EXHIBIT 10.1
FIFTH LIMITED WAIVER TO CREDIT AGREEMENT
THIS FIFTH LIMITED WAIVER TO CREDIT AGREEMENT (this "Waiver") is
entered into as of April 22, 2003, among LA PETITE ACADEMY, INC., a Delaware
corporation (the "Borrower"), LPA HOLDING CORP., a Delaware corporation
("Holdings"), and the Lenders party hereto. Capitalized terms used herein and
not otherwise defined shall have the meanings ascribed thereto in the Credit
Agreement (as defined below).
RECITALS
WHEREAS, the Borrower, Holdings and the Lenders entered into that
certain Credit Agreement, dated as of May 11, 1998 (as previously amended and
modified by Amendment No. 1, dated as of December 13, 1999; Amendment No. 2,
dated as of June 29, 2000; Amendment No. 3, dated as of November 14, 2001;
Amendment No. 4, dated as of February 5, 2002; Amendment No. 5, dated as of
February 10, 2003; and as otherwise amended or modified from time to time, the
"Credit Agreement");
WHEREAS, Defaults exist under the Credit Agreement as a result of (a)
the failure of the Borrower to provide timely and correct financial and other
information to the Lenders pursuant to Sections 5.01(c), 5.01(j), 5.01(k),
5.01(l) and 5.01(m) and (b) the failure of the Borrower to file any reports and
other materials required to be filed by Holdings and the Borrower with the
Securities and Exchange Commission pursuant to the terms of Section 5.10 of the
Credit Agreement (the defaults in (a) and (b) are collectively referred to as,
the "Existing Defaults").
WHEREAS, the Borrower has requested that the Lenders waive the
Existing Defaults;
WHEREAS, the Lenders are willing to provide a limited waiver of the
Existing Defaults for the period of time from the date hereof through and
including May 31, 2003, (the "Waiver Period"), based upon and subject to the
terms and conditions specified in this Waiver; and
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
SECTION 1
WAIVER
1.1 The Borrower acknowledges the existence and continuation of the
Existing Defaults. The Lenders hereby waive the Existing Defaults for, and only
for, the Waiver Period. From and after the end of the Waiver Period, the waiver
set forth herein shall be of no further force and effect and the Administrative
Agent and the Lenders shall be entitled to exercise any and all rights and
remedies available under the Loan Documents and applicable law with respect to
the Existing Defaults.
1.2 Except for the specific waiver set forth above, nothing contained
herein shall be deemed to constitute a waiver of (i) any rights or remedies the
Administrative Agent or any Lender may have under the Credit Agreement or any
other Loan Document or under applicable law or (ii) the Loan Parties' obligation
to comply fully with any duty, term, condition, obligation or covenant contained
in the Credit Agreement and the other Loan Documents not specifically waived.
1.3 The specific waiver set forth herein is a one-time waiver and
shall be effective only in this specific instance during the Waiver Period, and
shall not obligate the Lenders to waive any Default or Event of Default
(including, without limitation, any waiver of the Existing Defaults following
the end of the Waiver Period) other than the Existing Defaults, now existing or
hereafter arising.
SECTION 2
MISCELLANEOUS
2.1 Effectiveness. This Waiver shall be effective upon (a) receipt by the
Administrative Agent of counterparts of this Waiver executed by each of the Loan
Parties and the Lenders, and (b) payment to Administrative Agent's counsel for
all legal fees incurred by the Administrative Agent and Highland Capital
Management, L.P. in connection with the Credit Agreement for which Borrower has
received an invoice at least one business day prior to the date of this Waiver.
Notwithstanding anything to the contrary contained herein, this Waiver shall be
void ab initio upon the failure of the Borrower to pay the Expense Reimbursement
(as defined below) in accordance with the terms hereof.
2.2 Ratification of Credit Agreement and Other Loan Documents. The
Credit Agreement and the other applicable Loan Documents are hereby ratified and
confirmed and are in full force and effect.
2.3 Authority/Enforceability. Each party hereto represents and
warrants that (a) it has taken all necessary action to authorize the execution,
delivery, and performance of this Waiver; (b) this Waiver has been duly executed
and delivered by such Person and constitutes such Person's legal, valid, and
binding obligations, enforceable in accordance with its terms, except as such
enforceability may be subject to (i) bankruptcy, insolvency, reorganization,
fraudulent conveyance or transfer, moratorium, or similar laws affecting
creditors' rights generally and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding at law or in equity);
and (c) no material consent, approval, authorization, or order of, or filing,
registration, or qualification with, any court or Governmental Authority or
third party is required in connection with the execution, delivery, or
performance by such Person of this Waiver.
2.4 Representation and Warranties. Borrower and Holdings represent and
warrant to the Lenders that (a) the representations and warranties of Borrower
and Holdings set forth in Article III of the Credit Agreement qualified as to
materiality are true and correct as of the date hereof and those not so
qualified are true and correct in all material respects as of the date hereof,
except, in each case, for those representations and warranties that specifically
relate to an earlier date; (b) except for the Existing Defaults, no event has
occurred and is continuing which
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constitutes a Default or an Event of Default; and (c) the Security Documents
create a valid security interest in, and Lien upon, the Collateral.
2.5 Expenses. In addition to the legal fees described in Section 2.1,
the Borrower shall reimburse (the "Expense Reimbursement") the Administrative
Agent for all legal fees incurred by the Administrative Agent and Highland
Capital Management, L.P. in connection with the Credit Agreement (including this
Waiver). The Expense Reimbursement shall be paid by the Borrower to the
Administrative Agent (or directly to the Administrative Agent's counsel) as soon
as practicable but in no event later than one business day following receipt by
the Borrower of an invoice for such legal fees.
2.6 Counterparts/Telecopy. This Waiver may be executed in any number
of counterparts, each of which when so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument.
Delivery of executed counterparts by telecopy shall be effective as an original
and shall constitute a representation that an original will be delivered if
requested.
2.7 GOVERNING LAW. THIS WAIVER AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
[REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGES FOLLOW.]
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Signature Page
Fifth Limited Waiver to Credit Agreement
La Petite Academy, Inc.
IN WITNESS WHEREOF, the parties hereto have caused this Fifth Limited
Waiver to Credit Agreement to be duly executed and delivered by their proper and
duly authorized officers or attorneys-in-fact as of the day and year first above
written.
BORROWER: LA PETITE ACADEMY INC.
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chief Financial Officer
HOLDINGS: LPA HOLDING CORP.
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chief Financial Officer
Signature Page
Fifth Limited Waiver to Credit Agreement
La Petite Academy, Inc.
Each of the undersigned are unconditional guarantors of all obligations
of the Borrower under the Loan Documents and acknowledge and agree that (a) this
Waiver does not modify or waive any of its obligations under the Loan Documents,
including the Guarantee Agreements and (b) all Liens granted by it to support
its obligations remain in full force and effect.
LPA HOLDING CORP.
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chief Financial Officer
LPA SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chief Financial Officer
BRIGHT START, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chief Financial Officer
Signature Page
Fifth Limited Waiver to Credit Agreement
La Petite Academy, Inc.
LENDERS: U.S. BANK NATIONAL ASSOCIATION
(formerly Mercantile Bank),
as Administrative Agent and a Lender
By: /s/ Xxxxx X. Xxx
---------------------------------
Name: Xxxxx X. Xxx
Title: Vice President
Signature Page
Fifth Limited Waiver to Credit Agreement
La Petite Academy, Inc.
JPMORGAN CHASE BANK
(formerly The Chase Manhattan Bank)
By: /s/ X. Xxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President,
XX Xxxxxx Xxxxx Bank
Signature Page
Fifth Limited Waiver to Credit Agreement
La Petite Academy, Inc.
ML CBO IV CAYMAN
By: Highland Capital Management, L.P.,
as Collateral Manager
By: /s/ Xxxx Xxxxxxx
-----------------------------------
Name: Xxxx Xxxxxxx
Title: Senior Portfolio Manager
Signature Page
Fifth Limited Waiver to Credit Agreement
La Petite Academy, Inc.
HIGHLAND LEGACY, LTD
By: Highland Capital Management, L.P.,
as Collateral Manager
By: /s/ Xxxx Xxxxxxx
-----------------------------------
Name: Xxxx Xxxxxxx
Title: Senior Portfolio Manager
Signature Page
Fifth Limited Waiver to Credit Agreement
La Petite Academy, Inc.
PAMCO CAYMAN LTD
By: Highland Capital Management, L.P.,
as Collateral Manager
By: /s/ Xxxx Xxxxxxx
-----------------------------------
Name: Xxxx Xxxxxxx
Title: Senior Portfolio Manager
Signature Page
Fifth Limited Waiver to Credit Agreement
La Petite Academy, Inc.
KZH HIGHLAND-2 LLC
By: /s/ Xxxxx Xxx
-----------------------------------
Name: Xxxxx Xxx
Title: Authorized Agent
Signature Page
Fifth Limited Waiver to Credit Agreement
La Petite Academy, Inc.
SRV - HIGHLAND, INC.
By:
-----------------------------------
Name: Xxx X. Xxxxxx
Title: Assistant Vice President
Signature Page
Fifth Limited Waiver to Credit Agreement
La Petite Academy, Inc.
BANK OF AMERICA, N.A.
(formerly NationsBank, N.A.)
By: /s/ Xxxxxxx Xxxxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Managing Director
