EXHIBIT 10.1
FIRST EXTENSION TO FOURTH LIMITED WAIVER TO CREDIT AGREEMENT
THIS FIRST EXTENSION TO FOURTH LIMITED WAIVER TO CREDIT AGREEMENT (this
"First Extension") is entered into as of January 30, 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; and as otherwise amended or
modified from time to time, the "Credit Agreement");
WHEREAS, 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 6.13, 6.14 and
6.15 of the Credit Agreement for the first fiscal quarter which ended nearest
to September 30, 2002 (the "September 2002 Defaults"); (d) 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 (e) 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, the September 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 December 16, 2002, through and including
January 30, 2003, based upon and subject to the terms and conditions specified
in the Fourth Limited Waiver To Credit Agreement (the "Fourth Waiver") dated as
of December 16, 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 Fourth Waiver);
WHEREAS, the Required Lenders are willing to extend the Waiver Period
through and including February 7, 2003, based upon and subject to the terms and
conditions specified in this First 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 February 7, 2003. All references in the
Fourth Waiver to the Waiver Period shall be to the period of time from January
30, 2003, through and including February 7, 2003.
1.2 Except for the specific waiver set forth in the Fourth
Waiver, as modified by this First 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 Fourth Waiver, as
modified by this First 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 First Extension shall be effective
upon (a) receipt by the Administrative Agent of counterparts of this First
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 for which Borrower has received an invoice at least one
business day prior to the date of this First Extension. Notwithstanding anything
to the contrary contained herein, this First 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.
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2.3 2.4 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 First Extension; (b) this First
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 First Extension.
2.5 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.
2.6 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 First 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.
2.7 Counterparts/Telecopy. This First Extension 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.
2.8 GOVERNING LAW. THIS FIRST EXTENSION 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 First Extension
to Fourth 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/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Financial Officer and Secretary
HOLDINGS: LPA HOLDING CORP.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Financial Officer and Secretary
Signature Page
First Extension to Fourth 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
First 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/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Financial Officer and Secretary
LPA SERVICES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Financial Officer and Secretary
BRIGHT START, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Financial Officer and Secretary
LENDERS: U.S. BANK NATIONAL ASSOCIATION
(formerly Mercantile Bank), as Administrative
Agent and a Lender
By:
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Name:
Title:
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Signature Page
First Extension to Fourth Limited Waiver to Credit Agreement
La Petite Academy, Inc.
JPMORGAN CHASE BANK (formerly The Chase
Manhattan Bank)
By:
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Name:
Title:
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Signature Page
First Extension to Fourth Limited Waiver to Credit Agreement
La Petite Academy, Inc.
ML CBO IV CAYMAN
By: Highland Capital Management, L.P.,
as Collateral Manager
By: /s/ ▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇
Title: Chief Investment Officer
Highland Capital Management, L.P.
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Signature Page
First Extension to Fourth Limited Waiver to Credit Agreement
La Petite Academy, Inc.
HIGHLAND LEGACY, LTD
By: Highland Capital Management, L.P.,
as Collateral Manager
By: /s/ ▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇
Title: Chief Investment Officer
Highland Capital Management, L.P.
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Signature Page
First Extension to Fourth Limited Waiver to Credit Agreement
La Petite Academy, Inc.
PAMCO CAYMAN LTD
By: Highland Capital Management, L.P.,
as Collateral Manager
By: /s/ ▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇
Title: Chief Investment Officer
Highland Capital Management, L.P.
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Signature Page
First Extension to Fourth Limited Waiver to Credit Agreement
La Petite Academy, Inc.
KZH HIGHLAND-2 LLC
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Agent
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Signature Page
First Extension to Fourth Limited Waiver to Credit Agreement
La Petite Academy, Inc.
SRV -- HIGHLAND, INC.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇ ▇. ▇▇▇▇▇▇
Title: Assistant Vice President
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Signature Page
First Extension to Fourth 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:
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