Exhibit 10.6.5
M E M O R A N D U M
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February 6, 2003
TO: The Lenders under the Credit Agreement referred to below
FROM: Xxxxxxx Xxxxx Credit Partners L.P.
Re: XXXXXXX COMPANY
It has come to our attention that in connection with the Fourth Amendment
to the Xxxxxxx Company Credit and Guaranty Agreement dated as of October 31,
2002, a drafting error occurred whereby Section 2.25 of the Credit Agreement was
inadvertently deleted. Section 2.25 concerns the Company's ability to increase
the Tranche C Term Loan Commitments by an aggregate amount not in excess of
$50,000,000 and in minimum amounts of not less than $10,000,000 and in integral
multiples of $5,000,000 (such increase, the "Incremental Tranche C Term Loan
Commitments"). In addition, certain references and definitions used in
connection with Section 2.25 were also deleted. The Company wishes to replace
the inadvertently deleted Section 2.25 and corresponding references and
definitions. In addition, Company and Requisite Lenders wish to amend Section
2.25(e) to include a yield protection clause for the benefit of the Lenders.
Furthermore, Company and Requisite Lenders wish to amend Section 6.5(v)(b)
which allows for share repurchases from deceased, terminated or retired
Management Investors not to exceed $6,000,000 only for Fiscal Year 2002 (up from
an annual basket of $2,500,000) by carrying over unused share repurchases into
Fiscal Year 2003. During Fiscal Year 2002, the Company only repurchased shares
worth $3,288,000 as several large share repurchases were delayed into Fiscal
Year 2003.
We are requesting that you acknowledge and consent to the replacement of
the inadvertently deleted Section 2.25 and the above mentioned references and
defined terms, and the amendments to Section 2.25(e) and Section 6.5(v)(b) (all
as set forth on Appendix A attached hereto), by COMPLETING AND SIGNING THIS
LETTER WHERE INDICATED BELOW AND FAXING IT BACK TO XXXXXXXXX XXXX, LEGAL
ASSISTANT, AT SKADDEN, ARPS, SLATE, XXXXXXX & XXXX LLP (FAX NO. 000-000-0000)
PRIOR TO 5:00 PM (NEW YORK TIME), FRIDAY, FEBRUARY 14, 2003. Upon receipt by the
Administrative Agent of sufficient copies of this memorandum, originally
executed and delivered by the Credit Parties and the Requisite Lenders (as
defined in the Credit Agreement), the consents and amendments set forth herein
shall be effective.
APPENDIX A
1. The parties hereto hereby consent to and acknowledge the reinsertion of the
inadvertently deleted Section 2.25 and the deleted references and definitions
used in connection with Section 2.25 such as "Incremental Tranche C Term Loan
Commitments", "Incremental Tranche C Term Loan Effective Date", "Incremental
Tranche C Term Loans", "Incremental Tranche C Term Loan Lender", "Incremental
Tranche C Term Loan Notice" and "Incremental Tranche C Term Loan Syndication
Agent".
2. The parties hereto hereby consent to and acknowledge the following
amendments to Section 2.25(e) adding clauses (iv) and (v) thereto which contain
the following yield protection language for the benefit of Lenders:
"(iv) the Applicable Margin for each Incremental Tranche C Term Loan
(which, for such purposes only, shall be deemed to include the QUOTIENT
resulting from the aggregate of all upfront or similar fees or original
issue discount payable to all Lenders providing such Incremental Tranche C
Term Loans DIVIDED by four (4), but exclusive of any arrangement,
structuring or other fees payable in connection therewith that are not
shared with all Lenders providing such Incremental Tranche C Term Loans)
determined as of the applicable Incremental Tranche C Term Loan Effective
Date shall not be greater than 0.25% above the Applicable Margin then in
effect for Tranche C Term Loans (which, for such purposes only, shall be
deemed to include the QUOTIENT resulting from the aggregate of all upfront
or similar fees or original issue discount paid to all Tranche C Lenders on
the applicable Incremental Tranche C Term Loan Effective Date DIVIDED by
four (4), but exclusive of any arrangement, structuring or other fees
payable in connection therewith that are not shared with all Tranche C
Lenders); and
(v) other than with respect to amortization, maturity date and pricing,
terms relating to such Incremental Tranche C Term Loans shall be on the
same terms and conditions as those applicable to Tranche C Term Loans."
3. The parties hereto hereby consent to and acknowledge the amendment to
Section 6.5(v)(b) which shall delete the phrase "$6,000,000 only for the 2002
Fiscal Year" in its entirety and substitute "$3,288,000 only for the 2002 Fiscal
Year and $5,212,000 only for the 2003 Fiscal Year" therefor.
CONSENTED TO AND AGREED:
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NAME OF LENDER
By:
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Name:
Title:
CONSENTED TO AND AGREED:
XXXXXXX COMPANY
XXXXXXX HOLDINGS, INC.
By:
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Name:
Title:
SIMMONS INTERNATIONAL HOLDINGS COMPANY, INC.
By:
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Name:
Title:
THE SIMMONS MANUFACTURING CO., LLC
WORLD OF SLEEP OUTLETS, LLC
SIMMONS CONTRACT SALES, LLC
GALLERY CORP.
By:
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Name:
Title:
DREAMWELL, LTD.
SIMMONS CAPITAL MANAGEMENT, LLC
By:
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Name:
Title:
