Exhibit 10.38
SEALY MATTRESS COMPANY
SEALY CORPORATION
FOURTH AMENDMENT TO REVOLVER/TERM A LOAN CREDIT AGREEMENT
AND THIRD AMENDMENT TO AXEL CREDIT AGREEMENT
This FOURTH AMENDMENT TO REVOLVER/TERM A LOAN CREDIT AGREEMENT
AND THIRD AMENDMENT TO AXEL CREDIT AGREEMENT (this "Amendment") is dated as of
March 30, 2001 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"), 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 Bankers Trust Company, as documentation agent for Lenders, 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 Credit Agreement dated as
of December 18, 1997 (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"), in each case 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 Revolver/Term A Loan Credit Agreement or the AXEL
Credit Agreement, as applicable, or in Section 1.1 hereof.
RECITALS
WHEREAS, Company, Holdings and Lenders desire to amend certain of
the terms and provisions of each of the Credit Agreements 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 CREDIT AGREEMENTS
1.1 Amendments to Section 1: Definitions
-------------------------------------
A. Subsection 1.1 of each of the Credit Agreements is hereby amended
by adding thereto the following definitions, which shall be inserted in proper
alphabetical order:
"March 2001 Amendment" means that certain Fourth Amendment to
Revolver/Term A Loan Credit Agreement and Third Amendment to AXEL Credit
Agreement dated as of March 30, 2001 by and among Company, Holdings,
Subsidiary Guarantors and the Lenders party thereto.
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"March 2001 Amendment Effective Date" means the "Amendment
Effective Date" as defined in the March 2001 Amendment.
"New Headquarters Mortgage" means the Mortgage in favor of
Collateral Agent for the benefit of Lenders executed and delivered by
Company in connection with its acquisition of the real property in
Archdale, North Carolina, where its corporate headquarters are located
on and as of the March 2001 Amendment Effective Date.
B. Subsection 1.1 of each of the Credit Agreements is hereby further
amended by deleting the definition of "Senior Subordinated Notes" therefrom and
substituting therefor the following:
"Senior Subordinated Notes" means the $125,000,000 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 (not to exceed $125,000,000) of any additional Senior
Subordinated Notes issued on or after the March 2001 Amendment Effective
Date in transactions not prohibited under this Agreement.
1.2 Amendment to Section 5: Affirmative Covenants
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Section 5 of the AXEL Credit Agreement is hereby amended by adding at
the end thereof the following new subsection 5.13:
"5.13 Additional Senior Subordinated Note Proceeds.
Company shall, no later than the date of receipt of the proceeds
of any issuance of Senior Subordinated Notes on or after the March 2001
Amendment Effective Date, apply such proceeds (net of underwriting
discounts and commissions and other reasonable costs and expenses
associated with such issuance, including reasonable legal fees and
expenses) to (i) repay in full all outstanding Indebtedness, if any,
secured by any mortgage (other than the New Headquarters Mortgage)
encumbering the New Headquarters (such term used herein as defined in
the Revolving Credit Agreement), (ii) to the extent any such proceeds
remain after application in accordance with clause (i), repay any
outstanding Revolving Loans (without reducing the Revolving Loan
Commitments), and (iii) to the extent any such proceeds remain after
application in accordance with clauses (i) and (ii), repay any
outstanding Tranche A Term Loans. No later than 60 days after the
repayment of the Indebtedness described in clause (i), Company shall
terminate all mortgage Liens on the New Headquarters (other than the New
Headquarters Mortgage) and shall execute and deliver such documents and
instruments, and take all further action that Collateral Agent may
reasonably request, in order to cause the Lien granted under the New
Headquarters Mortgage to be a First Priority Lien (except for Permitted
Encumbrances of the type described in clause (vi) or (x) of the
definition thereof which are in existence, and
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have priority over the New Headquarters Mortgage, on the March 2001
Amendment Effective Date), subject to no other mortgage Lien."
1.3 Amendment to Section 6: Affirmative Covenants
Section 6 of the Revolver/Term A Loan Credit Agreement is hereby amended
by adding at the end thereof the following new subsection 6.13:
"6.13 Additional Senior Subordinated Note Proceeds.
Company shall, no later than the date of receipt of the proceeds
of any issuance of Senior Subordinated Notes on or after the March 2001
Amendment Effective Date, apply such proceeds (net of underwriting
discounts and commissions and other reasonable costs and expenses
associated with such issuance, including reasonable legal fees and
expenses) to (i) repay in full all outstanding Indebtedness, if any,
incurred pursuant to subsection 7.1(xviii), (ii) to the extent any such
proceeds remain after application in accordance with clause (i), repay
pursuant to subsection 2.4B(i) any outstanding Revolving Loans (without
reducing the Revolving Loan Commitments), and (iii) to the extent any
such proceeds remain after application in accordance with clauses (i)
and (ii), repay pursuant to subsection 2.4B(i) any outstanding Tranche A
Term Loans. No later than 60 days after the repayment of the
Indebtedness described in clause (i), Company shall terminate all
mortgage Liens on the New Headquarters (other than the New Headquarters
Mortgage) and shall execute and deliver such documents and instruments,
and take all further action that Collateral Agent may reasonably
request, in order to cause the Lien granted under the New Headquarters
Mortgage to be a First Priority Lien (except for Permitted Encumbrances
of the type described in clause (vi) or (x) of the definition thereof
which are in existence, and have priority over the New Headquarters
Mortgage, on the March 2001 Amendment Effective Date), subject to no
other mortgage Lien."
1.4 Amendment to Negative Covenants
-------------------------------
Each of subsection 6.10B of the AXEL Credit Agreement and subsection
7.14B of the Revolver/Term A Loan Credit Agreement is hereby amended by adding
immediately prior to the "." at the end thereof the following proviso:
"; provided, that on or after the March 2001 Amendment Effective Date
--------
Company may issue (and amend the Senior Subordinated Note Indenture to
the extent necessary to issue) up to $125,000,000 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
----------------------
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Each undersigned Lender hereby consents to the amendments to each of the
Credit Agreements 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 "Amendment Effective Date"):
(i) On or before the Amendment Effective Date, each of Company 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 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 Amendment Effective Date; and
(b) This Amendment, executed by Holdings, Company, Credit
Support Parties, Requisite Lenders under the Revolver/Term A Loan
Credit Agreement and Requisite Lenders under the AXEL Credit
Agreement.
(ii) So long as Requisite Lenders under the Revolver/Term A Loan
Credit Agreement and Requisite 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 March 30, 2001, an amendment fee in an amount equal to .05% of
the aggregate Revolving Loan Exposure, Tranche A Term Loan Exposure,
AXEL Series B Exposure, AXEL Series C Exposure and AXEL Series D
Exposure of such Lender.
(iii) Company shall have paid the reasonable fees, expenses and
disbursements of O'Melveny & Xxxxx LLP, counsel to Agents, to the extent
invoiced prior to the Amendment Effective Date.
Section 3. COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Amendment and to
amend the Credit Agreements in the manner provided herein, Company represents
and warrants to each Lender under each Credit Agreement that the following
statements are true, correct and complete:
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A. Incorporation of Representations and Warranties From Credit
Agreements. On and as of the date hereof and the Amendment Effective Date, the
representations and warranties contained in subsections 5.1A, 5.2A, 5.2B, 5.2C
and 5.2D of the Revolver/Term A Loan Credit Agreement and 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 respect to this Amendment and the Credit Agreements as
amended by this Amendment (each, as so amended, an "Amended Agreement," and
collectively, the "Amended Agreements") as if this Amendment and the Amended
Agreements 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 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.
B. 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
any of 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
A. Reference to and Effect on the Credit Agreements and the Other Loan
Documents.
(i) On and after the Amendment Effective Date, each reference in
each of the Revolver/Term A Loan Credit Agreement and the AXEL Credit
Agreement to "this Agreement", "hereunder", "hereof'", "herein" or words
of like import referring to such Credit Agreement, and each reference in
the other applicable Loan Documents to the "Credit Agreement",
"thereunder", "thereof" or words of like import referring to such Credit
Agreement shall mean and be a reference to the applicable Amended
Agreement.
(ii) Except as specifically amended by this Amendment, each 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 operate as a waiver of any right, power or
remedy of any Agent or any Lender under, any Credit Agreement or any of
the other Loan Documents relating thereto.
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B. 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 shall be for
the account of Company.
C. 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.
D. 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.
E. 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 Revolver/Term A Loan Credit Agreement and the AXEL
Credit Agreement upon (A) the execution of counterparts hereof by (1) Requisite
Lenders (as defined in the Revolver/Term A Loan Credit Agreement), (2) Requisite
Lenders (as defined in the AXEL Credit Agreement), (3) Company and (4) 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: ____________________________________
Name:
Title:
SEALY CORPORATION
By: _____________________________________
Name:
Title:
S-1
SUBSIDIARY GUARANTORS:
THE SEALY MATTRESS COMPANY OF PUERTO RICO
OHIO-SEALY MATTRESS MANUFACTURING CO., INC.
OHIO-SEALY MATTRESS MANUFACTURING CO.-- FORT WORTH
OHIO-SEALY MATTRESS MANUFACTURING CO.
OHIO-SEALY MATTRESS MANUFACTURING CO.-- HOUSTON
SEALY MATTRESS COMPANY OF MICHIGAN, INC.
SEALY MATTRESS MANUFACTURING COMPANY OF KANSAS CITY, INC.
SEALY OF MARYLAND AND VIRGINIA, INC.
SEALY MATTRESS COMPANY OF ILLINOIS
X. XXXXXXXXX & COMPANY
SEALY 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.
THE XXXXXXX & XXXXXX BEDDING COMPANY
THE XXXXXXX & XXXXXX UPHOLSTERY FURNITURE COMPANY
By:
--------------------------------------
Name:
Title:
S-2
AGENTS AND LENDERS:
XXXXXXX SACHS CREDIT PARTNERS L.P.,
individually and as Syndication Agent
By: _____________________________________
Name:
Title:
XXXXXX GUARANTY TRUST COMPANY
OF NEW YORK,
individually and as Administrative Agent
By: _____________________________________
Name:
Title:
BANKERS TRUST COMPANY,
individually and as Documentation Agent
By: _____________________________________
Name:
Title:
S-3
----------------------------------
[NAME OF LENDER]
By: __________________________________
Name:
Title:
S-4
