EXHIBIT 10.44
SEALY MATTRESS COMPANY
SEALY CORPORATION
FOURTH AMENDMENT TO AXEL CREDIT AGREEMENT
This FOURTH AMENDMENT TO AXEL CREDIT AGREEMENT (this "Amendment") is dated
as of May 2, 2003 and entered into by and among Sealy Mattress Company, an Ohio
corporation ("Company"), Sealy Corporation, a Delaware corporation ("Holdings"),
the financial institutions listed on the signature pages hereof ("Lenders"),
Xxxxxxx Xxxxx Credit Partners L.P., as arranger and syndication agent
("Syndication Agent"), JPMorgan Chase Bank (f/k/a The Chase Manhattan Bank as
successor by merger to Xxxxxx Guaranty Trust Company of New York), as
administrative agent for Lenders ("Administrative Agent"; collectively,
Syndication Agent and Administrative Agent are referred to herein as "Agents"),
and the Credit Support Parties (as defined in Section 4 hereof) listed on the
signature pages hereof, and is made with reference to (i) that certain Amended
and Restated Credit Agreement dated as of November 8, 2002 (as amended,
supplemented or otherwise modified to the date hereof, the "Revolver/Term A Loan
Credit Agreement"), and (ii) that certain AXEL Credit Agreement dated as of
December 18, 1997 (as amended, supplemented or otherwise modified to the date
hereof, the "AXEL Credit Agreement"; the AXEL Credit Agreement and the
Revolver/Term A Loan Credit Agreement are, collectively, the "Credit
Agreements"), by and among Company, Holdings, certain Lenders, Syndication Agent
and Administrative Agent. Capitalized terms used herein without definition shall
have the same meanings herein as set forth in the Credit Agreements, as
applicable, or in Section 1.1 hereof.
RECITALS
WHEREAS, Company, Holdings and the Lenders executing this Amendment desire
to amend certain of the terms and provisions of the AXEL Credit Agreement as set
forth below;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
SECTION 1. AMENDMENTS TO THE AXEL CREDIT AGREEMENT
1.1 Amendments to Section 1: Definitions
A. Subsection 1.1 of the AXEL Credit Agreement is hereby amended by
adding the following definitions, which shall be inserted in proper alphabetical
order:
"May 2003 Amendment" means that certain Fourth Amendment to AXEL
Credit Agreement dated as of May 2, 2003 by and among Company,
Holdings, Subsidiary Guarantors and the Lenders party thereto.
"May 2003 Amendment Effective Date" means the "Amendment Effective
Date" as defined in the May 2003 Amendment.
"May 2003 Refinancing" means, collectively, the issuance of no more
than $50 million of Senior Subordinated Notes and the prepayment of AXELs
Series B, the AXELs Series C and the AXELs Series D in an amount equal to
the May 2003 Net Refinancing Proceeds on or after the May 2003 Amendment
Effective Date.
"May 2003 Net Refinancing Proceeds" means the proceeds from the May
2003 Refinancing net of underwriting discounts and commissions and other
reasonable fees and expenses incurred in connection with such refinancing,
including the reasonable legal fees and expenses incurred in connection
with the negotiation of the May 2003 Amendment.
B. Subsection 1.1 of the AXEL Credit Agreement is hereby further
amended by deleting the definition of "Senior Subordinated Notes" therefrom and
substituting therefor the following:
"Senior Subordinated Notes" means the$250,000,000 in aggregate
principal amount of 9-7/8% Senior Subordinated Notes due December 15, 2007
of Company issued pursuant to the Senior Subordinated Note Indenture;
provided that such principal amount shall be increased by the principal
amount of any additional Senior Subordinated Notes issued on or after the
May 2003 Amendment Effective Date in transactions not prohibited under this
Agreement, provided, further, that such amount does not exceed $50,000,000
in the aggregate.
1.2 Amendments to Section 2: Amounts and Terms of Commitments and Loans
Subsection 2.4B(iii)(a) is hereby amended by deleting it in its
entirety and substituting therefor the following:
"(a) Application of Voluntary Prepayments by Type of Loans and Order
of Maturity.
On and after the Second Amendment Effective Date, any voluntary
prepayments of the Loans pursuant to subsection 2.4B(i) shall be applied
(x) to prepay the AXELs Series B, the AXELs Series C and the AXELs Series D
on a pro rata basis (in accordance with the respective outstanding
principal amounts thereof) and (y) to reduce the scheduled installments of
principal of the AXELs Series B, the AXELs Series C and the AXELs Series D
set forth in subsections 2.4A(i), 2.4A(ii) and 2.4A(iii) (x) on a pro rata
basis (in accordance with the respective outstanding principal amounts
thereof), or (y) in forward order of
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maturity (provided that any such prepayment may only be applied in forward
order of maturity to the extent the scheduled installments of principal
against which such prepayments are to be applied are due on or prior to the
date which is one year from the date of such prepayment), or (z) in inverse
order of maturity, at Company's option, as specified by Company in the
applicable notice of prepayment); provided, however, that so long as any
Tranche A Term Loans are outstanding, any prepayment of the Loans pursuant
to subsection 2.4B(i) shall be applied to the repayment of the Tranche A
Term Loans and the Loans on a pro rata basis according to the respective
outstanding principal amounts thereof; notwithstanding anything herein to
the contrary, a voluntary prepayment made with the May 2003 Net Refinancing
Proceeds shall be applied to prepay the AXELs Series B, the AXELs Series C
and the AXELs Series D, and such prepayment shall be applied in full in
forward order of maturity."
1.3 Amendment to Section 5: Affirmative Covenants
Subsection 5.13 is hereby amended by deleting it in its entirety.
1.4 Amendment to Section 6: Negative Covenants
Subsection 6.10B is hereby amended adding immediately prior to
the "." at the end thereof the following proviso:
"; provided, further, that on or after the May 2003 Amendment
Effective Date Company may issue (and amend the Senior Subordinated
Note Indenture to the extent necessary to issue) up to $50,000,000 in
aggregate principal amount of additional notes (such notes being
considered Senior Subordinated Notes for all purposes under the Loan
Documents) on identical terms as the $125,000,000 of Senior
Subordinated Notes originally issued under the Senior Subordinated
Note Indenture, so long as the proceeds from the issuance of such
additional Senior Subordinated Notes are applied in accordance with
the provisions of this Agreement."
1.5 Consents to Amendments
Each undersigned Lender hereby consents to the amendments to the AXEL
Credit Agreement set forth in this Amendment.
SECTION 2. CONDITIONS TO EFFECTIVENESS
Anything herein to the contrary notwithstanding, Section 1 of this
Amendment shall become effective only upon the prior or concurrent satisfaction
or waiver of all of the following conditions precedent (the date of satisfaction
of such conditions being referred to herein as the "May 2003 Amendment Effective
Date"):
(i) On or before the May 2003 Amendment Effective Date, each of Company
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and Holdings shall have delivered to Lenders (or to Administrative Agent for
Lenders with sufficient originally executed copies, where appropriate, for each
Lender and its counsel) the following, each, unless otherwise noted, dated the
May 2003 Amendment Effective Date:
(a) A certificate of its corporate secretary or an assistant secretary
to the effect that (i) there have been no amendments to its Certificate of
Incorporation or Bylaws after the Closing Date (or, in lieu thereof,
certified copies of any such amendments), (ii) the Resolutions of its Board
of Directors delivered on the Closing Date are in full force and effect
without modification or amendment, and (iii) there have been no changes
after the Closing Date in the incumbency of its officers (or, in lieu
thereof, a certificate of signatures and incumbency for the officers
executing this Amendment and any related documents), together with a good
standing certificate with respect to Company from the Secretary of State of
the State of Ohio, dated a recent date prior to the May 2003 Amendment
Effective Date; and
(b) This Amendment, executed by Holdings, Company, Credit Support
Parties, Requisite Lenders and Requisite Class Lenders for Lenders having
Class C Exposure and Requisite Class Lenders for Lenders having Class D
Exposure in each case under the AXEL Credit Agreement.
(ii) So long as Requisite Lenders and Requisite Class Lenders under the
AXEL Credit Agreement shall have executed this Amendment, Administrative Agent
shall have received from Company, for distribution to each Lender that has
executed and delivered this Amendment on or prior to 5:00 p.m. (New York City
time) on [April ___] 2003, an amendment fee in an amount equal to 0.05% of the
aggregate AXEL Series B Exposure, AXEL Series C Exposure and AXEL Series D
Exposure of such Lender after giving effect to the voluntary prepayment
contemplated by this Amendment, as well as payment for all reasonable fees,
expenses and disbursements incurred by Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
in connection with this Amendment, to the extent such fees are invoiced prior to
the May 2003 Amendment Effective Date.
SECTION 3. COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Amendment and to amend the
AXEL Credit Agreement in the manner provided herein, Company represents and
warrants to each Lender under the AXEL Credit Agreement that the following
statements are true, correct and complete:
3.1 Incorporation of Representations and Warranties From Credit Agreements.
On and as of the date hereof and the May 2003 Amendment Effective Date, the
representations and warranties contained in subsections 4.1A, 4.2A, 4.2B, 4.2C
and 4.2D of the AXEL Credit Agreement are and will be true, correct and complete
with
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respect to this Amendment and the AXEL Credit Agreement as amended by this
Amendment (as so amended, the "Amended Agreement") as if this Amendment and the
Amended Agreement were "Loan Documents" referred to in such representations and
warranties, and with the foregoing modifications such representations and
warranties are incorporated herein by this reference; and the representations
and warranties contained in Section 5 of the Revolver/Term A Loan Credit
Agreement and Section 4 of the AXEL Credit Agreement are and will be true,
correct and complete in all material respects on and as of the May 2003
Amendment Effective Date to the same extent as though made on and as of that
date, except to the extent such representations and warranties specifically
relate to an earlier date, in which case they were true, correct and complete in
all material respects on and as of such earlier date.
3.2 Absence of Default.
No event has occurred and is continuing or will result from the
consummation of the transactions contemplated by this Amendment that would
constitute an Event of Default or a Potential Event of Default under the Credit
Agreements.
SECTION 4. ACKNOWLEDGMENT AND CONSENT
Each of Company, Holdings and the Persons indicated as Subsidiary
Guarantors on the signature pages hereof (each individually a "Credit Support
Party" and collectively, the "Credit Support Parties") hereby acknowledges and
agrees that each Loan Document to which it is a party is in full force and
effect and shall not be limited or impaired in any manner by the effectiveness
of this Amendment and the transactions contemplated hereby.
Section 5. MISCELLANEOUS
5.1 Reference to and Effect on the Credit Agreements and the Other Loan
Documents.
(i) On and after the May 2003 Amendment Effective Date, each reference in
the AXEL Credit Agreement to "this Agreement", "hereunder", "hereof'", "herein"
or words of like import referring to the AXEL Credit Agreement, and each
reference in the other applicable Loan Documents to the "Credit Agreement",
"thereunder", "thereof" or words of like import referring to the AXEL Credit
Agreement shall mean and be a reference to the applicable Amended Agreement.
(ii) Except as specifically amended by this Amendment, the AXEL Credit
Agreement and the other Loan Documents relating thereto shall remain in full
force and effect and are hereby ratified and confirmed.
(iii) The execution, delivery and performance of this Amendment shall not,
except as expressly provided herein or therein, constitute a waiver of any
provision of, or
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operate as a waiver of any right, power or remedy of any Agent or any Lender
under, the AXEL Credit Agreement or any of the other Loan Documents relating
thereto.
5.2 Fees and Expenses. Company acknowledges that all reasonable costs, fees
and expenses incurred by Agents and their counsel with respect to this Amendment
and the documents and transactions contemplated hereby that are due and payable
pursuant to Section 2(ii) hereto shall be for the account of Company.
5.3 Headings. Section and subsection headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
5.4 Applicable Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
5.5 Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. This Amendment (other than Section 1 hereof) shall become
effective with respect to the AXEL Credit Agreement upon (A) the execution of
counterparts hereof by (1) Requisite Lenders (as defined in the AXEL Credit
Agreement), (2) Company and (3) Holdings and the other Credit Support Parties,
and (B) receipt by Company and Administrative Agent of written or telephonic
notification of such execution and authorization of delivery thereof.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
SEALY MATTRESS COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President, General Counsel
and Secretary
SEALY CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President, General Counsel
and Secretary
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SUBSIDIARY GUARANTORS:
SEALY MATTRESS COMPANY OF PUERTO RICO
OHIO-SEALY MATTRESS MANUFACTURING CO. INC.
OHIO-SEALY MATTRESS MANUFACTURING CO.
SEALY MATTRESS COMPANY OF MICHIGAN, INC.
SEALY MATTRESS COMPANY OF KANSAS CITY, INC.
SEALY OF MARYLAND AND VIRGINIA, INC.
SEALY MATTRESS COMPANY OF ILLINOIS
X. XXXXXXXXX & CO.
XXXXX MATTRESS COMPANY OF ALBANY, INC.
SEALY OF MINNESOTA, INC.
SEALY MATTRESS COMPANY OF MEMPHIS
THE OHIO MATTRESS COMPANY LICENSING AND COMPONENTS GROUP
SEALY MATTRESS MANUFACTURING COMPANY, INC.
SEALY, INC.
NORTH AMERICAN BEDDING COMPANY
MATTRESS HOLDINGS INTERNATIONAL, LLC
SEALY TECHNOLOGY LLC
SEALY-KOREA, INC.
SEALY REAL ESTATE, INC.
SEALY TEXAS MANAGEMENT, INC.
SEALY TEXAS HOLDINGS LLC
SEALY TEXAS L.P.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President, General Counsel and Secretary
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AGENTS AND LENDERS:
XXXXXXX XXXXX CREDIT PARTNERS L.P.,
individually and as Syndication Agent
By: /s/ illegible
-------------------------------------
Authorized Signatory
JPMORGAN CHASE BANK,
individually and as Administrative Agent
By: /s/ illegible
-------------------------------------
Name:
Title:
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[NAME OF LENDER] (1)
By: -------------------------------------
Name:
Title:
(1) Agreement was executed by each of the following Lenders:
JPMorgan Chase Bank Wrigley CDO, Ltd Nomura Bond & Loan Fund
Xxx Xxxxxx CLO I Limited APEX (IDM) CDO I, Ltd. Long Lane Master Trust IV
Carlyle High Yield Partners II, Ltd. ELC (Cayman) Ltd. CDO Series 1999 - I Xxxxxxx Xxxxx Credit Partners X.X.
Xxxxxxx High Yield Partners III, Ltd. ELC (Cayman) Ltd. 1999 - III Harbor Town Funding Trust
Carlyle High Yield Partners IV, Ltd. ELC (Cayman) Ltd. 2000 - I
Natexis Banques Populaires Allstate Life Insurance Company
Monument Capital Ltd. AIMCO CDO Series 2000 - A
New Alliance Global CDO, Limited AIMCO CDO Series 2001 - A
Alliance Investments Ltd. Deutsche Bank Trust Company Americas
Octagon Investment Partners III, Ltd. Indo Suez Capital Funding II A Limited
Fleet National Bank Toronto Dominion (Texas) Inc.
Franklin CLO III, Ltd. SEQUILS I, Ltd.
Franklin CLO II, Ltd. Centurion CDO II, Ltd.
ORIX Finance Corp. I Sequilis - Centurion V. Ltd.
Cypress Tree Investment Management Regiment Capital Ltd.
Company Inc. K2H Crescent LLC
Galaxy CLO 1991-1, Ltd. K2H Crescent - 2 LLC
Addison CDO, Limited K2H Crescent - 3 LLC
CAPTIVA III Finance Ltd. K2H Cypress Tree - 1 LLC
CAPTIVA IV Finance Ltd. K2H ING - 2 LLC
DELANO Company K2H Soleil LLC
Jissekikun Funding, Ltd. K2H Soleil - 2 LLC
San Xxxxxxx CDO I Limited K2H Sterling LLC
Sequilis - Magnum, Ltd. Fidelity Advisor Floating Rate
High Income Fund
Apex (Trimaron) CDO I, Ltd.
Ballyrock CDO I, Limited
Clydesdale CLO 2 CO1 - 1 Ltd.
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