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.

 

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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:

 

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(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 ordinary course of business that singly or in the
aggregate are not materially adverse to the Borrowers, the Guarantors or their
respective Subsidiaries, and to the extent that such representations and
warranties relate expressly to an earlier date.

 

(e)                                  Each such Person has performed and complied
in all material respects with all terms and conditions herein and in the Credit
Agreement and the other Loan Documents required to be performed or complied with
by it prior to or at the time hereof, and as of the date hereof, after giving
effect to the provisions hereof, there exists no Default or Event of Default
(other than the Specified Default).

 

5.                                      Conditions to Effectiveness.  Each Loan
Party, individually and on behalf of its respective Subsidiaries, hereby agrees
that the provisions of this Forbearance Agreement and the agreement of the
Lenders and the Administrative Agents to forbear from exercising its rights and
remedies under the Credit Agreement and the other Loan Documents as set forth in
Section 1 hereof shall become effective (the “Forbearance Effective Date”) upon
the satisfaction of each of the following conditions precedent:

 

(a)                                  The Borrowers, each Guarantor and the
Required Lenders shall have executed and delivered to the Administrative Agents
this Forbearance Agreement.

 

(b)                                 There shall not exist any Default or Event
of Default (other than the Specified Default).

 

(c)                                  The Borrowers shall have paid the fees set
forth in the fee letter, dated as of the date hereof, between the Borrowers and
the Administrative Agents.

 

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(d)                                 The Borrowers shall have paid all other fees
and expenses of the Administrative Agents in connection with the preparation of
this Forbearance Agreement and the transactions contemplated hereby, including,
without limitation, the fees and expenses of counsel to the Administrative
Agents to the extent invoices have been delivered to the Borrowers.

 

6.                                      Release.  Each Loan Party, individually
and on behalf of its respective Subsidiaries, hereby remises, releases, acquits,
satisfies and forever discharges the Lenders, the Administrative Agents, and
their respective agents, employees, officers, directors, predecessors, attorneys
and all others acting or purporting to act on behalf of or at the direction of
the Lenders or the Administrative Agents, of and from any and all manner of
actions, causes of action, suit, debts, accounts, covenants, contracts,
controversies, agreements, variances, damages, judgments, claims and demands
whatsoever, in law or in equity, which any of such parties ever had, now has or,
to the extent arising from or in connection with any act, omission or state of
facts taken or existing on or prior to the date hereof, may have after the date
hereof against the Lenders, the Administrative Agents, their respective agents,
employees, officers, directors, attorneys and all persons acting or purporting
to act on behalf of or at the direction of the Lenders or the Administrative
Agents (“Releasees”), for, upon or by reason of any matter, cause or thing
whatsoever arising from, in connection with or in relation to the Credit
Agreement or any of the other Loan Documents (including this Forbearance
Agreement) through the date hereof.  Without limiting the generality of the
foregoing, each Loan Party waives and affirmatively agrees not to allege or
otherwise pursue any defenses, affirmative defenses, counterclaims, claims,
causes of action, setoffs or other rights such Person does, shall or may have as
of the date hereof, including, but not limited to, the rights to contest any
conduct of the Lenders, Administrative Agents or other Releasees on or prior to
the date hereof.

 

7.                                      No Waiver.  Except as otherwise
expressly provided for in this Forbearance Agreement, nothing contained in this
Forbearance Agreement shall extend to or affect in any way any of the rights or
obligations of the Borrowers, the Guarantors and their respective Subsidiaries
or the Lenders and Administrative Agents’ obligations, rights and remedies
arising under the Loan Documents.  Except as expressly set forth herein, all of
the terms and provisions of the Credit Agreement and the other Loan Documents
shall remain in full force and effect.  Each of the Loan Parties, individually
and on behalf of its respective Subsidiaries, hereby agrees that the Lenders and
the Administrative Agents shall not be deemed to have waived any or all of its
remedies with respect to any Specified Default or any other Default or Event of
Default existing on the date hereof or arising hereafter.

 

8.                                      Miscellaneous.

 

(a)                                  This Forbearance Agreement shall be
governed by and construed in accordance with the internal laws of the State of
New York.

 

(b)                                 This Forbearance Agreement shall constitute
a Loan Document under the Credit Agreement, and all obligations included in this
Forbearance Agreement (including, without limitation, all obligations for the
payment of principal, interest, fees, and other amounts and expenses) shall
constitute obligations under the Loan Documents and secured by the collateral
security for the Obligations.

 

(c)                                  Failure to comply with any of the covenants
and agreements contained in this Forbearance Agreement shall constitute an
immediate Event of Default under the Credit Agreement.

 

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(d)                                 Wherever possible, each provision of this
Forbearance Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Forbearance Agreement
shall be prohibited by or rendered invalid under applicable law, such provision
shall be ineffective only to the extent of such prohibition or invalidity,
without invalidating the remainder of such provisions or the remaining
provisions of this Forbearance Agreement.

 

(e)                                  This Forbearance Agreement may be executed
in any number of counterparts and by each party on a separate counterpart, each
of which when so executed and delivered shall be an original, but all of which
together shall constitute one instrument.  Delivery of an executed counterpart
of a signature page of this Forbearance Agreement by facsimile or electronic
communication shall be effective as delivery of a manually executed counterpart
of this Forbearance Agreement.  In proving this Forbearance Agreement, it shall
not be necessary to produce or account for more than one such counterpart signed
by the party against whom enforcement is sought.

 

[Remainder of page intentionally left blank.]

 

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IN WITNESS WHEREOF, the parties have executed this Forbearance Agreement as of
the date first above written.

 

 

US BORROWERS:

 

LINENS ‘N THINGS, INC.

 

 

 

 

 

By:

/s/ ROBERT J. DINICOLA

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

LINENS ‘N THINGS CENTER, INC.

 

 

 

 

 

By:

/s/ ROBERT J. DINICOLA

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

CANADIAN BORROWER:

 

LINENS ‘N THINGS CANADA CORP.

 

 

 

 

 

By:

/s/ ROBERT J. DINICOLA

 

Name:

 

 

Title:

 

 

Signature Page to Forbearance Agreement

 

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GENERAL ELECTRIC CAPITAL CORPORATION,

 

as US Administrative Agent and Lender

 

 

 

By:

/s/ MARK J. FORTI

 

Name:

 Mark J. Forti

 

Title:

   Managing Director

 

 

 

 

 

GE CANADA FINANCE HOLDING COMPANY,

 

as Canadian Administrative Agent and Lender

 

 

 

 

 

By:

/s/ COLIN WOODYARD

 

Name:

Colin Woodyard

 

Its:

Duly Authorized Signatory

 

Signature Page to Forbearance Agreement

 

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Wells Fargo Foothill Canada ULC, as a Lender

 

 

 

 

 

By:

/s/ MATTHEW N. WILLIAMS

 

 

Name: Matthew N. Williams

 

 

Title:   Vice President

 

Signature Page to Forbearance Agreement

 

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Wells Fargo Retail Finance, LLC, as a Lender

 

 

 

 

 

By:

/s/ MATTHEW N. WILLIAMS

 

 

Name: Matthew N. Williams

 

 

Title:   Vice President

 

Signature Page to Forbearance Agreement

 

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Bank of America, NA, as a Lender

 

 

 

 

 

By:

/s/ ANDREW CERUSSI

 

 

Name:  Andrew Cerussi

 

 

Title:  Vice President

 

 

 

 

 

 

 

By:

 

 

 

Name:  

 

 

Title: 

 

Signature Page to Forbearance Agreement

 

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Bank of America, N.A.,

 

(Canada branch)

 

as a Lender

 

 

 

 

 

By:

/s/ MEDINA SALES DE ANDRADE

 

 

Name:  Medina Sales de Andrade

 

 

Title:     Vice President

 

Signature Page to Forbearance Agreement

 

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THE CIT GROUP/BUSINESS CREDIT, INC., as a
Lender

 

 

 

By:

/s/ DEBRA PUTZER

 

Name: Debra Putzer

 

Title: Senior Vice President

 

 

 

By:

 

 

Name:

 

Title:

 

Signature Page to Forbearance Agreement

 

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CIT FINANCIAL LTD., as a Lender

 

 

 

 

 

By:

/s/ EVAN BENNITT

 

Name:  Evan Bennitt

 

Title:     Vice President

 

 

 

 

 

By:

/s/ RICHARD KINLOUGH

 

Name:  Richard Kinlough

 

Title:    Managing Director

 

Signature Page to Forbearance Agreement

 

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UBS LOAN FINANCE LLC, as a Lender

 

 

 

 

 

By:

/s/ RICHARD L. TAVROW

 

Name:  Richard L. Tavrow

 

Title:  Director

 

 

 

 

 

By:

/s/ DAVID B. JULIE

 

Name:  David B. Julie

 

Title:  Associate Director

 

 

 

UBS AG CANADA BRANCH, as a Lender

 

 

 

 

 

By:

/s/ RICHARD L. TAVROW

 

Name:  Richard L. Tavrow

 

Title:  Director

 

 

 

 

 

By:

/s/ MARY E. EVANS

 

Name:  Mary E. Evans

 

Title:  Associate Director

 

Signature Page to Forbearance Agreement

 

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Wachovia Bank, National Association, as a Lender

 

 

 

 

 

By:

/s/ SANG KIM

 

Name:  Sang Kim

 

Title:  Vice President

 

Signature Page to Forbearance Agreement

 

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UPS CAPITAL CORPORATION, as a Lender

 

 

 

 

 

By:

/s/ JOHN P. HOLLOWAY

 

Name:  John P. Holloway

 

Title:  Director of Portfolio Management

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

Signature Page to Forbearance Agreement

 

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Webster Business Credit Corp., as a Lender

 

 

 

 

 

By:

/s/ CYNTHIA J. TONUCCI

 

Name:  Cynthia J. Tonucci

 

Title:  Vice President

 

Signature Page to Forbearance Agreement

 

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GE Business Financial Services Inc.

 

(formerly known as Merrill Lynch Business

 

Financial Services Inc.)

 

 

 

 

 

By:

/s/ MARK J. FORTI

 

Name:  Mark J. Forti

 

Title:  Duly Authorized Signatory

 

Signature Page to Forbearance Agreement

 

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Bear Stearns Corporate Lending., as a Lender

 

 

 

 

 

By:

/s/ LINDA A. CARPER

 

Name:  Linda A. Carper

 

Title:  Vice President

 

Signature Page to Forbearance Agreement

 

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Each of the undersigned Guarantors hereby consent to the foregoing Forbearance
Agreement, joins the above Forbearance Agreement for the sole purpose of
consenting to and being bound by the provisions of Sections 3 and 6 hereof, and
ratifies and confirms its obligations under that certain Guarantee pursuant to
Article VII of the Credit Agreement to the Administrative Agents, for the
benefit of the Administrative Agents and the Secured Parties.

 

 

HOLDINGS:

 

LINENS HOLDING CO.

 

 

 

 

 

 

 

By:

/s/ ROBERT J. DINICOLA

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

SUBSIDIARY GUARANTORS:

 

 

 

 

 

 

 

BLOOMINGTON MN., L.T., INC.

 

 

 

 

By:

/s/ ROBERT J. DINICOLA

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

LNT, INC.

 

 

 

 

 

 

 

By:

/s/ ROBERT J. DINICOLA

 

Name:

 

 

Title:

 

 

 

 

 

 

 

LNT SERVICES, INC.

 

 

 

 

 

 

 

By:

/s/ ROBERT J. DINICOLA

 

Name:

 

 

Title:

 

 

 

 

 

 

 

LNT WEST, INC.

 

 

 

 

 

 

 

By:

/s/ ROBERT J. DINICOLA

 

Name:

 

 

Title:

 

 

Signature Page to Forbearance Agreement

 

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VENDOR FINANCE, LLC

 

 

 

 

 

 

 

By:

/s/ ROBERT J. DINICOLA

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

 

 

 

LNT LEASING II, LLC

 

 

 

 

 

By:

/s/ ROBERT J. DINICOLA

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

 

 

 

LNT VIRGINIA LLC

 

 

 

 

 

 

 

By:

/s/ ROBERT J. DINICOLA

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

LNT MERCHANDISING COMPANY LLC

 

 

 

 

 

 

 

By:

/s/ ROBERT J. DINICOLA

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

LNT LEASING III, LLC

 

 

 

 

 

 

 

By:

/s/ ROBERT J. DINICOLA

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

CITADEL LNT, LLC

 

 

 

 

 

 

 

By:

/s/ ROBERT J. DINICOLA

 

Name:

 

 

Title:

 

 

Signature Page to Forbearance Agreement

 

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LINENS ‘N THINGS INVESTMENT
CANADA I COMPANY

 

 

 

 

 

 

 

By:

/s/ ROBERT J. DINICOLA

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

LINENS ‘N THINGS INVESTMENT
CANADA II COMPANY

 

 

 

 

 

 

 

By:

/s/ ROBERT J. DINICOLA

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

LINENS ‘N THINGS CANADA LIMITED
PARTNERSHIP

 

 

 

 

 

 

 

By:

Linens ‘N Things Investment Canada II

 

Company, its general partner

 

 

 

 

 

By:

/s/ ROBERT J. DINICOLA

 

Name:

 

 

Title:

 

 

Signature Page to Forbearance Agreement

 

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