UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13D
Under the Securities Exchange Act of 1934
LINENS 'N THINGS, INC.
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(Name of Issuer)
Common Stock, $0.01 Par Value Per Share
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(Title of Class of Securities)
535679104
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(CUSIP Number)
with copies to:
Jon Scheving Thorsteinsson John M. Reiss, Esq.
Arev Gregory Pryor, Esq.
Bankastraeti 5 White & Case LLP
105 Reykjavik 1155 Avenue of the Americas
Republic of Iceland New York, NY 10036
+44 7843 462247 (212) 819-8247
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
September 12, 2005
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
[ ].
SCHEDULE 13D
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CUSIP No. 535679104
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1 NAME OF REPORTING PERSONS
Jakup a Dul Jacobsen
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY)
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
OO (see Item 3)
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5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Denmark
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NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY OWNED 0
BY EACH REPORTING ---------------------------------------------------------
PERSON WITH 8 SHARED VOTING POWER
4,483,700(1)
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9 SOLE DISPOSITIVE POWER
0
---------------------------------------------------------
10 SHARED DISPOSITIVE POWER
4,483,700(1)
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,483,700(1)
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12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.9%
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14 TYPE OF REPORTING PERSON
IN
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(1) Jakup a Dul Jacobsen may be deemed to be the beneficial owner of the shares
of common stock of Linens 'n Things, Inc. reported herein by Lagerinn ehf
through his direct ownership of Lagerinn ehf and through arrangements with
Kaupthing Bank hf. See Item 3.
SCHEDULE 13D
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CUSIP No. 535679104
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1 NAME OF REPORTING PERSONS
Lagerinn ehf
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY)
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
WC, BK (see Item 3)
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5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Republic of Iceland
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NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY OWNED 0
BY EACH REPORTING ---------------------------------------------------------
PERSON WITH 8 SHARED VOTING POWER
4,483,700(1)
---------------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
---------------------------------------------------------
10 SHARED DISPOSITIVE POWER
4,483,700(1)
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,483,700(1)
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12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.9%
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14 TYPE OF REPORTING PERSON
CO
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(1) Lagerinn ehf may be deemed to be the beneficial owner of the shares of
common stock of Linens 'n Things, Inc. through arrangements with Kaupthing Bank
hf. See Item 3.
SCHEDULE 13D
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CUSIP No. 535679104
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1 NAME OF REPORTING PERSONS
TF Holding P/F
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY)
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X}
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
WC, BK (see Item 3)
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5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Faroe Islands
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NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY OWNED 0
BY EACH REPORTING --------------------------------------------------------
PERSON WITH 8 SHARED VOTING POWER
1,120,925(1)
--------------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
--------------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,120,925(1)
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,120,925(1)
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12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [X]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.5%
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14 TYPE OF REPORTING PERSON
CO
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(1) TF Holding P/F and Lagerinn ehf have agreed in principle that Lagerinn ehf
will sell and TF Holding P/F will purchase twenty-five percent (25%) of the
shares of common stock of Linens 'n Things, Inc. owned by Lagerinn ehf as
of the close of business on September 22, 2005. TF Holding P/F hereby
disclaims beneficial ownership of the remaining seventy-five percent (75%)
of shares of common stock of Linens 'n Things, Inc. owned by Lagerinn ehf
as of the close of business on September 22, 2005 and excludes such shares
from this table. See Item 3.
Item 1. Security and Issuer
This statement on Schedule 13D (this "Statement") relates to the common
stock, $0.01 par value per share (the "Common Stock"), of Linens 'n Things,
Inc., a Delaware corporation (the "Issuer"). According to the Issuer's most
recent Form 10-Q filed with the U.S. Securities and Exchange Commission on
August 1, 2005, the principal executive offices of the Issuer are located at 6
Brighton Road, Clifton, New Jersey 07015.
Item 2. Identity and Background
(a) This statement on Schedule 13D is being filed by: (i) Jakup a Dul
Jacobsen ("Jacobsen"), a citizen of Denmark who engages in activities and
maintains holdings in a number of jurisdictions; (ii) Lagerinn ehf, a Republic
of Iceland corporation ("Lagerinn"); and (iii) TF Holding P/F, a Faroe Islands
corporation ("TF Holding"). Jacobsen, Lagerinn and TF Holding are hereinafter
sometimes collectively referred to as the "Reporting Persons".
(b) The business address of Jacobsen is c/o Lagerinn at Sundaborg 7, 104
Reykjavik, Republic of Iceland.
The address of the principal office and principal business of Lagerinn is
Sundaborg 7, 104 Reykjavik, Republic of Iceland.
The address of the principal office and principal business of TF Holding is
Kongabrugvin, Post Box 329, FO 110 Torshavn.
(c) Jacobsen is an investor who engages in activities and maintains
holdings in a number of jurisdictions and is the Chairman of Lagerinn.
Lagerinn is wholly-owned by Jacobsen. Lagerinn is a holding company through
which Jacobsen holds investments.
TF Holding is a holding company that holds businesses and investments in
the Faroe Islands.
The attached Schedule A lists the executive officers and directors of
Lagerinn and TF Holding and contains the following information with respect to
each such person: (i) name; (ii) business address; (iii) present principal
occupation or employment and the name, principal business and address of any
corporation or other organization in which such employment is conducted; and
(iv) citizenship.
(d) During the past five years, neither Jacobsen, Lagerinn, TF Holding nor,
to the best of Jacobsen's, Lagerinn's, or TF Holding's knowledge, any person
named in Schedule A to this Statement, has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors).
(e) During the past five years, neither Jacobsen, Lagerinn, TF Holding nor,
to the best of Jacobsen's, Lagerinn's, or TF Holding's knowledge, any person
named in Schedule A to this statement, was a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction as a result of which
such person was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activity subject to, federal
or state securities laws or finding any violation with respect to such laws.
(f) Jacobsen is a citizen of Denmark. Lagerinn is a Republic of Iceland
corporation. TF Holding is a Faroe Islands corporation.
Item 3. Source and Amount of Funds or Other Consideration
The aggregate purchase price of the 4,483,700 shares of the Common Stock
currently beneficially owned by Jacobsen and Lagerinn (the "Shares") was
$114,696,043 (the "Purchase Price"). The Shares were purchased by Kaupthing Bank
hf ("Kaupthing") in accordance with certain Agreements, by and between Kaupthing
and Lagerinn, (the "Equity Swap Agreements"). Lagerinn may be deemed to be the
beneficial owner of the shares because it entered into the Equity Swap
Agreements and Jacobsen may be deemed to beneficially own the shares because of
his direct ownership of all the shares of Lagerinn.
Kaupthing has purchased and holds the Shares pursuant to the Equity Swap
Agreements. Lagerinn has the right at any time to close out the Equity Swap
Agreements and purchase the Shares. Kaupthing shall hold the Shares until the
earlier of (i) April 5, 2006 and (ii) such earlier date as Lagerinn closes the
swap agreement and purchases the Shares (the "Closing Date"). On the Closing
Date, Lagerinn is obligated to purchase the Shares from Kaupthing pursuant to
the Equity Swap Agreements. Lagerinn has the exclusive right to direct Kaupthing
to vote and dispose of the Shares. Pursuant to the Equity Swap Agreements,
Lagerinn bears the economic risk and benefit of the Shares. Any dividends paid
on the Shares shall be paid to Lagerinn on the Closing Date. If Lagerinn does
not purchase the Shares by April 5, 2006, Kaupthing has the right to dispose of
the Shares as it sees fit and shall pay to Lagerinn, with respect to the Shares
purchased pursuant to each Equity Swap Agreement, the increase in value of such
Shares from the date of such Equity Swap Agreement (subject to certain offsets
for fees and brokerage commissions). In the event that Lagerinn does not
purchase the Shares by April 5, 2006 and the Shares decrease in value, Lagerinn
shall pay to Kaupthing, with respect to the Shares purchased pursuant to each
Equity Swap Agreement, the amount of the decrease in value of such Shares from
the date of such Equity Swap Agreement (together with certain fees and brokerage
commissions). Lagerinn is also obligated to pay to Kaupthing (i) interest on the
Purchase Price at 5.0863%; and (ii) certain fees. Jacobsen and Lagerinn have
pledged certain assets other than the Shares to Kaupthing to secure Lagerinn's
obligations under the Equity Swap Agreements. The foregoing summary of the
Equity Swap Agreements is qualified in its entirety by reference to the Equity
Swap Agreements, copies of English translations of which are filed as Exhibit B,
Exhibit C and Exhibit D to this Statement. Lagerinn expects that it will
purchase the Shares from Kaupthing by using available working capital.
Lagerinn has agreed in principle with TF Holding that Lagerinn will sell
and TF Holding will purchase twenty-five percent (25%) of the Common Stock owned
by Lagerinn as of the close of business on September 22, 2005. The sale price
has not been finally determined but will be Lagerinn's average purchase price
for the Shares plus a pro rata share of Lagerinn's costs incurred for its
purchases of the Shares through September 22, 2005 (including advisor fees) (the
"Sale Price"). The Sale Price will be funded from TF Holding's working capital.
TF Holding may determine to use borrowings from one or more financial
institutions (which have not yet been identified) but has not yet determined to
do so. TF Holding is not obligated to purchase more than two hundred fifty (250)
million Danish Krones ("DKK") worth of Shares from Lagerinn. If the aggregate
Sale Price would be greater than DKK two hundred fifty (250) million, then the
number of shares that TF Holding is obligated to purchase shall be reduced by
the number of shares required to make the aggregate Sale Price equal to DKK two
hundred fifty (250) million. As part of the agreement
in principle, Lagerinn will also have the right to repurchase the Shares sold to
TF Holding at a per share price equal to the prevailing market price of such
Shares on the New York Stock Exchange at the time Lagerinn exercises such right.
The repurchase right will exist only if the share price increases more than
three hundred percent (300%) by October 1, 2009 as compared to the closing price
on the New York Stock Exchange on September 22, 2005. Additionally, if TF
Holding decides to dispose of the Shares purchased from Lagerinn, Lagerinn will
have the right of first refusal to purchase such Shares at the prevailing market
price of such Shares on the New York Stock Exchange. The agreement in principle
has not yet been reduced to writing.
Item 4. Purpose of Transaction
The purpose of the acquisition of the Common Stock by the Reporting Persons
is for investment related purposes. Depending on market conditions, their
continuing evaluation of the business and prospects of the Issuer and other
factors, the Reporting Persons may dispose of or acquire additional securities
of the Issuer. Additionally, if the Issuer determines to explore strategic
alternatives, the Reporting Persons may or may not participate in any process
established by the Issuer. Except as otherwise described herein or as expressly
stated below, no Reporting Person, and to the best knowledge of the Reporting
Persons, none of the persons set forth on Schedule A, has any present plan or
proposal that relates to or would result in:
(a) The acquisition by any person of additional securities of the Issuer,
or the disposition of securities of the Issuer;
(b) An extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Issuer or any of its subsidiaries;
(c) A sale or transfer of a material amount of assets of the Issuer;
(d) Any change in the present board of directors or management of the
Issuer, including any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the board;
(e) Any material change in the present capitalization or dividend policy of
the Issuer;
(f) Any other material change in the Issuer's business or corporate
structure;
(g) Changes in the Issuer's charter, bylaws or instruments corresponding
thereto or other actions which may impede the acquisition of control of the
Issuer by any person;
(h) Causing a class of securities of the Issuer to be delisted from a
national securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association;
(i) A class of equity securities of the Issuer becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Securities
Exchange Act of 1934; or
(j) Any action similar to any of those enumerated above.
Item 5. Interest in Securities of the Issuer
(a)-(b) Set forth in the table below is the number and percentage of shares
of Common Stock beneficially owned by each Reporting Person as of September 22,
2005.
Number of Shares Number of Shares Aggregate
Beneficially Beneficially Owned Number of Percentage of
Owned with Sole with Shared Voting Shares Class
Voting and and Dispositive Beneficially Beneficially
Name Dispositive Power Power Owned Owned(1)
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Reporting Persons 0 4,483,700 4,483,700 9.9
Lagerinn ehf (2) 0 4,483,700 4,483,700 9.9
Jakup a Dul Jacobsen (2) 0 4,483,700 4,483,700 9.9
TF Holding P/F (3) 0 1,120,925 1,120,925 2.5
(1) The percentages of Common Stock indicated in this table are based on the
45,290,079 shares of Common Stock outstanding as of August 1, 2005, as
disclosed in the Issuer's most recent Form 10-Q filed with the Securities
and Exchange Commission. Any Common Stock not outstanding which is subject
to options or conversion privileges which the beneficial owner had the
right to exercise on or within 60 days after the date hereof is deemed
outstanding for purposes of computing the percentage of Common Stock owned
by such beneficial owner and for the Reporting Persons but is not deemed
outstanding for the purpose of computing the percentage of outstanding
Common Stock owned by any other beneficial owner.
(2) Lagerinn ehf may be deemed to be the beneficial owner of the shares of
common stock of Linens 'n Things, Inc. through arrangements with Kaupthing
Bank hf. Jakup a Dul Jacobsen may be deemed to be the beneficial owner of
the shares of common stock of the Issuer reported herein by Lagerinn ehf
through his direct ownership of Lagerinn ehf and through arrangements with
Kaupthing Bank hf. See Item 3.
(3) TF Holding and Lagerinn have agreed in principle that Lagerinn will sell
and TF Holding will purchase twenty-five percent (25%) of the Common Stock
owned by Lagerinn as of the close of business on September 22, 2005. TF
Holding hereby disclaims beneficial ownership of the remaining seventy-five
percent (75%) of the Common Stock owned by Lagerinn as of the close of
business on September 22, 2005 and excludes such shares from this table.
Other than as described above, no Reporting Person, and to the best
knowledge of the Reporting Persons, none of the persons set forth on Schedule A,
beneficially owns any securities of the Issuer.
(c) Information concerning transactions in the Common Stock effected by the
Reporting Persons during the past sixty (60) days is set forth in Schedule B
hereto and is
incorporated herein by reference. All of the transactions in Shares listed on
Schedule B hereto were effected in open market purchases on the New York Stock
Exchange by Kaupthing.
(d) Dividends on the Shares will be paid to Kaupthing as the record owner
of the Shares at all times prior to the Closing Date. Any such dividends,
however, are to be paid to Lagerinn on the Closing Date.
Other than as described above, to the best knowledge of the Reporting
Persons, no person (other than the Reporting Persons) has the right to receive
or the power to direct the receipt of dividends from, or the proceeds from the
sale of, the Shares.
(e) Not applicable.
Item 6. Contracts, Agreements, Arrangements, Understandings or Relationships
with Respect to Securities of the Issuer
The information set forth, or incorporated by reference, in Item 3 is
hereby incorporated by this reference in this Item 6.
Other than as described in this Statement, to the best knowledge of the
Reporting Persons there are no contracts, arrangements, understandings or
relationships among the Reporting Persons or the persons set forth on Schedule
A, and between any such persons and any other person, with respect to any
securities of the Issuer, including but not limited to, transfer and voting of
any of the securities of the Issuer, joint ventures, loan or option
arrangements, put or calls, guarantees of profits, division of profits or loss,
or the giving or withholding of proxies or a pledge or contingency the
occurrence of which would give another person voting power or investment power
over the securities of the Issuer.
Item 7. Material to be Filed as Exhibits
Exhibit A - Agreement among Jacobsen, Lagerinn and TF Holding to file this
Statement jointly on behalf of each of them.
Exhibit B - Agreement Concerning Swap Agreement On Equity, dated July 2005,
by and between Kaupthing and Lagerinn.
Exhibit C - Equity Swap Agreement, dated May 9, 2005, by and between
Kaupthing and Lagerinn.
Exhibit D - Equity Swap Agreement, dated April 5, 2005, by and between
Kaupthing and Lagerinn.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: September 22, 2005
JAKUP A DUL JACOBSEN
/s/ Jakup a Dul Jacobsen
--------------------------------
LAGERINN EHF
/s/ Sigurdur Berntsson
--------------------------------
Name: Sigurdur Berntsson
Title: Chief Financial Officer
TF HOLDING P/F
/s/ Gunnar i Lida
--------------------------------
Name: Gunnar i Lida
Title: Managing Director
SCHEDULE A
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Executive Officers and Directors of Lagerinn ehf and TF Holding P/F
Name Citizenship Present Principal Business Address
Occupation or
Employment
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Lagerinn ehf Executive Officers
-------------------------------
Sigurdur Berntsson Republic of Iceland Chief Financial Officer of Sundaborg 7
Lagerinn ehf 104 Reykjavik
Republic of Iceland
Jakup a Dul Jacobsen Denmark Chairman of Lagerinn ehf Sundaborg 7
104 Reykjavik
Republic of Iceland
TF Holding P/F Executive Officers
---------------------------------
Gunnar i Lida Faroe Islands Managing Director of TF Kongabrugvin
Holding P/F Post Box 329
FO 110 Torshavn
Mortan Poulsen Faroe Islands Director of TF Holding P/F Kongabrugvin
Post Box 329
FO 110 Torshavn
TF Holding P/F Outside Directors
--------------------------------
Trygvi F. Guttesen Faroe Islands Chairman of the Board of Kongabrugvin
Directors of TF Holding P/F Post Box 329
FO 110 Torshavn
Birgir Mohr Faroe Islands Vice-Chairman of the Board Kongabrugvin
of Directors of TF Holding Post Box 329
P/F FO 110 Torshavn
Durita Bjellvag Faroe Islands Member of the Board of Kongabrugvin
Directors of TF Holding P/F Post Box 329
FO 110 Torshavn
Leif Ellingsgaard Faroe Islands Member of the Board of Kongabrugvin
Directors of TF Holding P/F Post Box 329
FO 110 Torshavn
Name Citizenship Present Principal Business Address
Occupation or
Employment
----------------------------------------------------------------------------------------------------------------
Jogvan Lutzen Faroe Islands Member of the Board of Kongabrugvin
Directors of TF Holding P/F Post Box 329
FO 110 Torshavn
Jan Muller Faroe Islands Member of the Board of Kongabrugvin
Directors of TF Holding P/F Post Box 329
FO 110 Torshavn
Ronald Poulsen Faroe Islands Member of the Board of Kongabrugvin
Directors of TF Holding P/F Post Box 329
FO 110 Torshavn
Emil Simonsen Faroe Islands Member of the Board of Kongabrugvin
Directors of TF Holding P/F Post Box 329
FO 110 Torshavn
Jakup Solstein Faroe Islands Member of the Board of Kongabrugvin
Directors of TF Holding P/F Post Box 329
FO 110 Torshavn
SCHEDULE B
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Transactions in the Shares by the Reporting Persons During the Past Sixty (60)
Days
Date of Average Price
Name Transaction Amount of Shares Per Share
--------------------------------------------------------------------------------
Lagerinn 9/22/2005 151,600 $26.21
Lagerinn 09/21/2005 118,300 $26.14
Lagerinn 09/20/2005 120,000 $27.33
Lagerinn 09/19/2005 218,500 $27.44
Lagerinn 09/14/2005 692,500 $27.88
Lagerinn 09/13/2005 650,000 $26.02
Lagerinn 09/12/2005 287,400 $25.11
Lagerinn 08/24/2005 100,000 $23.62
EXHIBIT A
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JOINT FILING AGREEMENT
This will confirm the agreement among the undersigned that the
Schedule 13D filed on or about this date and any amendments thereto with respect
to beneficial ownership by the undersigned of shares of common stock, $0.01 par
value per share, of Linens 'n Things, Inc. is being filed on behalf of each of
the undersigned in accordance with Rule 13d-1(k)(1) under the Securities and
Exchange Act of 1934, as amended. This agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Dated: September 22, 2005
JAKUP A DUL JACOBSEN
/s/ Jakup a Dul Jacobsen
-----------------------------------------
LAGERINN EHF
/s/ Sigurdur Berntsson
-----------------------------------------
Name: Sigurdur Berntsson
Title: Chief Financial Officer
TF HOLDING P/F
/s/ Gunnar i Lida
-----------------------------------------
Name: Gunnar i Lida
Title: Managing Director
EXHIBIT B
---------
This agreement is a translation of an agreement made between Kaupthing Bank hf.,
Icelandic id no. 560882-0419, hereinafter called "the Bank" and Lagerinn ehf.,
Icelandic id no. 480793-2699 dated in July 2005, and is not a copy of the
Agreement Concerning Swap Agreement on Equity itself. If any difference between
the English and Icelandic text occurs, the Icelandic version shall prevail.
AGREEMENT CONCERNING SWAP AGREEMENT ON EQUITY
Article 1
This agreement is between Kaupthing Bank hf., Icelandic id no.
560882-0419, hereinafter called "the Bank" and Lagerinn ehf., Icelandic id no.
480793-2699, hereinafter called "the Client".
This agreement replaces the agreement between the Bank and Jakups a Dul
Jacobsen, Icelandic id. No. 250961-2009, dated 5th of April 2005 concerning the
same matter. By signing this agreement, the bank and Jakup, on behalf of himself
personally, agree that the before mentioned agreement is fully fulfilled and
that this agreement replaces the before mentioned contract. Signature of this
agreement shall change the swap agreements already made in such a way that
instead of Jakup being the party to the agreements, the Client is the party to
the agreements.
Article 2
With this agreement, both parties obligate themselves to sign new swap equity
agreements with the same terms and duration as AFS9230, dated 5th of April 2005
and AFS9463, dated 9th of May 2005, which are presented at the signing of this
agreement and shall be considered a part of this agreement.
Article 3
The exchange rate of the reference shares
The reference amount and exchange rate of the reference shares in the agreements
the parties obligate themselves to sign is not yet determined, as the reference
shares have not yet been acquired. In the context of this agreement, it is
assumed that the swap agreement the parties will sign due to the obligations
within this agreement will have a reference amount of no more than 165.000.000
USD in total, this total referring to a total of the reference amounts of the
swap agreements that will be signed, and swap agreement s that have already been
signed. The stocks in question are Linens 'N Things Inc (ticker LIN US). The
parties are in agreement that the Bank will have up to 30 days to acquire the
necessary amount of stocks in the company. When that period is over the average
exchange rate of the reference stocks will be known and used as the reference
exchange rate in the agreements that are a part of this agreement.
Article 4
Currency exchange rate and reference amount
The exchange rate of currencies in the agreements that the parties oblige
themselves to make is not yet known for the same reason as mentioned above. When
the before mentioned 30 days have passed the average exchange rate will be known
that will apply in the agreements that will be signed according to this
agreement. The average exchange rate of currencies shall be used for the
exchange rate of currencies versus the Icelandic Krona according to the terms in
the agreements the parties oblige themselves to make. The reference amount is
equal to the combined value of the reference equity. Fee is not included in the
reference amount for the trades incurred by this agreement.
Article 5
Risk and information
The Client has been informed of the nature and risk of the transactions that
this agreement is about. The Client has been made aware that he has a currency,
market and interest risk of the transactions that will be done according to this
agreement. This entails, among others, that if the exchange rate of the
reference stock falls lower the Client is nevertheless obligated to sign the
agreements with a reference exchange rate in accordance to an average exchange
rate according to this agreement. This means that when a swap agreement is
signed and finalized in accordance with this agreement it can be then and there
in deficit. The same could apply regarding currency exchange rates and
interests. The Client has been made aware of the before mentioned premise of
this agreement and agrees to it.
Article 6
Client's Collateral
To indemnify the Client's obligations towards the Bank the Client will provide
collateral in accordance with the terms that apply in the parties' agreement on
pledges that is signed along with this agreement. The agreement on pledges and
the correct fulfillment of it is to be considered of the essence for the
transactions mentioned in this agreement.
Article 7
Fee
Kaupthing Bank's Capital Markets Division will be the broker for the purchase of
the reference stock in Article 3.
The Client is obligated with this agreement not to ask any other party to
purchase for him or any financially linked entities stock in LIN US. This
limitation is valid for three business days after the Client acquires 5% in the
company, i.e. the first three business days of the 10 almanac day period that
the Client has to issue a notification after a 5% stake is acquired in
accordance with respective laws and regulations on trading listed stocks. When
the before mentioned period is over the Client is permitted to request that
another party acts as a broker in purchasing the reference stocks, as long as
the results of Kaupthing Bank's Capital Markets Division is deemed unacceptable
by the Client.
The fee for the transactions is 0.04 USD for each share purchased for the Client
or related parties until the before mentioned period is over, after that the fee
is 0.04 USD for each purchased share brokered by Kaupthing Bank's Capital
Markets Division.
The brokerage fee incurred by the transactions shall be paid by the Client and
will be added on to other fees according to the swap agreements as applicable.
Article 8
Various clauses
This agreement is to further explain and define the agreements that are made in
connection with the business of the parties concerning stocks in LIN US. Where
this agreement is silent the articles and clauses of the agreements that are
signed along with this one by the same parties apply, but the terms shall be the
same as in Articles 3 and 4 in this agreement. When the before mentioned period
is over the final terms of the swap agreements the parties obliged themselves to
do will be known and the parties shall then sign a swap agreement with the same
terms as the agreements that are signed along with this agreement.
The headlines in this agreement are for explanatory purposes only and do not
constitute a part of this agreement. All changes of this agreement must be
confirmed by both parties in writing.
The construction and validity and performance of this agreement and the
transactions contemplated by it shall be governed by the laws of Iceland and
each party submits to the exclusive jurisdiction of the Reykjavik Municipal
Court for the purposes of determining any dispute arising out of this agreement
or the transactions contemplated or obliged by it. This agreement is made in two
copies and each party retains one copy.
To confirm all the above the parties sign this agreement before witnesses to the
correct date and signature.
Reykjavik, 7th of July 2005
On behalf of Kaupthing Bank hf.
(sign)
Kaupthing Bank hf. hereby confirms that with the signature above it obliges
itself to carry out the services that this agreement calls for.
On behalf of Lagerinn ehf.
(sign)
(sign)
The Client confirms he has read this contract and understands it and agrees to
it. The Client also confirms with his signature that he has asked for the
services called for herein and accepts the obligations herein.
(sign)
The Client confirms that he realizes the nature of stock transactions and the
risk inherit in such transactions. He confirms that he has also been made aware
that the return of stocks can fluctuate from time to time. The Client also
confirms that he is aware that the reference equity can go down in value during
the duration of the agreement.
Witnesses of the correct date and signature:
(sign)
(sign)
EXHIBIT C
---------
This agreement is a translation of an agreement made between Kaupthing Bank hf.,
Icelandic id no. 560882-0419, herein after called "the Bank" and Lagerinn ehf.,
Icelandic id no. 480793-2699 dated in May 2005, and is not a copy of the Equity
Swap Confirmation ID nr. AFS9436 itself. If any difference between the English
and Icelandic text occurs, the Icelandic version shall prevail.
Equity Swap Confirmation ID nr. AFS9436
Lagerinn ehf.
Parties to this contract: Kaupthing Bank hf., id.no. 560882-0419, herein
called "the Bank" and Lagerinn ehf., id.no.
480793-2699, Smaratorg 1, 200 Kopavogur, herein
after called "the Client".
Date of contract: 9th of May 2005
Start of interest period: 9th of May 2005
Closing date: 5th of April 2006
Due date: Closing date, or the date which the contract is
closed if earlier
Reference number: 32744
Swaps on closing day
Reference amount:
Currency Ratio Exchange rate Amount in Amount in ISK
currency
------------------------------------------------------------------------------
USD 100.00% 64.09000 11,282,991.83 723,126,946
The reference amount is equal to the value of the reference shares.
The fee for the contract is not included in the reference amount.
Reference shares:
Ticker Currency Nominal Exchange rate Amount in Amount in ISK
amount currency
--------------------------------------------------------------------------------
LIN US USD 482,700 23.37475 11,282,991.83 723,126,946
The reference shares are shares in LIN US (Linens'n Things Inc.,
is in number US5356791047)
Stock split: In the event of split shares being issued during the
contract period, these same shares are then owned by the
Bank, while reference shares named in this contract will at
the same time increase according to the split shares issued.
Dividend: Dividends, if any, from reference shares during the contract
period shall be paid by the Bank to the Client on the
closing day of the contract.
Obligation of Client
Interest period: The interest period in each instance shall be from
the first date of interest period to the due date.
Due date: Closing date, or the date which the contract is closed if
earlier.
Base of interest at date of contract:
Currency Base interest Markup Interest in total
-------------------------------------------------------------------
USD 3.7863% 1.30% 5.0863%
Interest is calculated on the reference amount for the interest period.
Bank clearance: A/360, except for GBP, then it's A/365
Payment: The Client has to pay any and all increases that may occur
on the exchange rate of the currency in the reference amount
from the date of the contract, but any and all decreases in
the exchange rate of the currency that may occur will be
subtracted. The Client must also pay interest on the
reference amount in accordance with this contract. All
currency shall be exchanged for ISK on the due date
according to the average general exchange rate of the
appropriate currency which the Bank publishes in a general
currency exchange rate table on the due date, unless the
parties agree to a different exchange rate.
Fee: The initial fee for this contract is 0.20% of the total
value of the reference shares. On the due date of this
contract the Client will pay the Bank a closing fee of 0.20%
of the value of the reference shares on the due date. The
closing fee in question will not be incurred if the Client
initiates a buy-out of the reference shares on the closing
date of the contract. The fees are payable when this
contract is terminated. Brokerage fees are not included in
the afore mentioned fees.
Obligation of the Bank
Payment: The Bank pays the Client the increase in value of the
reference shares from the contract date to the closing date,
and the reverse if the value of the reference shares
decreases.
Bank clearance: The next banking day after.
Mutual obligations and/or rights
Payment The payments between the parties shall always be netted out,
arrangement/ so that there is never any payment between either party
netting: except for the net difference. Should the total payment due
from the Client be higher than the total payment due from
the Bank the bank will debit the Client's account for the
difference. Should the reverse be the case the bank will
deposit the difference into the Client's account. Payment is
due two banking days after closing day, or the due date if
the contract is closed earlier.
Extension Should the Client wish for a change to this contract, and
and/or should the Bank agree to the change, the Client will pay the
changes: Bank a fee of ISK 10,000 for each change. Should the Client
wish for an extension of this contract the Client shall pay
the bank a fee of ISK 10,000 for each extension, in addition
to paying the Bank the difference in each other's netted
payments, as long as the difference is an obligation to pay
on the behalf of the Client.
Closing before Should the Client wish to close this contract during the
the closing contract period the Bank will, without any guarantee or
date: obligation on its part, release the Client from his
obligations and the contract will be netted in accordance
with market conditions at the time. The fee incurred by this
for the Client (aside from the potential deficit of the
contract due to market conditions) can be anything up to
0.125% of the reference shares amount for each month that
remains of the contract period, as determined by the Bank.
Security/ To secure the prompt and full payment by the Client
Collateral: according to this contract, Jakub a Dul Jacobsen, id.no..
250961-2009, has pledged collateral which is specified in
the Pledge Agreement concerning derivatives and its
appendices which count as part of this contract. This
agreement of collateralization is signed by Jakub a Dul
Jacobsen and further obligations found therein concerning
the Pledged Assets have been accepted by Jakup Napoleon
Purkhus, id.no. 210854-7389, and the aforementioned parties
are the sole shareholders in Smaratorg ehf. and shares in
this company are part of the Pledged Assets according to the
Pledge Agreement. Collateral needs of the contract and the
value of the collateral are calculated daily according to
the Bank's policy for determining collateral needs for
derivatives and the value of the Client's collateral, as
they are at any time. The aggregate
collateral needs incurred by contracts the Client has
entered are further defined in the parties' Pledge
Agreement. If the value of the collateral, as determined by
the Bank, is not sufficient to satisfy the calculated
collateral needs of the contract, according to the Pledge
Agreement, the Bank may require the Client to pledge
satisfactory collateral as determined by the Bank such that
the collateral requirements of the contract are fully
satisfied. If the Client fails to meet the requirements set
forth by the Bank concerning the pledge of satisfactory
collateral within the timeframe the Bank gives him, the Bank
may at any time consider this as an event of default of the
contract and may declare this Equity Swap confirmation to
become due without specific notification to the Client
thereof. As remedy in response to such events of default a
method of payment shall come into effect in the same manner
as defined above, i.e. by netting.
The Bank reserves the right to terminate the contract and to
sell the collateral in accordance with further stipulations
in the contract concerning collateral if the Bank deems
market conditions are such that the risk associated with the
collateral will not prove sufficient at the termination of
the contract. The Bank my utilize the collateral pledged by
the Client in any way the Bank sees fit as payment
concerning the obligations of the Client according to this
contract. The Pledged Assets may be sold without a court
order of sale.
Insolvency: Should either party become insolvent this contract will
automatically terminate without any specific notification
thereof. In cases of insolvency the method of payout shall
be the same as above, i.e. netted.
General terms: In addition to the terms in this contract the general terms
regarding interest and currency swaps published by the
Bankers' and Securities Dealers' Association of Iceland in
February 1998 (1st edition) which the Client is familiar
with. If there is a discrepancy between this contract and
the general terms this contract supersedes the general
terms. Additionally this contract is also governed by the
general market terms for clients of Capital Markets division
of Kaupthing Bank issued by the board of Kaupthing Bank, as
they are at the time and which the Client has specifically
agreed to.
Signature: As confirmation the parties to this contract sign this
contract in duplicate and each party retains one copy. With
his signature the Client authorizes the above transactions
and confirms that he has studied the nature of currency and
interest swaps and sought the advice of experts outside the
Bank before he signed if he thought that necessary.
Should any legal proceedings arise regarding this agreement they can be tried
before the Reykjavik Municipal Court.
This agreement is not negotiable to a third party without the agreement of both
parties.
Reykjavik 9th of May 2005
On behalf of Kaupthing Bank hf.
(sign)
On behalf of Kaupthing Bank hf.
(sign)
Lagerinn ehf.
(sign)
Witnesses to the correct date and signature
(sign) (sign)
EXHIBIT D
---------
This agreement is a translation of an agreement made between Kaupthing Bank hf.,
Icelandic id no. 560882-0419, herein after called "the Bank" and Lagerinn ehf.,
Icelandic id no. 480793-2699 dated in April 2005, and is not a copy of the
Equity Swap Confirmation ID nr. AFS9230 itself. If any difference between the
English and Icelandic text occurs, the Icelandic version shall prevail.
Equity Swap Confirmation ID nr. AFS9230
Lagerinn ehf.
Parties to this contract: Kaupthing Bank hf., id.no. 560882-0419, herein
called "the Bank" and Lagerinn ehf., id.no.
480793-2699, Smaratorg 1, 200 Kopavogur, herein
after called "the Client".
Date of contract: 5th of April 2005
Start of interest period: 7th of April 2005
Closing date: 5th of April 2006
Due date: Closing date, or the date which the contract is
closed if earlier
Reference number: 33055
Swaps on closing day
Reference amount:
Currency Ratio Exchange rate Amount in Amount in ISK
currency
------------------------------------------------------------------------------
USD 100.00% 61.93810 37,520,351.72 2,323,939,297
The reference amount is equal to the value of the reference shares. The fee for
the contract is not included in the reference amount.
Reference shares:
Ticker Currency Nominal Exchange rate Amount in Amount in ISK
amount currency
--------------------------------------------------------------------------------
LIN US USD 1,511,600 24.821614 37,520,351.72 2,323,939,297
The reference shares are shares in LIN US (Linens'n Things Inc., is
in number US5356791047)
Stock split: In the event of split shares being issued during the
contract period, these same shares are then owned by the
Bank, while refe rence shares named in this contract will at
the same time increase according to the split shares issued.
Dividend: Dividends, if any, from reference shares during the contract
period shall be paid by the Bank to the Client on the
closing day of the contract.
Obligation of Client
Interest period: The interest period in each instance shall be from the first
date of interest period to the due date.
Due date: Closing date, or the date which the contract is closed if
earlier.
Base of interest at date of contract:
Currency Base interest Markup Interest in total
-------------------------------------------------------------------
USD 3.7863% 1.30% 5.0863%
Interest is calculated on the reference amount for the interest period.
Bank clearance: A/360, except for GBP, then it's A/365
Payment: The Client has to pay any and all increases that may occur
on the exchange rate of the currency in the reference amount
from the date of the contract, but any and all decreases in
the exchange rate of the currency that may occur will be
subtracted. The Client must also pay interest on the
reference amount in accordance with this contract. All
currency shall be exchanged for ISK on the due date
according to the average general exchange rate of the
appropriate currency which the Bank publishes in a general
currency exchange rate table on the due date, unless the
parties agree to a different exchange rate.
Fee: The initial fee for this contract is 0.20% of the total
value of the reference shares. On the due date of this
contract the Client will pay the Bank a closing fee of 0.20%
of the value of the reference shares on the due date. The
closing fee in question will not be incurred if the Client
initiates a buy-out of the reference shares on the closing
date of the contract. The fees are payable when this
contract is terminated. Brokerage fees are not included in
the afore mentioned fees.
Obligation of the Bank
Payment: The Bank pays the Client the increase in value of the
reference shares from the contract date to the closing date,
and the reverse if the value of the reference shares
decreases.
Bankclearance: The next banking day after.
Mutual obligations and/or rights
Payment The payments between the parties shall always be netted out,
arrangement/ so that there is never any payment between either party
netting: except for the net difference. Should the total payment due
from the Client be higher than the total payment due from
the Bank the bank will debit the Client's account for the
difference. Should the reverse be the case the bank will
deposit the difference into the Client's account. Payment is
due two banking days after closing day, or the due date if
the contract is closed earlier.
Extension and/or Should the Client wish for a change to this contract, and
changes: should the Bank agree to the change, the Client will pay the
Bank a fee of ISK 10,000 for each change. Should the Client
wish for an extension of this contract the Client shall pay
the bank a fee of ISK 10,000 for each extension, in addition
to paying the Bank the difference in each other's netted
payments, as long as the difference is an obligation to pay
on the behalf of the Client.
Closing before Should the Client wish to close this contract during the
the closing date: contract period the Bank will, without any guarantee or
obligation on its part, release the Client from his
obligations and the contract will be netted in accordance
with market conditions at the time. The fee incurred by this
for the Client (aside from the potential deficit of the
contract due to market conditions) can be anything up to
0.125% of the reference shares amount for each month that
remains of the contract period, as determined by the Bank.
Security/ To secure the prompt and full payment by the Client
Collateral: according to this contract, Jakub a Dul Jacobsen, id.no..
250961-2009, has pledged collateral which is specified in
the Pledge Agreement concerning derivatives and its
appendices which count as part of this contract. This
agreement of collateralization is signed by Jakub a Dul
Jacobsen and further obligations found therein concerning
the Pledged Assets have been accepted by Jakup Napoleon
Purkhus, id.no. 210854-7389, and the aforementioned parties
are the sole shareholders in Smaratorg ehf. and shares in
this company are part of the Pledged Assets according to the
Pledge Agreement. Collateral needs of the contract and the
value of the collateral are calculated daily according to
the Bank's policy for determining collateral needs for
derivatives and the value of the Client's collateral, as
they are at any time. The aggregate
collateral needs incurred by contracts the Client has
entered are further defined in the parties' Pledge
Agreement. If the value of the collateral, as determined by
the Bank, is not sufficient to satisfy the calculated
collateral needs of the contract, according to the Pledge
Agreement, the Bank may require the Client to pledge
satisfactory collateral as determined by the Bank such that
the collateral requirements of the contract are fully
satisfied. If the Client fails to meet the requirements set
forth by the Bank concerning the pledge of satisfactory
collateral within the timeframe the Bank gives him, the Bank
may at any time consider this as an event of default of the
contract and may declare this Equity Swap confirmation to
become due without specific notification to the Client
thereof. As remedy in response to such events of default a
method of payment shall come into effect in the same manner
as defined above, i.e. by netting. The Bank reserves the
right to terminate the contract and to sell the collateral
in accordance with further stipulations in the contract
concerning collateral if the Bank deems market conditions
are such that the risk associated with the collateral will
not prove sufficient at the termination of the contract. The
Bank my utilize the collateral pledged by the Client in any
way the Bank sees fit as payment concerning the obligations
of the Client according to this contract. The Pledged Assets
may be sold without a court order of sale.
Insolvency: Should either party become insolvent this contract will
automatically terminate without any specific notification
thereof. In cases of insolvency the method of payout shall
be the same as above, i.e. netted.
General terms: In addition to the terms in this contract the general
terms regarding interest and currency swaps published by the
Bankers' and Securities Dealers' Association of Iceland in
February 1998 (1st edition) which the Client is familiar
with. If there is a discrepancy between this contract and
the general terms this contract supersedes the general
terms. Additionally this contract is also governed by the
general market terms for clients of Capital Markets division
of Kaupthing Bank issued by the board of Kaupthing Bank, as
they are at the time and which the Client has specifically
agreed to.
Signature: As confirmation the parties to this contract sign this
contract in duplicate and each party retains one copy. With
his signature the Client authorizes the above transactions
and confirms that he has studied the nature of currency and
interest swaps and sought the advice of experts outside the
Bank before he signed if he thought that necessary.
Should any legal proceedings arise regarding this agreement they can be tried
before the Reykjavik Municipal Court.
This agreement is not negotiable to a third party without the agreement of both
parties.
Reykjavik 5th of April 2005
On behalf of Kaupthing Bank hf.
(sign)
On behalf of Kaupthing Bank hf.
(sign)
Lagerinn ehf.
(sign)
Witnesses to the correct date and signature
(sign)
(sign)