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EXHIBIT 3
PARTICIPATION AGREEMENT
THIS AGREEMENT, dated as of February 28, 1997, is made by and between XXXX
II, LLC ("Xxxx II"), and FSP, Inc. ("FSP").
WHEREAS, The Bank of New York ("BNY") is a lender to Today's Man, Inc.,
Today's Man Outlet, Inc., F&S International, Inc., Beveman Development, Xxxx &
Xxxx, Inc., Benmal, Inc. and D&L, Inc. (the "Borrowers") pursuant to, among
other things, that certain Amended and Restated Credit Agreement, dated as of
April 27, 1995, amended and restated as of November 17, among the Borrowers and
NationsBank, N.A., Shawmut, N.A., n/k/a Fleet National Bank, and the BNY; and
WHEREAS, pursuant to an Assignment Agreement, dated of even date herewith
(a copy of which is attached hereto as Exhibit A). Xxxx II has purchased all
of the right, title, and interest of BNY in such loans made to the Borrowers
(the "Assigned Claim"); and
WHEREAS, Xxxx II is willing to sell and convey, and FSP is willing to
purchase and acquire, a participation interest in the Assigned Claim on the
terms and conditions set forth herein.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, Xxxx II and FSP agree as follows:
Section 1. Sale and Purchase of Participation.
a) Xxxx II hereby sells, assigns, transfers and conveys to FSP, and FSP
hereby purchases, acquires, accepts and assumes from Xxxx II, without recourse
to Xxxx II, for the account and risk of FSP, a fifty (50%) percent interest in
all of Xxxx II's rights, benefits and obligations in or to, or under, or with
respect to, the Assigned Claims, such interest of FSP in such Assigned Claim
being referred to herein as FSP's "Participation" in such Assigned Claim, and
such percentage of FSP in such Assigned Claim being referred to herein as FSP's
"Percentage" in such Assigned Claim.
In consideration for the sale by Xxxx II to FSP of FSP's Participation,
FSP shall pay to Xxxx II fifty (50%) percent of the amount which Xxxx II paid to
BNY pursuant to the terms of the Assignment Agreement.
Section 2. Distributions and Payments.
a) Whenever Xxxx II shall receive any payment on account of the Assigned
Claim, Xxxx II shall promptly pay over to FSP, FSP's Percentage share of the
amount so received.
b) If (i) any payment received by Xxxx II shall be rescinded or otherwise
shall be required to be returned or paid over by Xxxx II for any reason at any
time, or (ii) Xxxx II shall be liable for and pay any damages, penalties,
actions, judgments, costs, expenses or
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disbursements on account of, or related to, the Assigned Claim, whether before
or after the termination of this Agreement, FSP, promptly upon notice from Xxxx
II, shall pay over to Xxxx II its Percentage share of the amount so rescinded,
returned or paid by Xxxx II, together with its Percentage share of any interest
or penalties payable with respect thereto.
c) If FSP receives any payment on account of its Participation in the
Assigned Claim from any source other than Xxxx II pursuant to the terms of this
Agreement, FSP shall promptly pay over to Xxxx II the amount in excess of FSP's
Percentage share of the amount so received.
d) Xxxx II shall deliver to FSP copies of any and all notices received
with respect to the Assigned Claim promptly after receipt thereof by Xxxx II.
Section 3. Amendment and Waivers/Voting Rights. Xxxx II shall not agree
to amend, waive, or release any of the following terms or provisions of the
Assigned Claim without obtaining the prior consent of FSP: (a) any reduction
in the principal of, the interest rate on, or the extension of any stated
payment date for, the Assigned Claim or (b) the release of any collateral or
guarantee securing the Assigned Claim. All issues which are likely to have a
material impact on the Assigned Claim, its enforceability, or its collection,
and any issue which is likely to have a material impact on costs to be incurred
related to the Assigned Claim, shall be determined by vote requiring approval
of the Majority Participants. For the purposes of this Section 3, "Majority
Participants" shall mean the holders of at least 51% of the aggregate interest
in the Assigned Claim. If, after soliciting the vote of the participants there
is no such majority, the parties agree to negotiate in good faith in an attempt
to reach a consensus on such issue. Neither party shall be liable to the other
for actions or omissions on account of, or related to, the Assigned Claim
except on account of gross negligence or willful misconduct.
Section 4. Further Assignments.
a) Neither FSP's Participation interest in or any of its rights or
obligations under the Assigned Claim shall be sold, assigned, subdivided,
pledged or otherwise transferred, conveyed or encumbered without the prior
written notice of Xxxx II.
b) Neither Xxxx II's interest in or any of its rights or obligations under
the Assigned Claim shall be sold, assigned, subdivided, pledged or otherwise
transferred, conveyed or encumbered without the prior written consent of FSP.
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Section 5. Representations.
a) Xxxx II hereby represents and warrants to FSP that it has good and
marketable title to the Assigned Claim free and clear of any liens, interests,
security interests, encumbrances or other claims.
b) Xxxx II hereby represents and warrants to FSP that it has the right and
power and is duly authorized to enter into the agreement.
c) FSP hereby represents and warrants to Xxxx II that it has the right and
power and is duly authorized to enter into this agreement.
Section 6. Xxxx II's Rights. FSP expressly acknowledges that (i) Xxxx II
has not made any representation or warranty, express or implied, to FSP with
respect to the Assigned Claim, and that no act by Xxxx II heretofore or
hereafter taken, including any review of the financial condition or business
affairs of the Borrowers, shall be deemed to constitute any representation or
warranty by Xxxx II to FSP; and (ii) in connection with its entry into and its
performance of his obligations under this Agreement, FSP has made and shall
continue to make its own independent investigation of the financial condition
and business affairs of the Borrowers and his own independent appraisal of the
value and lien status of any collateral or guaranty securing the Assigned
claim. FSP agrees that it will promptly reimburse Xxxx II for fifty (50%)
percent of all out of pocket expenditures related to the Assigned claim,
including, without limitation reasonable attorney's fees and expenses.
Section 7. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be sent by telecopy
(which shall be effective when sent ) or by fist class, registered or certified
mail (which shall be effective when deposited in the mail, postage prepaid).
All notices shall be sent to the applicable party at the address stated on the
signature page hereof or in accordance with the last unrevoked written
direction form such party.
Section 8. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware,
without regard to its principles of conflicts of laws.
Section 9. Heading. Headings are for convenience only and shall not
modify or affect the meaning or construction hereof.
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XXXX II, LLC FSP, Inc.
By: Osiris Group, L.P., By: /s/ Xxxx Xxxxxxxxx
its Managing Member ------------------
By: Osiris Management, LLC President
its General Partner
By: Xxxxxx Xxxxxxx,
its Managing Member
of Osiris Management, LLC
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx Xxxxxxx,
Managing Member of Osiris Management, LLC
Address for Notices: Address for Notices:
Xxxx II, LLC FSP, Inc.
c/o SAC Capital Management, LLC Five Radnor Corporate Center
000 Xxxx Xxxxx Xxxx 000 Xxxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxxx 00000 Xxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxx Attn: Xxxx Xxxxxxxxx
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