Exhibit 10.1
AMENDMENT NO. 1 AND WAIVER TO
CREDIT AGREEMENT
This AMENDMENT NO. 1 AND WAIVER
TO CREDIT AGREEMENT dated as of July 25, 2008 (this
“ Amendment ”), by and among LINENS ‘N
THINGS, INC., a Delaware corporation (“ LNT ”)
and LINENS ‘N THINGS CENTER, INC., a California corporation
(“ LNT Center ” and together with LNT the
“ US Borrowers ” and each individually a “
US Borrower ”), LINENS ‘N THINGS CANADA CORP., a
Nova Scotia unlimited company (“ Canadian Borrower
” and together with US Borrowers, the “
Borrowers ”); LINENS HOLDING CO., a Delaware
corporation (“ Holdings ”); the Subsidiary
Guarantors; the Lenders; GE CAPITAL MARKETS, INC. (“
GECM ”), as lead arranger (in such capacity, “
Arranger ”); GENERAL ELECTRIC CAPITAL CORPORATION
(“ GE Capital ”), as US swingline lender (in
such capacity, “ US Swingline Lender ”); GENERAL
ELECTRIC CAPITAL CORPORATION, as US administrative agent (in such
capacity, “ US Administrative Agent ”) for the
Lenders and the Issuing Banks and as US collateral agent (in such
capacity, the “ US Collateral Agent ”) for the
Secured Parties; GE CANADA FINANCE HOLDING COMPANY (“ GE
CANADA ”), as Canadian collateral agent (in such
capacity, the “ Canadian Collateral Agent ”; the
US Collateral Agents and the Canadian Collateral Agents are
collectively referred to herein as the “ Collateral
Agents ”) for the Secured Parties; GE CANADA, as Canadian
administrative agent (in such capacity, the “ Canadian
Administrative Agent ” together with the US
Administrative Agents, the “ Administrative Agents
”) for the Lenders and the Issuing Banks, and GE CANADA, as
Canadian swingline lender (in such capacity, “ Canadian
Swingline Lender ” and together with US Swingline Lender,
the “ Swingline Lenders ”), amends certain
provisions of the Senior Secured, Super-Priority
Debtor-in-Possession and Exit Option Credit Agreement, dated as of
May 5, 2008, among the US Borrowers, each as a debtor and a
debtor-in-possession, the Canadian Borrower, the Lenders party
thereto, the Guarantors party thereto, the Arranger and the Agents
(as amended, restated, replaced, supplemented or otherwise modified
from time to time, the “ Credit Agreement
”). Capitalized terms used herein without definition
shall have the meanings assigned to such terms in the Credit
Agreement.
WHEREAS , the Loan Parties have requested that the
Administrative Agents and the undersigned Lenders waive certain of
the terms and provisions of the Credit Agreement, as specifically
set forth in this Amendment and agree to amend certain of the terms
and provisions of the Credit Agreement, as specifically set forth
in this Amendment;
NOW THEREFORE
, in consideration of the mutual
agreements contained in the Credit Agreement and herein and for
other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree
as follows:
§1.
Limited Waiver and Consent Under Credit Agreement
.
(a)
The Loan Parties have failed to
comply with the budget compliance covenants set forth in
Section 6.21(b) of the Credit Agreement for each of the
Cumulative Four Week Period ended July 5, 2008 and the
Cumulative Four Week Period ended July 12, 2008. The
Loan Parties acknowledge that such failures constitute Events of
Default pursuant to Section 8.01(d) of the Credit
Agreement (the “ Specified Defaults ”), and
request a waiver from the Administrative Agents and the Lenders in
respect thereof. Subject to the satisfaction of the
conditions precedent and covenants specified in §5 and §6
of this Amendment, respectively, the Administrative Agents and the
Lenders party hereto hereby waive the Specified
Defaults; provided , that the
foregoing waivers shall be rescinded and no longer effective if the
Loan Parties fail to comply in full with the provisions
hereof.
(b)
The Administrative Agents and the
Lenders hereby consent to the updated Budget delivered to the
Administrative Agents by the Loan Parties as of July 14, 2008
(the “ Revised Budget ”), which Revised Budget
shall be deemed effective as of such date of delivery.
§2.
Amendments to
the Credit Agreement .
(a)
Section 1.01 of the Credit
Agreement is hereby modified by deleting the definition of
“Cumulative Four Week Period” in its entirety and
replacing it with the following:
““ Cumulative Four
Week Period ” shall mean the four-week period up to and
through the Saturday of the most recent week then ended, or if a
four-week period has not then elapsed from the Petition Date, such
shorter period since the Petition Date through the Saturday of the
most recent week then ended, or if a four-week period has not then
elapsed from the First Amendment Effective Date, such shorter
period since the First Amendment Effective Date through the
Saturday of the most recent week then ended.”
(b)
Section 1.01 of the Credit
Agreement is hereby modified by adding the following
definitions:
““ Consensual Plan of
Reorganization ” shall mean a Plan of Reorganization
which has also been approved by the Ad Hoc Noteholders Committee
and the Committee.”
““ Lease Extension
Letter ” shall mean an agreement, in form and substance
reasonably satisfactory to the Agents, to extend the time for
assumption or rejection to no earlier than March 31,
2009.”
““ Non-Extended
Lease ” shall mean any Lease other than Leases which have
either been (i) assumed or (ii) as to which the Loan
Parties shall have received a fully-executed and effective Lease
Extension Letter.”
““ Non-Extended Lease
Location ” shall mean any warehouse location or retail
location not subject to a Lease Extension Letter.”
(c)
Section 6.21 of the Credit
Agreement is hereby deleted in its entirety and replaced with the
following:
“
SECTION 6.21. Budget Compliance Covenants
. Allow (a) the payment
of any expenses or other disbursements other than those set forth
in the Budget; provided that the Actual Disbursement Amount
(i) for any Cumulative Four Week Period ending prior to
August 1, 2008, may exceed the Budgeted Disbursement Amount
for such Cumulative Four Week Period by no more than ten percent
(10%), and (ii) for any Cumulative Four Week Period ending on
or after August 1, 2008, may exceed the Budgeted Disbursement
Amount for such
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Cumulative Four Week Period by no
more than five percent (5%); (b) Actual Sales Receipts
(i) for any Cumulative Four Week Period ending prior to
August 1, 2008, to be less than ninety percent (90%) of the
Budgeted Sales Receipts for such Cumulative Four Week Period as set
forth in the Budget and (ii) for any Cumulative Four Week
Period ending on or after August 1, 2008, to be less than
ninety-five percent (95%) of the Budgeted Sales Receipts for such
Cumulative Four Week Period as set forth in the Budget; or
(c) the Actual Inventory Amount (i) at any time prior to
August 1, 2008, to be less than ninety percent (90%) of the
Budgeted Inventory Amount at such time as set forth in the Budget
and (ii) at any time on or after August 1, 2008, to be
less than ninety-five percent (95%) of the Budgeted Inventory
Amount at such time as set forth in the Budget.”
(d)
Sections 8.01(p)(i) through
8.01(p)(xix) of the Credit Agreement are hereby deleted in their
entirety and replaced with the following:
“(i)
the bringing by a Debtor of a
motion, or the execution by a Debtor of a written agreement, or the
filing by a Debtor of any plan of reorganization or disclosure
statement attendant thereto by a Debtor in any Chapter 11 Case:
(w) to obtain additional financing under
Section 364(c) or (d) of the Bankruptcy Code not
otherwise permitted pursuant to this Agreement; (x) to grant
any Lien other than a Permitted Lien upon or affecting any
Collateral; (y) except as provided in the Interim or Final
Order, as the case may be, to use cash collateral of the Secured
Parties under Section 363(c) of the Bankruptcy Code
without the prior written consent of the Administrative Agents and
the Required Lenders; or (z) any other action or actions
materially adverse to the Administrative Agents and the Lenders or
their rights and remedies hereunder or their interest in the
Collateral;
(ii)
the failure of the Debtors to
deliver to the Agents, the Ad Hoc Noteholders Committee and the
Committee a term sheet for a proposed Consensual Plan of
Reorganization on or prior to August 1, 2008;
(iii)
with respect to (x) all of the
Debtors’ warehouse locations (other than the Permitted Store
Closings identified on Schedule 5.17 hereto) and
(y) not less than eighty percent (80%) of the Debtors’
retail locations (other than the Permitted Store Closings
identified on Schedule 5.17 hereto), the failure of the
Debtors, on or prior to August 1, 2008, to either
(A) assume the relevant Leases or (B) obtain Lease
Extension Letters in form and substance reasonably satisfactory to
the Agents;
(iv)
with respect to all Non-Extended
Leases, any of the following:
(A)
the failure of the Debtors to
distribute to prospective liquidators “bid books”
covering the Non-Extended Lease Locations, in form and substance
reasonably satisfactory to the Agents, on or prior to
August 8, 2008;
(B)
the failure of the Debtors to
complete the auction for inventory at the Non-Extended Lease
Locations, on term and conditions reasonably satisfactory to the
Agents, on or prior to August 27, 2008;
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(C)
the failure of the Debtors to obtain
an order from the U.S. Bankruptcy Court, in form and substance
reasonably satisfactory to the Agents, approving the sale of the
inventory at the Non-Extended Lease Locations, on or prior to
August 28, 2008;
(D)
the failure of the Debtors to
execute agency documents and all other relevant documents, such
documents in form and substance reasonably satisfactory to the
Agents, in connection with the sale of the inventory at the
Non-Extended Lease Locations, on or prior to August 28,
2008;
(E)
the failure of the Debtors to
consummate the sale of the inventory at the Non-Extended Lease
Locations, on terms and conditions reasonably satisfactory to the
Agents, on or prior to August 29, 2008;
(v)
the failure of the Debtors to
deliver to the Agents a term sheet reflecting a proposed Consensual
Plan of Reorganization reasonably acceptable to the Agents (and for
which the Agents are reasonably satisfied as to the likelihood that
such Consensual Plan of Reorganization will be approved and
confirmed by the U.S. Bankruptcy Court), on or prior to
August 15, 2008;
(vi)
the failure of the Debtors to file
the Consensual Plan of Reorganization and a disclosure statement
relating thereto (each in form and substance satisfactory to the
Required Lenders in their sole discretion) with the U.S. Bankruptcy
Court, on or prior to August 29, 2008;
(vii)
(x) the filing of any plan of
reorganization or disclosure statement attendant thereto, or any
direct or indirect amendment to such plan or disclosure statement,
by a Debtor to which the Required Lenders do not consent or
otherwise agree to the treatment of their claims thereunder or
(y) the entry of any order terminating any Loan Party’s
exclusive rights to file a plan of reorganization;
(viii)
the entry of an order in any of the
Chapter 11 Cases confirming a plan or plans of reorganization that
(x) is not acceptable to the Required Lenders in their sole
discretion or (y) does not contain a provision for termination
of the Commitments and repay
