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EXHIBIT 2
PARTICIPATION AGREEMENT
THIS AGREEMENT, dated as of February 7, 1997, is made by and between XXXX,
LLC ("Xxxx"), and FSP, Inc. ("FSP").
WHEREAS, NationsBank, N.A. ("NationsBank") 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, Shawmut Bank, N.A., n/k/a Fleet National Bank, and
the Bank of New York; and
WHEREAS, pursuant to an Assignment Agreement, dated of even date herewith
(a copy of which is attached hereto as Exhibit A), Xxxx has purchased all of
the right, title and interest of NationsBank in such loans made to the
Borrowers (the "Assigned Claim"); and
WHEREAS, Xxxx 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 and FSP agree as follows:
Section 1. Sale and Purchase of Participation.
a) Xxxx hereby sells, assigns, transfers and conveys to FSP, and FSP
hereby purchases, acquires, accepts and assumes from Xxxx, without recourse to
Xxxx, for the account and risk of FSP, a fifty (50%) percent interest in all of
Xxxx'x 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.
b) In consideration for the sale by Xxxx to FSP of FSP's Participation,
FSP shall pay to Xxxx fifty (50%) percent of the amount which Xxxx paid to
NationsBank pursuant to the terms of the Assignment Agreement.
Section 2, Distributions and Payments.
a) Whenever Xxxx shall receive any payment on account of the Assigned
Claim, Xxxx shall promptly pay over to FSP, FSP's Percentage share of the
amount so received.
b) If (i) any payment received by Xxxx shall be rescinded or otherwise
shall be required to be returned or paid over by Xxxx for any reason at any
time, or (ii) Xxxx 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 termination of this Agreement, FSP, promptly upon notice from
Xxxx, shall pay over to Xxxx its Percentage share of the amount so rescinded,
returned or paid by Xxxx, 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 pursuant to the terms of this
Agreement, FSP shall, promptly pay over to Xxxx the amount in excess of FSP's
Percentage share of the amount so received.
d) Xxxx shall deliver to FSP copies of any and all notices received with
respect to the Assigned Claim promptly after receipt thereof by Xxxx.
Section 3. Amendment and Waivers/Voting Rights. Xxxx 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 interests
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 consent of Xxxx.
b) Neither Xxxx'x 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 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 hereby represents and warrants to FSP that it has the right and
power and is duly authorized to enter into this agreement.
c) FSP hereby represents and warrants to Xxxx that it has the right and
power and is duly authorized to enter into this agreement.
Section 6. Xxxx'x Rights. FSP expressly acknowledges that (i) Xxxx has not
made any representation or warranty, express or implied, to FSP with respect to
the Assigned Claim, and that no act by Xxxx 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
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 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 first 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 from
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, 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, 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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