Exhibit 10.1
EXECUTION VERSION
FORBEARANCE AGREEMENT
This FORBEARANCE AGREEMENT , is made and
entered into as of April 15, 2008 (this “ Forbearance
Agreement ”), by and among (a) the lenders
identified on the signature pages hereof (such lenders, such
lenders together with the other financial institutions party to the
Credit Agreement referred to below and each of their respective
successors and permitted assigns, are referred to hereinafter each
individually as, a “ Lender ” and collectively
as, the “ Lenders ”), (b) General Electric
Capital Corporation (“ GE Capital ”), as US
administrative agent for the Lenders and Issuing Banks (as defined
in the Credit Agreement (as defined below)) (“ US
Administrative Agent ”) and GE Canada Finance Holding
Company (“ GE Canada ”), as Canadian
Administrative Agent for the Lenders and Issuing Banks (“
Canadian Administrative Agent ”, and, together with
the US Administrative Agent, the “ Administrative
Agents ”), and (c) Linens ‘n Things, Inc.
(“ LNT ”) and Linens ‘N Things,
Center, Inc. (“ LNT Center ” and, together
with LNT, the “ US Borrowers ”, and each
individually, a “ US Borrower ”), Linens
‘N Things Canada Corp. (the “ Canadian Borrower
”, and, together with the US Borrowers, the “
Borrowers ”), Linens Holding Co. (“
Holdings ”), and the Subsidiary Guarantors (as defined
in the Credit Agreement (as defined below)). All capitalized
terms used herein without definition shall have the same meanings
herein as in the Credit Agreement (as defined below).
WHEREAS , the
Borrowers, Holdings, the Subsidiary Guarantors, the Lenders, the
Issuing Banks and the Administrative Agents are party to that
certain Credit Agreement, dated as of October 24, 2007 (as
amended, restated, amended and restated, supplemented, modified and
otherwise in effect from time to time, the “ Credit
Agreement ”), pursuant to which the Lenders, upon the
terms and conditions set forth therein, agreed to make certain
financial accommodations for the benefit of the Borrowers;
WHEREAS , the
Borrowers have informed the Administrative Agents and the Lenders
that on April 15, 2008, the Borrowers failed to make the
interest payment due on such date under the Senior Notes (such
circumstances, excluding any further events or actions, the “
Missed Payment ”);
WHEREAS , each of
the Borrowers acknowledges that the Missed Payment constitutes a
Default (the “ Specified Default ”) under the
Credit Agreement;
WHEREAS , each of
the Borrowers acknowledges and agrees that the Specified Default
has occurred and is continuing as of the date hereof, and has not
been cured or waived;
WHEREAS , the
Administrative Agents and Lenders have not expressly or impliedly
waived the Specified Default, and as a result of the occurrence of
the Specified Default, in the absence of an agreement to the
contrary, the Administrative Agents and Lenders have the right,
among other things, to determine not to make any Credit Extensions
under Section 2.02 or issue Letters of Credit under
Section 2.18 of the Credit Agreement;
WHEREAS , at the
request of the Borrowers, the Administrative Agents and the
undersigned Lenders have agreed to forbear, for a limited period,
(a) from exercising their rights and remedies under the Credit
Agreement and the Loan Documents relating to the Specified Default
and (b) continue to make Credit Extensions, but only on the
terms and conditions set forth herein; and
WHEREAS , this
Forbearance Agreement constitutes a Loan Document and these
Recitals shall be construed as a part of this Forbearance
Agreement.
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 is hereby acknowledged, the parties hereto
agree as follows:
1.
Forbearance
Agreement . Subject to the terms, and in
consideration of and reliance upon, the agreements of the Borrowers
and the Guarantors contained herein, the Administrative Agents and
the undersigned Lenders hereby agree to forbear from
(i) exercising their rights and remedies relating to the
Specified Default and (ii) exercising their right to determine
not to make any Credit Extension based on the existence of the
Specified Default, in each case, during (but only during) the
period (the “ Forbearance Period ”) commencing
as of the date hereof and until that date (the “
Forbearance Termination Date ”) which is the earliest
to occur of (a) May 13, 2008, (b) the occurrence of
any other Default or Event of Default, other than the Specified
Default, (c) the failure after the date hereof of the
Borrowers, any Guarantor or any of their respective Subsidiaries,
to comply with any of the terms of this Forbearance Agreement,
(d) the date that the Borrowers, any Guarantor or any of their
respective Subsidiaries, or any affiliate of the Borrowers, any
Guarantor or any of their respective Subsidiaries, or any person or
entity claiming by or through either the Borrowers, any Guarantor
or any of their respective Subsidiaries joins in, assists,
cooperates or participates as an adverse party or adverse witness
in any suit or other proceeding against any Lender, the
Administrative Agents or any affiliate of any of them, relating to
the Obligations or any of the transactions contemplated by the
Credit Agreement, the other Loan Documents, this Forbearance
Agreement or any other documents, agreements or instruments
executed in connection with this Forbearance Agreement and
(e) the date on which Excess Availability is less than
$50,000,000. Such forbearance shall automatically, and
without action, notice, demand or any other occurrence, expire on
and as of the Forbearance Termination Date. Except as
expressly provided above in this Section 1 , each of
the Lenders and the Administrative Agents reserves the right to
exercise all of its rights and remedies under the Credit Agreement
and the other Loan Documents. Upon the Forbearance
Termination Date, the Lenders and the Administrative Agents shall
be free in their sole and absolute discretion to proceed to enforce
any or all of their rights and remedies under or in respect of the
Credit Agreement and the other Loan Documents and applicable law,
including without limitation, those credit termination,
acceleration, enforcement and other rights and remedies arising by
virtue of the occurrence of the Specified Default and each of the
Borrowers and Guarantors hereby waives notice thereof.
2.
Other Defaults . The
forbearance set forth in Section 1 shall apply only to
the Specified Default. No forbearance with respect to any
other Default or Event of Default, whether presently existing or
hereafter arising, is granted hereby.
3.
Ratification of Existing
Agreements . Each Loan Party, individually and on
behalf of its respective Subsidiaries, hereby adopts again,
ratifies and confirms in all respects all of the Obligations, all
of its respective obligations to the Lenders and the Administrative
Agents arising under the Credit Agreement, the Guarantees, the
Security Documents, the other Loan Documents and all of its
respective obligations to the Lenders and the Administrative Agents
arising under any other instrument or agreement creating,
evidencing or securing any of the Obligations. Each Loan
Party, individually and on behalf of its respective Subsidiaries,
acknowledges the validity of the liens granted in favor of the
Administrative Agents, for the benefit of the Secured Parties,
pursuant to the Security Documents and the other Loan
Documents.
4.
Representations and
Warranties . Each Loan Party, individually and on
behalf of its respective Subsidiaries, hereby represents and
warrants to the Lenders and the Administrative Agents as
follows:
2
(a)
The execution and delivery by such Person of this Forbearance
Agreement and the performance by such Person of its respective
obligations and agreements under this Forbearance Agreement are
within the corporate authority of such Person, have been duly
authorized by all necessary corporate proceedings on behalf of such
Person, and do not and will not contravene any provision of law,
statute, rule or regulation to which such Person is subject or
its respective charter, other incorporation papers, by-laws or any
stock provision or any amendment thereof or of any agreement or
other instrument binding upon such Person.
(b)
Each of this Forbearance Agreement, the Credit Agreement and the
other Loan Documents to which such Person is a party constitutes
the legal, valid and binding obligation of such Person, enforceable
in accordance with their respective terms, except as limited by
bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or affecting generally the enforcement of
creditors’ rights.
(c)
No approval or consent of, or filing with, any governmental agency
or authority is required to make valid and legally binding the
execution, delivery or performance by such Person of this
Forbearance Agreement.
(d)
The representations and warranties contained in Article III of
the Credit Agreement, the representations and warranties contained
in the other Loan Documents or in any other document or instrument
delivered pursuant to or in connection with the Credit Agreement
are true and correct at and as of the date made and as of the date
hereof, except to the extent of changes resulting from transactions
contemplated or permitted by the Credit Agreement, the other Loan
Documents, this Forbearance Agreement and changes occurring in the
ord
|
