EXHIBIT 10.1
EXTENSION TO THIRD LIMITED WAIVER TO CREDIT AGREEMENT
THIS EXTENSION TO THIRD LIMITED WAIVER TO CREDIT AGREEMENT (this
"Extension") is entered into as of November 1, 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 1, 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;
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 November 15, 2002, based upon and subject to the terms and
conditions specified in this 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 November 15, 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 November 15, 2002.
1.2 Except for the specific waiver set forth in the Third Waiver, as
modified by this 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
this 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 Extension shall be effective upon (a) receipt
by the Administrative Agent of counterparts of this Extension executed by each
of the Loan Parties and the Required 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.
Notwithstanding anything to the contrary contained herein, this 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 Extension; (b) this 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
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Authority or third party is required in connection with the execution, delivery,
or performance by such Person of this 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 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.
[REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGES FOLLOW.]
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IN WITNESS WHEREOF, the parties hereto have caused this 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: Senior Vice President & CFO
HOLDINGS: LPA HOLDING CORP.
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President & CFO
Signature Page
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
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
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Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President & CFO
LPA SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President & CFO
BRIGHT START, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President & CFO
Signature Page
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:
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Name:
Title:
Signature Page
Extension to Third Limited Waiver to Credit Agreement
La Petite Academy, Inc.
JPMORGAN CHASE BANK (formerly The Chase
Manhattan Bank)
By:
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Name:
Title:
Signature Page
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
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
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Name: Xxxx Xxxxx
Title: Chief Investment Officer
Highland Capital Management, L.P.
Signature Page
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
Extension to Third Limited Waiver to Credit Agreement
La Petite Academy, Inc.
KZH HIGHLAND-2 LLC
By: /s/ Xxxxx Xxxxxx Xxxxxx
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Name: Xxxxx Xxxxxx Xxxxxx
Title: Authorized Agent
Signature Page
Extension to Third Limited Waiver to Credit Agreement
La Petite Academy, Inc.
SRV - HIGHLAND, INC.
By: /s/ Xxx X. Xxxxxx
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Name: Xxx X. Xxxxxx
Title: Assistant Vice President
Signature Page
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:
