EXHIBIT 10.1
SECOND EXTENSION TO THIRD LIMITED WAIVER TO CREDIT AGREEMENT
THIS SECOND EXTENSION TO THIRD LIMITED WAIVER TO CREDIT AGREEMENT (this
"Second Extension") is entered into as of November 15, 2002 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; and as otherwise amended or
modified from time to time, the "Credit Agreement");
WHEREAS, certain Events of Default exist under the Credit Agreement as
a result of the failure of the Borrower to comply with the terms of (a) Sections
6.13, and 6.15 of the Credit Agreement for the third fiscal quarter which ended
nearest to March 31, 2002 (the "March 2002 Defaults"); (b) Sections 6.13, 6.14
and 6.15 of the Credit Agreement for the fourth fiscal quarter which ended
nearest to June 30, 2002 (the "June 2002 Defaults"); (c) Sections 5.01(a),
5.01(b), 5.01(c), 5.01(d), 5.01(e) and 5.01(f) of the Credit Agreement, solely
with respect to the financial statements and other related documents that have
not been delivered to the Administrative Agent prior to the date hereof (the
"Information Defaults"); and (d) Section 5.01(g) and 5.10 of the Credit
Agreement, solely with respect to the failure of the Borrower to timely file
2002 fiscal year end financial statements with the Securities and Exchange
Commission (the "SEC Reporting Default"; together with the March 2002 Defaults,
the June 2002 Defaults, and the Information Defaults, collectively, the
"Existing Defaults");
WHEREAS, the Borrower requested that the Lenders waive the Existing
Defaults, and Required Lenders provided a limited waiver of the Existing
Defaults for the period of time from September 30, 2002, through and including
November 15, 2002, based upon and subject to the terms and conditions specified
in the Third Limited Waiver To Credit Agreement (the "Third Waiver") dated as of
September 30, 2002, among the Borrower, Holdings, and the Lenders party thereto,
as extended by the Extension to Third Limited Waiver to Credit Agreement dated
as of November 1, 2002 (the "First Extension");
WHEREAS, the Borrower has requested that the Lenders extend the Waiver
Period (as defined in the Third Waiver);
WHEREAS, the Required Lenders are willing to extend the Waiver Period
through and including December 2, 2002, based upon and subject to the terms and
conditions specified in this Second Extension; 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
EXTENSION
1.1 The Borrower acknowledges the continued existence and continuation
of the Existing Defaults. The Required Lenders hereby extend the Waiver Period
through and including December 2, 2002. All references in the Third Waiver to
the Waiver Period shall be to the period of time from September 30, 2002,
through and including December 2, 2002.
1.2 Except for the specific waiver set forth in the Third Waiver, as
modified by the First Extension and this Second Extension, nothing contained
therein or 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 in the Third Waiver, as modified by
the First Extension and this Second Extension, 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 Second Extension shall be effective upon (a)
receipt by the Administrative Agent of counterparts of this Second Extension
executed by each of the Loan Parties and the Required Lenders, and (b) receipt
by the Administrative Agent of stock powers, endorsed in blank, with respect to
stock certificates representing all the Pledged Stock (as defined in the Pledge
Agreement), and (c) 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. Notwithstanding anything to the contrary
contained
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herein, this Second Extension 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 Second Extension; (b) this Second Extension 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 Second Extension.
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 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 additional legal fees incurred by the Administrative Agent and
Highland Capital Management, L.P. in connection with the Credit Agreement
(including this Second Extension). 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.
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IN WITNESS WHEREOF, the parties hereto have caused this Second
Extension to Third 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
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Name: Xxxxxxx X. Xxxxxxx
Title: Chief Financial Officer and
Secretary
HOLDINGS: LPA HOLDING CORP.
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chief Financial Officer and
Secretary
Signature Page
Second Extension to Third 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
Second Extension 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 and
Secretary
LPA SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chief Financial Officer and
Secretary
BRIGHT START, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chief Financial Officer and
Secretary
Signature Page
Second Extension to Third 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:
----------------------------------
Name:
Title:
Signature Page
Second Extension to Third Limited Waiver to Credit Agreement
La Petite Academy, Inc.
JPMORGAN CHASE BANK (formerly The Chase
Manhattan Bank)
By: /s/ Xxxxxxx Xxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Vice President
Signature Page
Second Extension to Third 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 Xxxxx
------------------------------------
Name: Xxxx Xxxxx
Title: Chief Investment Officer
Highland Capital Management, L.P.
Signature Page
Second Extension to Third Limited Waiver to Credit Agreement
La Petite Academy, Inc.
HIGHLAND LEGACY, LTD
By: Highland Capital Management, L.P.,
as Collateral Manager
By: /s/ Xxxx Xxxxx
------------------------------------
Name: Xxxx Xxxxx
Title: Chief Investment Officer
Highland Capital Management, L.P.
Signature Page
Second Extension to Third Limited Waiver to Credit Agreement
La Petite Academy, Inc.
PAMCO CAYMAN LTD
By: Highland Capital Management, L.P.,
as Collateral Manager
By: /s/ Xxxx Xxxxx
------------------------------------
Name: Xxxx Xxxxx
Title: Chief Investment Officer
Highland Capital Management, L.P.
Signature Page
Second Extension to Third Limited Waiver to Credit Agreement
La Petite Academy, Inc.
KZH HIGHLAND-2 LLC
By: /s/ Xxxxx Xxxxxx Xxxxxx
------------------------------------
Name: Xxxxx Xxxxxx Xxxxxx
Title: Authorized Agent
Signature Page
Second Extension to Third Limited Waiver to Credit Agreement
La Petite Academy, Inc.
SRV - HIGHLAND, INC.
By: /s/ Xxx X. Xxxxxx
------------------------------------
Name: Xxx X. Xxxxxx
Title: Assistant Vice President
Signature Page
Second Extension to Third Limited Waiver to Credit Agreement
La Petite Academy, Inc.
BANK OF AMERICA, N.A.
(formerly NationsBank, N.A.)
By:
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Name:
Title:
