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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended November 28, 1998
COMMISSION FILE NUMBER 0-20214
BED BATH & BEYOND INC.
(Exact name of registrant as specified in its charter)
NEW YORK 11-2250488
(State of incorporation) (I.R.S. Employer Identification No.)
650 LIBERTY AVENUE, UNION, NEW JERSEY 07083
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (908) 688-0888
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
NUMBER OF SHARES OUTSTANDING OF THE ISSUER'S COMMON STOCK:
CLASS OUTSTANDING AT NOVEMBER 28, 1998
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Common Stock - $0.01 par value 139,201,141 (gives effect to a
two-for-one stock split in the
form of a stock dividend
effected July 31, 1998)
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BED BATH & BEYOND INC. AND SUBSIDIARIES
INDEX
PAGE NO.
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PART I - FINANCIAL INFORMATION
Consolidated Balance Sheets
November 28, 1998 and February 28, 1998 3
Consolidated Statements of Earnings
Three Months and Nine Months Ended
November 28, 1998 and November 29, 1997 4
Consolidated Statements of Cash Flows
Nine Months Ended November 28, 1998 and November 29, 1997 5
Notes to Consolidated Financial Statements 6
Management's Discussion and Analysis of Financial Condition
and Results of Operations 7 - 9
PART II - OTHER INFORMATION
Item 5. Other information 10
Item 6. Exhibits and Reports on Form 8-K 10
Exhibit Index 11
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BED BATH & BEYOND INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
November 28, February 28,
1998 1998
------------ ------------
(unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 74,550 $ 53,280
Merchandise inventories 401,749 270,357
Prepaid expenses and other current assets 7,517 2,323
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Total current assets 483,816 325,960
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Property and equipment, net 137,251 111,381
Other assets 25,801 20,989
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$646,868 $458,330
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $163,354 $ 64,718
Accrued expenses and other current liabilities 85,197 73,610
Income taxes payable 9,820 12,015
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Total current liabilities 258,371 150,343
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Deferred rent 15,367 12,590
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Total liabilities 273,738 162,933
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Shareholders' equity:
Preferred stock - $0.01 par value; authorized -
1,000,000 shares; no shares issued or
outstanding -- --
Common stock - $0.01 par value; authorized -
350,000,000 shares; issued and
outstanding -November 28, 1998, 139,201,141 shares and
February 28, 1998, 138,087,946 shares 1,392 1,381
Additional paid-in capital 75,923 61,348
Retained earnings 295,815 232,668
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Total shareholders' equity 373,130 295,397
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$646,868 $458,330
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</TABLE>
See accompanying Notes to Consolidated Financial Statements.
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BED BATH & BEYOND INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
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November 28, November 29, November 28, November 29,
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net sales $ 363,431 $ 280,978 $ 977,948 $ 761,535
Cost of sales, including buying,
occupancy and indirect costs 214,958 165,556 577,353 449,255
------------ ------------ ------------ ------------
Gross profit 148,473 115,422 400,595 312,280
Selling, general and administrative expenses 108,319 84,696 297,937 233,974
------------ ------------ ------------ ------------
Operating profit 40,154 30,726 102,658 78,306
Interest income 761 714 2,149 1,855
------------ ------------ ------------ ------------
Earnings before provision for income taxes 40,915 31,440 104,807 80,161
Provision for income taxes 16,264 12,497 41,661 31,864
------------ ------------ ------------ ------------
Net earnings $ 24,651 $ 18,943 $ 63,146 $ 48,297
============ ============ ============ ============
Net earnings per share - Basic $ 0.18 $ 0.14 $ 0.46 $ 0.35
Net earnings per share - Diluted $ 0.17 $ 0.13 $ 0.44 $ 0.34
Weighted average shares outstanding - Basic 138,971,762 137,813,970 138,667,458 137,558,418
Weighted average shares outstanding - Diluted 143,079,852 142,473,058 142,921,542 142,036,003
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
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BED BATH & BEYOND INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS, UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
---------------------------
November 28, November 29,
1998 1997
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<S> <C> <C>
Cash Flows from Operating Activities:
Net earnings $ 63,146 $ 48,297
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization 16,642 13,147
Deferred income taxes (3,533) (2,050)
Increase in assets:
Merchandise inventories (131,392) (116,736)
Prepaid expenses and other current assets (5,194) (672)
Other assets (1,279) (1,027)
Increase (decrease) in liabilities:
Accounts payable 98,636 68,885
Accrued expenses and other current liabilities 11,587 21,920
Income taxes payable (2,195) (4,425)
Deferred rent 2,777 2,627
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Net cash provided by operating activities 49,195 29,966
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Cash Flows from Investing Activities:
Capital expenditures (42,512) (34,206)
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Net cash used in investing activities (42,512) (34,206)
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Cash Flows from Financing Activities:
Proceeds from exercise of stock options 14,587 5,873
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Net cash provided by financing activities 14,587 5,873
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Net increase in cash and cash equivalents 21,270 1,633
Cash and cash equivalents:
Beginning of period 53,280 38,765
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End of period $ 74,550 $ 40,398
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</TABLE>
See accompanying Notes to Consolidated Financial Statements.
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BED BATH & BEYOND INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1) BASIS OF PRESENTATION
The accompanying consolidated financial statements, except for the February 28,
1998 consolidated balance sheet, have been prepared without audit. In the
opinion of Management, the accompanying consolidated financial statements
contain all adjustments (consisting of only normal recurring accruals) necessary
to present fairly the financial position of Bed Bath & Beyond Inc. and
subsidiaries (the "Company") as of November 28, 1998 and February 28, 1998 and
the results of their operations for the three months and nine months ended
November 28, 1998 and November 29, 1997, respectively, and their cash flows for
the nine months ended November 28, 1998 and November 29, 1997. Because of the
seasonality of the specialty retailing business, operating results of the
Company on a quarterly basis may not be indicative of operating results for the
full year.
The accompanying unaudited consolidated financial statements are presented in
accordance with the requirements for Form 10-Q and consequently do not include
all the disclosures normally required by generally accepted accounting
principles. Reference should be made to Bed Bath & Beyond Inc.'s Annual Report
for the fiscal year ended February 28, 1998 for additional disclosures,
including a summary of the Company's significant accounting policies.
2) STOCK SPLIT
In June 1998, the Board of Directors approved a two-for-one split of the
Company's common stock effected in the form of a stock dividend. The stock
dividend was distributed on July 31, 1998 to shareholders of record on July 10,
1998. Accordingly, all shareholders' equity, share and per share amounts for all
periods presented have been retroactively adjusted to give effect to the stock
split.
In June 1998, the Company's Certificate of Incorporation was amended to increase
the number of authorized shares of common stock (par value $.01 per share) from
150,000,000 shares to 350,000,000 shares.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Three Months November 28, 1998 vs. Three Months November 29, 1997
Net sales for the third quarter ended November 28, 1998 were $363.4 million, an
increase of $82.5 million or approximately 29.3% over net sales of $281.0
million for the corresponding quarter last year. Approximately 73.6% of the
increase was attributable to new store net sales. The increase in comparable
store net sales in the third quarter of 1998 was approximately 8.8%. The
increase in comparable store net sales reflects a number of factors, including
but not limited to, the continued consumer acceptance of the Company's
merchandise offerings and customer service and the generally favorable retailing
environment. Approximately 55% and 45% of net sales for the third quarter were
attributable to sales of domestics merchandise and home furnishings merchandise,
respectively.
Gross profit for the third quarter of 1998 was $148.5 million or 40.9% of net
sales compared with $115.4 million or 41.1% of net sales during the third
quarter of 1997. The decrease in gross profit, as a percentage of net sales, was
primarily attributable to an increase in coupons redeemed associated with the
Company's marketing program.
Selling, general and administrative expenses ("SG&A") were $108.3 million in the
third quarter of 1998 compared with $84.7 million in the same quarter last year
and as a percentage of net sales were 29.8% and 30.1%, respectively. The
decrease in SG&A, as a percentage of net sales, primarily reflects a relative
decrease in payroll and payroll related items.
Operating profit in the third quarter of 1998 increased to $40.2 million from
$30.7 million in the third quarter of 1997, reflecting primarily the increase in
net sales and decrease in SG&A, which was partially offset by an increase in
costs of sales.
Nine Months November 28, 1998 vs. Nine Months November 29, 1997
Net sales for the nine months ended November 28, 1998 were $977.9 million, an
increase of $216.4 million or approximately 28.4% over net sales of $761.5
million for the corresponding period last year. Approximately 80.1% of the
increase was attributable to new store net sales. The increase in comparable
store net sales for the first nine months of 1998 was approximately 6.2%.
Gross profit for the first nine months of 1998 was $400.6 million or 41.0% of
net sales compared with $312.3 million or 41.0% of net sales during the same
period last year.
SG&A was $297.9 million in the first nine months of 1998 compared with $234.0
million for the same period last year and as a percentage of net sales were
30.5% and 30.7%, respectively. The decrease in SG&A, as a percentage of net
sales, primarily reflects a relative decrease in payroll and payroll related
items.
Operating profit in the first nine months of 1998 increased to $102.7 million
from $78.3 million for the same period last year, primarily resulting from the
increase in net sales and decrease in SG&A.
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EXPANSION PROGRAM
The Company is engaged in an ongoing expansion program involving the opening of
new stores in both existing and new markets and the expansion or replacement of
existing stores with larger stores. As a result of this program, the total
number of stores has increased to 185 stores at the end of the third quarter of
1998 compared with 141 stores at the end of the corresponding quarter last year.
Total square footage grew to 7,653,000 square feet at the end of the third
quarter of 1998, from 5,767,000 square feet at the end of the third quarter of
last year.
During the first nine months of fiscal 1998, the Company opened 44 new
superstores and expanded three stores resulting in an aggregate addition of
1,886,000 square feet to total store space. The Company anticipates opening one
new store during the remainder of fiscal 1998.
FINANCIAL CONDITION
Total assets at November 28, 1998 were $646.9 million compared with $458.3
million at February 28, 1998, an increase of $188.5 million. Of the total
increase, $157.9 million represented an increase in current assets and $30.7
million represented an increase in non-current assets. The increase in current
assets was primarily attributable to an increase in merchandise inventories,
which resulted from new store space.
Total liabilities at November 28, 1998 were $273.7 million compared with $162.9
million at February 28, 1998, an increase of $110.8 million. The increase was
primarily attributable to a $98.6 million increase in accounts payable
(resulting from an increase in inventories) and a $11.6 million increase in
accrued expenses and other current liabilities.
Shareholders' equity was $373.1 million at November 28, 1998 compared with
$295.4 million at February 28, 1998. The increase primarily reflects net
earnings for the first nine months of fiscal 1998 and additional paid-in capital
from the exercise of stock options.
Capital expenditures for the first nine months of fiscal 1998 were $42.5 million
compared with $34.2 million for the corresponding period last year. The increase
is primarily attributable to furniture and fixtures and leasehold improvements
for the 44 new superstores opened and three stores expanded during the first
nine months compared to furniture and fixtures and leasehold improvements for
the 33 new superstores opened and three stores expanded in the same period last
year.
YEAR 2000
During fiscal 1997, the Company conducted an extensive review of its computer
systems and operations to identify the areas that could be affected by the Year
2000 issue. A plan was developed which focuses on the Company's information
systems and third-party relationships.
With respect to its own information systems, the Company has adopted a
five-phase Year 2000 program consisting of: Phase I -- identification and
ranking of the components of the Company's systems that may be vulnerable to
Year 2000 problems; Phase II -- assessment of items identified in Phase I; Phase
III -- remediation or replacement of non-compliant systems and components; Phase
IV -- testing of systems and components following remediation; and Phase V --
developing contingency plans to address the most reasonably likely worst case
Year 2000 scenarios. The Company has completed Phases I, II, and III, has
substantially completed Phase IV, and is in the process of developing
contingency plans for Phase V.
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With respect to its third-party relationships, the Company contacted its largest
suppliers, vendors, and service providers to assess their state of Year 2000
readiness. This process is effectively complete and the Company is in the
process of contingency planning to address the most reasonably likely worst case
Year 2000 scenarios with respect to its third-party relationships, including
developing alternate third-party relationships, if necessary. Potential sources
of risk include the inability of principal suppliers to be Year 2000 compliant,
which could result in delays in product deliveries from such suppliers, and
disruption of the Company's distribution channel.
Based on the efforts to date, the Company does not believe that the Year 2000
issue will have a material adverse effect on its financial condition or results
of operations. The Company's costs incurred to date associated with the Year
2000 issue are not material. The Company estimates that the costs to complete
its five-phase program, excluding any costs that may be incurred by the Company
as a result of the failure of any third-parties to become Year 2000 compliant,
will also not be material. The Company believes that by the end of fiscal 1998,
it will have developed contingency plans to address its most reasonably likely
worst case Year 2000 scenarios.
FORWARD LOOKING STATEMENTS
This Form 10-Q may contain forward looking statements. Important factors which
may affect these statements are contained in the Company's Annual Report to
shareholders for the fiscal year ended February 28, 1998.
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PART II - OTHER INFORMATION
Item 5. Other Information
On December 17, 1998, the Board of Directors adopted amendments to the
Company's By-Laws, including amendments permissible as a result of recent
changes in the New York Business Corporation Law. The By-Law amendments, among
other changes, provide for shareholder meeting rules, and increase the minimum
number of days by which shareholders must give notice for business properly to
be brought before a shareholder meeting. The By-Laws of the Company, as
amended, are being filed as an exhibit to this Report.
Item 6. Exhibits and Reports on Form 8-K
(a) The exhibits to this report are listed on the Exhibit Index included
elsewhere herein.
(b) No reports on Form 8-K were filed by the Company during the three month
period ended November 28, 1998.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BED BATH & BEYOND INC.
(Registrant)
Date: January 11, 1999 By: /s/ Ronald Curwin
-------------------------------------
Ronald Curwin
Chief Financial Officer and Treasurer
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EXHIBIT INDEX
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<TABLE>
<CAPTION>
Exhibit No. Exhibit Page No.
- ----------- ------- --------
<S> <C> <C>
3.1 Amended By-Laws of Bed Bath & Beyond Inc. 12-23
(As amended through December 17, 1998)
10.1 Fifth Amendment to the Credit Agreement 24-36
among the Company, bed 'n bath Stores, Inc.,
BBBL, Inc., Bed Bath & Beyond of California
Limited Liability Company, BBBY Management
Corporation and The Chase Manhattan Bank,
dated October 26, 1998
10.2 Second Amended and Restated Revolving Credit 37-38
Note among the Company, bed 'n bath Stores, Inc.,
BBBL, Inc., Bed Bath & Beyond of California
Limited Liability Company, BBBY Management
Corporation and The Chase Manhattan Bank,
dated October 26, 1998
27 Financial Data Schedule 39
(Filed electronically with SEC only)
</TABLE>
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AMENDED BY-LAWS*
OF
BED BATH & BEYOND INC.
(a New York Corporation)
ARTICLE I - OFFICES
The Corporation may have such offices within and without the
State of New York as the Board of Directors may from time to time determine or
the business of the Corporation may require.
ARTICLE II - MEETINGS OF SHAREHOLDERS
SECTION 1. PLACE OF MEETINGS. All meetings of the shareholders
shall be held at such place within or without the State of New York as the Board
of Directors may from time to time determine.
SECTION 2. ANNUAL MEETINGS. The annual meeting of the
shareholders for the election of directors and for the transaction of such other
business as may properly be brought before the meeting shall be held on such
date and at such hour as shall from time to time be fixed by the Board of
Directors. The Board of Directors acting by resolution may postpone and
reschedule any previously scheduled annual meeting of shareholders.
SECTION 3. SPECIAL MEETINGS. Special meetings of the
shareholders for any purpose or purposes shall be called and may be held at any
time upon the written request of the Board of Directors, the Chairman or the
President. Any such request shall state the purpose or purposes of the proposed
meeting. The business transacted at any special meeting shall be confined to the
purposes stated in the notice of the meeting. The Board of Directors acting by
resolution may postpone and reschedule any previously scheduled special meeting
of shareholders.
SECTION 4. NOTICE OF MEETINGS. Written notice of each annual
and special meeting of shareholders shall state the date, time, place and
purpose or purposes of each such meetings of shareholders and, unless it is the
annual meeting, shall indicate that it is being issued at the direction of the
person or persons requesting the meeting.
SECTION 5. FIXING RECORD DATE. For the purpose of determining
the shareholders
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* As amended through December 17, 1998
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entitled to notice of or to vote at any meeting of the shareholders or any
adjournment thereof, or to express consent to or dissent from any taking of
corporate action without a meeting, or for the purpose of determining
shareholders entitled to receive payment of any dividend or other distribution
or the allotment of any rights, or for the purpose of any other lawful action,
the Board of Directors may fix, in advance, a date as the record date for any
such determination of shareholders. Such date shall not be less than ten (10)
nor more than sixty (60) days before the date of any such meeting, nor more than
sixty (60) days before any other action. When a determination of shareholders of
record entitled to notice of or to vote at any meeting of shareholders has been
made as provided in this Section 4, such determination shall apply to any
adjournment thereof, unless the Board of Directors fixes a new record date for
the adjourned meeting or further notice is required by statute. If no record
date is fixed, it shall be determined by statute.
SECTION 6. QUORUM. Unless otherwise provided by statute or by
the Certificate of Incorporation, the holders of a majority of the votes of
shares issued and outstanding and entitled to vote thereat, represented in
person or by proxy, shall constitute a quorum at any meeting of shareholders for
the transaction of business. When a quorum is once present to organize a
meeting, it shall not be broken by the subsequent withdrawal of any
shareholders. At any time a quorum is not present at a meeting of the
shareholders, a majority of the shareholders present in person or by proxy and
entitled to vote thereat may adjourn the meeting from time to time, without
notice other than an announcement at the meeting of the place, date and hour of
the adjourned meeting, until a quorum shall be present, and at the adjourned
meeting at which a quorum is present any business may be transacted that might
have been transacted at the meeting as originally called.
SECTION 7. WAIVERS. Notice of meeting need not be given to
any shareholder who signs and submits a waiver of notice, in person or by proxy,
whether before or after the meeting. The attendance of any shareholder at a
meeting, in person or by proxy, without protesting prior to the conclusion of
the meeting the lack of notice of such meeting shall constitute a waiver of
notice by such shareholder.
SECTION 8. PROXIES. Every shareholder entitled to vote at a
meeting of shareholders or to express consent or dissent without a meeting may
authorize another person or other persons to act for him or her by proxy, in the
manner and to the extent provided by statute.
SECTION 9. QUALIFICATION OF VOTERS. Every shareholder of
record shall be entitled at every meeting of the shareholders to one vote for
each share standing in his or her name on the record of shareholders of the
Corporation, unless otherwise provided by statute, by the Certificate of
Incorporation or by these By-laws.
SECTION 10. ORDER OF BUSINESS. For business properly to be
brought before a meeting by a shareholder (including, without limitation, the
nomination of a person or persons to the Board of Directors), the shareholder
must have given timely notice thereof in proper written form
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to the Secretary of the Corporation. To be timely, a shareholder's notice must
be delivered to or mailed and received at the principal executive offices of the
Corporation (a) in the case of an annual or special meeting of shareholders, not
fewer than sixty (60) days or more than ninety (90) days prior to the meeting at
which such business will be considered; provided, however, that, if fewer than
sixty (60) days' notice or prior public disclosure of the date of the meeting is
given or made to shareholders, notice by the shareholder to be timely must be
received not later than the close of business on the earlier of (i) the tenth
day following the day on which such notice of the date of the meeting was mailed
or such public disclosure was made or (ii) the last business day prior to the
meeting date; and (b) in the case of an annual meeting of shareholders, not
fewer than sixty (60) days in advance of the date of the previous year's annual
meeting of shareholders. To be in proper written form, a shareholder's notice to
the Secretary shall set forth in writing as to each matter the shareholder
proposes to bring before the meeting: (w) a brief description of the business
desired to be brought before the meeting and the reasons for conducting such
business at the meeting; (x) the name and address, as they appear on the
Corporation's books, of the shareholder proposing such business; (y) the class
and number of shares of the Corporation that are held of record and that are
beneficially owned by such shareholder; and (z) any material interest of such
shareholder in such business. If the business proposed to be brought before the
meeting by a shareholder involves the nomination of a person or persons to the
Board of Directors, the notice to the Secretary also shall set forth all the
information relating to the person or persons that is required to be disclosed
in solicitations of proxies for election of directors, or is otherwise required,
pursuant to Regulation 14A under the Securities Exchange Act of 1934.
Notwithstanding anything else in these By-laws to the contrary, no business
shall be conducted at a meeting of shareholders that contravenes the procedures
set forth in this Section 10. The chairman of a meeting shall, if the facts
warrant, determine that business was not properly brought before the meeting in
accordance with the provisions of this Section 10 and, if the chairman of the
meeting should so determine, any such business not properly brought before the
meeting shall not be transacted and a declaration to such effect shall be made
to the meeting. The Board of Directors of the Company shall be entitled to make
such rules or regulations for the conduct of meetings of shareholders as it
shall deem necessary, appropriate or convenient. Subject to such rules and
regulations of the Board of Directors, if any, the chairman of the meeting shall
have the right and authority to prescribe such rules, regulations and procedures
and to do all such acts as, in the judgment of such chairman, are necessary,
appropriate or convenient for the proper conduct of the meeting, including,
without limitation, establishing an agenda or order of business for the meeting,
rules and procedures for maintaining order at the meeting and the safety of
those present, limitations on participation in such meeting to shareholders of
record of the Company and their duly authorized and constituted proxies, and
such other persons as the Chairman shall permit, restrictions on entry to the
meeting after the time fixed for the commencement thereof, limitations on the
time allotted to questions or comment by participants and regulation of the
opening and closing of the polls for balloting on matters which are to be voted
on by ballot. Unless, and to the extent, otherwise determined by the Board of
Directors or the chairman of the meeting, meetings of shareholders shall not be
required to be held in accordance with rules of parliamentary procedure.
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SECTION 11. VOTING. Unless otherwise provided by statute or by
the Certificate of Incorporation, all elections for directors shall be
determined by a plurality of the votes cast, whether in person or by proxy, at a
meeting of shareholders by the holders of shares entitled to vote in the
election, and all other corporate action shall be by a majority of the votes
properly cast at a meeting of shareholders, whether in person or by proxy. All
voting for the election of directors shall be by ballot.
SECTION 12. LIST OF SHAREHOLDERS. A list of shareholders as of
the record date, certified by the corporate officer responsible for its
preparation or by a transfer agent, shall be produced at any meeting upon the
request thereat or prior thereto of any shareholder. If the right to vote at any
meeting is challenged, the inspectors of the election, or person presiding
thereat, shall require such list of shareholders to be produced as evidence of
the right of the persons challenged to vote at such meeting, and all persons who
appear from such list to be shareholders entitled to vote thereat may vote at
such meeting.
SECTION 13. INSPECTORS OF ELECTION. Prior to the holding of
each annual or special meeting of the shareholders, one or more inspectors of
election to serve thereat shall be appointed by the Board of Directors, or, if
the Board shall not have made such appointment, by the Chairman of the Board or
the President. If there shall be a failure to appoint an inspector, or if, at
any such meeting, the inspector or inspectors so appointed shall be absent or
shall fail to act or the office shall become vacated, the chairman of the
meeting may, and at the request of a shareholder present in person and entitled
to vote at such meeting shall, appoint such inspector or inspectors of election
to act thereat. The inspector or inspectors of election so appointed to act at
any meeting of the shareholders, before entering upon the discharge of their
duties, shall be sworn faithfully to execute the duties of inspector at such
meeting, with strict impartiality and according to the best of his or her
ability, and the oath so taken shall be subscribed by such inspector. Such
inspector or inspectors of election shall take charge of the polls, and, after
the voting on any question, shall make a certificate of the results of the vote
taken. No director or candidate for the office of director shall act as an
inspector of an election of directors. Inspectors need not be shareholders.
ARTICLE III - BOARD OF DIRECTORS
SECTION 1. NUMBER, QUALIFICATION AND TERM OF OFFICE. The
business of the Corporation shall be managed under the direction of the Board of
Directors. The number of directors that shall constitute the whole Board of
Directors shall be fixed exclusively by one or more resolutions adopted by the
Board of Directors. The directors need not be residents of the State of New York
and need not be shareholders. No decrease in the number of directors shall
shorten the term of an incumbent director. Members of the Board of Directors
shall be elected at each annual meeting of shareholders in accordance with and
subject to the provisions of the Certificate of Incorporation. Directors so
elected shall serve until their successors have been elected and qualified
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or until an earlier resignation, removal or other displacement from office as
provided in these By-laws.
SECTION 2. PLACE OF MEETINGS. The Board of Directors may hold
its meetings, regular or special, at such place or places, within or without the
State of New York, as the Board of Directors may from time to time determine or
as may be specified in the notice of any meeting.
SECTION 3. ANNUAL MEETINGS. An annual meeting of the Board of
Directors shall be held following the annual meeting of the shareholders for the
purposes of electing officers of the Corporation and the committees of the Board
of Directors and transacting any other business which may properly come before
the meeting. Notice of annual meetings of the Board of Directors need not be
given in order legally to constitute the meeting, provided a quorum shall be
present.
SECTION 4. REGULAR MEETINGS. Regular meetings of the Board of
Directors shall be held at times and dates fixed by the Board or at such other
times and dates as the Chairman or President shall determine and as shall be
specified in the notice of such meetings. Notice of regular meetings of the
Board of Directors need not be given except as otherwise required by statute or
these By-laws.
SECTION 5. SPECIAL MEETINGS. Special meetings of the Board of
Directors may be called by the Secretary of the Corporation upon the written
request of the Chairman or President or any two directors.
SECTION 6. NOTICE OF MEETINGS. Notice of each special meeting
of the Board of Directors (and of each regular meeting for which notice shall be
required) shall be given by the Secretary as hereinafter provided in this
Section 6, which notice shall state the time, place and, if required by statute
or these By-laws, the purposes of such meeting. Notice of each such meeting
shall be mailed, postage thereon prepaid, to each director, by first-class mail,
at least four days before the day on which such meeting is to be held, or shall
be sent by facsimile transmission or comparable medium, or be delivered
personally or by telephone, at least twenty-four hours before the time at which
such meeting is to be held. Any meeting of the Board of Directors shall be a
legal meeting without notice thereof having been given, if all the directors of
the Corporation then holding office shall be present thereat.
SECTION 7. WAIVERS. Notice of a meeting need not be given to
any director who signs a waiver of notice, whether before or after the meeting.
The attendance of any director at a meeting without protesting prior to the
meeting or at its commencement the lack of notice of such meeting, shall
constitute a waiver of notice by such director.
SECTION 8. QUORUM. Unless otherwise provided by statute, the
Certificate of Incorporation or these By-laws, a majority of the entire Board of
Directors shall constitute a quorum
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for the transaction of business or of any specified item of business. At any
time a quorum is not present at a meeting of the Board of Directors, a majority
of the directors participating may adjourn the meeting from time to time until a
quorum shall be present thereat; and notice of any adjournment to another time
or place shall be given to the directors who were absent at the time of the
adjournment and, unless the new time and place are announced at the meeting to
be adjourned, to the other directors.
SECTION 9. MEETING PARTICIPATION WITHOUT PHYSICAL PRESENCE.
Any one or more members of the Board of Directors or of any committee thereof
may participate in a meeting of the Board of Directors or of such committee by
means of conference telephone or similar communications equipment allowing all
persons participating in the meeting to hear each other at the same time.
Participation by such means shall constitute presence in person at a meeting.
SECTION 10. ACTION OF THE BOARD. Unless otherwise provided by
statute, the Certificate of Incorporation or these By-laws, the vote of a
majority of the directors at any meeting at which a quorum is present shall be
the act of the Board of Directors. Each director shall have one vote regardless
of the number of shares, if any, which he or she may hold.
SECTION 11. ACTION BY CONSENT WITHOUT A MEETING. Any action
required or permitted to be taken by the Board of Directors or any committee
thereof may be taken without a meeting if all members of the Board or of such
committee consent in writing to the adoption of a resolution authorizing such
action. The written consent or consents to each such action, including the
resolutions adopted thereby, shall be filed with the minutes of the proceedings
of the Board of Directors or of the committee taking such action.
SECTION 12. EXECUTIVE AND OTHER COMMITTEES. The Board of
Directors, by resolution adopted by a majority of the entire Board, may
designate from among its members an executive committee and other committees,
each consisting of one (1) or more directors, and each of which shall have all
the authority of the Board of Directors to the extent provided in the
resolution, except as otherwise provided by statute. Each such committee shall
serve at the pleasure of the Board of Directors and shall keep minutes of its
meetings and report the same to the Board of Directors as and when requested by
the Board and shall observe such other procedures with respect to its meetings
as are provided in these By-laws or, to the extent not provided herein, as may
be provided by the Board of Directors in the resolution appointing such
committee or as may be adopted by the Board of Directors thereafter.
SECTION 13. REMOVAL. Unless otherwise provided by statute, any
or all directors may be removed for cause by vote of the shareholders or by
action of the Board of Directors at a special meeting called for that purpose.
SECTION 14. RESIGNATION. Any director may resign at any time
by giving written notice to the Board of Directors, the President or the
Secretary of the Corporation. Unless otherwise
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specified in the notice, the resignation shall take effect upon receipt thereof
by the Board of Directors or such officer, and acceptance of the resignation
shall not be necessary to make it effective.
SECTION 15. NEWLY CREATED DIRECTORSHIPS AND VACANCIES. Newly
created directorships resulting from an increase in the number of directors and
vacancies occurring in the Board of Directors for any reason shall be filled in
accordance with and subject to the provisions of the Certificate of
Incorporation.
SECTION 16. COMPENSATION. The Board of Directors, by
resolution and irrespective of any personal interest of any of its members,
shall have the authority to establish reasonable compensation and fix
reimbursement for reasonable expenses of all directors for their services to the
Corporation as directors, officers or otherwise.
ARTICLE IV - OFFICERS
SECTION 1. OFFICERS. The officers of the Corporation shall
include the Chairman, the President, one or more Vice Presidents (one or more of
whom may be designated as Executive Vice Presidents or as Senior Vice Presidents
or by other designations), the Secretary, the Treasurer and such other officers
as the Board of Directors may from time to time deem necessary, each of whom
shall have such duties, powers and functions as provided in these By-laws and as
may be determined from time to time by resolution of the Board of Directors. Two
or more offices may be held by the same person; provided, however, that no
officer shall execute, acknowledge or verify any instrument in more than one
capacity. Each of the officers shall, when requested, consult with and advise
the other officers of the corporation.
SECTION 2. ELECTION OR APPOINTMENT AND TERM OF OFFICE. Each
officer shall be elected or appointed by the Board of Directors to hold office
until the next annual meeting of the Board of Directors and until his or her
successor is elected or appointed and qualified, or until such earlier date as
shall be prescribed by the Board of Directors at the time of his or her election
or appointment or until an earlier resignation, removal or displacement from
office. Any officer elected or appointed by the Board of Directors may be
removed at any time, with or without cause, by vote of a majority of the Board
of Directors.
SECTION 3. VACANCIES. In the event of the resignation, removal
or other displacement from office of an officer elected or appointed by the
Board of Directors, the Board, in its sole discretion, may elect or appoint a
successor to fill the unexpired term.
SECTION 4. THE CHAIRMAN. The Chairman shall, together with the
President, have general direction over the day-to-day business of the
Corporation, subject to the control and direction of the Board of Directors. The
Chairman shall, when present, preside as chairman at all
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meetings of the shareholders and of the Board of Directors. The Chairman shall,
in the absence or incapacity of the President, perform all duties and functions
and exercise all the powers of the President. The Chairman shall also have such
other powers and perform such other duties required by statute or by these
By-laws or as the Board of Directors may from time to time determine.
SECTION 5. THE PRESIDENT. The President shall, together with
the Chairman, have general direction over the day-to-day business of the
Corporation, subject to the control and direction of the Board of Directors. In
the absence of the Chairman, the President shall preside at meetings of the
shareholders and of the Board of Directors. The President shall, in the absence
or incapacity of the Chairman, perform all duties and functions and exercise all
the powers of the Chairman. The President shall also have such other powers and
perform such other duties required by statute or by these By-laws or as the
Board of Directors may from time to time determine.
SECTION 6. VICE PRESIDENTS. Each Vice President shall have
such powers and perform such duties as from time to time may be assigned to him
or her by the Board of Directors or be delegated to him or her by the Chairman
or by the President. In the absence or inability to perform of the Chairman and
the President, the Vice President (or if there is more than one Vice President,
then the Executive Vice President) shall have all the powers and functions of
the President.
SECTION 7. TREASURER. The Treasurer shall have the safekeeping
and custody of the corporate funds and other valuable effects, including
securities, shall keep full and accurate accounts of receipts and disbursements
in books belonging to the Corporation, and shall deposit all money and other
valuable effects in the name and to the credit of the Corporation in such
depositories as may be designated by the Board of Directors. The Treasurer shall
disburse the funds of the Corporation under the direction of the President or
the Chairman, taking proper vouchers for such disbursements, and render to the
President and the Chairman at the annual and regular meetings of the Board of
Directors, or whenever the President or the Chairman require it, an account of
all transactions as Treasurer and of the financial condition of the Corporation.
The Treasurer shall make a full financial report at the annual meeting of
shareholders. The Treasurer shall also have such other powers and perform such
other duties incident to the office of Treasurer required by statute or by these
By-laws or as the Board of Directors may from time to time determine.
SECTION 8. SECRETARY. The Secretary shall keep or cause to be
kept in one or more books provided for such purpose, the minutes of all meetings
of the Board of Directors, shareholders and committees of the Board of
Directors, see that all notices are duly given in accordance with the provisions
of these By-laws and as required by law and see that the books, reports,
statements, certificates and other documents and records required by law to be
kept and filed are properly kept and filed. The Secretary shall also have such
other powers and perform such other duties incident to the office of Secretary
required by law or by these By-laws or as the Board of Directors may from time
to time determine.
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SECTION 9. DESIGNATED OFFICERS. (a) Chief Executive Officer.
Either the Chairman or the President, or both, as the Board of Directors may
designate, shall be the Chief Executive Officer of the Corporation. The officer
so designated shall have, in addition to the powers and duties applicable to his
or her office set forth in this Article IV, general and active supervision and
direction over the business and affairs of the Corporation and over its several
officers, agents and employees, subject, however, to the control of the Board of
Directors. The Chief Executive Officer shall also have such other powers and
duties incident to the designated position of Chief Executive Officer as the
Board of Directors may from time to time determine. Any reference to the Chief
Executive Officer in these By-laws shall be deemed to mean, if there is a
Co-Chief Executive Officer, either Co-Chief Executive Officer, each of whom may
exercise the full powers and authorities of the designated position of Chief
Executive Officer.
(b) Other Designated Officers. The Board of Directors may from
time to time designate officers to serve as Chief Financial Officer, Chief
Accounting Officer and other such designated positions and to fulfill the
responsibilities of such designated positions in addition to the powers and
duties applicable to his or her office as set forth in this Article IV. Such
designated officers shall also have such other powers and duties incident to his
or her designated position as the Board of Directors may from time to time
determine.
SECTION 10. COMPENSATION. The salaries and other compensation
of all officers elected by the Board of Directors shall be fixed from time to
time by or under the direction of the Board of Directors.
ARTICLE V - INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Corporation shall, to the fullest extent permitted by
applicable law as in effect at any time, indemnify any director (and may
indemnify any officer) made, or threatened to be made, a party to an action or
proceeding, whether civil or criminal, including an action by or in the right of
any other corporation of any type or kind, domestic or foreign, or any
partnership, joint venture, trust, employee benefit plan or other enterprise,
which any director or officer of the Corporation served in any capacity at the
request of the Corporation, by reason of the fact that he or she, his or her
testator or intestate, was a director or officer of the corporation, or served
such other corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise in any capacity, against judgments, fines, amounts paid in
settlement and reasonable expenses, including reasonable attorneys' fees
incurred as a result of such action or proceeding, or any appeal therein;
provided that to the extent prohibited by applicable law no indemnification may
be made to or on behalf of any director or officer if a judgment or other final
adjudication adverse to the director or officer establishes that his or her acts
were committed in bad faith or were the result of active and deliberate
dishonesty and were material to the cause of action so adjudicated, or that he
or she personally gained in fact a financial profit or other advantage to which
he or she was not legally entitled. The
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right to indemnification pursuant to this Article V is intended to be
retroactive and shall, to the extent permitted by applicable law, be available
with respect to events occurring prior to the adoption hereof and shall continue
to exist after any future rescission or restrictive modification hereof with
respect to any alleged cause of action that accrues, or any other incident or
matter that occurs, prior to such rescission or modification.
ARTICLE VI - SHARES
SECTION 1. CERTIFICATES FOR SHARES. The certificates for
shares of the Corporation shall be in such form as shall be determined by the
Board of Directors, and shall be numbered and entered in the books of the
Corporation as they are issued. Each certificate shall exhibit the registered
holder's name, the number and class of shares, and the designation of any
series, if any, that it evidences, and shall set forth such other statements as
may be required by statute. Each certificate shall be signed by the Chairman or
the President and by the Secretary or the Treasurer, any or all of whose
signatures may be facsimile if such certificate is countersigned by a transfer
agent or registered by a registrar. Each certificate may be sealed with the seal
of the Corporation or a facsimile thereof. In case any one or more of the
officers who have signed or whose facsimile signatures appear on any such
certificate shall cease to be such officer or officers of the Corporation,
whether because of resignation, removal or other displacement from office,
before such certificate is issued and delivered, it may nonetheless be issued
and delivered with the same effect as if such officer or officers had continued
in office.
SECTION 2. LOST, MUTILATED, STOLEN OR DESTROYED CERTIFICATES.
The Board of Directors may direct a new certificate or new certificates be
issued in place of any certificate theretofore issued by the Corporation alleged
to have been lost, mutilated, stolen or destroyed. When authorizing such issue
of a new certificate, the Board of Directors, in its discretion and as a
condition precedent to the issuance thereof, may prescribe such terms and
conditions as it deems expedient, and may require such indemnities as it deems
adequate, to protect the Corporation from any claim that may be made against it
with respect to any such certificate alleged to have been lost, mutilated,
stolen or destroyed.
SECTION 3. TRANSFER AGENT AND REGISTRAR; REGULATIONS. The
Board of Directors may appoint transfer agents or registrars, or both, and may
require all share certificates to bear the signature of either or both. The
Board of Directors may make such additional rules and regulations as it may deem
expedient concerning the issue, transfer and registration of certificates for
shares of the Corporation.
SECTION 4. TRANSFER OF SHARES. Upon surrender to the
Corporation or the transfer agent of the Corporation of a certificate for shares
duly endorsed or accompanied by proper evidence of succession, assignment or
authority to transfer, the Corporation shall issue or cause the transfer
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agent to issue a new certificate to the person entitled thereto, shall cancel
the old certificate and shall record such transfer upon the books of the
corporation.
SECTION 5. CANCELLATION OF CERTIFICATES. Each certificate for
shares to be canceled shall be marked "CANCELED" across the face thereof by the
Secretary, with the date of cancellation, and the transaction shall be
immediately recorded in the certificate book opposite the memorandum of issue.
The canceled certificate should be inserted thereafter in the certificate book.
SECTION 6. CONTINGENT INTEREST IN SHARES. No entry shall be
made in the books of the Corporation or on any certificate for shares that any
person is entitled to any future, limited or contingent interest in any share.
SECTION 7. UNCERTIFICATED SHARES. The Board of Directors may
in its discretion authorize the issuance of shares which are not represented by
certificates and provide for the registration and transfer thereof on the books
and records of the Corporation or any transfer agent or registrar so designated.
SECTION 8. SHAREHOLDER RECORDS. The names and addresses of the
persons to whom shares are issued, and the number of shares and the dates of
issue and any transfer thereof, whether in certificated or uncertificated form,
shall be entered on records kept for that purpose. The stock transfer records
and the blank stock certificates shall be kept by the transfer agent, or by the
treasurer, or such other officer as shall be designated by the Board of
Directors for that purpose.
ARTICLE VII - GENERAL
SECTION 1. FISCAL YEAR. The fiscal year of the Corporation
shall be fixed and may from time to time be changed by resolution of the Board
of Directors.
SECTION 2. SEAL. The seal of the Corporation, if any, shall be
circular in form and bear the name of the Corporation, the year of its
organization and the words "Corporate Seal New York." The seal may be used by
causing it or a facsimile thereof to be impressed, affixed or reproduced
directly on the instrument or writing to be sealed.
SECTION 3. INSTRUMENTS AND DOCUMENTS. All corporate
instruments and documents shall be signed, countersigned, executed, verified or
acknowledged by such officers or other person or persons as the Board of
Directors may from time to time designate.
SECTION 4. AMENDMENTS. These By-laws may be amended or
repealed or new By-laws may be adopted by the shareholders at any annual or
special meeting if the notice thereof mentions that amendment or repeal or the
adoption of new By-laws is one of the purposes of such
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meeting; provided, however, that the provisions of the By-laws relating to the
Board of Directors and meetings of shareholders may be amended or modified only
by (i) the affirmative vote of the holders of at least 80% of voting power of
all the then-outstanding shares of voting stock of the corporation entitled to
vote at an election of directors, voting together as a single class, or (ii) the
affirmative vote of a majority of the total number of directors then in office.
These By-laws may also be amended or repealed or new By-laws may be adopted by
the affirmative vote of a majority of the Board of Directors given at any
meeting, if the notice thereof mentions that amendment or repeal or the adoption
of new By-laws is one of the purposes of such meeting. If any By-laws relating
to the election of directors or meetings of shareholders are amended, notice of
such amendment shall be given to shareholders to the extent required by law.
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FIFTH AMENDMENT TO
CREDIT AGREEMENT
THIS FIFTH AMENDMENT TO CREDIT AGREEMENT (this "Fifth Amendment") is
made as of October 26, 1998, by and among BED BATH & BEYOND INC., a New York
corporation (the "Company"), and BED-N-BATH STORES INC., a New Jersey
corporation ("BNBS"), BBBL, INC., a Delaware corporation ("BBBL"), BED BATH &
BEYOND OF CALIFORNIA LIMITED LIABILITY COMPANY, a Delaware limited liability
company ("Calco"), and BBBY MANAGEMENT CORPORATION, a New Jersey corporation
("BBBY", and together with BNBS, BBBL and Calco, collectively, the "Guarantors"
and individually, a "Guarantor," and the Guarantors together with the Company,
collectively, the "Credit Parties"), and THE CHASE MANHATTAN BANK, a New York
banking corporation ("Chase").
W I T N E S S E T H:
WHEREAS, the Credit Parties and Chase are parties to that certain
Credit Agreement dated as of October 26, 1994, as amended that certain First
Amendment, dated as of October 1, 1995, as further amended by that certain
Second Amendment, dated as of February 24, 1997, that certain Third Amendment,
dated as of September 11, 1997 and that certain Fourth Amendment, dated as of
September 19, 1997 (such Credit Agreement, as amended by the First Amendment,
the Second Amendment, the Third Amendment and the Fourth Amendment, shall
hereafter be known as, the "Credit Agreement"); and
WHEREAS, the Credit Parties and Chase have agreed to further amend the
Credit Agreement, to (i) extend the term of the revolving credit facility
thereunder and eliminate the conversion option thereof to a term loan, (ii)
eliminate the "L/C Commitment," and (iii) otherwise modify certain of the terms
and provisions therein;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto hereby agree as follows:
1. MODIFICATION OF THE CREDIT AGREEMENT. The Credit Agreement is hereby
amended in the following particulars, effective as of the date hereof:
(A)(i) The following new or revised definitions are hereby
inserted in Section 1.1 of the Credit Agreement (Defined Terms) as follows:
"Applicable Margin": for each Type of Loan, the rate per annum
under the relevant column heading below:
Eurodollar COF
Chase Rate Loan Loans Rate Loans
- --------------- ----- ----------
-1.00% 0.50% 0.50%
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<PAGE> 2
"Bank": means Chase (and "Chase" and "Bank" are used
interchangeably throughout this Agreement).
"Consolidated Adjusted Debt": at a particular date, Consolidated Funded
Debt plus the product of eight (8) times Rental Payments.
"Consolidated EBITDAR": for any period, the sum of (i) Consolidated Net
Income plus (ii) Consolidated Interest Expense plus (iii) the income tax expense
of the Company and its Subsidiaries for such period determined on a consolidated
basis in accordance with GAAP plus (iv) the amount reported as the depreciation
of the assets of the Company and its Subsidiaries for such period determined on
a consolidated basis in accordance with GAAP, as such item is used in the
computation of Consolidated Net Income for such period plus (v) the amount
reported as the amortization of Consolidated Intangibles of the Company and its
Subsidiaries for such period determined on a consolidated basis in accordance
with GAAP, as such item is used in the computation of Consolidated Net Income
for such period plus Rental Payments.
"Consolidated Funded Debt": at a particular date, the sum of (i) the
aggregate principal amount of all indebtedness outstanding as of such date that
would appear as Indebtedness on a consolidated balance sheet of the Company and
its Subsidiaries prepared as of such date in accordance with GAAP plus (ii) the
aggregate principal amount outstanding of all consolidated Guarantee Obligations
of the Company and its Subsidiaries as of such date plus (iii) obligations under
Financing Leases.
"Permitted Acquisitions": means the acquisition by any of the Credit
Parties or any wholly owned Subsidiary of a Credit Party of all or substantially
all of the capital stock, securities, assets or other ownership interests of any
Person in any transaction or series of related transactions provided that (i) at
the time of such acquisition, no Event of Default has occurred and is continuing
or after giving effect to such acquisition would at the time of such acquisition
occur; (ii) such Person, at the time of acquisition, engages in a substantially
similar business (it being agreed that the term "substantially similar business"
shall mean any retail business operating through any medium, including, without
limitation, by operating stores, distributing catalogs, maintaining an internet
"web page" or other on-line presence) in which the Company, any Credit Party or
Subsidiary engages on the date hereof; (iii) at the time of such acquisition,
the Credit Parties shall have provided to Chase financial projections (certified
by the Company's chief financial officer), for the twelve (12) month period
immediately subsequent to such acquisition, which projections shall show that
after giving effect to such acquisition, the Credit Parties shall be in
compliance with all the financial covenants and other provisions of this
Agreement; (iv) the aggregate consideration paid for all such acquisitions
throughout the term of this Agreement (including, without limitation, by payment
in cash, issuance of capital stock, issuance of subordinated debt or assumption
of Indebtedness) shall not exceed $100,000,000; (v) the proposed acquisition may
not be "contested" by any Person; (vi) the proposed acquisition documents
(including, without limitation, the stock or asset purchase agreement) shall
have been provided to Chase at least fourteen (14) days prior to the date of the
proposed consummation thereof; and (vii) Chase shall have been provided at least
fourteen (14) days prior to the date of the proposed acquisition consolidated
and consolidating financials of the Credit Parties prepared on a pro forma basis
taking into account the proposed acquisition (certified as to accuracy by the
Company by a certificate signed on the Company's behalf by its chief financial
officer);
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provided, however, that if the aggregate consideration paid for such
acquisitions does not exceed $20,000,000, the provisions of clause (ii) shall
not be applied in determining whether same constitutes a Permitted Acquisition.
"Rental Payments": means for each four-quarter period ending on the
last day of the accounting period covered by the consolidated financial
statements of the Company and its Subsidiaries, and delivered pursuant to this
Agreement, the dollar amount of the fixed payments which the Company or its
Subsidiaries are required to make by terms of any lease to its landlords during
such four-quarter period, (a) excluding, however, (i) rentals under Financing
Leases, and (ii) maintenance, repairs, taxes and other similar charges included
in such payments and (b) less (x) rental income and (y) amortization of gains on
sale-leasebacks.
"Termination Date": means October 26, 2001.
(ii) The following definitions in Section 1.1 of the Credit
Agreement are hereby deleted:
"L/C Commitment"
"Term-out Loan"
"Term-out Note"
(iii) All references to the "Credit Parties" in the Credit
Agreement are deemed to mean the Credit Parties as defined in this Fifth
Amendment; all references to the "Revolving Credit Note(s)" or the "Note(s)" in
the Credit Agreement are deemed to mean the Second Amended and Restated
Revolving Credit Note, dated as of October 26, 1998 (the "1998 Note"); and all
references to the "Obligations" in the Credit Agreement are deemed to include,
along with the other obligations set forth therein, all obligations of the
Credit Parties to the Bank under the 1998 Note.
(B) The reference to "October 1, 1995" in the last sentence of
Section 2.2 of the Credit Agreement (Revolving Credit Notes) is hereby amended
to read: "October 26, 1998."
(C) Section 2.4 of the Credit Agreement (Commitment Fee) is
hereby amended and restated in its entirety to read as follows:
"2.4. Commitment Fee. The Company agrees to pay to Chase a
commitment fee for the period from and including October 26, 1998 to the
Termination Date, computed at the rate of 1/8% of 1% per annum on the average
daily amount of the aggregate Available Revolving Credit Commitment, during the
period for which payment is made, payable quarterly, in arrears on the last day
of each March, June, September and December and on the Termination Date or such
earlier date as the Revolving Commitment shall terminate as provided herein,
commencing on the first of such dates to occur after the date hereof."
(D) Sections 2.6 and 2.7 and any and all other provisions
dealing with the Term-out Loan and the Term-out Note(s) are hereby deleted from
the Credit Agreement in their entirety.
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<PAGE> 4
(E) The first sentence of Section 3.1(a) of the Credit
Agreement (L/C Commitment) is hereby amended by deleting clause (i) thereof so
that the proviso will hereby read as follows:
"provided that Chase shall have no obligation to issue any
Letter of Credit if, after giving effect to such issuance, the Available
Revolving Credit Commitment would be less than zero."
(F) Section 3.1(b) of the Credit Agreement (L/C Commitment) is
hereby amended so that the references to "the State of New Jersey" is amended to
read: "the State of New York."
(G) Section 6 of the Credit Agreement (Representations and
Warranties) is hereby amended as follows:
(i) Section 6.2 of the Credit Agreement (No Change)
is hereby amended by inserting the phrase "to the best of the Company's
knowledge," at the beginning of clause (a) on the 3rd and 4th lines thereof.
(ii) Section 6.3 of the Credit Agreement (Corporate
Existence; Compliance with Law) is hereby amended by deleting the proviso in
clause (d), so that clause (d) will read as follows:
"(d) is in compliance with Requirements of Law except
to the extent that the failure to comply therewith could not, in the aggregate,
have a Material Adverse Effect."
(iii) Section 6.7 of the Credit Agreement (No
Default) s hereby amended by deleting the second sentence thereof in its
entirety.
(iv) Section 6.11 of the Credit Agreement (Taxes) is
hereby amended by adding the words "which could have a Material Adverse Effect"
to the end thereof after the word "charge."
(v) Section 6.15 of the Credit Agreement
(Subsidiaries) is hereby amended by deleting the first sentence thereof and by
replacing the word "Guarantors" with the words "Credit Parties."
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(H) Section 6 of the Credit Agreement (Representations and
Warranties) is hereby amended to add the following new Section 6.18 as follows:
"6.18 Year 2000. To the best of the Company's
knowledge, any reprogramming required to permit the proper functioning, in and
following the year 2000, of (i) the Company's and its Subsidiaries' computer
systems and (ii) equipment containing embedded microchips (including systems and
equipment supplied by others or with which Company's and its Subsidiaries'
system interface) and the testing of all such systems and equipment, as so
reprogrammed, will be completed on or prior to the end of the second fiscal
quarter of 1999. To the best of the Company's knowledge, the cost to the Company
and its Subsidiaries of such reprogramming and testing and of the reasonably
foreseeable consequences of year 2000 to the Company and its Subsidiaries
(including, without limitation, reprogramming errors and the failure of others'
systems or equipment) will not result in a Default, Event of Default, or a
Material Adverse Effect. Except for such of the reprogramming referred to in the
preceding sentence as may be necessary, to the best of the Company's knowledge,
the computer and management information systems of the Company and its
Subsidiaries are and, with ordinary course upgrading and maintenance, will
continue for the term of this Agreement to be, sufficient to permit each of the
Company and its Subsidiaries to conduct its business without Material Adverse
Effect."
(I) Section 9.1(a) of the Credit Agreement (Maintenance of
Current Ratio) is hereby deleted in its entirety and is replaced by the
following:
"(a) Maintenance of Cash Flow Leverage. Permit the
ratio of Consolidated Adjusted Debt at the end of any fiscal quarter to
Consolidated EBITDAR for the period of four (4) consecutive fiscal quarters
ending on such date to be greater than 3.50 to 1.00."
(J) Section 9.1(b) of the Credit Agreement (Maintenance of
Tangible Net Worth) is hereby amended and restated in its entirety to read as
follows:
"(b) Maintenance of Tangible Net Worth. Permit the
Consolidated Tangible Net Worth of the Company at any time during any fiscal
quarter to be less than the sum of (x) $277,125,000 less the amount of any
declared but unpaid dividends described in Section 9.9 plus (y) 50% of
cumulative Consolidated Net Income for the prior fiscal year then ended."
(K) Section 9.3 of the Credit Agreement (Adjusted Senior
Debt/TNW) is hereby deleted in its entirety to read as follows: "Intentionally
Omitted."
(L) Section 9.4 of the Credit Agreement (Limitation on
Indebtedness) is hereby amended and restated in its entirety to read as follows:
"9.4 Limitation on Indebtedness. Create, incur,
assume or suffer to exist any Indebtedness, except:
(a) Indebtedness in respect of the Loans, the Note,
the Letter of Credit and other obligations of the Company under this Agreement;
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<PAGE> 6
(b)(i) Indebtedness of any Credit Party (A) to any
other Credit Party or (B) consisting of Indebtedness of the Company which is
subordinated to the Loans on terms reasonably satisfactory to Chase, and (ii)
Indebtedness of any Credit Party or any of their respective Subsidiaries to the
Company or the Guarantors.
(c) Indebtedness of the Credit Parties and their
Subsidiaries in an aggregate principal amount not exceeding as to the Credit
Parties and their respective Subsidiaries $40,000,000 at any time outstanding.
The amount permitted in this subsection 9.4(c) shall not be in addition to that
amount permitted under Sections 9.6 and 9.14 but shall be cummulative with such
amount so that the total amount of Indebtedness, direct or contingent, or
sale/leaseback transactions permitted by Sections 9.4(c), 9.6 and 9.14 shall not
exceed in the aggregate principal amount of $40,000,000;
(d) Indebtedness outstanding on the Closing Date and
listed on Schedule II;
(e) Accrued future lease payments determined in
accordance with GAAP; and
(f) Deferred compensation payable to present and past
employees of the Credit Parties and their respective Subsidiaries."
(M) Section 9.5(b) of the Credit Agreement (Limitation on
Liens) is hereby amended and restated in its entirety to read as follows:
"(b) Any lien or liens, including without limitation,
carriers', warehousemen's, mechanics', materialmen's, repairmen's or judgement
liens, involving in the aggregate a liability (not paid or covered by insurance)
of $10,000,000 or less."
(N) Section 9.6 of the Credit Agreement (Limitation on
Guarantee Obligations) is hereby amended and restated in its entirety to read as
follows:
"9.6 Limitation on Guarantee Obligations. Create,
incur, assume or suffer to exist any Guarantee Obligation except (i) the
Guarantee Obligation of the Guarantors pursuant to Section 11, (ii) guarantees
by the Company of lease obligations of its Subsidiaries under leases of stores
and other facilities, (iii) guaranties made by the Credit Parties of obligations
of any of the other Credit Parties, and (iv) subject to the "basket" limitations
set forth in Section 9.4(c), guarantees of up to the aggregate principal amount
of $40,000,000 at any time outstanding by the Credit Parties of obligations of
any of their Subsidiaries that are not Credit Parties."
(O) Section 9.7 of the Credit Agreement (Limitations on
Fundamental Changes) is hereby amended and restated in its entirety to read as
follows:
"9.7 Limitations on Fundamental Changes. Enter into
any merger, consolidation or amalgamation, or liquidate, wind up or dissolve
itself (or suffer any liquidation or dissolution), or convey, sell, lease,
assign, transfer or other wise dispose of, all or substantially all
-29-
<PAGE> 7
of its property, business or assets, or make any material change in its present
method of conducting business, except:
(a) any Credit Party may be merged or
consolidated with or into any other Credit Party (provided that such Credit
Party shall be the continuing or surviving corporation or entity);
(b) any Subsidiary of any Credit Party may
be merged or consolidated with or into any Credit Party (provided that such
Credit Party shall be the continuing or surviving corporation or entity or with
or into any one or more wholly owned Subsidiaries of any Credit Party (provided
that the wholly owned Subsidiary or Subsidiaries shall be the continuing or
surviving corporation);
(c) any Credit Party may sell, lease,
transfer or otherwise dispose of any or all of its assets (upon voluntary
liquidation, by dividend or otherwise) to any other Credit Party;
(d) any wholly owned Subsidiary of a Credit
Party may sell, lease, transfer or otherwise dispose of any or all of its assets
(upon voluntary liquidation or otherwise) to any Credit Party or any other
wholly owned Subsidiary of any Credit Party; and
(e) any Credit Party or any wholly owned
Subsidiary of a Credit Party may make Permitted Acquisitions."
(P) The last proviso in Section 9.9 of the Credit Agreement
(Limitations on Dividends) is hereby amended and restated in its entirety to
read as follows:
"provided, further, that any Credit Party (including, the
Company) may declare and pay a Dividend of any amount to any other Credit
Party."
(Q) Section 9.11(c) of the Credit Agreement (Limitations on
Investments, Loans and Advances) is hereby amended by replacing the amount
"$500,000" on the fifth (5th) line thereof with the amount "$2,000,000."
(R) Section 9.11(d) of the Credit Agreement (Limitations on
Investments, Loans and Advances) is hereby amended and restated in its entirety
to read as follows:
"(d)(A) investments by the Credit Parties in any of the other
Credit Parties, (B) investments by the Credit Parties in their respective
Subsidiaries or Affiliates that are not Credit Parties not to exceed $20,000,000
in the aggregate, (C) investments by such Subsidiaries in the Credit Parties and
in other Subsidiaries and (D) investments by the Credit Parties in Canadian
Subsidiaries in the form of contributions or indebtedness as permitted under
Section 9.4(b)."
(S) Section 9.13 of the Credit Agreement (Transactions with
Affiliates) is hereby amended and restated in its entirety to read as follows:
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<PAGE> 8
"9.13 Transactions with Affiliates. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service with any Affiliate which is
not a Credit Party unless such transaction is otherwise permitted under this
Agreement or is in the ordinary course of the Credit Party's or such
Subsidiary's business, and is upon fair and reasonable terms no less favorable
to the Credit Party or such Subsidiary, as the case may be, than it would obtain
in a comparable arm's length transaction with a Person not an Affiliate."
(T) Section 9.14 of the Credit Agreement (Sale and Leaseback)
is hereby amended and restated in its entirety to read as follows:
"9.14 Sale and Leaseback Enter into any arrangement
with any Person providing for the leasing by any Credit Party or any of their
respective Subsidiaries of real or personal property which has been or is to be
sold or transferred by such Credit Party or such Subsidiary to such Person or to
any other Person to whom funds have been or are to be advanced by such Person on
the security of such property or rental obligations of such Credit Party or such
Subsidiary, except for any business equipment and except for the sale or
leaseback of store premises up to $40,000,000 in the aggregate amount of
purchase price of such real estate, which amounts shall be included in the
"basket" limitations set forth in subsections 9.4(c)."
(U) Section 9.15 of the Credit Agreement (Corporate Documents)
is hereby amended and restated in its entirety to read as follows:
"9.15 Corporate Documents. Amend its certificate of
incorporation or bylaws or certificate of formation or operating agreement or
other organizational document, except if such amendment would not have a
Material Adverse Effect.
(V) Section 9.16 of the Credit Agreement (Fiscal Year) is
hereby eliminated in its entirety and shall read as follows:
"Section 9.16 Intentionally Omitted."
(W) Section 10.8 of the Credit Agreement (Events of Default)
is hereby amended by replacing the amount of "3,000,000" therein with the amount
"$10,000,000."
(X) Section 10.9 of the Credit Agreement (Events of Default)
is hereby amended by replacing the amount of "$3,000,000" therein with the
amount of "$10,000,000."
(Y) Section 14.2 of the Credit Agreement (Notices) is hereby
amended so that notices to Chase read as follows:
"Chase: The Chase Manhattan Bank
East 36 Midland Avenue
Paramus, New Jersey 07652
Attention: Valerie Schanzer, VP
Telecopy: (201) 599-6755
-31-
<PAGE> 9
with a copy to: Schenck, Price, Smith & King, LLP
10 Washington Street
Morristown, New Jersey 07963-0905
Attention: Patti S. Liberman, Esq.
Telecopy: (973) 540-7300"
(Z) Section 14.11 of the Credit Agreement (Governing Law) is
hereby amended and restated in its entirety to read as follows:
"14.11 GOVERNING LAW. THIS AGREEMENT AND THE NOTE AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE NOTE
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK."
(AA) Section 14.12(a) of the Credit Agreement (Submission to
Jurisdiction; Waivers) is hereby amended to read as follows:
"(a) submits for itself and its property in any legal
action or proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the Courts of the
State of New York, the courts of the United States of America for the Southern
District of New York, and appellate courts from any thereof."
(BB) SCHEDULE I and SCHEDULE III to the Credit Agreement are
hereby replaced by SCHEDULE I and SCHEDULE III to this Fifth Amendment.
2. ESTOPPEL. To induce the Credit Parties to enter into this Fifth
Amendment, each of the Credit Parties hereby represents and warrants to Chase
that:
(A) As of the date hereof, there is currently $-0- of
principal, together with accrued interest thereon, outstanding under the
Revolving Credit Loan; and to the best of the Company's knowledge, the Company
has no defenses, offsets or counterclaims regarding the same.
(B) As of the date hereof, there is currently the amount set
forth in SCHEDULE I to this Fifth Amendment of L/C Obligations outstanding under
the Credit Agreement, and to the best of the Company's knowledge, the Company
has no defenses, offsets or counterclaims regarding the same.
(C) As of the date hereof, the Company, to the best of its
knowledge, has no defenses, offsets or counterclaims regarding its other
Obligations to Chase under the Credit Agreement.
(D) As of the date hereof, each of the Guarantors, to the best
of its knowledge, has no defenses, offsets or counterclaims regarding its
Obligations to Chase under the Credit Agreement.
3. CONDITIONS PRECEDENT. The agreement of Chase to amend the Credit
Agreement as
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<PAGE> 10
set forth in this Fifth Amendment shall not become effective unless Chase shall
have received, in form and substance reasonably satisfactory to Chase and its
counsel, the following:
(A) This Fifth Amendment, duly executed and delivered by the
parties hereto;
(B) The 1998 Note, duly executed and delivered by the Company;
(C) (i) True and complete copies (including all amendments) of
the charters and bylaws of each of the Credit Parties other than Calco, all
certified by the corporate secretaries of each of the Credit Parties other than
Calco to be in full force and effect as of such date; (ii) the certificate of
formation and operating agreement of Calco, certified by the corporate secretary
of the sole member of Calco to be in full force and effect as of such date; and
(iii) corporate resolutions of each of the boards of directors of the Company
and the other Credit Parties other than Calco, respectively, certified by each
of their corporate secretaries as of the date hereof and in full force and
effect and a resolution of the sole member of Calco, certified by the corporate
secretary of the sole member of Calco as of such date, authorizing (x) the
consummation of the transactions contemplated by this Fifth Amendment, and (y)
specific officers to execute and deliver this Fifth Amendment and such other
instruments and documents as may be executed in connection herewith;
(D) Certificates of the corporate secretaries of each of the
Company and the other Credit Parties (including the sole member of Calco)
certifying the names of the officers authorized to execute this Fifth Amendment
and such other instruments and documents as may be executed in connection
herewith, together with true and genuine signatures of each of such officers;
(E) Good standing certificates of the appropriate Governmental
Authorities, dated the most recent practicable date prior to the date hereof,
showing each of the Company and the other Credit Parties to be in good standing
in their respective states of incorporation and such states in which such
entities are authorized to do business;
(F) Payment of an amendment fee of $15,000 by the Company to
Chase in connection with this Fifth Amendment;
(G) Payment of all other reasonable fees and expenses incurred
by Chase in connection with this Fifth Amendment, including, but not limited to,
reasonable fees and expenses of counsel to Chase; and
(H) Such other documents, certificates, opinions, affidavits,
etc. as Chase may reasonably request.
Notwithstanding anything contained in Section 3 to the
contrary, the items set forth in Paragraphs (C), (D) and (E) of this Section 3
may be delivered within fourteen (14) days after the date of this Fifth
Amendment. The failure to delivery such items within such time period will
constitute an Event of Default.
4. REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES. Each of Company and
the other Credit Parties hereby reaffirms the representations and warranties
made by it in the Credit
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<PAGE> 11
Agreement and all of the other Loan Documents as fully and completely as if set
forth herein at length. All of such representations and warranties are true,
correct and complete on the date hereof (except as to such representations and
warranties, which are made as of a specified date, in which case such
representations and warranties remain true as of such date). In addition, each
of Company and the other Credit Parties represents and warrants to Chase that:
(A) Each of the Company and the other Credit Parties has the
power and authority to enter into this Fifth Amendment;
(B) The execution, delivery and performance of this Fifth
Amendment and the instruments and documents executed and delivered by the
Company and the other Credit Parties have been duly authorized by all requisite
corporate or other action and this Fifth Amendment and the instruments and
documents executed and delivered in connection herewith constitute the legal,
valid and binding obligations of the Company and the other Credit Parties,
enforceable against each of them (to the extent each is a party thereto), in
accordance with its terms; and
(C) No Event of Default, or to the best of the Credit Parties'
knowledge, no Default, has occurred and is continuing.
(D) The execution and delivery of this Fifth Amendment and the
instruments and documents executed and delivered in connection herewith, the
consummation of the transactions contemplated hereunder and the fulfillment of
or compliance with the terms and conditions contained herein by the Credit
Parties, to the best of the Credit Parties' knowledge, are not prevented, or
limited by, and do not result in the breach of, any terms, conditions or
provisions of any requirements of law or any contractual obligations of the
Credit Parties in any respect which could have a Material Adverse Effect.
6. POST CLOSING UNDERTAKING. By executing this Fifth Amendment, the
Credit Parties agree to deliver to Chase within ninety (90) days of October 26,
1998, financial projections for the immediately succeeding three (3) years
including a consolidated income statement, consolidated statement of cash flows
and a consolidated balance sheet, in form and substance satisfactory to Chase.
7. MISCELLANEOUS.
(A) EFFECT OF AMENDMENT. Except as amended by this Fifth
Amendment, all terms and provisions of the Credit Agreement and the other Loan
Documents, and all rights of Chase and obligations of the Company and the other
Credit Parties thereunder, remain unchanged and in full force and effect, and
are hereby ratified, adopted and confirmed in all respects. This Fifth Amendment
is incorporated by reference in the Credit Agreement and the other Loan
Documents. This Fifth Amendment is given as a modification of the Company's and
the other Credit Parties' obligations to Chase under the Credit Agreement and is
not give in substitution therefor or extinguishment thereof and is not intended
to be a novation.
(B) COSTS AND EXPENSES. Each of the Company and the other
Credit Parties agrees to pay all reasonable costs and expenses (including,
without limitation, reasonable attorneys'
-34-
<PAGE> 12
fees and expenses) incurred by Chase in connection with the preparation,
execution, delivery and administration of this Fifth Amendment and the documents
executed and delivered in connection herewith.
(C) REFERENCES TO CREDIT AGREEMENT. All references to the
"Agreement" or "this Agreement" in the Credit Agreement are deemed to mean the
Credit Agreement, as amended by this Fifth Amendment.
(D) COUNTERPARTS. This Fifth Amendment may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
agreement.
(E) GOVERNING LAW. This Fifth Amendment shall be governed by
and construed in accordance with the internal laws (and not the law of
conflicts) of the State of New York.
[SIGNATURES ON NEXT PAGE]
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<PAGE> 13
IN WITNESS WHEREOF, the parties hereto have caused this Fifth Amendment to be
duly executed and delivered by their respective officers duly authorized as of
the date set forth above.
BED BATH & BEYOND INC.
By:_____________________________
Name: Warren Eisenberg
Title: Co-Chief Executive Officer
BED-N-BATH STORES INC.
By:_____________________________
Name: Warren Eisenberg
Title: President
BBBL, INC.
By:_____________________________
Name: Warren Eisenberg
Title: President
BBBY MANAGEMENT CORPORATION
By:_____________________________
Name: Warren Eisenberg
Title: President
BED BATH & BEYOND OF CALIFORNIA
LIMITED LIABILITY COMPANY
By: BBBL, INC., sole member
By:_________________________
Name: Warren Eisenberg
Title: President
THE CHASE MANHATTAN BANK
By:_____________________________
Name:
Title:
-36-
<PAGE> 1
SECOND AMENDED AND RESTATED
REVOLVING CREDIT NOTE
$45,000,000 New York, New York
as of October 26, 1998
FOR VALUE RECEIVED, the undersigned (the "Borrower"), a New York corporation,
hereby unconditionally promises to pay to the order of THE CHASE MANHATTAN BANK
(the "Bank"), at the office of the Bank located at East 36 Midland Avenue,
Paramus, New Jersey 07652 or at such other place as the Bank or any holder
hereof may from time to time designate, on the Termination Date (as defined in
the Credit Agreement referred to below) in lawful money of the United State of
America and in immediately available funds, the principal amount of (a)
FORTY-FIVE MILLION DOLLARS ($45,000,000) or, if less, (b) the aggregate unpaid
principal amount of all Revolving Credit Loans made by the Bank to the Borrower
pursuant to Subsection 2.1 of the Credit Agreement. The Borrower further agrees
to pay interest in like money on the unpaid principal amount hereof from time to
time from the date hereof at said office, on the dates, at the rates and for the
periods specified in Sections 2 and 5 of the Credit Agreement.
The holder of this Second Amended and Restated Revolving Credit Note is
authorized to record the date, Type and amount of each Loan made by the Bank,
each continuation thereof, each conversion of all or a portion thereof to
another Type, the date and amount of each payment or prepayment of principal
thereof and the length of each Interest Period with respect thereto, on the
schedule annexed hereto and made a part hereof, which recordation shall
constitute prima facie evidence of the accuracy of the information recorded
absent manifest error; provided, however, that failure by any holder to make any
such recordation on such schedules or continuation thereof shall not in any
manner affect any of the obligations of the Borrower to make payments of
principal and interest in accordance with the terms of this Second Amended and
Restated Revolving Credit Note and the Credit Agreement.
This Second Amended and Restated Revolving Credit Note is the Revolving Credit
Note referred to in, and is entitled to the benefits of, the Credit Agreement
dated as of October 26, 1994, as amended (as so amended, and as the same may
hereafter be amended, modified or supplemented from time to time, the "Credit
Agreement"; capitalized terms not otherwise defined in this Second Amended and
Restated Revolving Credit Note shall have the meanings assigned to them in the
Credit Agreement) among the Borrower, Bed-N-Bath Stores Inc., BBBL, Inc., Bed
Bath & Beyond of California Limited Liability Company, BBBY Management
Corporation and the Bank.
This Second Amended and Restated Revolving Credit Note shall supersede and
replace, the Amended and Restated Revolving Credit Note dated as of October 1,
1995 of the undersigned to the order of Chemical Bank (the predecessor of the
Bank) (the "Prior Note") and shall not be considered a repayment or novation of
the Prior Note. This Second and Amended and Restated
-37-
<PAGE> 2
Revolving Credit Note shall continue the indebtedness of the undersigned to the
Bank under the Prior Note.
The Credit Agreement, among other things, contains provisions for acceleration
of the maturity hereof upon the happening of certain stated events and also for
optional and mandatory prepayments on account of principal hereof prior to the
maturity hereof on the terms and conditions therein specified.
All parties now or hereafter liable with respect to this Second Amended and
Restated Revolving Credit Note, whether maker, principal, surety, guarantor,
endorser or otherwise, hereby waive presentment, demand, protest and all other
notices of any kind.
THIS AMENDED AND RESTATED REVOLVING CREDIT NOTE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
BED BATH & BEYOND INC.
By:
Name: Warren Eisenberg
Title: Co-Chief-Executive Officer
-38-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Balance Sheet as of November 28, 1998 and the Consolidated
Statement of Earnings for the nine months ended November 28, 1998, and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> FEB-27-1999
<PERIOD-END> NOV-28-1998
<CASH> 74,550
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 401,749
<CURRENT-ASSETS> 483,816
<PP&E> 210,893
<DEPRECIATION> (73,642)
<TOTAL-ASSETS> 646,868
<CURRENT-LIABILITIES> 258,371
<BONDS> 0
0
0
<COMMON> 1,392
<OTHER-SE> 371,738
<TOTAL-LIABILITY-AND-EQUITY> 646,868
<SALES> 977,948
<TOTAL-REVENUES> 977,948
<CGS> 577,353
<TOTAL-COSTS> 577,353
<OTHER-EXPENSES> 297,937
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (2,149)
<INCOME-PRETAX> 104,807
<INCOME-TAX> 41,661
<INCOME-CONTINUING> 63,146
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 63,146
<EPS-PRIMARY> .46
<EPS-DILUTED> .44
</TABLE>
