over the "tag-along" rights set forth in Section 2 above, and the
"tag-along" rights set forth in Section 2 will become exercisable by the Oaktree
Investors following a determination by the KKR Holder not to exercise its rights
under this Section 3.
(b) NOTICE. Prior to making any Drag-Along Sale, the KKR Holders
shall, if they determine in their sole discretion that the Oaktree Investors
should participate in such transfer, provide Oaktree with written notice (the
"Drag-Along Notice") not less than 5 business days prior to the proposed date of
the Drag-Along Sale (the "Drag-Along Sale Date"). The Drag-Along Notice
<PAGE>
7
shall set forth: (i) the name and address of the Proposed Purchaser; (ii) the
proposed amount and form of consideration to be paid per share of Common Stock
and the material terms and conditions of the transfer; (iii) the Drag-Along Sale
Date and the date upon which the Oaktree Investors shall deliver to the KKR
Holders the certificates representing the Oaktree Shares, duly endorsed, and the
power of attorney referred to below; and (iv) that the Proposed Purchaser has
been informed of the Drag-Along Sale rights and has agreed to acquire all of the
Oaktree Shares. The Oaktree Investors shall (i) prior to closing of any such
transfer, execute any purchase agreement or other documentation required by the
Proposed Purchaser to consummate the transfer, which purchase agreement and
other documentation shall be on terms no less favorable in respect of any
material term to the Oaktree Investors than those executed by the KKR Holders,
and (ii) at the closing of any such transfer, deliver to the Proposed Purchaser
the certificate or certificates representing the Oaktree Shares, duly endorsed
for transfer with signatures guaranteed, against receipt of the purchase price
thereof. Prior to entering into a Transaction Agreement, the KKR Holders shall,
if they determine in their sole discretion that the Oaktree Investors should
execute a Transaction Agreement, provide Oaktree with written notice (the
"Transaction Agreement Notice") not less than 5 business days prior to the
proposed date of the execution of the Transaction Agreement (the "Transaction
Agreement Date"). The Transaction Agreement Notice shall set forth: (i) the
name and address of the counter-parties to the Transaction Agreement; (ii) the
proposed form of Transaction Agreement; and (iii) the material terms and
conditions of the business combination with the Company to which the Transaction
Agreement relates. The Oaktree Investors shall, at the signing and closing of
such Transaction Agreement, execute and deliver all other documentation required
by such Transaction Agreement, which documents shall be on terms no less
favorable in respect of any material term to the Oaktree Investors than those
executed by the KKR Holder.
(c) EFFECT OF DRAG-ALONG SALE. If the Oaktree Investors receive their
proportionate share of the purchase price from a Drag-Along Sale, but have
failed to deliver certificates representing their shares of Common Stock as
described in this Section 3, they shall for all purposes be deemed no longer to
be stockholders of the Company, shall have no voting rights, shall not be
entitled to any dividends or other distributions with respect to the Common
Stock held by them, and shall have no other rights or privileges granted to
stockholders under law or this Agreement.
<PAGE>
8
Section 4. ELECTION OF DIRECTOR; OTHER RIGHTS. (a) Subject to Fund
V's compliance with Section 3(g) of the Voting Agreement, if immediately after
giving effect to the merger contemplated by the Merger Agreement, Fund V owns in
excess of 432,099 shares of the Common Stock, then one representative of the
Oaktree Investors, who shall be either Mr. Stephen A. Kaplan or Mr. Bruce A.
Karsh, or in the event that both Mr. Kaplan and Mr. Karsh are not affiliated
with Oaktree or are permanently disabled, another individual selected by Oaktree
who is reasonably acceptable to the Company and the KKR Holder, shall (i) be
nominated by the Company for election to the Board and (ii) have the KKR Shares
voted in favor of his election to the Board, until such time as this Agreement
terminates in accordance with its terms. At such time as this Agreement
terminates in accordance with its terms, the Oaktree Investors will, upon notice
to Oaktree from the KKR Investors, cause their nominee to resign from the Board.
(b) VCOC AGREEMENTS. The Oaktree Investors shall have the right,
during the term of this Agreement, upon reasonable prior written notice to the
Company, to (i) discuss the business, operations, properties, financial and
other conditions and plans and prospects of the Company with any executive
officer or director of the Company or any subsidiary of the Company and (ii)
during normal business hours, to visit and inspect any of the properties of the
Company and its subsidiaries.
Section 5. TRANSFER. (a) The Oaktree Investors agree not to offer or
to transfer, sell, assign, pledge, hypothecate or otherwise dispose of
("Transfer") any of their shares of Common Stock unless such offer or Transfer
complies with the Securities Act and the rules and regulations thereunder and
the state securities laws of any applicable state.
(b) Any transferee of an Oaktree Investor will not acquire any rights
under this Agreement. Any Person which owns shares of Common Stock and which,
prior to the date of determination, was an Oaktree Investor, but, on the date of
determination, Oaktree is not the sole investment manager of, shall not be
entitled to any rights under this Agreement.
Section 6. MISCELLANEOUS. (a) TERMINATION OF AGREEMENT. The
provisions of this Agreement shall terminate upon the earliest of:
(i) the earliest of (A) if the number of Initial Oaktree Shares is
less than 864,198, such time as the Oaktree Investors own less than 90% of
the number of Initial Oaktree Shares; (B) if the number of Initial Oaktree
Shares is 864,198 or more, then at such time as the Oaktree Investors
transfer a number of shares of Common Stock such that (1) immediately
before giving effect to such transfer, the Oaktree Investors owned at least
10% of the shares of Common Stock on a fully diluted basis and (2)
immediately
<PAGE>
9
after giving effect to such transfer, the Oaktree Investors owns less than
10% of the shares of Common Stock on a fully diluted basis or (C) if the
number of Initial Oaktree Shares is 864,198 or more and the number of
Oaktree Shares falls below 10% of the number of shares of Common Stock on a
fully diluted basis other than as a result of a transfer by the Oaktree
Investors, such time after such falling below as the Oaktree Investors
transfer any shares of Common Stock and thereafter the Oaktree Investors
own less than 90% of the number of Initial Oaktree Shares;
(ii) the date on which the KKR Holders in the aggregate own less than
15% of the shares of Common Stock on a fully diluted basis; or
(iii) the tenth anniversary of the date of this Agreement.
Notwithstanding the immediately preceding sentence, this Section 6 and the
last sentence of Section 4(a) shall survive the termination of this Agreement.
For the purpose of Section 6(a)(i), the term "transfer" shall include, with
respect to an Oaktree Investor, Oaktree no longer being the sole investment
manager of such Oaktree Investor.
(b) REPRESENTATION AND WARRANTY. The Oaktree Investors own, of
record or beneficially, no shares of Common Stock or securities convertible or
exchangeable for shares of Common Stock, other than the Oaktree Shares subject
to this Agreement.
(c) ASSIGNMENT, BINDING EFFECT. This Agreement shall not be
assignable by the parties hereto, except to any Person who in connection with a
transfer of KKR Shares is required by this Agreement, in connection with such
transfer, to agree to be bound by the provisions of this Agreement. Subject to
the foregoing, this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective legal representatives, heirs, legatees,
successors and permitted assigns.
(d) COSTS AND EXPENSES. All costs and expenses incurred in
connection with this Agreement and the consummation of any of the transactions
contemplated hereby shall be paid by the party incurring such expenses.
(e) AMENDMENTS. The provision of this Agreement, including the
provisions of this sentence, may be amended, modified or supplemented only by a
written instrument executed by holders of (i) at least a majority of the KKR
Shares, (ii) Oaktree and (iii) the Company.
(f) GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York, without regard to
principles of conflict of
<PAGE>
10
laws. Each of the parties hereto agrees to submit to the jurisdiction of the
courts of the State of New York in any action or proceeding arising out of or
relating to this Agreement.
(g) INTERPRETATION. The headings of the sections contained in this
Agreement are solely for the purpose of reference, are not part of the agreement
of the parties and shall not affect the meaning or interpretation of this
Agreement.
(h) NOTICES. All notices and other communications required or
permitted to be given under this Agreement shall be in writing and shall be
deemed to have been given if delivered personally or by telecopy or seven days
after having been sent by certified mail, return receipt requested, postage
prepaid, to the parties to this Agreement at the following address or to such
other address as either party to this Agreement shall specify by notice to the
other:
(1) If to the KKR Investors or a KKR Holder, to it in care of:
Kohlberg Kravis Roberts & Co.
9 West 57th Street
New York, New York 10019
Attention: Clifton S. Robbins
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: David J. Sorkin
(2) If to Oaktree or to an Oaktree Investor, to it in care of:
Oaktree Capital Management, LLC
550 South Hope Street, 22nd Floor
Los Angeles, California 90071
Attention: Stephen A. Kaplan
with a copy to:
Gibson, Dunn & Crutcher LLP
200 Park Avenue
New York, N.Y. 10166-0193
Attention: Conor D. Reilly, Esq.
(3) If to the Company, to it in care of:
KinderCare Learning Centers, Inc.
2400 Presidents Drive
Montgomery, AL 36111
Attention: Rebecca Bryan
<PAGE>
11
Vice President/General Counsel
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: David J. Sorkin
(i) WAIVER AND CONSENT. No action taken pursuant to this Agreement,
including, without limitation, any investigation by or on behalf of any party,
shall be deemed to constitute a waiver by the party taking such action of
compliance with any representations, warranties, covenants or agreements
contained herein. The waiver by any party hereto of a breach of any provision
of this Agreement shall not operate or be construed as waiver of any preceding
or succeeding breach and no failure by any party to exercise any right or
privilege hereunder shall be deemed a waiver of such party's rights or
privileges hereunder or shall be deemed a waiver of such party's rights to
exercise the same at any subsequent time or times hereunder. Each party hereto,
in addition to being entitled to exercise all rights provided herein, in the
charter or granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement. Each party hereto
agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this Agreement and
hereby agrees to waive the defense in any action for specific performance that a
remedy at law would be adequate.
(j) INSPECTION. Copies of this Agreement will be available for
inspection or copying by any party at the offices of the Company through the
Secretary of the Company.
(k) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to constitute one and the same agreement.
(l) SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
(m) ENTIRE AGREEMENT. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the rights of the Oaktree Investors herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matters.
<PAGE>
12
(n) LIMITED LIABILITY OF PARTNERS. Notwithstanding anything that may
be expressed or implied in this Agreement, each KKR Holder and each Oaktree
Investor, by its acceptance of the benefits of this Agreement, covenants, agrees
and acknowledges that notwithstanding that the KKR Holder and the Oaktree
Investors are partnerships no recourse under this Agreement or any documents or
instruments delivered in connection with this Agreement shall be had against any
officer, agent or employee of any KKR Holder or any Oaktree Investor, against
any partner of any KKR Holder or Oaktree Investor or any director, officer,
employee, partner, affiliate or assignee of any of the foregoing, whether by the
enforcement of any assessment or by any legal or equitable proceeding, or by
virtue of any statute, regulation or other applicable law, it being expressly
agreed and acknowledged that no personal liability whatsoever shall attach to,
be imposed on or otherwise be incurred by an officer, agent or employee of any
KKR Holder or any Oaktree Investor or any partner of any KKR Holder or any
Oaktree Holder or any director, officer, employee, partner, affiliate or
assignee of any of the foregoing, as such for any obligations of any KKR Holder
or Oaktree Investor under this Agreement or any documents or instruments
delivered in connection with this Agreement or for any claim based on, in
respect of or by reason of such obligations or their creation.
IN WITNESS WHEREOF, the parties have executed this Stockholders'
Agreement as of the date first above written.
KINDERCARE LEARNING CENTERS, INC.
a Delaware corporation
By: /s/ Philip L. Maslowe
-------------------------------------
Name: Philip L. Maslowe
Title: Chief Financial Officer
and Senior Vice President
TCW SPECIAL CREDITS FUND V - THE
PRINCIPAL FUND
By: TCW ASSET MANAGEMENT CO.,
General Partner
By: OAKTREE CAPITAL
MANAGEMENT, LLC
Manager
By: /s/ Kenneth Liang
----------------------------------
Name: Kenneth Liang
Title: Authorized Signatory
<PAGE>
13
By: /s/ Stephen Kaplan
----------------------------------
Name: Stephen Kaplan
Title: Authorized Signatory
OAKTREE CAPITAL MANAGEMENT, LLC,
By: /s/ Kenneth Liang
-------------------------------------
Name: Kenneth Liang
Title: Authorized Signatory
By: /s/ Stephen Kaplan
-------------------------------------
Name: Stephen Kaplan
Title: Authorized Signatory
