EXHIBIT 10.43
SEALY MATTRESS COMPANY
SEALY CORPORATION
FIRST AMENDMENT TO AMENDED AND RESTATED
CREDIT AGREEMENT
This FIRST AMENDMENT TO AMENDED AND RESTATED 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"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P. ("GSCP"), as
co-lead arranger and syndication agent (in such capacity, "Syndication Agent"),
THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF, JPMORGAN CHASE
BANK, as administrative agent for Lenders, ▇.▇. ▇▇▇▇▇▇ SECURITIES INC., as
co-lead arranger, FLEET NATIONAL BANK ("Fleet"), as co-documentation agent and
WACHOVIA BANK, N.A., as a co-documentation agent, 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
"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 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 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
Subsection 1.1 of the Credit Agreement is hereby amended by adding the
following definitions, which shall be inserted in proper alphabetical order:
"May 2003 Amendment" means that certain First Amendment to Amended and
Restated 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 "May 2003 Amendment
Effective Date" as defined in the May 2003 Amendment.
"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 fourth amendment to the AXEL Credit Agreement
dated as of May 2, 2003.
"May 2003 Refinancing" means, collectively, the issuance of
approximately $50 million in aggregate principal amount of Senior
Subordinated Notes and the prepayment of AXELs Series B, the AXELs Series C
and the AXELs Series D (in each case, as defined in the AXEL Credit
Agreement) in an amount equal to the May 2003 Net Refinancing Proceeds.
1.2 Amendments to Section 7: Holdings' and Company's Negative Covenants
(a) Subsection 7.6A is hereby amended by deleting the Minimum
Interest Coverage Ratio table at the end thereof and substituting therefor the
following table:
==================================== ================================
Period Minimum Interest Coverage Ratio
==================================== ================================
March 3, 2003 - June 1, 2003 2.1:1
==================================== ================================
June 2, 2003 - August 31, 2003 2.0: 1
==================================== ================================
September 1, 2003 - November 30, 2.1: 1
2003
==================================== ================================
December 1, 2003 - February 29, 2.2: 1
2004
==================================== ================================
March 1, 2004 - May 30, 2004 2.2: 1
==================================== ================================
May 31, 2004 - August 29, 2004 and 2.3: 1
any Fiscal Quarter thereafter
==================================== ================================
(b) Subsection 7.6B is hereby amended by deleting the Maximum
Total Leverage Ratio table at the end thereof and substituting therefor the
following table:
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==================================== ================================
Period Maximum Total Leverage Ratio
==================================== ================================
March 3, 2003 - June 1, 2003 5.2:1
==================================== ================================
June 2, 2003 - August 31, 2003 5.4: 1
==================================== ================================
September 1, 2003 - November 30, 5.2: 1
2003
==================================== ================================
December 1, 2003 - February 29, 4.9: 1
2004
==================================== ================================
March 1, 2004 - May 30, 2004 4.8: 1
==================================== ================================
May 31, 2004 - August 29, 2004 and 4.6: 1
any Fiscal Quarter thereafter
==================================== ================================
(c) Subsection 7.6C is hereby amended by deleting the Consolidated
Senior Debt Ratio table at the end thereof and substituting therefor the
following table:
==================================== =================================
Period Consolidated Senior Debt Ratio
==================================== =================================
March 3, 2003 - June 1, 2003 2.1:1
==================================== =================================
June 2, 2003 - August 31, 2003 2.1 :1
==================================== =================================
September 1, 2003 - November 30, 2.0: 1
2003
==================================== =================================
December 1, 2003 - February 29, 1.9 :1
2004
==================================== =================================
March 1, 2004 - May 30, 2004 1.9 :1
==================================== =================================
May 31, 2004 - August 29, 2004 and 1.8 : 1
any Fiscal Quarter thereafter
==================================== =================================
(d) Subsection 7.14B 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
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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."
1.3 Consents to Amendments
Each undersigned Lender hereby consents to the amendments to the 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 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 Effective Date (as defined in the Credit
Agreement) (or, in lieu thereof, certified copies of any such amendments),
(ii) the Resolutions of its Board of Directors delivered on the Effective
Date are in full force and effect without modification or amendment, and
(iii) there have been no changes after the Effective 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 and Requisite Lenders under the Credit Agreement.
(ii) So long as Requisite Lenders under the 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 total commitment under the Credit
Agreement, as well as payment
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for all reasonable fees, expenses and disbursements incurred by Skadden, Arps,
Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP in connection with this Amendment to the extent such
fees are invoiced prior to the May 2003 Amendment Effective Date.
(iii) The Company shall have consummated the May 2003 Refinancing.
SECTION 3. COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Amendment and to amend the
Credit Agreement in the manner provided herein, Company represents and warrants
to each Lender under the 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 5.1A, 5.2A, 5.2B, 5.2C
and 5.2D of the Credit Agreement are and will be true, correct and complete with
respect to this Amendment and the 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 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
Agreement.
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.
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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 Credit Agreement to "this Agreement", "hereunder", "hereof'", "herein" or
words of like import referring to the 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 Credit Agreement shall mean
and be a reference to the applicable Amended Agreement.
(ii) Except as specifically amended by this Amendment, the 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, the 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 Credit Agreement upon (A) the execution of
counterparts hereof by (1) Requisite Lenders (as defined in the 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.
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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/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President, General Counsel
and Secretary
SEALY CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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
▇. ▇▇▇▇▇▇▇▇▇ & CO.
▇▇▇▇▇ 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/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President, General Counsel
and Secretary
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AGENTS AND LENDERS:
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.,
individually and as Syndication Agent
By: /s/ illegible
--------------------------------------
Authorized Signatory
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JPMORGAN CHASE BANK,
individually and as Administrative Agent
By: /s/ illegible
---------------------------------------
Name:
Title:
11
FLEET NATIONAL BANK,
individually and as Co-Documentation Agent
By: /s/ illegible
--------------------------------------
Name:
Title:
12
WACHOVIA BANK, NATIONAL ASSOCIATION,
individually and as Co-Documentation Agent
By: /s/ illegible
--------------------------------------
Name:
Title:
13
