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exv4w2

 

Exhibit 4.2

SEVENTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

     THIS SEVENTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT, dated as
of January 20, 2004 (this “Amendment”), is by and between CHILDTIME CHILDCARE,
INC., an Illinois corporation (the “Company”), and BANK ONE, NA, with its main
office in Chicago, Illinois, and successor by merger to Bank One, Michigan, a
Michigan banking corporation (the “Bank”).

INTRODUCTION

     A.     The Company and the Bank have entered into an Amended and Restated
Credit Agreement dated as of January 31, 2002, as amended by the First
Amendment to Amended and Restated Credit Agreement dated as of April 1, 2002,
the Second Amendment to Amended and Restated Credit Agreement dated as of July
19, 2002, the Third Amendment to Amended and Restated Credit Agreement dated as
of February 14, 2003, the Fourth Amendment to Amended and Restated Credit
Agreement dated as of June 25, 2003, the Fifth Amendment to Amended and
Restated Credit Agreement dated as of November 19, 2003, and the Sixth
Amendment to Amended and Restated Credit Agreement dated as of December 29,
2003 (the “Credit Agreement”).

     B.     The Company has requested the Bank to modify the Credit Agreement in
certain respects, and the Bank is willing to so amend the Credit Agreement on
the terms and conditions set forth in this Amendment.

     NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein and in the Credit Agreement contained, the parties hereto
agree as follows:

ARTICLE 1. AMENDMENT TO CREDIT AGREEMENT

     Effective the date (the “Amendment Date”) the conditions precedent set
forth in Article 3 are satisfied, the Credit Agreement hereby is amended as
follows:

          1.1 Clause (iv) of Section 5.2(e) (relabeled as such pursuant to the
Second Amendment referenced above) is relabeled as clause “(v)”, and the
following new clause (iv) is inserted into Section 5.2(e):

		
	 	          (iv)    Rental obligations under, and contingent obligations in
respect of guaranties of, leases for real property sold by the
Company pursuant to sale/leaseback transactions approved by the
Bank in connection with sales of childcare centers consented to by
the Bank under Section
5.2(h)(ii) and with respect to which all conditions of such
consents have been satisfied; and

 

 

ARTICLE 2. REPRESENTATIONS AND WARRANTIES

          In order to induce the Bank to enter into this Amendment, the Company
represents and warrants that:

          2.1 The execution, delivery and performance by the Company of this
Amendment are within its corporate powers, have been duly authorized by all
necessary corporate action and are not in contravention of any law, rule or
regulation, or any judgment, decree, writ, injunction, order or award of any
arbitrator, court or governmental authority, or of the terms of the Company’s
charter or by-laws, or of any contract or undertaking to which the Company is a
party or by which the Company or its property is or may be bound or affected.

          2.2 This Amendment is a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms.

          2.3 No consent, approval or authorization of or declaration, registration
or filing with any governmental authority or any nongovernmental person or
entity, including without limitation any creditor or stockholder of the
Company, is required on the part of the Company in connection with the
execution, delivery and performance of this Amendment or the transactions
contemplated hereby or as a condition to the legality, validity or
enforceability of this Amendment.

          2.4 After giving effect to this Amendment, the representations and
warranties contained in Article IV of the Credit Agreement and in the Loan
Documents are true on and as of the date hereof with the same force and effect
as if made on and as of the date hereof and no Default or Event of Default has
occurred and is continuing; provided that such representations and warranties
contained in Section 4.6 of the Credit Agreement shall be deemed made with
respect to the most recent fiscal year-end and interim financial statements,
respectively, of the Parent Guarantor and its Subsidiaries delivered pursuant
to Section 5.1(d) of the Credit Agreement.

ARTICLE 3. CONDITIONS PRECEDENT

          The amendment set forth in Article 1 of this Amendment shall not become
effective until each of the following has been satisfied:

          3.1 This Amendment shall have been executed by a duly authorized officer
on behalf of the Company, and the acknowledgements at the end of this Amendment
shall have been executed by a duly authorized officer on behalf of each of the
Guarantors, in the respective spaces so provided, and this Amendment shall have
been delivered to the Bank.

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          3.2 Such other documents, and evidence of completion of such other
matters, as the Bank may reasonably request shall have been duly executed, if
applicable, and delivered to the Bank.

ARTICLE 4. CONSENT TO SALE/LEASEBACKS

     The Company has informed the Bank that the Company desires to sell the
thirteen (13) childcare centers identified below or as otherwise are identified
to the Bank and approved by the Bank in its sole discretion (the “Subject
Centers”) as contemplated by Section 5.2(h)(ii) of the Credit Agreement,
pursuant to agreements in the form of the Agreement for Purchase and Sale of
Real Estate provided to the Bank’s counsel on January 14, 2004 via email from
the Chief Financial Officer of the Company, which agreements provide for sale
and leaseback of the Subject Centers (the “Sale/Leasebacks”), and which
childcare centers are encumbered by Mortgages in favor of the Bank. The
Company has requested the Bank to consent to the Sale/Leasebacks and release
the Mortgages on the Subject Centers.

	 	 	 	 	 
	The Subject Centers are:	 	Accepted Value:
	2839 Villareal Drive, Orange, CA
	 	$	930,000	 
	9861 Yorktown Avenue, Huntington Beach, CA
	 	$	1,000,000	 
	2091 Sierra Avenue, Clovis, CA
	 	$	625,000	 
	14700 Perris Avenue, Moreno Valley, CA
	 	$	760,000	 
	9950 St. Augustine Road, Jacksonville, FL
	 	$	750,000	 
	2145 Eastwood Avenue, Akron, OH
	 	$	500,000	 
	5959 24 Mile Road, Shelby Twp., MI
	 	$	773,000	 
	1506 Kempsville Road, Virginia Beach, VA
	 	$	800,000	 
	6048 Providence Road, Virginia Beach, VA
	 	$	800,000	 
	1431 Eden Way North, Chesapeake, VA
	 	$	790,000	 
	1220 Alverser Drive, Midlothian, VA
	 	$	850,000	 
	5050 Warner Road, Phoenix, AZ
	 	$	650,000	 
	24590 La Plata Drive, Laguna Niguel, CA
	 	$	900,000	 

     The Bank hereby consents to the Sale/Leasebacks and agrees to release its
Mortgages on the Subject Centers, subject to the satisfaction of the following
conditions:

     (i)  the terms and provisions of the lease agreements for the
Sale/Leasebacks shall be acceptable to the Bank;

     (iii)  concurrently with the closing of each of the Sale/Leasebacks, the
Company shall prepay the Loans in an aggregate principal amount of not less
than an amount acceptable to the Bank in its sole discretion, and in connection
with each such prepayment the Commitment shall be deemed permanently reduced by
an amount not less than 40% of the “Accepted Value” of each related Subject
Center as set forth above or as otherwise proposed by the Company and accepted
by the Bank in its sole discretion; provided that for administrative
convenience such

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ARTICLE 4. KNOWN DEFAULTS WAIVER

Commitment reductions shall take place at such time and times as the aggregate
amount of such values has reached an amount acceptable to the Bank;

     (v)  all conditions precedent set forth in Article 3 shall have been
satisfied.

     The Company and the Guarantors acknowledge and agree that the consent
provided hereby is a limited consent, limited to the specified Sale/Leasebacks
described above and subject to the conditions described herein. Such limited
consent (a) shall not be deemed a consent to the sale of any other childcare
centers owned by the Company or any other action or omission by the Company or
any of the Guarantors, (b) shall not be deemed a waiver of any term, covenant
or agreement of the Credit Agreement or any other Loan Document, and (c) shall
not be deemed to prejudice any present or future right or rights which the Bank
now has or may have thereunder.

ARTICLE 5. MISCELLANEOUS

          5.1 If the Company shall fail to perform or observe any term, covenant or
agreement in this Amendment, or any representation or warranty made by the
Company in this Amendment shall prove to have been incorrect in any material
respect when made, such occurrence shall be deemed to constitute an Event of
Default.

          5.2 All references to the Credit Agreement in any other document,
instrument or certificate referred to in the Credit Agreement or delivered in
connection therewith or pursuant thereto hereafter shall be deemed references
to the Credit Agreement, as amended hereby

          5.3 The Company represents and warrants that it is aware of no claims or
causes of action against the Bank or any of its officers, directors, employees
or agents. Notwithstanding such representation and warranty, and as further
consideration for the agreements set forth in this Amendment, each of the
Company and the Guarantors, for itself and its successors and assigns, releases
the Bank, and its officers, directors, employees, agents, attorneys,
affiliates, subsidiaries, and successors and assigns, from any liability,
claim, right or cause of action which now exists or hereafter arises, whether
known or unknown, arising from or in any way related to facts in existence as
of the date hereof.

          5.4 Each party hereto, after consulting or having had the opportunity to
consult with counsel, knowingly, voluntarily, and intentionally waives any
right any of them may have to a trial by jury in any litigation based upon or
arising out of this Amendment, or any agreement referenced herein or other
related instrument or agreement, or any of the transactions contemplated by
this Amendment, or any course of conduct, dealing, statements (whether oral or
written) or actions of any of them. None of the parties hereto shall seek to
consolidate, by counterclaim or otherwise, any such action in which a jury
trial has been waived with any other action in which a jury trial cannot be or
has not been waived. These provisions shall not be deemed to have been
modified in any respect or relinquished by any party hereto except by a written
instrument executed by all of them.

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          5.5 This Amendment and the other agreements and documents executed in
connection with this Amendment constitute the entire understanding of the
parties with respect to the subject matter hereof. This Amendment is binding
on the parties hereto and their respective successors and assigns, and shall
inure to the benefit of the parties hereto and their respective successors and
assigns. If any of the provisions of this Amendment are in conflict with any
applicable statute or rule or law or otherwise unenforceable, such offending
provisions shall be null and void only to the extent of such conflict or
unenforceability, but shall be deemed separate from and shall not invalidate
any other provision of this Amendment.

          5.6 No course of dealing on the part of the Bank, nor any delay or failure
on the part of the Bank in exercising any right, power or privilege hereunder
shall operate as a waiver of such right, power or privilege or otherwise
prejudice the Bank’s rights and remedies hereunder or under the Credit
Agreement, the Note, any Security Document, any other Loan Document or any
other agreement or instrument of the Company or any of the Guarantors with or
in favor of the Bank; nor shall any single or partial exercise thereof preclude
any further exercise thereof or the exercise of any other right, power or
privilege. No right or remedy conferred upon or reserved to the Bank under
this Amendment or under the Credit Agreement, the Note, any Security Document,
any other Loan Document or any other agreement or instrument of the Company or
any Guarantor with or in favor of the Bank is intended to be exclusive of any
other right or remedy, and every right and remedy shall be cumulative and in
addition to every other right or remedy granted thereunder or now or hereafter
existing under any applicable law. Every right and remedy granted by this
Amendment or under the Credit Agreement, the Note, any Security Document, any
other Loan Document or any other agreement or instrument of the Company or any
Guarantor with or in favor of the Bank or by applicable law to the Bank may be
exercised from time to time and as often as may be deemed expedient by the
Bank.

          5.7 The Loan Documents and, subject to the amendments herein provided, the
Credit Agreement shall in all respects continue in full force and effect.

          5.8 Capitalized terms used but not defined herein shall have the
respective meanings ascribed thereto in the Credit Agreement.

          5.9 This Amendment shall be governed by and construed in accordance with
the laws of the State of Michigan.

          5.10 The Company agrees to pay the reasonable fees and expenses of
Dickinson Wright PLLC, counsel for the Bank, in connection with the negotiation
and preparation of this Amendment and the consummation of the transactions
contemplated hereby, and in connection with advising the Bank as to its rights
and responsibilities with respect thereto.

          5.11 This Amendment may be executed upon any number of counterparts with
the same effect as if the signatures thereto were upon the same instrument.

[The remainder of this page intentionally left blank.]

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     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered as of the day and year first-above written.

	 	 	 
	 	
CHILDTIME CHILDCARE, INC.
	 	 	
 
	 	By:	
/s/ Frank Jerneycic
	 	 	

	 	 	
 
	 	
Its Vice President and Chief Financial
Officer
	 	 	
 
	 	
BANK ONE, NA
	 	 	
 
	 	By:	
/s/ Richard C. Ellis
	 	 	

	 	 	
 
	 	
Its First Vice President

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GUARANTOR ACKNOWLEDGEMENT

     Each of the undersigned hereby acknowledges that it has reviewed and fully
consents to the foregoing Seventh Amendment to Amended and Restated Credit
Agreement (the “Amendment”), that the Guaranty Agreements and all other Loan
Documents made by each of the undersigned in favor of the Bank continue in full
force and effect and each of the undersigned acknowledges and agrees that it
has no defenses, counterclaims or offsets with respect thereto. All references
to the Credit Agreement in the Guaranty Agreements and in all other Loan
Documents or any other document, instrument or certificate referred to in the
Credit Agreement or delivered in connection therewith or pursuant thereto,
hereafter shall be deemed references to the Credit Agreement, as amended by the
Amendment. Except as otherwise expressly set forth herein, capitalized terms
used but not defined herein shall have the respective meanings ascribed thereto
in the Amendment or the Credit Agreement, as the case may be.

	 	 	 
	 	
CHILDTIME LEARNING CENTERS, INC.
	 	 	
 
	 	By:	
/s/ Frank Jerneycic
	 	 	

	 	 	
 
	 	
Its Vice President and Chief Financial
Officer
	 	 	
 
	 	
CHILDTIME CHILDCARE-PMC, INC.
	 	 	
 
	 	By:	
/s/ Frank Jerneycic
	 	 	

	 	 	
 
	 	
Its Vice President and Chief Financial
Officer
	 	 	
 
	 	
CHILDTIME CHILDCARE-MICHIGAN, INC.
	 	 	
 
	 	By:	
/s/ Frank Jerneycic
	 	 	

	 	 	
 
	 	
Its Vice President and Chief Financial
Officer
	 	 	
 
	 	
TUTOR TIME LEARNING CENTERS, LLC

(formerly known as TT Acquisition LLC)
	 	 	
 
	 	By:	
/s/ Frank Jerneycic
	 	 	

	 	 	
 
	 	
Its Vice President and Chief Financial
Officer

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TUTOR TIME INTERNATIONAL LEARNING

CENTERS, INC. (formerly known as CTT

Acquisition Corp.)
	 	 	
 
	 	By:	
/s/ Frank Jerneycic
	 	 	

	 	 	
 
	 	
Its Vice President and Chief Financial
Officer

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