EXHIBIT 10.2
FOURTH LIMITED WAIVER TO CREDIT AGREEMENT
THIS FOURTH LIMITED WAIVER TO CREDIT AGREEMENT (this "Waiver") is
entered into as of December 16, 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, 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 fourth 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 has requested that the Lenders waive the Existing
Defaults;
WHEREAS, the Required Lenders are willing to provide a limited waiver
of the Existing Defaults for the period of time from the date hereof through and
including January 30, 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 Required 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 be effective upon (a) receipt by the
Administrative Agent of counterparts of this Waiver 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 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.
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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 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
Fourth Limited Waiver to Credit Agreement
La Petite Academy, Inc.
IN WITNESS WHEREOF, the parties hereto have caused this 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/ Michael F. Czlonka
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Name: Michael F. Czlonka
Title: Chief Financial Officer
HOLDINGS: LPA HOLDING CORP.
By: /s/ Michael F. Czlonka
-----------------------------------
Name: Michael F. Czlonka
Title: Chief Financial Officer
Signature Page
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
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/ Michael F. Czlonka
-----------------------------------
Name: Michael F. Czlonka
Title: Chief Financial Officer
LPA SERVICES, INC.
By: /s/ Michael F. Czlonka
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Name: Michael F. Czlonka
Title: Chief Financial Officer
BRIGHT START, INC.
By: /s/ Michael F. Czlonka
-----------------------------------
Name: Michael F. Czlonka
Title: Chief Financial Officer
Signature Page
Fourth 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
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:
Signature Page
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/ Todd Travers
-----------------------------------
Name: Todd Travers
Title: Senior Portfolio Manager
Signature Page
Fourth Limited Waiver to Credit Agreement
La Petite Academy, Inc.
HIGHLAND LEGACY, LTD
By: Highland Capital Management, L.P.,
as Collateral Manager
By: /s/ Todd Travers
-----------------------------------
Name: Todd Travers
Title: Senior Portfolio Manager
Signature Page
Fourth Limited Waiver to Credit Agreement
La Petite Academy, Inc.
PAMCO CAYMAN LTD
By: Highland Capital Management, L.P.,
as Collateral Manager
By: /s/ Todd Travers
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Name: Todd Travers
Title: Senior Portfolio Manager
Signature Page
Fourth Limited Waiver to Credit Agreement
La Petite Academy, Inc.
KZH HIGHLAND-2 LLC
By: /s/ Susan Lee
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Name: Susan Lee
Title: Authorized Agent
Signature Page
Fourth Limited Waiver to Credit Agreement
La Petite Academy, Inc.
SRV - HIGHLAND, INC.
By: /s/ Ann E. Morris
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Name: Ann E. Morris
Title: Assistant Vice President
Signature Page
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: