Document:

<PAGE>

                                                                    EXHIBIT 10.1

                                 AMENDMENT NO. 3
                         TO CREDIT AGREEMENT AND WAIVER

         THIS AMENDMENT NO. 3 TO CREDIT AGREEMENT AND WAIVER (this "Amendment")
is entered into as of November 14, 2001 among LA PETITE ACADEMY, INC., a
Delaware corporation (the "Borrower"), LPA HOLDING CORP., a Delaware corporation
("Holdings"), the Lenders party thereto, BANK OF AMERICA, N.A. (formerly
NationsBank, N.A.), as Administrative Agent, Documentation Agent and Collateral
Agent for the Lenders and as Issuing Bank and Swingline Lender (collectively, in
such capacities, the "Administrative Agent"), and CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, formerly The Chase Manhattan Bank, as Syndication Agent (in such
capacity, the "Syndication Agent"). 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, the Lenders, the Administrative Agent
and the Syndication Agent 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, and Amendment No. 2, dated as of June 29, 2000, 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,
6.14 and 6.15 of the Credit Agreement for the fourth fiscal quarter of 2001
which ended June 30, 2001 (the "June 2001 Defaults"); (b) Sections 6.13, 6.14
and 6.15 of the Credit Agreement for the first fiscal quarter of 2002 which
ended closest to September 30, 2001 (the "September 2001 Defaults"); (c)
Sections 5.01(a), 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
2001 fiscal year end financial statements with the Securities and Exchange
Commission (the "SEC Reporting Default"; together with the June 2001 Defaults,
the September 2001 Defaults and the Information Defaults, collectively, the
"Existing Defaults");

         WHEREAS, Holdings intends to issue, in one or more issuances, equity
securities to one or more of its stockholders (including LPA Investment LLC, a
Delaware limited liability company ("LPA Investment")) in consideration of an
aggregate amount of at least $4,250,000 in cash;
<PAGE>

         WHEREAS, one or more stockholders of Holdings (including LPA
Investment) will commit to purchase additional equity securities of Holdings in
an aggregate amount equal to at least $10,750,000 in cash;

         WHEREAS, the Borrower has requested that the Lenders waive the Existing
Defaults and that the Lenders agree to modify certain terms of the Credit
Agreement;

         WHEREAS, the Required Lenders are willing to provide a waiver of the
Existing Defaults, based upon and subject to the terms and conditions specified
in this Amendment; and

         WHEREAS, the Required Lenders and the Loan Parties have agreed to
modify the Credit Agreement as more fully set forth herein.

         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:

                                    AGREEMENT

                                    SECTION 1
                              REAFFIRMATION/WAIVER

         1.1 Reaffirmation of Existing Debt and Liens. The Borrower acknowledges
and confirms that: (a) as of the date hereof, the outstanding principal amount
of Revolving Loans and issued Letters of Credit is $24,036,234.05 and the
outstanding principal amount of Term Loans is $37,000,000,(b) the Lenders have a
Lien on all Collateral and the Collateral is not subject to any Lien other than
those specifically permitted under the Loan Documents, (c) the Maturity Date is
May 11, 2005, at which time all obligations under the Loan Documents will be due
and payable in full if not accelerated sooner pursuant to the terms of the
Credit Agreement, (d) the Borrower's obligation to repay the outstanding
principal amount of the Loans and to reimburse the Issuing Bank for any drawing
on a Letter of Credit is unconditional and, as of the date hereof, is not
subject to any offsets, defenses or counterclaims, (e) the Administrative Agent
and the Lenders have performed fully all of their respective obligations to the
Loan Parties under the Credit Agreement and the other Loan Documents, and (f) by
entering into this Amendment, the Lenders party hereto do not waive, modify or
release (except as specifically set forth herein) any term or condition of the
Credit Agreement or any of the other Loan Documents or any of their rights or
remedies under such Loan Documents or applicable law or any of the obligations
of the Loan Parties thereunder.

         1.2      Waiver.

         (a) The Borrower acknowledges the existence and continuation of the
Existing Defaults. The Required Lenders hereby waive the Existing Defaults
subject to the following terms and conditions: (i) the Leverage Ratio shall not
be in excess of 6.50 to 1.00 as of the fiscal quarters ending on June 30, 2001
and closest to September 30, 2001; (ii) the Consolidated Fixed

                                       2
<PAGE>

Charge Coverage Ratio (as defined prior to the effective date of this Amendment)
shall not be less than .92 to 1.00 as of the fiscal quarter ending on June 30,
2001 and shall not be less than 1.00 to 1.00 as of the fiscal quarter ending
closest to September 30, 2001; (iii) Consolidated EBITDA shall not be less than
$32,000,000 for the four fiscal quarter period ending on June 30, 2001 and shall
not be less than $5,750,000 for the one fiscal quarter period ending closest to
September 30, 2001; and (iv) the requirements set forth in Section 3.1 shall be
satisfied, or otherwise waived by the Required Lenders.

         (b) 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.

         The specific waiver set forth herein is a one-time waiver and shall be
effective only in this specific instance, and shall not obligate the Lenders to
waive any Default or Event of Default other than the Existing Defaults, now
existing or hereafter arising.

                                    SECTION 2
                         AMENDMENTS TO CREDIT AGREEMENT

         2.1      Existing Definitions.

         (a)      Applicable Rate. The pricing grid contained in the definition
of "Applicable Rate" set forth in Section 1.01 of the Credit Agreement is
amended and restated in its entirety to read as follows:

<TABLE>
<CAPTION>
                                                                     Commitment
                                                ABR     Eurodollar      Fee
  Pricing Level        Leverage Ratio:        Spread     Spread         Rate
  -------------        --------------         ------     ------         ----
<S>                <C>                        <C>       <C>          <C>
   Category I          Greater than or         3.25%     4.25%       0.750%
                           equal to
                          5.0 to 1.0
   Category II           Greater than or       3.00%     4.00%       0.750%
                             equal to
                          4.5 to 1.0 and
                       less than 5.0 to 1.0
   Category III          Greater than or       2.50%     3.50%       0.500%
                             equal to
                          4.0 to 1.0 and
                       less than 4.5 to 1.0
   Category            Less than 4.0 to 1.0    2.00%     3.00%       0.500%
      IV

</TABLE>

                                       3
<PAGE>

         (b)      Change of Control.  Clause (a)(i) of the definition of
"Change of Control" set forth in Section 1.01 of the Credit Agreement is amended
and restated in its entirety to read as follows:

                   (i) Investor or an entity controlled by Sponsor or Investor
         ceases to be the "beneficial owner" (as defined in Rule 13d-3 and 13d-5
         under the Securities Exchange Act), directly or indirectly, of at least
         51% of the capital stock or other equity interests of Holdings
         ordinarily having the right to vote at an election of directors;

         (c)      Consolidated EBITDA. The definition of "Consolidated EBITDA"
set forth in Section 1.01 of the Credit Agreement is amended and restated in its
entirety as follows:

                  "Consolidated EBITDA" means, for any period, Consolidated Net
         Income for such period, plus, without duplication and to the extent
         deducted from revenues in determining Net Income for such period, the
         sum of (a) the aggregate amount of Consolidated Interest Expense for
         such period, (b) the aggregate amount of letter of credit fees paid
         during such period, (c) the aggregate amount of income tax expense for
         such period, (d) all amounts attributable to depreciation, amortization
         and other non-cash charges or losses for such period, (e) (i) all fees,
         costs and expenses to be paid by the Loan Parties (including, but not
         limited to, the fees, costs and expenses to be reimbursed by the Loan
         Parties to the Administrative Agent and the Lenders) in connection with
         the negotiation, execution and delivery of Amendment No. 3 and the
         fees, costs and expenses of any consultants or advisors required by the
         Required Lenders to be engaged pursuant to the terms thereof and (ii)
         all fees, costs and expenses associated with the New Equity Issuance
         and Equity Commitment (including, but not limited to, legal fees) ((i)
         and (ii) collectively referred to as the "Amendment No. 3 Expenses");
         and (f) non-cash expenses resulting from the grant of stock options to
         any director, officer or employee of Holdings, the Borrower or any
         Subsidiary pursuant to a written plan or agreement, all as determined
         on a consolidated basis with respect to Holdings, the Borrower and the
         Subsidiaries in accordance with GAAP.

         (d)      Consolidated EBITDAR. The definition of "Consolidated EBITDAR"
set forth in Section 1.01 of the Credit Agreement is amended and restated in its
entirety to read as follows:

                  "Consolidated EBITDAR" means, for any period, the sum of (a)
         Consolidated EBITDA for such period plus (b) Consolidated Lease Expense
         for such period.

         (e)      Consolidated Fixed Charges. The definition of "Consolidated
Fixed Charges" set forth in Section 1.01 of the Credit Agreement is amended and
restated in its entirety to read as follows:

                  "Consolidated Fixed Charges" means, with respect to any
         period, the sum (without duplication) of (a) Consolidated Lease Expense
         (excluding interest expense, if any, associated with Capital Lease
         Obligations) for such period plus (b) Consolidated Interest Expense
         (excluding interest expense, if any, incurred as a result of the
         incurrence of Amendment No. 3 Expenses) for such period plus (c)
         scheduled principal payments of

                                       4
<PAGE>

         Indebtedness made by the Borrower or any Subsidiary to any person other
         than the Borrower or any wholly owned Subsidiary of the Borrower during
         such period plus (d) cash dividends paid by Holdings during such period
         (less the amount of any Indebtedness incurred by Holdings or any of its
         subsidiaries to fund such dividends) on the Preferred Stock after the
         fifth anniversary of the Effective Date as permitted under this
         Agreement.

         (f)      Consolidated Fixed Charge Coverage Ratio. The definition of
"Consolidated Fixed Charge Coverage Ratio" set forth in Section 1.01 of the
Credit Agreement is amended and restated in its entirety to read as follows:

                  "Consolidated Fixed Charge Coverage Ratio" means, with respect
         to any period, the ratio of (a) Consolidated EBITDAR for such period
         minus Capital Expenditures (excluding Capital Expenditures to the
         extent financed by third parties) made during such period to (b)
         Consolidated Fixed Charges for such period; provided that, for the
         purpose of calculating this definition, $5,000,000 shall be added to
         EBITDAR for each of the fiscal quarters ending September 30, 2001,
         December 31, 2001, March 31, 2002 and June 30, 2002.

         (g)      LIBO Rate. The definition of "LIBO Rate" set forth in Section
1.01 of the Credit Agreement is amended by adding the following sentence at the
end of such definition:

                  Notwithstanding anything to the contrary contained herein, at
no time shall the LIBO Rate equal an amount less than 2.50% per annum.

         (h)      Leverage Ratio. The definition of "Leverage Ratio" set forth
in Section 1.01 of the Credit Agreement is amended and restated in its entirety
to read as follows:

                  "Leverage Ratio" means, as of the last day of each fiscal
         quarter for the four quarter period ending on such date, the ratio of
         (a) Total Debt as of the last day of such period to (b) Consolidated
         EBITDA for such period, all as determined on a consolidated basis in
         accordance with GAAP.

         (i)      Prepayment Event. A new clause (c)(iv) is added to the
definition of "Prepayment Event" set forth in Section 1.01 of the Credit
Agreement to read as follows:

                  or (iv) the New Equity Issuance, any equity securities issued
         pursuant to the Equity Commitment or the contribution of any proceeds
         thereof to the Borrower;

         2.2      New Definitions. Section 1.01 of the Credit Agreement is
amended to add, in the appropriate alphabetical order, the following new
definitions:

                  "Amendment No. 3" means that certain Amendment No. 3 to Credit
         Agreement and Waiver dated as of November 14, 2001 among the Borrower,
         Holdings and the Lenders party thereto.

                                       5
<PAGE>

                  "Equity Commitment" means the commitment by one or more
         stockholders of Holdings (including LPA Investment) to purchase equity
         securities of Holdings in an aggregate amount equal to at least
         $10,750,000 in excess of the New Equity Issuance pursuant to the
         Securities Purchase Agreement and the other Transaction Documents.

                  "LPA Investment" means LPA Investment, LLC, a Delaware limited
         liability company.

                  "Morgan Guarantee" means the Guarantee issued by J.P. Morgan
         Partners (23A SBIC), LLC, a Delaware limited liability company, on
         November 15, 2001 in favor of the Lenders.

                  "New Equity Issuance" means the issuance by Holdings, in one
         or more issuances, of equity securities to one or more of its
         stockholders (including LPA Investment) in consideration of an
         aggregate amount of at least $4,250,000 pursuant to the Initial
         Closings (as defined in the Securities Purchase Agreement).

                  "Securities Purchase Agreement" means the Securities Purchase
         Agreement of even effective date with Amendment No. 3 among Holdings,
         LPA Investment and the other signatories thereto from time to time.

                  "Transaction Documents" has the meaning given to such term in
         the Securities Purchase Agreement.

         2.3      Default Rate of Interest. Section 2.13(c) of the Credit
Agreement is amended and restated in its entirety to read as follows:

                  (c) Notwithstanding the foregoing, upon the occurrence, and
         during the continuation of an Event of Default, the principal of and,
         to the extent permitted by law, interest on, the Loans and any other
         amounts owing hereunder or under the other Loan Documents shall bear
         interest, payable on demand, at a per annum rate equal to two percent
         (2%) plus the rate which would otherwise be applicable (or if no rate
         is applicable, then the rate applicable to ABR Revolving Loans plus two
         percent (2%) per annum).

         2.4      Equity Commitment. A new Section 5.16 is added to the Credit
Agreement to read as follows:

                  SECTION 5.16. The Borrower shall take such action as is
         necessary to maintain the Equity Commitment and to keep the Transaction
         Documents in full force and effect and enforce its rights thereunder.

         2.5      Indebtedness; Certain Equity Securities. Section 6.01(c) of
the Credit Agreement is amended and restated to read as follows:

                                       6

<PAGE>

         (c) Neither Holdings nor the Borrower will, nor will it permit any of
its Subsidiaries to, issue any preferred stock (other than (a) the currently
outstanding preferred stock of Holdings and the preferred stock of Holdings to
be issued in connection with the New Equity Issuance and the Equity Commitment
and (b) any preferred stock issued by Holdings which is not Disqualified Stock
(as defined in the Senior Unsecured Notes Indenture)) or become liable in
respect of any obligation (contingent or otherwise) to purchase, redeem, retire,
acquire or make any other payment in respect of any shares of capital stock of
Holdings, the Borrower or any Subsidiary or any option, warrant or other right
to acquire any such shares of capital stock.

         2.6      Acquisitions. Section 6.04(a)(ii) of the Credit Agreement is
amended and restated in its entirety to read as follows:

                  (ii)     with the prior written consent of the Required
         Lenders, Permitted Acquisitions;

         2.7      Asset Sales. Section 6.05(d) of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:

                  (d) with the prior written consent of the Required Lenders,
sales, transfers and dispositions of other assets (including, without
limitation, assets constituting Collateral) and are not otherwise permitted by
any other clause of this Section,

         2.8      Restricted Payments; Certain Payments of Indebtedness. Section
6.08(a)(v) of the Credit Agreement is amended and restated in its entirety to
read as follows:

                  (v) with the prior written consent of the Required Lenders,
         the proceeds of which shall be applied by Holdings to pay in cash
         scheduled dividends on the Preferred Stock in accordance with its
         terms, provided that such Restricted Payments shall not exceed in any
         quarterly period the amounts scheduled with respect to the Preferred
         Stock for such quarter.

         2.9      Amendment of Material Documents. Section 6.11 of the Credit
Agreement is amended and restated in its entirety to read as follows:

                  SECTION 6.11. Amendment of Material Documents. Except for
         amendments and modifications to the Certificate of Incorporation of
         Holdings in connection with the New Equity Issuance and the Transaction
         Documents (a) Holdings and the Borrower will not, and will not permit
         any Subsidiary to, amend, modify or waive any of its rights under (i)
         their respective certificates of incorporation, by-laws or other
         organizational documents, (ii) the Management Agreement, (iii) the
         Merger Agreement, (iv) the Certificate of Designations, (v) the Senior
         Unsecured Notes or the Senior Unsecured Notes Indenture or (vi) the
         Stockholders Agreement, in each case other than amendments,
         modifications or waivers that would not reasonably be expected to
         adversely affect the interests of the Lenders.

                                       7
<PAGE>

         2.10     Capital Expenditures. Section 6.12 of the Credit Agreement is
amended and restated in its entirety to read as follows:

                  SECTION 6.12. Capital Expenditures. The Borrower will not
         permit the aggregate amount of Capital Expenditures made by Holdings,
         the Borrower and their Subsidiaries in any four fiscal quarter period
         to exceed the sum of (a) the amount of depreciation of Holdings, the
         Borrower and their Subsidiaries on a consolidated basis (as determined
         in accordance with GAAP) during such period plus (b) 20% of
         Consolidated EBITDA for such period.

         2.11     Leverage Ratio. Section 6.13 of the Credit Agreement is
amended and restated in its entirety to read as follows:

                  SECTION 6.13.  Leverage Ratio.

                  (a) The Borrower will not permit the Leverage Ratio, as of the
         last day of any fiscal quarter ending closest to the date set forth
         below, to be in excess of the ratio set forth opposite such date:

<TABLE>
<CAPTION>
                   Quarter Ending Closest To:         Maximum Ratio
                   -------------------------          -------------
<S>                                                  <C>
                   December 31, 2001                  6.25 to 1.00
                   March 31, 2002                     6.00 to 1.00
                   June 30, 2002                      5.75 to 1.00
                   September 30, 2002                 5.75 to 1.00
                   December 31, 2002                  5.75 to 1.00
                   March 31, 2003                     5.375 to 1.00
                   June 30, 2003                      5.125 to 1.00
                   September 30, 2003                 4.85 to 1.00
                   December 31, 2003                  4.75 to 1.00
                   March 31, 2004                     4.50 to 1.00
                   June 30, 2004                      4.25 to 1.00
                   September 30, 2004                 4.00 to 1.00
                   December 31, 2004                  3.50 to 1.00
                   March 31, 2005 and thereafter      3.50 to 1.00
</TABLE>

         2.12     Consolidated Fixed Charge Coverage Ratio. Section 6.14 of the
Credit Agreement is amended and restated in its entirety to read as follows:

                  SECTION 6.14. Consolidated Fixed Charge Coverage Ratio. The
         Borrower will not permit the Consolidated Fixed Charge Coverage Ratio
         for any period set forth below to be less than the ratio set forth
         opposite such period:

<TABLE>
<CAPTION>
                   Period:                            Maximum Ratio
<S>                                                   <C>
                   For the two fiscal quarter period

</TABLE>

                                       8

<PAGE>

<TABLE>
<S>                                                            <C>
                   ending closest to
                   December 31, 2001                            1.00 to 1.0

                   For the three fiscal quarter
                   period ending closest to
                   March 31, 2002                               1.00 to 1.0

                   For the four fiscal quarter
                   period ending closest to
                   June 30, 2002 and the last day of
                   each calendar quarter thereafter
                   to and including March 31, 2003              1.00 to 1.0

                   For the four fiscal quarter period
                   ending closest to June 30, 2003
                   and the last day of each calendar
                   quarter thereafter to and including
                   March 31, 2004                               1.05 to 1.0

                   For the four fiscal quarter period
                   ending closest to June 30, 2004
                   and thereafter                              1.10 to 1.0
</TABLE>

         2.13     Minimum Consolidated EBITDA. Section 6.15 of the Credit
Agreement is amended and restated in its entirety to read as follows:

                  SECTION 6.15. Minimum Consolidated EBITDA. The Borrower will
         not permit Consolidated EBITDA for any period set forth below to be
         less than the amount set forth below opposite such period:

<TABLE>
<CAPTION>
                                                                Minimum
                                                                Consolidated
                       Period:                                  EBITDA

<S>                                                             <C>
                       For the two fiscal quarter period
                       ending closest to
                       December 31, 2001                        $12,250,000

                       For the three fiscal quarter
                       period ending closest to
                       March 31, 2002                           $24,500,000

                       For the four fiscal quarter
                       period ending closest to
                       June 30, 2000 and the last
</TABLE>

                                   9
<PAGE>
<TABLE>
<S>                                                             <C>
                       day of each calendar quarter
                       thereafter to and including
                       December 31, 2002                        $34,500,000

                       For the four fiscal quarter
                       period ending closest to
                       March 31, 2003 and for each
                       four fiscal quarter period ending
                       thereafter                               $37,000,000
</TABLE>

         2.14     Management Fees. A new Section 6.17 is added to the Credit
Agreement to read as follows:

                  SECTION 6.17 Management and Other Fees. Without the prior
         written consent of the Required Lenders, Holdings and the Borrower will
         not, nor will it permit any of its Subsidiaries to, pay or accrue any
         fees to the Sponsor or any of its Affiliates pursuant to any Management
         Agreement or otherwise; provided that the Sponsor may be reimbursed for
         reasonable out-of-pocket expenses actually incurred and paid by the
         Sponsor on behalf of Holdings, the Borrower and their Subsidiaries and
         which are customarily reimbursed in the financial advisory services
         industry (excluding, however, any fees and expenses incurred to perform
         any administrative or management functions which are typically
         performed by officers, directors and employees of companies similar to
         Holdings, the Borrower and its Subsidiaries).

         2.15     Equity Documents. A new Section 6.18 is added to the Credit
Agreement to read as follows:

                  SECTION 6.18 Equity Documents. The Borrower will not permit
         any of the Transaction Documents to be modified or amended without the
         prior written consent of the Required Lenders.

         2.16     Events of Default.

         (a)      Clause (e) of Article VII of the Credit Agreement is amended
and restated in its entirety to read as follows:

                  (e) any Loan Party shall fail to observe or perform any
         covenant or agreement contained in Section 5.01 (other than Section
         5.01(h)) and such failure shall continue unremedied for a period of
         five Business Days or any Loan Party shall fail to observe or perform
         any other covenant or agreement contained in any Loan Document (other
         than those specified in clause (a), (b), (c) or (d) of this Article),
         and such failure shall continue unremedied for a period of 30 days
         after written notice thereof is given from the Administrative Agent to
         the Borrower (which notice will be given at the request of any Lender);

                                       10
<PAGE>

         (b) Article VII of the Credit Agreement is amended by adding the word
         "or" at end of clause (n) of Article VII and adding a new clause (o) to
         read as follows:

                  (o) Holdings has not received proceeds from the Equity
         Commitment equal to at least $10,750,000 on or prior to May 14, 2002;
         provided, however, that notwithstanding anything to contrary contained
         herein, the occurrence of the default described in this clause (o)
         shall not entitle the Lenders to terminate the Commitments or declare
         the Loans then outstanding to be due and payable in whole or in part
         (except to the extent necessary to apply any payments made under the
         Morgan Guarantee to reduce the outstanding principal balance of the
         Term Loans, such payments to be applied in reverse order of maturity)
         unless the Lenders shall have first requested payment under the Morgan
         Guarantee, in writing, and the Lenders shall not have received full
         payment thereunder within 3 Business Days following such request;

         (c) The last paragraph of Article VII is hereby amended by replacing
         the phrase "the Administrative Agent may, and at the request of the
         Required Lenders shall," with the phrase "and at the direction of the
         Required Lenders the Administrative Agent shall,".

         2.17     Successors and Assigns. Section 9.04(b)(i) of the Credit
Agreement is amended to add the following clause to the end thereof:

                  provided, however, that the consent of the Borrower shall not
be required during the existence of an Event of Default,

         2.18     Amended Schedules. Schedules 1.01(a), 3.05, 3.06, 3.07, 3.12,
3.13, 6.01, 6.02, 6.09 and 6.10 to the Credit Agreement attached hereto as
Exhibit A have been delivered by the Borrower and will replace the corresponding
schedules in the Credit Agreement upon written approval of the Required Lenders.

                                    SECTION 3
                              CONDITIONS PRECEDENT

         3.1      Conditions Precedent. This Amendment shall not be effective
until the following conditions have been satisfied (or waived by the Required
Lenders):

                  (a)   Documentation. Receipt by the Administrative Agent of
         counterparts of this Amendment  executed by each of the Loan Parties
         and the Required Lenders.

                  (b)   Authority. Receipt by the Administrative Agent of a
         certificate of the secretary of each of the Borrower, Holdings and the
         Subsidiary Loan Parties certifying as to resolutions or authorization
         of the Board of Directors approving and adopting this Amendment and the
         transactions contemplated herein and authorizing the execution,
         delivery and performance hereof.

                                       11
<PAGE>

                  (c) Good Standing. Copies of certificates of good standing,
         existence or its equivalent with respect to each Loan Party certified
         as of a recent date by the appropriate Governmental Authority of the
         state or other jurisdiction of its formation and the state of its chief
         executive office and principal place of business.

                  (d) Incumbency. An incumbency certificate of each Loan Party
         and J.P. Morgan Partners (23A SBIC), LLC, a Delaware limited liability
         company (JPMP"), certified by a secretary of such Loan Party or JPMP,
         as applicable, to be true and correct as of the date hereof.

                  (e) Opinions. Receipt by the Administrative Agent of an
         opinion or opinions from counsel to the Loan Parties relating to this
         Amendment and the transactions contemplated herein, in form and
         substance satisfactory to the Administrative Agent, addressed to the
         Administrative Agent on behalf of the Lenders and dated as of the date
         hereof.

                  (f) Schedules to Loan Documents. Receipt by the Administrative
         Agent of (i) revised Schedules 1.01(a), 3.05, 3.06, 3.07, 3.12, 3.13,
         6.01, 6.02, 6.09 and 6.10 to the Credit Agreement, (ii) revised
         Schedules I and II to the Pledge Agreement and (iii) revised Schedules
         I, II, III, IV and V to the Security Agreement.

                  (g) Collateral. Receipt by the Administrative Agent of duly
         executed (i) Uniform Commercial Code financing statements (or
         amendments thereto), (ii) patent/ trademark/copyright filings, (iii)
         Mortgages (or amendments thereto) and (iv) such other documentation,
         policies or opinions with respect to the Collateral as may be
         reasonably requested on or prior to the date hereof by the Required
         Lenders in order to perfect and protect the Lenders' security interest
         in the Collateral.

                  (h) Fees and Expenses. The payment by the Borrower of (i) an
         amendment fee to each Lender who duly executes and delivers this
         Amendment on or before 12:00 p.m., Eastern Time, on November 15, 2001
         of fifty basis points (0.50%) of its aggregate Commitments and (ii) an
         arrangement fee to Highland Capital Management, L.P. in an amount equal
         to $300,000.

                  (i) Transaction Documents. Holdings shall have entered into
         documentation evidencing the Equity Commitment in an amount equal to at
         least $10,750,000 in the aggregate (to be used for general working
         capital and liquidity needs) in form and substance reasonably
         satisfactory to the Required Lenders. The Administrative Agent shall
         have received a copy, certified by an officer of Holdings as true and
         complete, of each Equity Commitment Document as originally executed and
         delivered, together with all exhibits and schedules thereto.

                  (j) Management Fees. The Sponsor shall have acknowledged and
         agreed in writing that it will not accept fees from the Borrower,
         Holdings or their Subsidiaries except as permitted pursuant to the
         terms of the new Section 6.17 to the Credit Agreement.

                                       12
<PAGE>
                  (k) New Equity Issuance. The transactions contemplated by the
         New Equity Issuance shall have been consummated by LPA Investment and
         Holdings shall have received, in immediately available funds from such
         investment by LPA Investment at least $3,400,000. The New Equity
         Issuance shall have been consummated on terms reasonably acceptable to
         the Required Lenders.

                  (l) Morgan Guarantee. JPMP shall have executed and delivered
         the Morgan  Guarantee,  in form and  substance satisfactory to the
         Required Lenders.

         3.2  Condition Subsequent.

                  (a) This Amendment shall be void ab initio and of no further
         force and effect if Holdings shall not have received, on or prior to
         the fortieth day following the effectiveness of this Amendment, an
         additional amount, in immediately available funds, from the proceeds of
         the New Entity Issuance which, when added to the amount received by
         Holdings pursuant to Section 3.1(k) of this Amendment, will equal at
         least $4,250,000.

                  (b) This Amendment shall be void ab initio and of no further
         force and effect if the Borrower shall not have paid prior to the later
         of (x) two Business Days following receipt by the Borrower of an
         invoice for payment and (y) November 19, 2002 (i) all out-of-pocket
         expenses incurred to date by the Administrative Agent in connection
         with the negotiation, preparation, execution and delivery of this
         Amendment and the other transactions contemplated herein, and in
         connection with the Credit Agreement including, without limitation, the
         legal fees and expenses of Moore & Van Allen, PLLC, counsel to the
         Administrative Agent, and (ii) all out-of-pocket expenses incurred to
         date by KZH - Highland 2 LLC, Pamco Cayman LTD and SRV - Highland, Inc.
         (together with any other Lender managed by or affiliated with Highland
         Capital Management, L.P., the "Highland Lenders") in connection with
         the negotiation, preparation, execution and delivery of this Amendment
         and the other transactions contemplated herein, including without
         limitation the legal fees and expenses of Haynes and Boone, L.L.P.

                                    SECTION 4
                                  MISCELLANEOUS

         4.1 Ratification of Credit Agreement. The terms "Credit Agreement" and
"Agreement" as used in each of the Loan Documents shall hereafter mean the
Credit Agreement as amended by this Amendment. Except as herein specifically
agreed, the Credit Agreement is hereby ratified and confirmed and shall remain
in full force and effect according to its terms.

         4.2 Authority/Enforceability. Each of the Loan Parties, the
Administrative Agent and the Lenders party hereto represents and warrants as
follows:

                                       13
<PAGE>

                  (a) It has taken all necessary action to authorize the
         execution, delivery and performance of this Amendment.

                  (b) This Amendment 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).

                  (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
         Amendment.

         4.3      Representation and Warranties.  Each of the Borrower and
Holdings represents and warrants to the Lenders that:

                  (a) the representations and warranties of the 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 that specifically relate
         to an earlier date;

                  (b) no event has occurred and is continuing which constitutes
         a Default or an Event of Default (other than as specifically waived
         hereby); and

                  (c) The Security Documents create a valid security interest
         in, and Lien upon, the Collateral.

         4.4 Financial Consultant; other Professionals. Upon the request of the
Required Lenders, the Administrative Agent shall retain a financial consultant,
attorneys or other professionals to advise the Lenders, such financial
consultant, attorneys or other professionals to be approved by the Required
Lenders. The Borrower acknowledges and agrees that, upon the request of the
Required Lenders, it will grant access to its senior officers and to its books
and records, during the normal business hours of the Borrower, to such financial
consultant and that it will be responsible for such financial consultant's fees
and reasonable expenses; provided that if no Default or Event of Default exists,
the Borrower shall not be responsible for fees and expenses of such financial
consultant in excess of $150,000 in the aggregate. If a Default or Event of
Default (other than the Existing Defaults) shall exist, it is understood and
agreed that the Borrower shall be responsible for all fees and expenses of such
financial consultant. Upon the request of the Required Lenders the Borrower will
forward $75,000 as an initial retainer to be used for the fees and expenses of
such financial consultant and that the Borrower will replenish such retainer
from time to time, as necessary, upon request of the Required Lenders. The
Borrower hereby agress to pay promptly upon demand all reasonable out-of-pocket
expenses incurred by any Highland Lender, including the reasonable fees and
expenses of counsel for the Highland Lenders, in connection with the
administration of the Loan Documents or any

                                       14
<PAGE>

amendments or modifications thereof and the enforcement or protection of its
rights in connection with the Loan Documents, including any such fees and
expenses incurred during any workout, restructuring or negotiations in respect
thereof. Notwithstanding anything to the contrary contained herein, the Highland
Lenders shall not be reimbursed for fees or expenses associated with the
administration of the Loan Documents to the extent such administrative services
were performed by, or are in the process of being performed by, the
Administrative Agent.

         4.5 General Release. In consideration of the Required Lenders entering
into this Amendment, the Loan Parties hereby release the Administrative Agent,
the Lenders, and the Administrative Agent's and the Lenders' respective
officers, employees, representatives, agents, counsel and directors from any and
all actions, causes of action, claims, demands, damages and liabilities of
whatever kind or nature, in law or in equity, now known or unknown, suspected or
unsuspected to the extent that any of the foregoing arises from any action or
failure to act under the Credit Agreement on or prior to the date hereof.

         4.6 Counterparts/Telecopy. This Amendment 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.

         4.7 Further Assurances. The Borrower agrees to promptly take such
action, upon the reasonable request of the Required Lenders, as is reasonably
necessary to carry out the intent of this Amendment, the Security Documents and
the Loan Documents, including, but not limited to, such actions as are necessary
to ensure that the Lenders have a perfected security interest in the Collateral
subject to no Liens other than the Liens permitted by Section 6.02 of the Credit
Agreement.

         4.8 GOVERNING LAW. THIS AMENDMENT 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 left blank]

                                       15
<PAGE>

                                 Signature Page
                 Amendment No. 3 to Credit Agreement and Waiver
                             La Petite Academy, Inc.

         IN WITNESS WHEREOF, the parties hereto have caused this Amendment 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/ Jeffrey Fletcher
                                   -----------------------------
                                   Name: Jeffrey Fletcher
                                   Title: Secretary and Chief Financial Officer

HOLDINGS:                       LPA HOLDING CORP.

                                By:   /s/ Jeffrey Fletcher
                                   -----------------------------
                                   Name: Jeffrey Fletcher
                                   Title:  Secretary and Chief Financial Officer

                                       16

<PAGE>

                                 Signature Page
                 Amendment No. 3 to Credit Agreement and Waiver
                             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
Amendment 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/ Jeffrey Fletcher
                                   -----------------------------
                                   Name:   Jeffrey Fletcher
                                   Title:  Secretary and Chief Financial Officer

                             LPA SERVICES, INC.

                             By:   /s/ Jeffrey Fletcher
                                   -----------------------------
                                   Name:   Jeffrey Fletcher
                                   Title:  Secretary and Chief Financial Officer

                              BRIGHT START, INC.

                              By:  /s/ Jeffrey Fletcher
                                   -----------------------------
                                   Name:   Jeffrey Fletcher
                                   Title:  Secretary and Chief Financial Officer

                                       17
<PAGE>

                                 Signature Page
                 Amendment No. 3 to Credit Agreement and Waiver
                             La Petite Academy, Inc.

LENDERS:                       BANK OF AMERICA, N.A. (formerly
                               NationsBank, N.A.)

                               By:   /s/ James W. Ford
                                  --------------------------------------
                                  Name:  James W. Ford
                                  Title: Managing Director

                               JPMORGAN CHASE BANK (formerly The Chase
                               Manhattan Bank)

                               By:   /s/ Michael Lister
                                  -----------------------------
                                  Name:  Michael Lister
                                  Title: Vice President

                               PB CAPITAL CORPORATION (formerly BHF
                               (USA) Capital Corporation)

                               By:   /s/ Steven Alexander
                                  -----------------------------
                                  Name:  Steven Alexander
                                  Title: Associate

                               MERCANTILE BANK NATIONAL
                               ASSOCIATION

                               By:   /s/
                                  --------------------------------------
                                  Name:
                                  Title:

                               ML CBO IV CAYMAN

                               By:   /s/ James Dondero
                                  -----------------------------
                                  Name:  James Dondero
                                  Title: President

                                       18
<PAGE>

                                 Signature Page
                 Amendment No. 3 to Credit Agreement and Waiver
                             La Petite Academy, Inc.

                               HIGHLAND LEGACY, LTD

                               By:   /s/ James Dondero
                                  -----------------------------
                                  Names: James Dondero
                                  Title: President

                               PAMCO CAYMAN LTD

                               By:  Highland Capital Management, L.P. as
                                    Collateral Manager

                               By:   /s/ James Dondero
                                  -----------------------------
                                  Names: James Dondero
                                  Title: President

                               KZH HIGHLAND-2 LLC

                               By:   /s/ Susan Lee
                                  --------------------------------------
                                  Names: Susan Lee
                                  Title: Authorized Agent

                                       19<PAGE>

                                                                    EXHIBIT 10.2

                                                  GUARANTEE dated as of November
                                        15, 2001 (this "Guarantee"), by J.P.
                                        MORGAN PARTNERS (23A SBIC), LLC, a
                                        Delaware limited liability company (the
                                        "Guarantor"), for the benefit of the
                                        Lenders (as defined in the Credit
                                        Agreement referred to below).

                  WHEREAS, LPA Holding Corp., a Delaware corporation
("Holdings"), and La Petite Academy, Inc., a Delaware corporation (the
"Borrower"), are party to the Credit Agreement dated as of May 11, 1998, as
amended or modified from time to time, including without limitation pursuant to
the hereinafter defined Amendment (the "Credit Agreement"), among Holdings, the
Borrower, the Lenders party thereto, Bank of America, N.A. (formerly
NationsBank, N.A.), as Administrative Agent (the "Administrative Agent"), and
Chase Bank of Texas, National Association.

                  WHEREAS, Holdings, the Borrower and the Required Lenders have
agreed to waive certain defaults under the Credit Agreement and amend certain
sections of the Credit Agreement pursuant to Amendment No. 3 to Credit Agreement
and Waiver dated as of November 15, 2001 (the "Amendment"), among Holdings, the
Borrower and the Required Lenders.

                  WHEREAS, the execution and delivery of this Guarantee by the
Guarantor is a condition precedent to the effectiveness of the waivers and
amendments set forth in the Amendment.

                  NOW THEREFORE, in consideration of the premises and the mutual
agreements contained herein and for other good and valuable consideration the
receipt and sufficiency of which are hereby acknowledged, the Guarantor hereby
agrees as set forth below.

         SECTION 2. DEFINED TERMS.

            (a) Capitalized terms used herein and not otherwise defined shall
have the respective meanings set forth in the Credit Agreement.

            (b) The following terms shall have the respective meanings assigned
below:

                   (i) "Equity Commitment Default" means the failure of Holdings
         to receive proceeds, in immediately available funds, from the Equity
         Commitment equal to at least $10,750,000 on or prior to May 14, 2002.

                   (ii) "Guaranteed Obligations" means an amount of Obligations
         equal to the difference between (x) $10,750,000 and (y) the aggregate
         amount of gross proceeds received by Holdings, in immediately available
         funds, from the Equity Commitment on or prior to the earlier to occur
         of (i) May 14, 2002 and (ii) the occurrence of any Event of Default
         (other than the Equity Commitment Default) and acceleration of the
         Obligations.

<PAGE>

                   (iii) "Obligations" means all obligations and indebtedness of
         Holdings, Borrower and the other Loan Parties to Administrative Agent
         or any Lender arising under the Credit Agreement and the other Loan
         Documents, whether now existing or hereafter arising, fixed on
         contingent, including, without limitation, the Loans and LC Exposure.

         SECTION 3. GUARANTEE.

            (a) The Guarantor unconditionally guarantees, as primary obligor and
not merely as a surety, the due and punctual payment of the Obligations;
provided, however, that the amount of Obligations guaranteed by the Guarantor
hereunder shall never exceed the Guaranteed Obligations. Upon the written the
request of the Required Lenders following the occurrence of either (i) the
Equity Commitment Default or (ii) any other Event of Default which results in
the acceleration of the Obligations prior to May 14, 2002, the Guarantor shall
pay the Guaranteed Obligations in full in cash within three Business Days
following such request for payment. Such payment shall be delivered to the
Administrative Agent for the benefit of the Lenders and shall be applied to the
Obligations in accordance with clause (o) of Article VII of the Credit
Agreement.

            (b) The Guarantor further agrees that its guarantee hereunder
constitutes a guarantee of payment when due and not of collection, and waives
any right to require that any resort be had by the Lenders to any other Person
or to any security held for payment of the Obligations.

         SECTION 4. OBLIGATIONS NOT WAIVED.

         To the fullest extent permitted by applicable law, the Guarantor waives
presentment to, demand of payment from and protest to the Loan Parties of any of
the Obligations. To the fullest extent permitted by applicable law, the
obligations of the Guarantor hereunder shall not be affected by (a) the failure
of the Lenders to assert any claim or demand or to enforce or exercise any right
or remedy against the Loan Parties or any other guarantor of the Obligations
under the provisions of the Credit Agreement, any other Loan Document or
otherwise or (b) any rescission, waiver, amendment or modification of, or any
release from any of the terms or provisions of, any Loan Document.

         SECTION 5. NO DISCHARGE OR DIMINISHMENT OF GUARANTEE.

         The obligations of the Guarantor hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason (other than the
indefeasible payment in full in cash of the Obligations or as otherwise provided
for herein), and shall not be subject to any defense or set-off, counterclaim,
recoupment or termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of the Guarantor hereunder shall
not be discharged or impaired or otherwise affected by the failure of any Lender
to assert any claim or demand or to enforce any remedy under the Credit
Agreement, any other Loan Document or any other agreement, by any waiver or
modification of any provision of any thereof, by any default, failure or delay,
willful or otherwise, in the performance of the Obligations, or by any other act
or omission that may or might in any manner or to any extent vary the risk of
the Guarantor or that

                                      -2-
<PAGE>
would otherwise operate as a discharge of the Guarantor as a matter of law or
equity (other than the indefeasible payment in full in cash of all the
Obligations).

         SECTION 6. DEFENSES OF THE LOAN PARTIES WAIVED.

         To the fullest extent permitted by applicable law, the Guarantor waives
any defense based on or arising out of any defense of the Loan Parties or the
unenforceability of the Obligations or any part thereof from any cause, other
than the final and indefeasible payment in full in cash of the Obligations.

         SECTION 7. AGREEMENT TO PAY; SUBROGATION.

         In furtherance of the foregoing and not in limitation of any other
right that the Lenders have at law or in equity against the Guarantor by virtue
hereof, the Guarantor hereby promises to and will forthwith pay, or cause to be
paid, to the Administrative Agent for the benefit of the Lenders in cash the
amount of the Guaranteed Obligations to the extent required by, and in the
manner set forth in Section 2(a) of this Guaranty. Upon payment by the Guarantor
of any sums to the Lenders as provided above, the Guarantor shall have no rights
against the Loan Parties arising as a result thereof by way of right of
subrogation, contribution, reimbursement, indemnity or otherwise prior to the
indefeasible payment in full in cash of all the Obligations. If any amount shall
erroneously be paid to the Guarantor on account of such subrogation,
contribution, reimbursement, indemnity or similar right, such amount shall be
held in trust for the benefit of the Lenders and shall forthwith be turned over
to such Person as the Required Lenders shall designate in the exact form
received by the Guarantor (duly endorsed by the Guarantor to such designated
Person, if required) to be credited against the payment of the Obligations,
whether matured or unmatured, in accordance with the terms of the Credit
Agreement.

         SECTION 8. TERMINATION.

         This Guarantee shall automatically terminate without further action of
the Guarantor or the Lenders upon the earlier of (x) provided no Event of
Default (including, without limitation, the Equity Commitment Default) exists
and the Lenders have not accelerated the repayment of the Loans, the time at
which Holdings shall have received proceeds from the Equity Commitment equal to
at least $10,750,000, (y) full and final payment in cash of the Guaranteed
Obligations by the Guarantor to the Lenders and (z) termination of the Credit
Agreement and all Commitments thereunder in accordance with the terms thereof
and the final and indefeasible payment in cash of the Obligations (other than
contingent obligations not yet due and indemnity obligations for claims not
made).

         SECTION 9. ASSIGNMENTS; SEVERAL AGREEMENTS.

         Whenever in this Guarantee any of the parties hereto is referred to,
such reference shall be deemed to include the successors and permitted assigns
of such party; and all covenants, promises and agreements by or on behalf of the
Guarantor or the Lenders that are contained in this Guarantee shall bind and
inure to the benefit of each party hereto and their respective successors and
permitted assigns, except that the Guarantor shall not have the right to assign
its rights or obligations hereunder without the prior written consent of the
Required Lenders.

                                      -3-
<PAGE>

         SECTION 10. WAIVERS; AMENDMENT.

         (a) No failure or delay of the Lenders in exercising any power or right
in this Guarantee shall operate as a waiver hereof or thereof, nor shall any
single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such right or power, preclude any other or
further exercise of any other right or power. The rights and remedies of the
Lenders hereunder and under the Loan Documents are cumulative and are not
exclusive of any rights or remedies they would otherwise have. No notice or
demand on the Guarantor in any case shall entitle the Guarantor to any other
notice or further notice or demand in similar or other circumstances.

         (b) No provision hereof may be waived, amended or modified except
pursuant to a written agreement entered into between the Guarantor and the
Required Lenders.

         SECTION 11. GOVERNING LAW.

         ALL QUESTIONS CONCERNING THE CONSTRUCTION, INTERPRETATION AND VALIDITY
OF THIS GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
DOMESTIC LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ANY CHOICE OR
CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF NEW YORK OR ANY OTHER
JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION
OTHER THAN THE STATE OF NEW YORK.

         SECTION 12. NOTICES.

         All notices or other communications pursuant to this Guarantee shall be
in writing and shall be deemed to be sufficient if delivered, in accordance with
Section 9.01 of the Credit Agreement, to the parties at the following addresses
(or at such other address for a party as shall be specified by like notice):

                  (i)   if to the Guarantor, to:

                        J.P. Morgan Partners (23A SBIC), LLC
                        c/o J.P. Morgan Partners, LLC
                        1221 Avenue of the Americas, 40th Floor
                        New York, New York 10020
                        Attention: Stephen Murray
                                   Kevin O'Brien
                        Facsimile: 212-899-3401
                        Telephone: 212-899-3400

with a copy to:

                        O'Sullivan LLP
                        30 Rockefeller Plaza, 24th Floor
                        New York, New York 10112
                        Attention: Frederick M. Bachman

                                      -4-
<PAGE>

                        Facsimile: 212-728-5950
                        Telephone: 212-408-2400; and

                  (ii) if to any Lender, to its address for notices provided in
         Section 9.01 of the Credit Agreement.

         SECTION 13. SEVERABILITY.

         Whenever possible, each provision of this Guarantee will be interpreted
in such manner as to be effective and valid under applicable law, but if any
provision of this Guarantee is held to be invalid, illegal or unenforceable in
any respect under any applicable law in any jurisdiction, such invalidity,
illegality or unenforceability will not affect any other provision or any other
jurisdiction, and such invalid, void or otherwise unenforceable provisions shall
be null and void. It is the intent of the parties, however, that any invalid,
void or otherwise unenforceable provisions be automatically replaced by other
provisions which are as similar as possible in terms to such invalid, void or
otherwise unenforceable provisions but are valid and enforceable to the fullest
extent permitted by applicable law.

         SECTION 14. FACSIMILE EXECUTION.

         Any counterpart or other signature to this Guarantee that is delivered
by facsimile shall be deemed for all purposes as constituting good and valid
execution and delivery by such party of this Guarantee.

         SECTION 15. HEADINGS.

         Section headings used herein are for convenience of reference only and
are not to affect the construction of, or to be taken into consideration in
interpreting, this Guarantee.

                                     *******

                                      -5-
<PAGE>

IN WITNESS WHEREOF, the undersigned has duly executed this Guarantee as of the
day and year first above written.

                                    J.P. MORGAN PARTNERS (23A SBIC), LLC

                                    By: J.P. Morgan Partners (23A SBIC Manager),
                                        Inc., its Managing Member

                                    By:   /s/ Eric Wilkinson
                                         -----------------------------
                                         Name:  Eric Wilkinson
                                         Title: Managing Director

                                      -6-

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