EX-99.2 3 l86016aex99-2.txt EXHIBIT 99.2 1 EXHIBIT 99.2 (CONFORMED EXECUTED COPY) SIMMONS COMPANY THIRD AMENDMENT AND WAIVER TO CREDIT AND GUARANTY AGREEMENT THIS THIRD AMENDMENT AND WAIVER (this "Amendment") dated as of January 5, 2001 to the CREDIT AND GUARANTY AGREEMENT dated as of October 29, 1998 (as amended by that certain First Amendment to Credit and Guaranty Agreement dated as of March 1, 1999 and that certain Second Amendment to Credit and Guaranty Agreement dated as of March 22, 2000, the "Credit Agreement") is entered into by and among SIMMONS COMPANY, a Delaware corporation (the "Company"), SIMMONS HOLDINGS, INC., a Delaware corporation ("Holdings"), the CREDIT SUPPORT PARTY listed on the signature papers hereto, CERTAIN FINANCIAL INSTITUTIONS listed on the signature pages hereto, GOLDMAN SACHS CREDIT PARTNERS L.P., as Syndication Agent and UBS AG, STAMFORD BRANCH, as Administrative Agent. Capitalized terms used herein without definition shall have the same meanings herein as set forth in the Credit Agreement and in the amendments contained in Section 1 hereof. RECITALS WHEREAS, Company has advised Lenders that the litigation with Serta disclosed on SCHEDULE 4.25 of the Credit Agreement (the "Subject Litigation") has been resolved and that the settlement liability of Holdings and its Subsidiaries in connection with the Subject Litigation is equal to $4,250,000; WHEREAS, Company has represented and warranted in Section 4.10 of the Credit Agreement that the Subject Litigation would not reasonably be expected to exceed $1,500,000; WHEREAS, Company requests that Requisite Lenders hereby waive the provisions of Section 3.2(b) of the Credit Agreement to the extent that such provisions require that the representations and warranties pertaining to the Subject Litigation in Section 4.10 of the Credit Agreement are true, correct and complete in all respects on and as of a Credit Extension Date; WHEREAS, Company and Requisite Lenders desire to amend the Credit Agreement to (i) permit Company to purchase an option to sell certain account receivables of The Heilig- 2 Meyers Company for an aggregate amount equal to no greater than $3,000,000, (ii) allow the sale and lease-back of certain equipment of Company and its Subsidiaries for an aggregate amount equal to no greater than $10,000,000, (iii) make certain amendments to the levels of certain financial covenants, (iv) make certain amendments to EXHIBIT M (Certain Adjustments to EBITDA) with respect to the Subject Litigation and (v) to make certain other amendments as set forth below; and WHEREAS, pursuant to Section 2.12(b) of the Credit Agreement, Company hereby notifies Administrative Agent and the Lenders of a permanent reduction in the aggregate amount of the Revolving Loan Commitments 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 CREDIT AGREEMENT SECTION 1.1 AMENDMENTS TO SECTION 1: DEFINITIONS. A. Section 1.1 of the Credit Agreement is hereby amended by adding the following definitions in proper alphabetical order: "PERMITTED SALE/LEASE-BACK TRANSACTIONS" means the sale and lease-back of certain equipment of Company and its Subsidiaries to a third-party for an aggregate amount equal to no greater than $10,000,000, the terms and conditions of which shall be reasonably satisfactory to Administrative Agent. "RECEIVABLES PUT OPTION" means the option purchased by Company to sell certain account receivables of The Heilig-Meyers Company for an aggregate amount equal to no greater than $3,000,000, the terms and conditions of which shall be reasonably satisfactory to Syndication Agent and Administrative Agent. B. Section 1.1 of the Credit Agreement is hereby amended by restating clauses (i) and (ii) of the definition of "APPLICABLE MARGIN" in their entirety as follows: "(i) 2.25% per annum for Tranche B Term Loans which are Base Rate Loans and 2.50% per annum for Tranche C Term Loans which are Base Rate Loans; PROVIDED, if the Leverage Ratio in effect is greater than 4.75:1.00 then "APPLICABLE MARGIN" shall mean 2.50% per annum for Tranche B Term Loans which are Base Rate Loans and 2.75% per annum for Tranche C Term Loans which are Base Rate Loans, (ii) 3.25% per annum for Tranche B 3 Term Loans which are Eurodollar Rate Loans and 3.50% per annum for Tranche C Term Loans which are Eurodollar Rate Loans; PROVIDED, if the Leverage Ratio in effect is greater than 4.75:1.00 then "APPLICABLE MARGIN" shall mean 3.50% per annum for Tranche B Term Loans which are Eurodollar Rate Loans and 3.75% per annum for Tranche C Term Loans which are Eurodollar Rate Loans, and" C. Section 1.1 of the Credit Agreement is hereby amended by restating the table set forth in the definition of "APPLICABLE MARGIN" in its entirety as follows:
================================================================================================================ Applicable Margin for Tranche A Term Loans and Applicable Margin for Tranche A Term Revolving Loans which are Loans, Revolving Loans and Swing Line Leverage Ratio Eurodollar Loans Loans which are Base Rate Loans ---------------------------------------------------------------------------------------------------------------- Greater than 4.75:1.00 3.00% 2.00% ---------------------------------------------------------------------------------------------------------------- Greater than 4.25:1.00 and #4.75:1.00 2.75% 1.75% ---------------------------------------------------------------------------------------------------------------- Greater than 3.75:1.00 and #4.25:1.00 2.50% 1.50% ---------------------------------------------------------------------------------------------------------------- Greater than 3.25:1.00 and #3.75:1.00 2.25% 1.25% ---------------------------------------------------------------------------------------------------------------- #3.25:1.00 2.00% 1.00% ================================================================================================================
SECTION 1.2 AMENDMENTS TO SECTION 6: NEGATIVE COVENANTS. A. LIENS. Section 6.2 of the Credit Agreement is hereby amended by deleting the "and" at the end of subsection (viii) thereof, deleting the "." at the end of subsection (ix) thereof and inserting the phrase "; and " in lieu thereof, and further by inserting the following subsection (x) at the end thereof: "(x) Liens in connection with the sale of any account receivable pursuant to the Receivables Put Option." B. MINIMUM FIXED CHARGE COVERAGE RATIO. Section 6.6(a) of the Credit Agreement is hereby amended by deleting the table set forth therein in its entirety and substituting therefor the following: 4
========================================================== ================================= Minimum Fixed Charge Coverage Period Ratio ========================================================== ================================= The last day of Fiscal Year 2000 - the day immediately preceding the end of 1st Fiscal Quarter 2001 1.40:1.00 ---------------------------------------------------------- --------------------------------- The last day of 1st Fiscal Quarter 2001 - the day immediately preceding the end of 2nd Fiscal Quarter 2001 1.45:1.00 ---------------------------------------------------------- --------------------------------- The last day of 2nd Fiscal Quarter 2001 - the day immediately preceding the end of 3rd Fiscal Quarter 2001 1.50:1.00 ---------------------------------------------------------- --------------------------------- The last day of 3rd Fiscal Quarter 2001 - the day immediately preceding the end of Fiscal Year 2001 1.65:1.00 ---------------------------------------------------------- --------------------------------- The last day of Fiscal Year 2001 - the day immediately preceding the end of 2nd Fiscal Quarter 2002 1.75:1.00 ---------------------------------------------------------- --------------------------------- The last day of 2nd Fiscal Quarter 2002 and thereafter 1.95:1.00 ---------------------------------------------------------- ---------------------------------
C. MINIMUM CASH INTEREST COVERAGE RATIO. Section 6.6(b) of the Credit Agreement is hereby amended by deleting the table set forth therein in its entirety and substituting therefor the following:
========================================================== ================================= Minimum Cash Interest Period Coverage Ratio ========================================================== ================================= The last day of Fiscal Year 2000 - the day immediately 1.65:1.00 preceding the end of 1st Fiscal Quarter 2001 ---------------------------------------------------------- --------------------------------- The last day of 1st Fiscal Quarter 2001 - the day 1.70:1.00 immediately preceding the end of 2nd Fiscal Quarter 2001 ---------------------------------------------------------- --------------------------------- The last day of 2nd Fiscal Quarter 2001 - the day 1.85:1.00 immediately preceding the end of 3rd Fiscal Quarter 2001 ---------------------------------------------------------- ---------------------------------
5
========================================================== ================================= Minimum Cash Interest Period Coverage Ratio ========================================================== ================================= The last day of 3rd Fiscal Quarter 2001 - the day 2.10:1.00 immediately preceding the end of Fiscal Year 2001 ---------------------------------------------------------- --------------------------------- The last day of Fiscal Year 2001 - the day immediately 2.30:1.00 preceding the end of 2nd Fiscal Quarter 2002 ---------------------------------------------------------- --------------------------------- The last day of 2nd Fiscal Quarter 2002 - thereafter 2.50:1.00 ========================================================== =================================
D. MAXIMUM LEVERAGE RATIO. Section 6.6(c) of the Credit Agreement is hereby amended by deleting the table set forth therein in its entirety and substituting therefor the following:
========================================================== ================================= Maximum Period Leverage Ratio ========================================================== ================================= The last day of Fiscal Year 2000 - the day immediately 5.75:1.00 preceding the end of 1st Fiscal Quarter 2001 ---------------------------------------------------------- --------------------------------- The last day of 1st Fiscal Quarter 2001 - the day 5.60:1.00 immediately preceding the end of 2nd Fiscal Quarter 2001 ---------------------------------------------------------- --------------------------------- The last day of 2nd Fiscal Quarter 2001 - the day 5.00:1.00 immediately preceding the end of Fiscal Year 2001 ---------------------------------------------------------- --------------------------------- The last day of Fiscal Year 2001 and thereafter 4.75:100 ========================================================== =================================
E. FUNDAMENTAL CHANGES; ASSET SALES AND ACQUISITIONS. Section 6.7 is hereby amended by adding the following clause (vii) at the end thereto as follows: "(vii) Company and its Subsidiaries may sell assets in connection with any Permitted Sale/Lease-Back Transaction and in connection with the Receivables Put Option; provided, the sale of any account receivable pursuant to the Receivables Put Option shall not be deemed an Asset Sale for any purpose hereunder." 6 F. CONSOLIDATED CAPITAL EXPENDITURES. Section 6.8 of the Credit Agreement is hereby amended by deleting the reference to "$12,500,000" for the period ending 12/30/00 in the table set forth therein and substituting "$13,500,000" therefor. G. SALES AND LEASE-BACKS. Section 6.9 of the Credit Agreement is hereby amended by adding the following proviso at the end thereto: "; provided, further, that Company and its Subsidiaries may become and remain liable as lessee, guarantor or other surety with respect to any Operating Lease entered into in connection with any Permitted Sale/Lease-Back Transaction; provided, further still, that the net proceeds from any such Permitted Sale/Lease-Back Transaction shall be deemed Net Asset Sale Proceeds for all purposes hereof but shall not be deemed Proposed Reinvestment Proceeds for purposes of Section 2.13." SECTION 1.3 AMENDMENTS TO EXHIBITS. The Credit Agreement is hereby amended by deleting the current Exhibit M (Certain Adjustments to EBITDA) in its entirety and substituting therefor a new Exhibit M in the form of Annex A attached hereto. SECTION 2. WAIVER As of the Third Amendment Effective Date (as defined in Section 4 hereof), the Requisite Lenders hereby waive the provisions of Section 3.2(b) of the Credit Agreement to the extent that such provisions require that the representations and warranties pertaining to the Subject Litigation in Section 4.10 of the Credit Agreement are true, correct and complete in all respects on and as of a Credit Extension Date. The waiver set forth in this Section 2 shall be effective only as to the matters set forth specifically herein and shall not entitle the Company to any other waiver or agreement with respect to any other matter. SECTION 3. NOTICE OF REVOLVING LOAN COMMITMENT REDUCTION Pursuant to Section 2.12(b) of the Credit Agreement, Company hereby notifies Administrative Agent and each Lender that the aggregate amount of the Revolving Loan Commitments shall be permanently reduced by an amount equal to $20,000,000 on January 12, 2001, making the aggregate amount of the Revolving Loan Commitments $60,000,000 as of such date, and the Revolving Loan Commitments of each Lender shall be reduced proportionately to its Pro Rata Share. 7 SECTION 4. CONDITIONS TO EFFECTIVENESS Sections 1 and 2 of this Amendment shall become effective only upon the satisfaction of all of the following conditions precedent (the date of satisfaction of such conditions being referred to herein as the "Third Amendment Effective Date"): A. EXECUTION. Credit Parties and Requisite Lenders shall have executed this Amendment. B. AMENDMENT FEE. The Administrative Agent shall have received, for distribution to all Lenders executing this Amendment, an amendment fee equal to 0.200% of such Lender's outstanding Loans and Commitments. C. OTHER FEES. The Agents shall have received all other fees and other amounts due and payable on or prior to the Third Amendment Effective Date, including, to the extent invoiced, reimbursement or other payment of all out-of-pocket expenses required to be reimbursed or paid by the Company hereunder or under any other Credit Document. D. NECESSARY CONSENTS. Each Credit Party shall have obtained all material consents necessary or advisable in connection with the transactions contemplated by this Amendment. E. OTHER DOCUMENTS. Administrative Agent and Lenders shall have received such other documents and information regarding Credit Parties as Administrative Agent may reasonably request. SECTION 5. BORROWER'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, each of the Company represents and warrants to each Lender that other than with respect to the Subject Litigation, the following statements are true, correct and complete in all material respects: A. CORPORATE POWER AND AUTHORITY. Each Credit Party which is party hereto has all requisite corporate power and authority to enter into this Amendment and to carry out the transactions contemplated by, and perform its obligations under, the Credit Agreement as amended by this Amendment (the "Amended Agreement") and the other Credit Documents. B. AUTHORIZATION OF AGREEMENTS. The execution and delivery of this Amendment and the performance of the Amended Agreement and the other Credit Documents have been duly authorized by all necessary corporate action on the part of each Credit Party. C. NO CONFLICT. The execution and delivery by each Credit Party of this Amendment and the performance by each Credit Party of the Amended Agreement and the other Credit 8 Documents do not and will not (i) violate (A) any provision of any law, statute, rule or regulation, or of the certificate or articles of incorporation or partnership agreement, other constitutive documents or by-laws of Holdings, the Company or any Subsidiary, (B) any applicable order of any court or any rule, regulation or order of any Governmental Authority or (C) any provision of any indenture, certificate of designation for preferred stock, agreement or other instrument to which Holdings, the Company or any Subsidiary is a party or by which any of them or any of their property is or may be bound, (ii) be in conflict with, result in a breach of or constitute (alone or with notice or lapse of time or both) a default under any such indenture, certificate of designation for preferred stock, agreement or other instrument, where any such conflict, violation, breach or default referred to in clause (i) or (ii) of this Section 5.C., individually or in the aggregate could reasonably be expected to have a Material Adverse Effect, (iii) result in or require the creation or imposition of any Lien upon any of the properties or assets of each Credit Party (other than any Liens created under any of the Credit Documents in favor of Administrative Agent on behalf of Lenders), or (iv) require any approval of stockholders or partners or any approval or consent of any Person under any contractual obligation of each Credit Party, except for such approvals or consents which will be obtained on or before the Third Amendment Effective Date. D. GOVERNMENTAL CONSENTS. No action, consent or approval of, registration or filing with or any other action by any Governmental Authority is or will be required in connection with the execution and delivery by each Credit Party of this Amendment and the performance by Company and Holdings of the Amended Agreement and the other Credit Documents, except for such actions, consents and approvals the failure to obtain or make which could not reasonably be expected to result in a Material Adverse Effect or which have been obtained and are in full force and effect. E. BINDING OBLIGATION. This Amendment and the Amended Agreement have been duly executed and delivered by each of the Credit Parties party thereto and each constitutes a legal, valid and binding obligation of such Credit Party to the extent a party thereto enforceable against such Credit Party in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, moratorium, reorganization or other similar laws affecting creditors' rights generally and except as enforceability may be limited by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). F. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT AGREEMENT. The representations and warranties contained in Section 4 of the Amended Agreement are and will be true, correct and complete in all material respects on and as of the Third 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. G. 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 Default. 9 SECTION 6. ACKNOWLEDGMENT AND CONSENT Simmons International Holdings Company, Inc. referred to herein as the "credit support party", and the Credit Documents to which they are a party are collectively referred to herein as the "CREDIT SUPPORT DOCUMENTS". Credit Support Party hereby acknowledges that it has reviewed the terms and provisions of the Credit Agreement and this Amendment and consents to the amendment of the Credit Agreement effected pursuant to this Amendment. Credit Support Party hereby confirms that each Credit Support Document to which it is a party or otherwise bound and all Collateral encumbered thereby will continue to guarantee or secure, as the case may be, to the fullest extent possible in accordance with the Credit Support Documents the payment and performance of all "Obligations" under each of the Credit Support Documents to which is a party (in each case as such terms are defined in the applicable Credit Support Document). Credit Support Party acknowledges and agrees that any of the Credit Support Documents to which it is a party or otherwise bound shall continue in full force and effect and that all of its obligations thereunder shall be valid and enforceable and shall not be impaired or limited by the execution or effectiveness of this Amendment. Credit Support Party represents and warrants that all representations and warranties contained in the Amended Agreement and the Credit Support Documents to which it is a party or otherwise bound are true, correct and complete in all material respects on and as of the Third 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. Credit Support Party acknowledges and agrees that (i) notwithstanding the conditions to effectiveness set forth in this Amendment, Credit Support Party is not required by the terms of the Credit Agreement or any other Credit Support Document to consent to the amendments to the Credit Agreement effected pursuant to this Amendment and (ii) nothing in the Credit Agreement, this Amendment or any other Credit Support Document shall be deemed to require the consent of Credit Support Party to any future amendments to the Credit Agreement. SECTION 7. MISCELLANEOUS A. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS. (i) On and after the Third 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 Credit 10 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 Credit Agreement as amended by this Amendment. (ii) Except as specifically amended by this Amendment, the Credit Agreement and the other Credit Documents 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, constitute a waiver of any provision of, or operate as a waiver of any right, power or remedy of any Agent or Lender under, the Credit Agreement or any of the other Credit Documents. B. 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. C. APPLICABLE LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. D. 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. [Remainder of page intentionally left blank] 11 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. BORROWER: SIMMONS COMPANY By:/s/ Brian P. Breen ----------------------------------------------- Name: Brian P. Breen Title: Vice President & Assistant Treasurer HOLDINGS: SIMMONS HOLDINGS, INC. By:/s/ Brian P. Breen ----------------------------------------------- Name: Brian P. Breen Title: Vice President & Assistant Treasurer CREDIT SUPPORT SIMMONS INTERNATIONAL HOLDINGS COMPANY, INC. PARTIES: (for the purposes of Section 6 only) as a Credit Support Party By:/s/ Brian P. Breen ----------------------------------------------- Name: Title: 12 LENDERS AND AGENTS GOLDMAN SACHS CREDIT PARTNERS L.P., By: /s/ Elizabeth Fischer ----------------------------------------------- Authorized Signatory 13 UBS AG, STAMFORD BRANCH By:/s/ Wilfred V. Saint ----------------------------------------------- Name: Wilfred V. Saint Title: Associate Director Banking Products Services By:/s/ Lynne B. Alfarone ----------------------------------------------- Name: Lynne B. Alfarone Title: Associate Director Banking Products Services 14 WACHOVIA BANK, N.A., By:/s/ Howard Kim -------------------------------------------- Name: Howard Kim Title: Senior Vice President 15 FLEET NATIONAL BANK By: /s/ Frances L. Mueller -------------------------------------------- Name: Frances L. Mueller Title: Vice President 16 U.S. BANK NATIONAL ASSOCIATION By:____________________________________________ Name: Title: 17 BHF-BANK AKTIENGESELLSCHAFT NEW YORK BRANCH By:/s/ Christopher J. Ruzzi --------------------------------------------- Name: Christopher J. Ruzzi Title: Vice President By:/s/ Lisa Moraglia -------------------------------------------- Name: Lisa Moraglia Title: Associate 18 SUNTRUST BANK By:/s/ Katherine A. Boozer --------------------------------------------- Name: Katherine A. Boozer Title: Vice President 19 WELLS FARGO BANK, N.A. By:/s/ Hugh Diddy -------------------------------------------- Name: Hugh Diddy Title: Assistant Vice President 20 BAYERISCHE HYPO-UND VEREINSBANK, AG NEW YORK BRANCH By:/s/ Irv Roa -------------------------------------------- Name: Irv Roa Title: Associate Director By:/s/ Vicky S. Soo -------------------------------------------- Name: Vicky S. Soo Title: Associate Director 21 THE BANK OF NEW YORK By:/s/ David C. Siegel -------------------------------------------- Name: David C. Siegel Title: Vice President 22 BANK AUSTRIA CREDITANSTALT CORPORATE FINANCE, INC. By: /s/ Francesco Ossino -------------------------------------------- Name: Francesco Ossino Title: Vice President By: /s/ David M. Harnisch -------------------------------------------- Name: David M. Harnisch Title: Senior Vice President 23 HELLER FINANCIAL, INC. By:/s/ Robert M. Reeg -------------------------------------------- Name: Robert M. Reeg Title: Assistant Vice President 24 THE MITSUBISHI TRUST AND BANKING CORPORATION By: /s/ Toshimiro Hayashi -------------------------------------------- Name: Toshimiro Hayashi Title: Senior Vice President 25 SENECA - CBO III By:/s/ Charles Dicke -------------------------------------------- Name:/s/ Charles Dicke Title: Portfolio Manager 26 SCOTIABANC INC. By:/s/ William E. Zarrett -------------------------------------------- Name: William E. Zarrett Title: Managing Director 27 ALLSTATE LIFE INSURANCE COMPANY By:/s/ Jerry D. Zinkula -------------------------------------------- Name: Jerry D. Zinkula Title: Authorized Signatory By: /s/ Charles D. Mires -------------------------------------------- Name: Charles D. Mires Title: Authorized Signatory 28 MERRILL LYNCH SENIOR FLOATING RATE FUND, INC. By:/s/ Anthony Heyman -------------------------------------------- Name: Anthony Heyman Title: Authorized Signatory 29 HSBC BANK USA By:/s/ Carol A. Krause -------------------------------------------- Name: Carol A. Krause Title: Vice President 30 FREMONT INVESTMENT & LOAN By:/s/ Randolph M. Ross -------------------------------------------- Name: Randolph M. Ross Title: Vice President - Senior Portfolio Manager 31 AIMCO CDO SERIES 200 A By: /s/ Jerry D. Zinkula -------------------------------------------- Name: Jerry D. Zinkula Title: Authorized Signatory By:/s/ Charles D. Mires -------------------------------------------- Name: Charles D. Mires Title: Authorized Signatory 32 AMARA 1 FINANCE LTD. BY: INVESCO SENIOR SECURED MANAGEMENT, INC. AS SUB-ADVISOR By: /s/ Thomas H. B. Ewald -------------------------------------------- Name: Thomas H.B. Ewald Title: Authorized Signatory 33 AMARA 2 FINANCE LTD. BY: INVESCO SENIOR SECURED MANAGEMENT, INC. AS SUB-ADVISOR By:/s/ Thomas H.B. Ewald -------------------------------------------- Name: Thomas H.B. Ewald Title: Authorized Signatory 34 NORTH AMERICAN SENIOR FLOATING RATE FUND BY: CYPRESSTREE INVESTMENT MANAGEMENT COMPANY, INC. AS PORTFOLIO MANAGER By:/s/ P.Jeffrey Huth -------------------------------------------- Name: P. Jeffrey Huth Title: Principal 35 KZH CYPRESSTREE - 1 LLC By:/s/ Kimberly Rowe -------------------------------------------- Name: Kimberly Rowe Title: Authorized Agent 36 SENIOR DEBT PORTFOLIO BY: BOSTON MANAGEMENT AND RESEARCH AS INVESTMENT ADVISOR By:/s/ Payson E. Swaffield ---------------------------------------------- Name: Payson E. Swaffield Title: Vice President EATON VANCE SENIOR INCOME TRUST BY: EATON VANCE MANAGEMENT AS INVESTMENT ADVISOR By:/s/ Payson E. Swaffield ---------------------------------------------- Name: Payson E. Swaffield Title: Vice President EATON VANCE INSTITUTIONAL SENIOR LOAN FUND BY: EATON VANCE MANAGEMENT AS INVESTMENT ADVISOR By: /s/ Payson E. Swaffield -------------------------------------------- Name: Payson E. Swaffield Title: Vice President OXFORD STRATEGIC INCOME FUND BY: EATON VANCE MANAGEMENT AS INVESTMENT ADVISOR By:/s/ Payson E. Swaffield ---------------------------------------------- Name: Payson E. Swaffield Title: Vice President GRAYSON & CO. BY: BOSTON MANAGEMENT AND RESEARCH AS INVESTMENT ADVISOR By:/s/ Payson E. Swaffield ---------------------------------------------- Name: Payson E. Swaffield Title: Vice President 37 BAVARIA TRR CORPORATION By:/s/ Lori Rezza -------------------------------------------- Name: Lori Rezza Title: Vice President 38 BLACK DIAMOND CLO 2000-1 LTD By:/s/ Bernie Boggess -------------------------------------------- Name: Bernie Boggess Title: Director 39 BLACK DIAMOND INTERNATIONAL FUNDING, LTD By:/s/ Bernie Boggess ---------------------------------------------- Name: Bernie Boggess Title: Director 40 LONGHORN CDO (CAYMAN) LTD. BY: MERRILL LYNCH INVESTMENT MANAGERS, L.P. AS INVESTMENT ADVISOR By:/s/ Anthony Heyman ---------------------------------------------- Name: Anthony Heyman Title: Authorized Signatory 41 MASTER SENIOR FLOATING RATE TRUST By:/s/ Anthony Heyman ---------------------------------------------- Name: Anthony Heyman Title: Authorized Signatory 42 PROMETHEUS INVESTMENT FUNDING NO. 1 LTD. By: CPF Asset Advisory, L.P. as Investment Manager By:/s/ Irv Roa ------------------------------------------------ Name: Irv Roa Title: Associate Director By:/s/ Vicky S. Soo ------------------------------------------------ Name: Vicky S. Soo Title: Associate Director 43 TORONTO DOMINION (NEW YORK), INC. By:/s/ Stacey Malek -------------------------------------------- Name: Stacey Malek Title: Vice President 44 STEIN ROE FLOATING RATE LIMITED LIABILITY COMPANY By:/s/ James R. Fellows -------------------------------------------- Name: James R. Fellows Title: Senior Vice President Stein Roe & Farnham Incorporated, as Advisor to the Stein Roe Floating Rate Limited Liability Company 45 CITIBANK GLOBAL ASSET MANAGEMENT By:__________________________________________ Name: Title: 46
ANNEX A EXHIBIT M TO THE CREDIT AND GUARANTY AGREEMENT Simmons Company Historical Adjusted EBITDA ($ thousands) 1997 1998 1999 Q1 `00 Q2 `00 Q3 `00 Q4 `00 --------------------------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- EBITDA 53,325 58,682 52,612 Actual Actual Actual Actual Interest Income 256 184 201 Actual Actual Actual Actual Non-Recurring SWIFT/UNITE 2,347 2,208 -- -- -- -- -- Management Strategic Initiatives Strategic Initiative #1 1,363 -- -- -- -- -- -- Strategic Initiative #2 330 -- -- -- -- -- -- Strategic Initiative #3 -- 418 444 -- -- -- -- Other Discontinued Product Line 799 772 -- -- -- -- -- Severance -- -- 6,600 3,800 -- -- -- H&H -- -- 6,883 -- -- -- -- Serta Settlement -- -- -- -- -- -- 4,250 Serta Litigation Fees -- -- -- 42 354 1,322 282 EBITDA, as Adjusted 58,420 62,264 66,740
The numbers set forth above under "EBITDA, as Adjusted" for periods prior to Fiscal Year 2000 shall be used as "Consolidated Adjusted EBITDA" in computing the covenants set forth in Section 6.6 of the Credit Agreement. EBITDA for each Fiscal Quarter in 2000 shall use the actual numbers for such quarter adjusted as provided under each heading '00. The severance and H&H adjustments for 1999 were incurred in the fourth Fiscal Quarter of 1999.