Document:

Exhibit 10.6

 

SECOND AMENDMENT TO CREDIT AGREEMENT

 

THIS SECOND AMENDMENT TO CREDIT AGREEMENT (the “Second Amendment to Credit Agreement,” or this “Amendment”) is entered into effective as of May 19, 2016 (the “Effective Date”), among LONESTAR RESOURCES AMERICA INC., a Delaware corporation (“Borrower”), and CITIBANK, N.A., a national banking association, as Administrative Agent (in such capacity, the “Administrative Agent”), and the financial institutions executing this Amendment as Lenders.

 

R  E  C  I  T  A  L  S

 

A.                                    Borrower, the financial institutions signing as Lenders and Administrative Agent are parties to a Credit Agreement dated as of July 28, 2015, as amended by a First Amendment to Credit Agreement dated as of April 29, 2016 (collectively, the “Original Credit Agreement”).

 

B.                                    The parties desire to amend the Original Credit Agreement as hereinafter provided.

 

NOW, THEREFORE, in consideration of these premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1.                                      Same Terms.  All terms used herein which are defined in the Original Credit Agreement shall have the same meanings when used herein, unless the context hereof otherwise requires or provides.  In addition, (i) all references in the Loan Documents to the “Agreement” shall mean the Original Credit Agreement, as amended by this Amendment, as the same shall hereafter be amended from time to time, and (ii) all references in the Loan Documents to the “Loan Documents” shall mean the Loan Documents, as amended by this Amendment, as the same shall hereafter be amended from time to time.

 

2.                                      Conditions Precedent.  The obligations and agreements of Lenders as set forth in this Amendment are subject to the satisfaction (in the opinion of Administrative Agent), unless waived in writing by Administrative Agent, of each of the following conditions (and upon such satisfaction, this Amendment shall be deemed to be effective as of the Effective Date):

 

A.                                    Second Amendment to Credit Agreement.  Administrative Agent shall have received executed counterparts of this Amendment from each of the parties hereto.

 

B.                                    Fees and Expenses.  Administrative Agent shall have received payment of all out-of-pocket fees and expenses (including reasonable attorneys’ fees and expenses) incurred by Administrative Agent in connection with the preparation, negotiation and execution of this Amendment.

 

C.                                    Representations and Warranties.  All representations and warranties contained herein or otherwise made in writing in connection herewith shall be true and correct in all material respects (provided that any such representations or warranties that are, by their terms, already qualified by reference to materiality shall be true and correct without regard to such materiality standard) with the same force and effect as though such representations and warranties have been made on and as of the Effective Date.

 

3.                                      Amendments to Original Credit Agreement.  On the Effective Date, the Original Credit Agreement shall be deemed to be amended as follows:

 

SECOND AMENDMENT TO CREDIT AGREEMENT— Page 1

 

 

(a)                                 Section 1.02 of the Original Credit Agreement shall be amended by adding the following definitions to read in their entirety as follows:

 

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

 

“Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

 

“Consolidated Cash Balance” means, at any time, the aggregate amount of cash and cash equivalents, marketable securities, treasury bonds and bills, certificates of deposit, investments in money market funds and commercial paper, in each case held by the Borrower and its Consolidated Subsidiaries, with the exception of royalty payable funds kept in separate bank accounts in Lonestar Operating, LLC and T-N-T Operating, Inc.

 

“Consolidated Cash Balance Excess Period” has the meaning given such term in Section 3.04(c)(iv).

 

“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

 

“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

 

“EEA Resolution Authority” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

 

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.

 

“Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

 

(b)                                 The definition of “Defaulting Lender” in Section 1.02 of the Original Credit Agreement shall be amended and restated to read in its entirety as follows:

 

SECOND AMENDMENT TO CREDIT AGREEMENT— Page 2

 

 

“Defaulting Lender” means, subject to Section 2.10(b), any Lender that (a) has failed to (i) fund all or any portion of its Loans within two Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s good faith determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent, the Issuing Bank or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit) within two Business Days of the date when due, (b) has notified the Borrower, the Administrative Agent or the Issuing Bank in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s good faith determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three Business Days after written request by the Administrative Agent or the Borrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity, or (iii) become the subject of a Bail-In Action; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender.  Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.10(b)) upon delivery of written notice of such determination to the Borrower, the Issuing Bank and each Lender.

 

(c)                                  Section 2.02(c) of the Original Credit Agreement shall be amended by replacing the phrase “six (6) Eurodollar Borrowings” with the phrase “ten (10) Eurodollar Borrowings” in the ninth and tenth lines thereof.

 

(d)                                 Section 2.03 of the Original Credit Agreement shall be amended by (1) deleting the word “and” from the end of clause (v), (2) renumbering clause (vi) to be clause (vii), and (3) adding a new clause (vi) to read in its entirety as follows:

 

(vii)                           the Consolidated Cash Balance (without regard to the requested Borrowing) and the pro forma Consolidated Cash Balance (giving effect to the requested

 

SECOND AMENDMENT TO CREDIT AGREEMENT— Page 3

 

 

Borrowing) as of the end of the third Business Day after such requested Borrowing will be funded; and

 

(e)                                  The last sentence of the unnumbered paragraph immediately following clause (vii) of Section 2.03 of the Original Credit Agreement shall be amended and restated to read in its entirety as follows:

 

Each Borrowing Request shall constitute a representation (1) that the amount of the requested Borrowing shall not cause the total Revolving Credit Exposures to exceed the total Commitments (i.e., the lesser of the Aggregate Maximum Credit Amounts and the then effective Borrowing Base) and (2) that as of the end of the third Business Day after such requested Borrowing will be funded, after giving pro forma effect to the requested Borrowing, the Consolidated Cash Balance shall not exceed $10,000,000.

 

(f)                                   Section 2.07(b) of the Original Credit Agreement shall be amended to read in its entirety as follows:

 

(b)                                 Scheduled and Interim Redeterminations.  The Borrowing Base shall be redetermined semi-annually in accordance with this Section 2.07 (a “Scheduled Redetermination”), and, subject to Section 2.07(d), such redetermined Borrowing Base shall become effective and applicable to the Borrower, the Agents, the Issuing Bank and the Lenders on or about May 1st and November1st of each year.  In addition, the Borrower may, by notifying the Administrative Agent thereof, one time during any 12-month period, and the Administrative Agent may, one time during any 12-month period, at the direction of the Required Lenders, by notifying the Borrower thereof, each elect to cause the Borrowing Base to be redetermined between Scheduled Redeterminations (an “Interim Redetermination”) in accordance with this Section 2.07.

 

(g)                                  Section 2.07(d)(i) of the Original Credit Agreement shall be amended to read in its entirety as follows:

 

(i)                                     in the case of a Scheduled Redetermination, (A) if the Administrative Agent shall have received the Engineering Reports required to be delivered by the Borrower pursuant to Section 8.12(a) and (c) in a timely and complete manner, then on May 1st or November 1st, as applicable, following such notice, or (B) if the Administrative Agent shall not have received the Engineering Reports required to be delivered by the Borrower pursuant to Section 8.12(a) and (c) in a timely and complete manner, then on the Business Day next succeeding delivery of such notice; and

 

(h)                                 The last sentence of Section 2.10(a)(iv) of the Original Credit Agreement shall be amended and restated to read in its entirety as follows:

 

Subject to Section 12.20, no reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased exposure following such reallocation.

 

(i)                                     Section 3.04(c) of the Original Credit Agreement shall be amended by (1) renumbering clauses (iv) and (v) to be clauses (v) and (vi), respectively, and (2) adding a new clause (iv) to read in its entirety as follows:

 

SECOND AMENDMENT TO CREDIT AGREEMENT— Page 4

 

 

(iv)                              If, at any time, (A) there are outstanding Borrowings or LC Exposure and (B) the Consolidated Cash Balance exceeds $10,000,000 as of the end of any four consecutive Business Days (such four Business Day period, the “Consolidated Cash Balance Excess Period”), then the Borrower shall, on or before the end of such Consolidated Cash Balance Excess Period, (x) prepay the Borrowings in an aggregate principal amount equal to such excess as of the end of the Consolidated Cash Balance Excess Period, and (y) if any excess remains after prepaying all of the Borrowings as a result of any LC Exposure, pay to the Administrative Agent on behalf of the Lenders an amount equal to such excess to be held as cash collateral as provided in Section 2.08(j), in each case.

 

(j)                                    Section 6.02 of the Original Credit Agreement shall be amended by (1) re-lettering clause (e) to be clause (f), and (2) adding a new clause (e) to read in its entirety as follows:

 

(e)                                  (i) The Consolidated Cash Balance as of the day of the Borrowing Request and (ii) the pro forma Consolidated Cash Balance as of the end of the third Business Day after such Borrowing will be funded, in each case, shall not exceed $10,000,000.

 

(k)                                 The last sentence of Section 6.02 of the Original Credit Agreement shall be amended by deleting the phrase “Section 6.02(a) through (d)” and replacing it with the phrase “Section 6.02(a) through (e)”.

 

(l)                                     A new Section 9.20 shall be added to the Original Credit Agreement to read in its entirety as follows:

 

9.20                        Maintenance of Deposit Accounts. The Borrower will not, and will not permit any Subsidiary to (a) open or maintain any deposit account, securities account or commodity account at or with any banking or other financial institution other than a Lender, (b) establish or maintain a deposit account, securities account or commodity account, without delivering to the Administrative Agent a control agreement signed by the Administrative Agent, the depository bank, the other parties thereto and the applicable Loan Party, and otherwise in form and substance reasonably satisfactory to the Administrative Agent, covering the applicable deposit account, securities account or commodity account, or (c) deposit or maintain Collateral (including the proceeds thereof) in a deposit account, securities account or commodities account that is not subject to a control agreement.

 

(m)                             The Form of Borrowing Request attached as Exhibit B to the Original Credit Agreement is hereby replaced in its entirety by Exhibit B attached to this Amendment.

 

(n)                                 Article XII of the Original Credit Agreement shall be amended by adding a new Section 12.20 thereto in proper order to read in its entirety as follows:

 

Section 12.20                      Acknowledgement and Consent to Bail-In of EEA Financial Institutions.  Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the write-

 

SECOND AMENDMENT TO CREDIT AGREEMENT— Page 5

 

 

down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

 

(a)                                 the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and

 

(b)                                 the effects of any Bail-In Action on any such liability, including, if applicable:

 

(i)                                     a reduction in full or in part or cancellation of any such liability;

 

(ii)                                  a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

 

(iii)                               the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any EEA Resolution Authority.

 

4.                                      Decrease of Borrowing Base.  The Borrowing Base is hereby decreased from $180,000,000 to $120,000,000.  This redetermination of the Borrowing Base constitutes the Scheduled Redetermination of the Borrowing Base to be made on or about May 1, 2016 pursuant to Section 2.07(b) of the Credit Agreement.  The Borrowing Base shall remain at this amount until next redetermined in accordance with Section 2.07 of the Credit Agreement.

 

5.                                      Post-Closing Obligations.  Within 30 days after the Effective Date (or such later date to which Administrative Agent shall agree in writing in its reasonable discretion), the Borrower shall, use commercially reasonable efforts, and shall cause the other Loan Parties to use commercially reasonable efforts to, deliver duly executed control agreements required to comply with Section 9.20 of the Credit Agreement, with respect to their respective deposit accounts, securities accounts and commodity accounts.

 

6.                                      Certain Representations.  Borrower represents and warrants that, as of the Effective Date:  (a) Borrower has full power and authority to execute this Amendment, and this Amendment constitutes the legal, valid and binding obligation of Borrower enforceable in accordance with their terms, except as enforceability may be limited by general principles of equity and applicable bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting the enforcement of creditors’ rights generally; and (b) no authorization, approval, consent or other action by, notice to, or filing with, any governmental authority or other person is required for the execution, delivery and performance by Borrower of this Amendment.  In addition, Borrower represents that after giving effect to this Amendment all representations and warranties contained in the Original Credit Agreement and the other Loan Documents are true and correct in all material respects (provided that any such representations or warranties that are, by their terms, are requalified by reference to materiality shall be true and correct without regard to such materialty standard) on and as of the Effective Date as if made on and as of such date except to the extent that any such representation or warranty expressly relates solely to an earlier date, in which case such representation or warranty is true and correct in all material respects (or true and correct without regard to such materiality standard, as applicable) as of such earlier date.

 

SECOND AMENDMENT TO CREDIT AGREEMENT— Page 6

 

 

7.             No Further Amendments.  Except as previously amended in writing or as amended hereby, the Original Credit Agreement shall remain unchanged and all provisions shall remain fully effective between the parties.

 

8.             Acknowledgments and Agreements.  Borrower acknowledges that on the date hereof all outstanding Obligations are payable in accordance with their terms, and Borrower (i) waives any defense, offset, counterclaim or recoupment with respect thereto and (ii) releases and discharges Administrative Agent and Lenders and their officers, directors, employees, agents, shareholders, affiliates and attorneys (the “Released Parties”) from any and all obligations, indebtedness, liabilities, claims, rights, causes of action or other demands whatsoever, whether known or unknown, suspected or unsuspected, in law or equity, which Borrower ever had, now has or claims to have or may have against any Released Party arising prior to the Effective Date and from or in connection with the Loan Documents or the transactions contemplated thereby, except those resulting from the gross negligence or willful misconduct of the Released Party, as determined by final non-appealable order of a court of competent jurisdiction.  Borrower, Administrative Agent and each Lender do hereby adopt, ratify and confirm the Original Credit Agreement, as amended hereby, and acknowledge and agree that the Original Credit Agreement, as amended hereby, is and remains in full force and effect.  Borrower acknowledges and agrees that its liabilities and obligations under the Original Credit Agreement, as amended hereby, and under the other Loan Documents, are not impaired in any respect by this Amendment.  Any breach of any representations, warranties and covenants under this Amendment shall be an Event of Default under the Original Credit Agreement (subject to applicable notice and cure periods as set forth in the Original Credit Agreement).

 

9.             Limitation on Agreements.  The modifications set forth herein are limited precisely as written and shall not be deemed (a) to be a consent under or a waiver of or an amendment to any other term or condition in the Original Credit Agreement or any of the Loan Documents, or (b) to prejudice any right or rights that Administrative Agent now has or may have in the future under or in connection with the Original Credit Agreement and the other Loan Documents, each as amended hereby, or any of the other documents referred to herein or therein.  This Amendment shall constitute Loan Documents for all purposes.

 

10.          Confirmation of Security.  Borrower hereby confirms and agrees that all of the Security Instruments that presently secure the Obligations shall continue to secure, in the same manner and to the same extent provided therein, the payment and performance of the Obligations as described in the Original Credit Agreement as modified by this Amendment.

 

11.          Counterparts.  This Amendment may be executed in any number of counterparts, each of which when executed and delivered shall be deemed an original, but all of which constitute one instrument.  In making proof of this Amendment, it shall not be necessary to produce or account for more than one counterpart thereof signed by each of the parties hereto.

 

12.          Incorporation of Certain Provisions by Reference.  The provisions of Section 12.09 of the Original Credit Agreement captioned “ Governing Law; Jurisdiction; Consent to Service of Process; Waiver of Jury Trial” are incorporated herein by reference for all purposes.

 

13.          Entirety, Etc.  This Amendment and all of the other Loan Documents embody the entire agreement between the parties.  THIS AMENDMENT AND ALL OF THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

 

SECOND AMENDMENT TO CREDIT AGREEMENT— Page 7

 

 

[This space is left intentionally blank.  Signature pages follow.]

 

SECOND AMENDMENT TO CREDIT AGREEMENT— Page 8

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment to be effective as of the date and year first above written.

 

	
 
    	
BORROWER:
    
	
 
    	
 
    
	
 
    	
LONESTAR RESOURCES AMERICA INC.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Frank D. Bracken   III
    
	
 
    	
Name:
    	
Frank D. Bracken III
    
	
 
    	
Title:
    	
Chief Executive Officer
    
				

 

SECOND AMENDMENT TO CREDIT AGREEMENT— Signature Page

 

 

	
 
    	
ADMINISTRATIVE AGENT:
    
	
 
    	
 
    
	
 
    	
CITIBANK, N.A.
    
	
 
    	
as Administrative Agent
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jarrod Bourgeois
    
	
 
    	
Name:
    	
Jarrod Bourgeois
    
	
 
    	
Title:
    	
Senior Vice President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
LENDERS:
    
	
 
    	
 
    
	
 
    	
CITIBANK, N.A.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jarrod Bourgeois
    
	
 
    	
Name:
    	
Jarrod Bourgeois
    
	
 
    	
Title:
    	
Senior Vice President
    
				

 

SECOND AMENDMENT TO CREDIT AGREEMENT— Signature Page

 

 

	
 
    	
ABN AMRO CAPITAL USA LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Darrell Holley
    
	
 
    	
Name:
    	
Darrell Holley
    
	
 
    	
Title:
    	
Manging Director
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ David Montgomery
    
	
 
    	
Name:
    	
David Montgomery
    
	
 
    	
Title:
    	
Executive Director
    

 

SECOND AMENDMENT TO CREDIT AGREEMENT— Signature Page

 

 

	
 
    	
TEXAS CAPITAL BANK, N.A.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Grant W. Leigh
    
	
 
    	
Name:
    	
Grant W. Leigh
    
	
 
    	
Title:
    	
Senior Vice President
    
				

 

SECOND AMENDMENT TO CREDIT AGREEMENT— Signature Page

 

 

	
 
    	
BOKF, N.A.
    	
 

	
 
    	
 
    	
 

	
 
    	
 
    	
 
    	
 

	
 
    	
By:
    	
/s/ Lacey H. Miller
    	
 

	
 
    	
Name:
    	
Lacey H. Miller
    
	
 
    	
Title:
    	
Assistant Vice   President
    
					

 

SECOND AMENDMENT TO CREDIT AGREEMENT— Signature Page

 

 

Comerica Bank hereby executes this Amendment for the sole purpose of consenting to Sections 3(f) and 3(g) hereof.

 

	
 
    	
COMERICA BANK
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Robert C. Pitcock
    
	
 
    	
Name:
    	
Robert C. Pitcock
    
	
 
    	
Title:
    	
Relationship Manager
    
				

 

SECOND AMENDMENT TO CREDIT AGREEMENT— Signature Page

 

 

	
 
    	
COMPASS BANK
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Les Werme
    
	
 
    	
Name:
    	
Les Werme
    
	
 
    	
Title:
    	
Director
    

 

SECOND AMENDMENT TO CREDIT AGREEMENT— Signature Page

 

 

	
 
    	
BARCLAYS BANK PLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Vanessa A.   Kurbatskiy
    
	
 
    	
Name:
    	
Vanessa A. Kurbatskiy
    
	
 
    	
Title:
    	
Vice President
    

 

SECOND AMENDMENT TO CREDIT AGREEMENT— Signature Page

 

 

EXHIBIT B
 FORM OF BORROWING REQUEST

 

                    , 20   

 

LONESTAR RESOURCES AMERICA INC., a Delaware corporation (the “Borrower”), pursuant to Section 2.03 of the Credit Agreement dated as of July 28, 2015 (together with all amendments, restatements, supplements or other modifications thereto, the “Credit Agreement”) among the Borrower, CITIBANK, N.A., as Administrative Agent and the other agents and lenders (the “Lenders”) which are or become parties thereto (unless otherwise defined herein, each capitalized term used herein is defined in the Credit Agreement), hereby requests a Borrowing as follows:

 

1.                                      Aggregate amount of the requested Borrowing is $          ;

 

2.                                      Date of such Borrowing is               , 20  ;

 

3.                                      Requested Borrowing is to be [an ABR Borrowing] [a Eurodollar Borrowing];

 

4.                                      In the case of a Eurodollar Borrowing, the initial Interest Period applicable thereto is              ;

 

5.                                      Amount of Borrowing Base in effect on the date hereof is $              ;

 

6.                                      Total Revolving Credit Exposures on the date hereof (i.e., outstanding principal amount of Loans and total LC Exposure) is $             ;

 

7.                                      Pro forma total Revolving Credit Exposures (giving effect to the requested Borrowing) is $              ;

 

8.                                      Total Consolidated Cash Balance on the date hereof (prior to giving effect to the requested Borrowing) is $             ;

 

9.                                      Pro forma total Consolidated Cash Balance (giving effect to the requested Borrowing as of the end of the third Business Day after such requested Borrowing will be funded) is $              ; and

 

10.                               Location and number of the Borrower’s account to which funds are to be disbursed, which shall comply with the requirements of Section 2.05 of the Credit Agreement, is as follows:

 

 

The undersigned certifies that he/she is the               of the Borrower, and that as such he/she is authorized to execute this certificate on behalf of the Borrower.  The undersigned further certifies, represents and warrants on behalf of the Borrower that the Borrower is entitled to receive the requested Borrowing under the terms and conditions of the Credit Agreement.

 

	
 
    	
LONESTAR RESOURCES AMERICA INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
				

 

EXHIBIT B, Form of Borrowing Request — Page SoloExhibit 10.1

 

The use of “[***]” in this Exhibit indicates that a confidential portion has been omitted pursuant to a request for confidential treatment. The omitted material has been filed separately with the Securities and Exchange Commission.

 

Vendor Supply Agreement

 

This Vendor Supply Agreement (the “Agreement”) is made and entered into as of the 9th day of June, 2016 (the “Effective Date”), between Sherwood Bedding Holding Company, LLC, a Florida limited liability company (“Bedding”), Sherwood West, LLC, a Delaware limited liability company (“West”), Sherwood Southeast, LLC, a Florida limited liability company (“Southeast”), Sherwood Southwest, LLC, a Florida limited liability company (“Southwest”), Sherwood Midwest, LLC, a Florida limited liability company (“Midwest”), and their future affiliated bedding manufacturing companies (Bedding, West, Southeast, Southwest, Midwest and their future affiliated bedding manufacturing companies are collectively referred to as “Sherwood”), and Mattress Firm, Inc., a Delaware corporation, and its current and future affiliated bedding retail companies (collectively, “Mattress Firm”).

 

WHEREAS, Sherwood is engaged in the business of manufacturing and wholesaling mattresses, foundations and bedding-related products and Mattress Firm is engaged in the retail sale of such products;

 

WHEREAS, West, Southeast and Southwest are currently manufacturing and selling mattresses and foundations to Mattress Firm pursuant to (1) that certain Vendor Supply Agreement dated October 1, 2013, between Southeast and Mattress Firm (as amended, the “Southeast Agreement”), (2) that certain Vendor Supply Agreement dated December 28, 2012, between Southwest and Mattress Firm (as amended, the “Southwest Agreement”), and (3) that certain Vendor Supply Agreement dated October 1, 2013, between West and Mattress Firm (as amended, the “West Agreement,” and, together with the Southeast Agreement and the Southwest Agreement, the “Existing Supply Agreements”);

 

WHEREAS, the parties desire to expand their business relationship and increase the volume of supply;

 

WHEREAS, in order to meet Mattress Firm’s needs, Sherwood will need to invest capital and add manufacturing space when necessary to meet the increased volume demands of Mattress Firm and Mattress Firm expects to provide Sherwood with a minimum volume of business sufficient to justify Sherwood’s capital investment(s); and

 

WHEREAS, in order to reflect the parties’ intentions, Mattress Firm and Sherwood desire to replace the Existing Supply Agreements and proceed pursuant to the terms of this Agreement.

 

NOW, THEREFORE, in consideration of the mutual covenants and promises of the parties set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1.              Preamble and Recitals.  The preamble and recitals set forth above are hereby incorporated into and made a part of this Agreement.

 

2.              Term.

 

a.              The term of this Agreement shall commence on July 1, 2016 (the “Commencement Date”) and shall expire three (3) years thereafter (the “Term”), unless earlier terminated in accordance herewith (such date of expiration or, if any, earlier termination, the “Termination Date”).

 

 

The use of “[***]” in this Exhibit indicates that a confidential portion has been omitted pursuant to a request for confidential treatment. The omitted material has been filed separately with the Securities and Exchange Commission.

 

b.              For the avoidance of doubt, the parties shall continue to govern their relationship under the Existing Supply Agreements until the Commencement Date.

 

3.              Products.

 

a.              During the term of this Agreement, the parties shall collaborate in good faith on the design and development of mattresses, foundations and bedding-related products (collectively, the “Proprietary Products”).

 

b.              Sherwood shall manufacture any Proprietary Products for testing purposes in such quantities and at such times as may be reasonably requested by Mattress Firm.

 

c.               From time to time during the term of this Agreement, Mattress Firm may offer for retail sale one or more of the Proprietary Products or any other mattresses, foundations or bedding-related products manufactured by Sherwood (collectively, “Non-Proprietary Products,” and, together with the Proprietary Products, the “Products”).

 

d.              All orders by Mattress Firm for Proprietary Products shall include written manufacturing specifications, including minimum quality levels and substance criteria for component parts, for such Proprietary Products (the “Specifications”) or reference previously approved Specifications.

 

4.              Pricing.  The purchase price for each Product shall be set by Sherwood and communicated to Mattress Firm in writing; provided that the parties shall mutually agree on the initial price of any Proprietary Product.  Sherwood may adjust the prices of the Products from time to time upon sixty (60) days written notice to Mattress Firm.  Such price adjustments shall not be effective in respect of any pending Product orders and shall not apply to any Proprietary Product until Mattress Firm consents to such price adjustment in writing (such consent not to be unreasonably withheld).  Sherwood shall not control nor set the price at which any Product may be offered to customers of Mattress Firm.

 

5.              Orders and Deliveries.  Mattress Firm shall place written purchase orders for Product.  Sherwood shall fill all Product orders from Mattress Firm within agreed upon lead times.

 

6.              Payment Terms.  Sherwood shall invoice Mattress Firm no earlier than the date on which the Products related thereto are received by Mattress Firm.  Mattress Firm shall pay the amount set forth on each invoice, unless disputed in good faith, within thirty-one (31) days after receipt thereof; provided that if Mattress Firm remits payment within thirty (30) days after receipt of any such invoice, Mattress Firm shall be entitled to permanently reduce the aggregate gross invoiced amount on such invoice by two percent (2%).  The parties shall attempt to resolve any dispute in good faith.  If the parties are unable to resolve a dispute within ninety (90) days, either party may refer such dispute to a nationally recognized accounting firm not affiliated with either party.  The costs of such accounting firm shall be borne equally by the parties.

 

7.              Volume Target.

 

a.              During the term of this Agreement, Mattress Firm shall purchase Products from Sherwood in aggregate annual amounts greater than or equal to the Volume Target.

 

2

 

The use of “[***]” in this Exhibit indicates that a confidential portion has been omitted pursuant to a request for confidential treatment. The omitted material has been filed separately with the Securities and Exchange Commission.

 

b.              “Volume Target” means a minimum of Net Purchases in each Contract Year of this Agreement as shown below:

 

	
Contract
    	
 
    	
Net Purchase
    	
 
    
	
Year
    	
 
    	
Minimum
    	
 
    
	
1
    	
 
    	
$
    	
[***]
    	
 
    
	
2
    	
 
    	
$
    	
[***]
    	
 
    
	
3
    	
 
    	
$
    	
[***]
    	
 
    

 

8.              Purchase Rebate.

 

a.              Sherwood shall issue to Mattress Firm a merchandise credit memo in an amount equal to [***] % of the Rebate Base (the “MFI Purchase Rebate”), payable sixty (60) days after the end of the applicable Contract Year (such date, the “PR Determination Date”).

 

b.              The “Rebate Base”, determined on an annual basis, consists of the amount by which (x) [***] (y) [***].  The proportionate share of [***] shall be derived by an allocation of such [***] based upon the relationship of the [***] by Mattress Firm to the total [***] generated by Sherwood during each Contract Year.

 

c.               “Net Purchases” means (a) the sum of (x) the gross amount of the purchase price of the Products manufactured by Sherwood and received by Mattress Firm plus (y) the gross amount of the purchase price of any Products ordered in the ordinary course of business by Mattress Firm during the applicable Contract Year but not timely delivered by Sherwood in the applicable Contract Year (other than due to a Force Majeure Event (hereinafter defined)), less (b) any taxes, service charges, discounts, rebates (other than the MFI Purchase Rebate), credits, returns or other allowances of any kind.

 

9.              Audit Rights.

 

a.              At any time and from time to time, Mattress Firm, at Mattress Firm’s expense, shall have the right to request the audit and validation of any amounts calculated hereunder, including pricing, the MFI Purchase Rebate and the Rebate Base amounts.  Such audit and validation work shall be performed by a nationally recognized accounting firm.

 

b.              At any time and from time to time, Mattress Firm, at Mattress Firm’s expense, shall have the right to request the audit and validation of Product quality and construction, including conformity to Specifications.  Such audit and validation work may be performed by Mattress Firm or, at Mattress Firm’s option, by a third party not affiliated with either party.

 

c.               In the event of any audit, Sherwood shall provide Mattress Firm and any such third party and their respective representatives and agents reasonable access (during normal business hours and after reasonable advance notice and in a manner that will not unduly disrupt the normal operation of Sherwood’s business) to all documents, work papers, reports and information relating to the amounts or Products that are subject to the audit or validation.

 

3

 

The use of “[***]” in this Exhibit indicates that a confidential portion has been omitted pursuant to a request for confidential treatment. The omitted material has been filed separately with the Securities and Exchange Commission.

 

10.       Early Termination.

 

a.              Mattress Firm may terminate this Agreement upon written notice in the event that:

 

i.                  Sherwood defaults in the performance of any of the material covenants or obligations of performance imposed upon it under this Agreement, and such failure continues for a period of fifteen (15) days after written notice of such default, setting forth in reasonable detail the reason for which the notice is given, is delivered.  The parties agree that, without limitation, the obligations of Sherwood set forth in Section 13 (Warranty), Section 5 (Orders and Delivery) and Section 8 (Purchase Rebate) represent material obligations of Sherwood; or

 

ii.               Any equity interests in Sherwood are sold, pledged, assigned or otherwise transferred to either (A) a national mattress retail chain that competes with Mattress Firm or (B) a mattress manufacturer, having manufacturing facilities in the United States, from whom Mattress Firm does not purchase any products as of the date of such sale, pledge, assignment or transfer; or

 

iii.            Sherwood is subject to a Force Majeure Event (1) for a period of six (6) consecutive calendar months or more or (2) for a shorter period of time (not less than three (3) consecutive calendar months) and, in the case of (2) only, Sherwood has failed to take or continue to take reasonable efforts in remediating and terminating the Force Majeure Event after written notice of such failure from Mattress Firm; or

 

b.              At any time on or after the first anniversary of the Commencement Date, Mattress Firm may terminate this Agreement for any reason upon twelve (12) months prior written notice and, upon the effective date of such termination for convenience, shall pay $2,000,000 to Sherwood as liquidated damages in satisfaction of all claims.

 

c.               Sherwood may terminate this Agreement upon written notice in the event Mattress Firm:

 

i.                 fails to pay when due any amount payable by it hereunder and such failure continues for a period of fifteen (15) days after written notice of non-payment is delivered; or

 

ii.              defaults in the performance of any of the material covenants or obligations of performance imposed upon it under this Agreement, except where such failure is excused pursuant to any provision of this Agreement, and such failure continues for a period of fifteen (15) days after written notice of such default, setting forth in reasonable detail the reason for which the notice is given, is delivered.  The parties agree that, for purposes of this termination right, the obligations of Mattress Firm set forth in Section 7 (Volume Target) does not represent material obligations of Mattress Firm; or

 

iii.           fails to reach the Volume Target in a Contract Year as set forth in Section 7 herein; provided that Sherwood has communicated the monthly volume of Net Purchases to Mattress Firm in writing on a monthly basis during the Term and such failure continues for a period of thirty (30) days after written notice of such default.

 

4

 

The use of “[***]” in this Exhibit indicates that a confidential portion has been omitted pursuant to a request for confidential treatment. The omitted material has been filed separately with the Securities and Exchange Commission.

 

11.       Effect of Termination or Expiration.

 

a.              Sections 12-19, Section 21 and this Section 11 shall survive the expiration or earlier termination of this Agreement.

 

b.              On the PR Determination Date occurring in the Contract Year immediately following the Termination Date, Sherwood shall pay to Mattress Firm the MFI Purchase Rebate applicable to any Contract Year ending on or prior to the Termination Date.  Such MFI Purchase Rebate shall be determined after given effect to any Product orders pending on the Termination Date that are filled by Sherwood.

 

c.               Sherwood shall fill any Product orders pending on the Termination Date unless otherwise agreed by the parties in writing.

 

d.              In the event of early termination of this Agreement, the non-breaching party may pursue any and all remedies available.  All rights and remedies provided in this Agreement are cumulative and not exclusive of any other rights or remedies that may be available to the parties, whether provided by law, equity, statute, in any other agreement between the parties or otherwise.

 

12.       Exclusivity.  The Proprietary Products shall be manufactured exclusively for Mattress Firm and Sherwood shall not sell or manufacture for sale or otherwise provide any Proprietary Product, including any New Intellectual Property (hereinafter defined) contained therein, to a third party.  For clarification, the parties agree and acknowledge that the term “Proprietary Products” excludes products that do not contain any unique components or are not the result of collaboration between the parties, irrespective of whether such products have been specially branded for sale by Mattress Firm.  For further clarification, the parties agree and acknowledge that the term “collaboration between the parties” as it relates to the design of Products shall exclude any product designed by Sherwood or an affiliate of Sherwood in which the parties agree to make minor modifications to the product’s outermost layer or other aspects that the parties mutually agree in writing are non-proprietary.  Sherwood shall, at Mattress Firm’s option, exclusively sell to Mattress Firm during the term of this Agreement any Non-Proprietary Products that contain or reflect such minor modifications.  Any products developed by Mattress Firm internally or in collaboration with parties other than Sherwood shall be considered “Proprietary Products” for purposes of this Section 12.

 

13.       Warranty. Sherwood hereby warrants to Mattress Firm that all Products purchased by Mattress Firm from Sherwood shall be of good quality and free of defect in workmanship or material and, in respect of all Proprietary Products, shall conform to the Specifications for such Proprietary Product.  This warranty is in addition to any standard product warranty offered by Sherwood to its customers.  Mattress Firm may return any Products with warranty defects to Sherwood and shall receive a merchandise credit for the full purchase price of such Product.

 

14.       Liability.  Sherwood shall be liable for all product liability claims or causes of action, including all damages, costs and expenses arising therefrom or related thereto, relating to the Products.  Sherwood hereby agrees to INDEMNIFY AND HOLD HARMLESS Mattress Firm and its affiliates and their respective employees, directors, officers and representatives from any and all liabilities and damages arising out of or relating to any such claims, any standard product

 

5

 

The use of “[***]” in this Exhibit indicates that a confidential portion has been omitted pursuant to a request for confidential treatment. The omitted material has been filed separately with the Securities and Exchange Commission.

 

warranty claims or any liabilities and damages relating to the operation of its manufacturing facilities.

 

15.       Title; Risk of Loss.  Title to and risk of loss for the Products shall pass to Mattress Firm FBO Mattress Firm’s warehouse.  Mattress Firm has the right to reject defective Products or misdeliveries (including in respect of floor samples) at the point of receipt or within a reasonable time after any defect may be later determined or discovered.

 

16.       Confidentiality.  Without the express written consent of the other party hereto, each party hereto hereby agrees to maintain in confidence and not disclose to any other person any Confidential Information of the other party, other than (1) disclosures to those professionals, advisors, accountants, agents, suppliers and affiliates who have a need to know (in the reasonable judgment of the receiving party) (collectively, the “representatives” and each a “representative”) in connection with the design, development, manufacture or sale of the Proprietary Products, or (2) any other disclosures required by applicable law.  Notwithstanding the foregoing, Sherwood shall not disclose any Confidential Information to a competitor of Mattress Firm irrespective of whether such competitor otherwise qualifies as a “representative” of Sherwood.  “Confidential Information” shall mean any business, financial, operational or other information or data of whatever kind or nature relating to the disclosing party or its affiliates which may be supplied in writing or orally by, or on behalf of, the disclosing party, including, without limitation, the Proprietary Products, the Specifications, any New Intellectual Property and any other intellectual property relating to or used in the Proprietary Products.  Any products developed by Mattress Firm internally or in collaboration with parties other than Sherwood shall be considered “Proprietary Products” for purposes of this Section 16.  Each party will inform its representatives of the confidential nature of such information and will direct them to treat such information in accordance with this Agreement.  No representative will receive any Confidential Information unless such representative has agreed to be bound by this Section 16.  In the event that a receiving party is at any time requested or required (by oral questions, interrogatories, request for information or documents, subpoena or similar process) to disclose any Confidential Information supplied to it in connection with the transactions contemplated hereunder, the receiving party agrees to provide the disclosing party prompt notice of such request to the extent legally feasible so that an appropriate protective order may be sought or the disclosing party may waive the receiving party’s compliance with the terms of this Section 16; provided, however, that, even if no protective order or any waiver is obtained prior to making any such disclosure, the receiving party may make such disclosure to the extent required by applicable law, by order of any court, arbitral body or governmental agency having competent jurisdiction or by similar compulsion by a court, arbitral body or governmental authority or securities exchange regulation; provided, further, however that receiving party shall use all commercially reasonable efforts to limit or prevent such disclosure, and, if disclosure is ultimately required, use all commercially reasonable efforts to provide the disclosing party a reasonable opportunity to review the proposed disclosure and comment thereon, and use all commercially reasonable efforts to obtain an order or other reliable assurance that confidential treatment shall be accorded to such disclosed information.  Notwithstanding the foregoing, the confidentiality provisions set forth in this Agreement shall not apply to information that (i) is or becomes part of the public domain or is available to the public by publication or otherwise without breach of this Agreement; or (ii) is acquired by the receiving party from any third party having a right to disclose such information.  A breach by either party of any of the promises or agreements contained in this Section 16 may result in irreparable and continuing damage to the other party for which there will be no adequate remedy at law, and such

 

6

 

The use of “[***]” in this Exhibit indicates that a confidential portion has been omitted pursuant to a request for confidential treatment. The omitted material has been filed separately with the Securities and Exchange Commission.

 

other party shall be entitled to seek injunctive relief or a decree for specific performance, and such other relief as may be proper (including monetary damages if appropriate).

 

17.       Intellectual Property.  The parties agree and acknowledge that Mattress Firm shall own and have all intellectual property rights in and to the Proprietary Products, the Specifications and any other ideas, concepts, drawings, designs or other intellectual property, whether or not patentable, arising out of or developed or created as a result of the discussions or collaboration between the parties (collectively, the “New Intellectual Property”) irrespective of whether the New Intellectual Property includes any confidential or proprietary information of Sherwood.  SHERWOOD HEREBY WAIVES ALL RIGHT, TITLE AND INTEREST IN AND TO THE NEW INTELLECTUAL PROPERTY AND GRANTS TO MATTRESS FIRM A ROYALTY-FREE, NON-EXCLUSIVE, PERPETUAL, WORLDWIDE LICENSE TO USE ANY CONFIDENTIAL OR PROPRIETARY INFORMATION OF SHERWOOD INCLUDED IN THE NEW INTELLECTUAL PROPERTY; PROVIDED THAT SUCH CONFIDENTIAL OR PROPRIETARY INFORMATION SHALL CONTINUE TO OTHERWISE BE TREATED AS CONFIDENTIAL INFORMATION IN ACCORDANCE WITH THIS AGREEMENT.  Sherwood agrees to provide any consents, waivers or other documents reasonably requested by Mattress Firm in connection with the registration or filing of any patent or copyright application for the New Intellectual Property or as may be otherwise necessary or advisable establish and protect Mattress Firm’s rights in and to the New Intellectual Property.  For clarification, the parties agree and acknowledge that the term “Proprietary Products” excludes products that do not contain any unique components or are not the result of collaboration between the parties, irrespective of whether such products have been specially branded for sale by Mattress Firm.  For further clarification, the parties agree and acknowledge that the term “collaboration between the parties” as it relates to the design of Products shall exclude any product designed by Sherwood or an affiliate of Sherwood in which the parties agree to make minor modifications to the product’s outermost layer or other aspects that the parties mutually agree in writing are non-proprietary.  Any products developed by Mattress Firm internally or in collaboration with parties other than Sherwood shall be considered “Proprietary Products” for purposes of this Section 17.

 

18.       Expenses.  Except as otherwise expressly agreed herein, each party will each bear their own costs and expenses (including legal fees and expenses and federal, state and local income taxes) incurred in connection with this Agreement and the transactions contemplated hereby.

 

19.       Prevailing Party.  In the event of any litigation arising out of, in connection with, or related to this Agreement, the prevailing party shall be entitled to receive from the non-prevailing party all reasonable costs, fees (including reasonable attorneys’ fees) and expenses of the prevailing party.

 

20.       Notices.  All notices and other communications under this Agreement must be delivered in writing and shall be deemed to have been given when (i) delivered by hand or (ii) one (1) day after deposit thereof for overnight delivery with a nationally recognized overnight delivery service (receipt requested) to the appropriate address as set forth below (or to such other address as a party may designate by notice to the other parties):

 

	
Mattress Firm:
    	
Mattress Firm, Inc.
    
	
 
    	
5815 Gulf Freeway
    
	
 
    	
Houston, Texas 77023
    
	
 
    	
713-923-1090
    
	
 
    	
Attention: Legal Department
    

 

7

 

The use of “[***]” in this Exhibit indicates that a confidential portion has been omitted pursuant to a request for confidential treatment. The omitted material has been filed separately with the Securities and Exchange Commission.

 

	
Sherwood:
    	
Sherwood Bedding Holding Company, LLC
    
	
 
    	
2830 NE 29th Street
    
	
 
    	
Ft. Lauderdale, Florida 33306
    
	
 
    	
954-566-9115
    
	
 
    	
Attention: Legal Department
    

 

21.       Governing Law; Dispute Resolution.  This Agreement shall be governed by the laws of the State of Texas without giving effect to the conflicts of laws principles thereof.  Except as set forth in Section 6 and Section 16, in the event of any dispute between the parties relating to this Agreement, the parties agree to have a meeting between representatives of each party to the dispute with authority to settle the dispute and make a good faith effort to resolve their differences prior to instituting any proceeding for the resolution of the dispute. In the event that the parties are unable to reach an agreement to resolve the dispute, the parties agree to submit the issue to arbitration in Dallas, Texas under the Commercial Arbitration rules of the American Arbitration Association.

 

22.       Force Majeure.  If the performance of any part of this Agreement by either party, or of any obligation under this Agreement, is prevented, restricted, interfered with or delayed by reason of a cause beyond reasonable control of the party liable to perform (such event, a “Force Majeure Event”), unless conclusive evidence to the contrary is provided, the party so effected shall, on giving written notice to the other party of the Force Majeure Event, be excused from such performance to the extent of and for the period of such prevention, restriction, interference or delay, provided that the effected party shall use commercially reasonable efforts to avoid or remove such causes of nonperformance and shall continue to perform with the utmost dispatch whenever such causes are removed. When such circumstances arise, the parties shall cooperate in good faith in order to determine any modification to the terms of this Agreement that may be required in order to arrive at an equitable solution.  Notwithstanding the foregoing, if Sherwood is subject to a Force Majeure Event for a period of fifteen (15) consecutive days or longer, Mattress Firm shall be entitled to order products from a third-party supplier during the period of the Force Majeure event and Mattress Firm’s obligations set forth in Section 7 shall be immediately reduced on a pro rata basis for the period of delay or non-performance caused by the Force Majeure Event.

 

23.       Parties in Interest; Assignment.  This Agreement and every covenant, term, provision and agreement contained herein shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.  Neither party may assign this Agreement without the other party’s prior written consent.

 

24.       Counterparts.  This Agreement may be in executed in counterparts, each of which is deemed an original, but all of which together shall constitute one and the same agreement. This Agreement may be executed or delivered by electronic or facsimile means, and electronic or facsimile copies of executed signature pages shall be binding as originals.

 

25.       Waiver.  No waiver of any term or condition of this Agreement shall be effective or binding unless such waiver is in writing and is signed by the waiving party, nor shall this Agreement be changed, modified, discharged or terminated other than in accordance with its terms, in whole or in part, except by a writing signed by both parties. Waiver by any party of any term, provision or

 

8

 

The use of “[***]” in this Exhibit indicates that a confidential portion has been omitted pursuant to a request for confidential treatment. The omitted material has been filed separately with the Securities and Exchange Commission.

 

condition of this Agreement shall not be construed to be a waiver of any other term, provision or condition nor shall such waiver be deemed a subsequent waiver of the same term, provision or condition.

 

26.       Severability.  The provisions of this Agreement are fully severable and the invalidity or unenforceability of any provision of this Agreement shall in no way affect the validity or enforceability of any other provision hereof.

 

27.       Entire Agreement; Amendments.  This Agreement constitutes the entire agreement between the parties and sets forth all of the representations, warranties, promises, covenants, agreements, conditions, and undertakings between the parties hereto with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements and understandings, inducements or conditions, express or implied, oral or written, including, without limitation, the Existing Supply Agreements, which shall effectively terminate on the Commencement Date of this Agreement without any further obligation among the parties thereunder except for those surviving provisions set forth therein.  No amendment or modification of this Agreement shall be effected unless made in writing and signed by each of the parties hereto.  This Agreement amends, restates, supersedes and replaces each of the Existing Vendor Supply Agreements in their entirety, effective as of the Commencement Date.

 

28.       No Agency or Partnership.  The parties hereto are independent contractors.  Nothing herein shall be deemed to establish a partnership (general partnership or otherwise), joint venture, association or employment relationship between the parties.  No party is granted any right or authority to assume or create any obligation or responsibility on behalf of the other party, or in the name of such other party, or to bind such other party in any manner whatsoever.  Mattress Firm has no obligation or right to share any in losses of Sherwood as a partner.  Each party shall remain responsible for and shall indemnify and hold harmless the other party for the withholding and payment of all federal, state and local personal income, wage, earnings, occupation, social security, unemployment, sickness, workmens’ compensation and disability insurance taxes, payroll levies, employee benefit requirements or obligations (under ERISA, state law or otherwise) now existing or hereafter enacted and attributable to themselves and their respective employees.

 

29.       Joinder.  Each future bedding manufacturing company affiliated with Sherwood and purporting to have rights under this Agreement shall execute a written joinder to this Agreement in form reasonably satisfactory to Mattress Firm, which joinder shall specifically provide that such new bedding manufacturing company assumes and accepts its respective obligations hereunder.

 

(Signatures appear on following page)

 

9

 

The use of “[***]” in this Exhibit indicates that a confidential portion has been omitted pursuant to a request for confidential treatment. The omitted material has been filed separately with the Securities and Exchange Commission.

 

IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first set forth above.

 

	
Sherwood Bedding Holding   Company, LLC
    	
 
    	
Mattress Firm, Inc.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/ Jacob Ellman
    	
 
    	
/s/ Craig McAndrews
    
	
Jacob Ellman, Manager
    	
 
    	
Name/Title: Craig McAndrews Chief Merchandising Officer
    
	
 
    	
 
    	
 
    
	
Date: June 9, 2016
    	
 
    	
Date: June 9, 2016
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Sherwood West, LLC
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/ Jacob Ellman
    	
 
    	
 
    
	
Jacob Ellman, Manager
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Date: June 9, 2016
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Sherwood Southeast, LLC
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/ Jacob Ellman
    	
 
    	
 
    
	
Jacob Ellman, Manager
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Date: June 9, 2016
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Sherwood Southwest, LLC
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/ Jacob Ellman
    	
 
    	
 
    
	
Jacob Ellman, Manager
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Date: June 9, 2016
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Sherwood Midwest, LLC
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/ Jacob Ellman
    	
 
    	
 
    
	
Jacob Ellman, Manager
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Date: June 9, 2016
    	
 
    	
 
    

 

10

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