Document:

ex10_2.htm

 

 

AMENDMENT NO. 2 TO FORBEARANCE AGREEMENT TO INDENTURE

 

This AMENDMENT NO. 2 TO FORBEARANCE AGREEMENT TO INDENTURE (this “Second Amendment”) is entered into as of May 27, 2009, by and among Simmons Bedding Company, a Delaware corporation (the “Company”),
the Guarantors (as defined in the Indenture (as hereinafter defined)) and the Amending Holders (as hereinafter defined).

 

RECITALS

 

WHEREAS, the Company, the Guarantors and Wells Fargo Bank Minnesota, National Association, as trustee (in such capacity, the “Trustee”) are parties to that certain Indenture, dated as of December 19, 2003 (as has been or may be further amended, restated, amended
and restated, supplemented or otherwise modified from time to time, the “Indenture”), pursuant to which those certain 7.875% Senior Subordinated Notes due 2014 (the “Notes”) were issued;

 

WHEREAS, as of the date hereof, the Defaults or Events of Default listed on Exhibit A to the Indenture Forbearance Agreement (as hereinafter defined), as amended by this Second Amendment, have either occurred and are continuing or may occur and continue during the Forbearance
Period (as hereinafter defined) (collectively, the “Specified Defaults”);

 

WHEREAS, the Company, the Guarantors and certain Holders (the “Forbearing Holders”) are parties to that certain Forbearance Agreement to Indenture, dated as of February 4, 2009 (the “Original Indenture
Forbearance Agreement”, as amended by the First Forbearance Amendment (as hereinafter defined), the “Indenture Forbearance Agreement”), pursuant to which the Forbearing Holders agreed to, among other things, (i) forbear from exercising their default-related rights and remedies against the Company and the Guarantors, (ii) direct the Trustee to refrain from exercising any such rights and remedies on the Holders’ behalf
and (iii) rescind and cancel any acceleration of the Notes directed by or on behalf of any Holders, in each case, with respect to the Specified Defaults until March 31, 2009;

 

WHEREAS, the Company, the Guarantors and certain Forbearing Holders are parties to that certain Amendment No. 1 to Forbearance Agreement to Indenture, dated as of March 20, 2009 and made effective as of March 25, 2009 (the “First Forbearance Amendment”), pursuant
to which the Forbearing Holders agreed to, among other things extend the Forbearance Period until May 31, 2009 or, subject to the satisfaction of certain conditions, July 31, 2009; and

 

WHEREAS, upon the Company’s request, the Amending Holders have agreed, subject to the terms and conditions set forth herein, to amend the Indenture Forbearance Agreement to provide for an extension of the Forbearance Period until June 30, 2009, or, subject to the satisfaction of certain conditions, July 31, 2009.

 

NOW THEREFORE, in consideration of the mutual execution hereof and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

SECTION 1.   Definitions.  Capitalized terms used in this Second Amendment,
unless otherwise defined herein, shall have the meanings ascribed to such terms in the Indenture.

 

SECTION 2.   Amendments to Indenture Forbearance Agreement.  Subject to the
satisfaction of the condition precedent set forth in Section 4 hereof, the Indenture Forbearance Agreement is hereby amended as follows:

 

(a)  Section 2(a) of the Indenture Forbearance Agreement shall be amended as follows:

 

 

(i)  Clause “(i)” of Section 2(a) is hereby amended and restated in its entirety to read as follows:

 

“(i) 11:59 p.m. (New York City time) on June 30, 2009 (the “Outside Date”); provided, however, that the Outside Date shall be automatically extended to July 31, 2009 so long as the Company
has commenced, by June 30, 2009, a solicitation process seeking consent for, or votes to effect, a Proposed Transaction (as hereinafter defined), which Proposed Transaction at the time of extension shall be acceptable to Forbearing Holders collectively holding more than 50% of the aggregate outstanding principal amount of the Notes (any such Holders, the “Extending Holders”) in their sole discretion (such transaction, the “Selected
Transaction”); and”.

 

(ii)  Clause “(ii)” of Section 2(a) is hereby amended by deleting “Paul Weiss, as counsel to the Noteholder Group,” therein and inserting in lieu thereof “Paul, Weiss, Rifkind, Wharton & Garrison LLP, as counsel to the Forbearing Holders (“Paul
Weiss”),”.

 

(b)  Exhibit A to the Indenture Forbearance Agreement is hereby amended by amending and restating clause “(i)” of paragraph 1 thereon in its entirety to read as follows:

 

“(i) the failure of the Company to timely furnish a quarterly report on Form 10-Q for the quarters ended September 27, 2008 and March 28, 2009, and ending on June 27, 2009, in each case, as required under Section 4.03(a)(1);”.

 

(c)  Exhibit A to the Indenture Forbearance Agreement is hereby amended by amending and restating clause “(ii)” of paragraph 1 thereon in its entirety to read as follows:

 

“(ii) the failure of the Company to timely furnish an annual report on Form 10-K for the fiscal year ended December 27, 2008, as required under Section 4.03(a)(1)”.

 

SECTION 3.   Ratification of Liability.  The Company and each Guarantor hereby ratify and reaffirm (a) that the aggregate outstanding
principal amount of the Notes is $200,000,000 and the accrued and unpaid interest through and including May 26, 2009 is $13,634,906.25 and (b) all of their respective payment and performance obligations under this Second Amendment, the Indenture Forbearance Agreement and the Indenture, including, without limitation, the obligation to pay interest at the default rate, in accordance with Sections 2.12 and 4.01 of the Indenture, which commenced on January 15, 2009.  The Company and each Guarantor (i) acknowledge
receipt of a copy of this Second Amendment and all other agreements, documents, and instruments executed and/or delivered in connection herewith, (ii) consent to the terms and conditions of same and (iii) agree and acknowledge that the Indenture Forbearance Agreement and the Indenture remain in full force and effect and are hereby ratified and confirmed.

 

SECTION 4.   Conditions to Effectiveness.  This Second Amendment and the agreement
of the Forbearing Holders to continue to forbear under the Indenture Forbearance Agreement shall become effective on such date (the “Second Amendment Effective Date”) as the following condition shall have been satisfied in full or waived in writing by the Amending Holders:

 

 

(a)           Second Amendment. The Company, the Guarantors and Forbearing Holders collectively holding more than $100,000,000 in principal amount of the Notes  shall
have executed and delivered signature pages to this Second Amendment (such Forbearing Holders, the “Amending Holders”). Paul Weiss, in reliance on Section 6 hereof, will notify the Company upon receipt of signature pages from the Amending Holders.

 

For the avoidance of doubt, this Second Amendment shall be effective in accordance with this Section 4 regardless of whether the Trustee executes this Second Amendment.

 

SECTION 5.   Representations and Warranties of the Company and Guarantors.

 

To induce the Amending Holders to execute and deliver this Second Amendment, each of the Company and each Guarantor represents and warrants that:

 

(a)           Corporate Power and Authority.  It has all requisite corporate or other organizational power and authority to enter into this Second Amendment and to carry out the transactions contemplated by, and perform
its obligations under, this Second Amendment.

 

(b)           Authorization of Second Amendment.  The execution and delivery of this Second Amendment and the performance of this Second Amendment have been duly authorized by all necessary corporate or other organizational
action on its part.

 

(c)           No Conflict.  The execution and delivery of this Second Amendment and the performance of this Second Amendment and the consummation of the transactions contemplated hereby do not and will not (i) contravene
its certificate of incorporation or by-laws or or other constituent documents, (ii) violate any (a) applicable material requirement of law or (b) material order or decree of any governmental authority or arbitrator applicable to it, (iii) materially conflict with or result in the breach of, or constitute a default under, or result in or permit the termination or acceleration of, any of its material contractual obligations or (iv) result in the creation or imposition of any material lien or encumbrance upon any
of its material property.

 

(d)           Binding Obligation.  This Second Amendment has been duly executed and delivered by it and constitutes a legal, valid and binding obligation of it to the extent a party hereto enforceable against it in accordance
with its terms, except as enforceability may be limited by bankruptcy, insolvency, moratorium, reorganization or similar laws limiting creditors’ rights generally and except as enforceability may be limited by general principles of equity (regardless or whether such enforceability is considered in a proceeding in equity or at law).

 

(e)           Absence of Default.  As of the date hereof, except for the Specified Defaults, no Default or Event of Default has occurred or is continuing under the Indenture.

 

SECTION 6.   Representation of the Amending Holders.  Each  Holder
party hereto severally represents that on the date hereof it is the beneficial owner and/or investment advisor or manager of discretionary accounts for the Holders or beneficial owners of not less than the aggregate principal amount of the Notes set forth on a version of its signature page hereof provided by it to Paul Weiss.

 

SECTION 7.   Entire Agreement; Second Amendment.  This Second Amendment, the Indenture Forbearance Agreement and the Indenture (the
“Note Documents”), constitute the full and final agreement between the parties hereto with respect to the subject matter hereof. Any other previous agreement among the parties with respect to the subject matter hereof is superseded by this Second Amendment and the other Note Documents.

 

SECTION 8.   Reference to and Effect Upon the Indenture Forbearance Agreement.

 

(a)           Except as expressly modified hereby, all terms, conditions, covenants, representations and warranties contained in the Indenture Forbearance Agreement and the Indenture, and all rights of the Holders and the Trustee and
all of the Obligations, shall remain in full force and effect. The Company and each Guarantor hereby confirm that no such party has any right of setoff, recoupment or other offset with respect to any of the Obligations.

 

(b)           From and after the Second Amendment Effective Date, (i) the term “Agreement” in the Indenture Forbearance Agreement and all references to the Indenture Forbearance Agreement in any Note Document shall mean the
Indenture Forbearance Agreement as amended by this Second Amendment.

 

SECTION 9.   Release of Holders.

 

(a)           Upon the effectiveness hereof and in consideration of the mutual covenants contained herein and other accommodations granted to the Company and the Guarantors hereunder, the Company and each Guarantor, on behalf of themselves and each of their respective Subsidiaries,
and their respective successors, assigns and agents (collectively, the “Releasing Parties”), hereby expressly forever waive, release and discharge any and all claims (including, without limitation, cross-claims, counterclaims, and rights of setoff and recoupment), causes of action (whether direct or derivative in nature), demands, suits, costs, expenses and damages (collectively, the “Claims”)
any of them may have or allege to have as of the Second Amendment Effective Date (and all defenses that may arise out of any of the foregoing) of any nature, description, or kind whatsoever, based in whole or in part on facts, whether actual, contingent or otherwise, now known, unknown, or subsequently discovered, whether arising in law, at equity or otherwise, against the Amending Holders in any capacity, their respective affiliates, agents, principals, managers, managing members, members, stockholders, “controlling
persons” (within the meaning of the United States federal securities laws), directors, officers, employees, attorneys, consultants, advisors, agents, trusts, trustors, beneficiaries, heirs, executors and administrators of each of the foregoing (collectively, the “Released Parties”), in each case, involving or otherwise relating to this Second Amendment, or any of the other agreements entered into in connection herewith, the Indenture
Forbearance Agreement, the Indenture or any or all of the actions and transactions contemplated hereby or thereby, including, without limitation, any actual or alleged performance or nonperformance by any of the Released Parties hereunder or thereunder.  Each of the Releasing Parties hereby acknowledges that the agreements in this Section 9(a) are intended to be in full satisfaction of all or any alleged injuries or damages arising in connection with the Claims.  In entering into this Second
Amendment, each of the Releasing Parties expressly disclaims any reliance on any representations, acts, or omissions by any of the Released Parties and hereby agrees and acknowledges that the validity and effectiveness of the releases set forth above does not depend in any way on any such representation, acts and/or omissions or the accuracy, completeness, or validity thereof.  The provisions of this Section 9 shall survive the termination or expiration of the Forbearance Period and the termination
of the Indenture and the payment in full of all obligations of any Releasing Party under or in respect of the Indenture and all other amounts owing thereunder.

 

(b)           Each of the Releasing Parties represents and warrants that it has not assigned to any Person any Claim, other than to Deutsche Bank AG, New York Branch, as collateral agent (the “Collateral Agent”),
pursuant to that certain Pledge and Security Agreement, dated as of December 19, 2003, by and among the Grantors party thereto and the Collateral Agent.  In the event that the foregoing representation and warranty is, or is purported to be, untrue, each of the Releasing Parties agrees to indemnify and hold harmless the Released Parties against, and to pay, any and all actions, demands, obligations, causes of action, decrees, awards, claims, liabilities, losses and costs (including, but not limited
to, reasonable expenses of investigation and fees and expenses of counsel) that any of the Released Parties may sustain or incur as a result of the breach or purported breach of the foregoing representation and warranty.  The provisions of this paragraph shall survive the termination or expiration of the Forbearance Period and the termination of the Indenture and the payment in full of all obligations under or in respect of the Indenture and all other documents executed in connection therewith and all
other amounts owing thereunder.

 

SECTION 10.   Successors and Assigns; No Third Party Beneficiaries.  This
Second Amendment shall be binding upon and inure to the benefit of the Company, the Guarantors, the Forbearing Holders, the Trustee and their respective successors and assigns; provided, that neither the Company nor any Guarantor shall be entitled to delegate any of its duties hereunder and shall not assign any of its rights or remedies set forth in this Second Amendment without the prior written consent of the Forbearing Holders in their sole discretion.
No Person other than the parties hereto shall have any rights hereunder or be entitled to rely on this Second Amendment and all third-party beneficiary rights are hereby expressly disclaimed.

 

SECTION 11.   Governing Law.                                This
Second Amendment shall be governed by and construed in accordance with the laws of the State of New York, without regard to its choice of law provisions.

 

SECTION 12.   Counterparts.  This Second Amendment may be executed in any
number of counterparts, each of which when so executed shall be deemed an original, but all such counterparts shall constitute one and the same instrument, and all signatures need not appear on any one counterpart. Any party hereto may execute and deliver a counterpart of this Second Amendment by delivering by facsimile, in a .pdf or other electronic transmission a signature page to this Second Amendment signed by such party, and any such facsimile, .pdf or other electronic signature shall be treated in all respects
as having the same effect as an original signature.

 

SECTION 13.   Section Headings.  Section
headings in this Second Amendment are included herein for convenience of reference only and shall not constitute part of this Second Amendment for any other purpose.

 

SECTION 14. Severability.                                                      The
invalidity, illegality or unenforceability of any provision in or obligation under this Second Amendment in any jurisdiction shall not affect or impair the validity, legality or enforceability of the remaining provisions or obligations under this Second Amendment or of such provision or obligation in any other jurisdiction.

 

[signature pages follow]

 

  

  

  

IN WITNESS WHEREOF, this Amendment No. 2 to Forbearance Agreement to Indenture has been executed by the parties hereto as of the date first written above.

 

SIMMONS BEDDING COMPANY

By:  /s/ William S. Creekmuir                                                            

	
  
	
Name:
	
William S. Creekmuir

	
  
	
Title:
	
Executive Vice President, Chief Financial Officer, Treasurer and Assistant Secretary

  

  

  

SIMMONS COMPANY

By:  /s/ William S. Creekmuir                                                              

	
  
	
Name:
	
William S. Creekmuir

	
  
	
Title:
	
Executive Vice President, Chief Financial Officer, Treasurer and Assistant Secretary

  

  

  

THE SIMMONS MANUFACTURING CO., LLC

WORLD OF SLEEP OUTLETS, LLC

SIMMONS CONTRACT SALES, LLC

WINDSOR BEDDING CO., LLC

SIMMONS EXPORT CO.

By:  /s/ William S. Creekmuir                                                              

	
  
	
Name:
	
William S. Creekmuir

	
  
	
Title:
	
Executive Vice President, Chief Financial Officer, Treasurer and Assistant Secretary

  

  

  

DREAMWELL, LTD.

SIMMONS CAPITAL MANAGEMENT, LLC

By:  /s/ William S. Creekmuir                                                              

	
  
	
Name:
	
William S. Creekmuir

	
  
	
Title:
	
President and Treasurer

  

  

  

[_________], AS AMENDING HOLDER

By:                                                              

	
  
	
Name:

	
  
	
Title:EX-4.1

EXHIBIT 4.1

SUPPLEMENTAL INDENTURE

This Supplemental Indenture is dated as of August 20, 2009 (this “Supplemental Indenture”),
among UDR, Inc., a Maryland corporation (formerly known as United Dominion Realty Trust, Inc., a
Maryland corporation, and successor by merger to United Dominion Realty Trust, Inc., a Virginia
corporation)(the “Company”), and U.S. Bank National Association (as successor to NationsBank of
Virginia, N.A.), as trustee under the Indenture referred to below (the “Trustee”).

W I T N E S S E T H :

WHEREAS, the Company and the Trustee are parties to an Indenture, dated as of April 1, 1994
(the “Indenture”), under which the Company issued an aggregate principal amount of $150,000,000 of
the Company’s 81/2 % Debentures Due September 15, 2024 (the “Notes”); and

WHEREAS, the Company has solicited consents (the “Consent Solicitation”) from the Holders of
the Notes to certain proposed amendments to the Indenture (the “Proposed Amendments”) as set forth
in Section 2.01 hereof, in accordance with the terms of an Offer to Purchase and Consent
Solicitation Statement dated August 4, 2009 (the “Offer to Purchase”); and

WHEREAS, pursuant to Section 9.02 of the Indenture, with the consent of the Holders of not
less than a majority in principal amount of the Notes at the time outstanding, the Company and the
Trustee may enter into a supplemental indenture for the purpose of adopting the Proposed
Amendments; and

WHEREAS, pursuant to the Consent Solicitation, the Holders of a majority in principal amount
of the outstanding Notes have consented to the adoption of the Proposed Amendments; and

WHEREAS, the Notes are the only series of notes currently outstanding under the Indenture; and

WHEREAS, the Supplemental Indenture complies with the provisions of the Trust Indenture Act of
1939, as amended (the “Trust Indenture Act”); and

WHEREAS, the Supplemental Indenture has been approved by the Board of Directors of the Company
or by a duly authorized committee of the Board of Directors.

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto mutually covenant
and agree as follows:

ARTICLE I

DEFINITIONS

Section 1.01. Defined Terms. Capitalized terms not otherwise defined herein shall have the
meaning given to them in the Indenture. The words “herein,” “hereof’ and “hereby” and other words
of similar import used in this Supplemental Indenture refer to this Supplemental Indenture as a
whole and not to any particular section hereof.

ARTICLE II

INDENTURE AMENDMENTS

Section 2.01. Deletion of Certain Sections and Subsections from the Indenture. The text of
the following sections and subsections of the Indenture shall be deleted from the Indenture:

	 	 	 
	Subsections (5) and (6)

of Section 501

	 	Events of Default

	Section 1004

	 	Limitations on Incurrence of Debt
	Section 1006

	 	Maintenance of Properties
	Section 1007

	 	Insurance
	Section 1009

	 	Provision of Financial Information

In place of the deleted text of the foregoing sections and subsections, the following text
shall be inserted immediately after the section or subsection number: “[Reserved].”

Any and all references to the foregoing sections and subsections and any and all obligations
thereunder related solely to such sections and subsections throughout the Indenture shall be of no
further force or effect. All definitions in the Indenture which are used exclusively in the
sections and subsections deleted pursuant to this Section 2.01 shall be of no further force or
effect.

ARTICLE III

EFFECTIVENESS; OPERATIVENESS

Section 3.01. Effectiveness of Supplemental Indenture. This Supplemental Indenture shall
become effective upon the due execution and delivery by the Company and the Trustee of this
Supplemental Indenture.

Section 3.02. Operativeness of Amendments. Notwithstanding Section 3.01 of this Supplemental
Indenture, the Proposed Amendments set forth in Section 2.01 of this Supplemental Indenture shall
become operative when, and only when, the Notes with respect to which the Requisite Consents (as
defined in the Offer to Purchase) have been delivered are paid for on the applicable Payment Date
(as defined in the Offer to Purchase).

ARTICLE IV

MISCELLANEOUS

Section 4.01. Parties. Nothing expressed or mentioned herein is intended or shall be
construed to give any Person, firm or corporation, other than the Holders and the Trustee, any
legal or equitable right, remedy or claim under or in respect of this Supplemental Indenture or the
Indenture or any provision herein or therein contained.

Section 4.02. Governing Law. This Supplemental Indenture shall be governed by and construed
in accordance with the law of the Commonwealth of Virginia.

Section 4.03. Severability Clause. In case any provision in this Supplemental Indenture shall
be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby and such provision shall be
ineffective only to the extent of such invalidity, illegality and unenforceability.

Section 4.04. Ratification of Indenture: Supplemental Indenture Part of Indenture. Except as
expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the
terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental
Indenture shall form a part of the Indenture for all purposes, and every Holder of Notes heretofore
or hereafter authenticated and delivered shall be bound hereby.

Section 4.05. Counterparts. The parties hereto may sign one or more copies of this
Supplemental Indenture in counterparts, all of which together shall constitute one and the same
agreement.

Section 4.06. Headings. The headings of the Articles and the Sections in this Supplemental
Indenture are for convenience of reference only and shall not be deemed to alter or affect the
meaning or interpretation of any provisions hereof.

Section 4.07. Successors and Assigns. All agreements of the Company and the Trustee in this
Supplemental Indenture shall bind their respective successors and assigns.

Section 4.08. Conflict With Trust Indenture Act. If any provision of this Supplemental
Indenture limits, qualifies or conflicts with any provision of the Trust Indenture Act that is
required under the Trust Indenture Act to be part of and govern any provision of the Indenture,
such provision of the Trust Indenture Act shall control. If any provision of this Supplemental
Indenture modifies or excludes any provision of the Trust Indenture Act that may be so modified or
excluded, the provision of the Trust Indenture Act shall be deemed to apply to the Indenture as so
modified or to be excluded by this Supplemental Indenture, as the case may be.

Section 4.09 Trustee Disclaimer. The recitals contained in this Supplemental Indenture shall
be taken as the statements of the Company, and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations or warranties as to the validity or sufficiency
of this Supplemental Indenture.

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly
executed as of the date first above written.

UDR, INC.

By:  /s/ Warren L. Troupe

Name: Warren L. Troupe

Title: Senior Executive Vice President

U.S. BANK NATIONAL ASSOCIATION, as Trustee

By:  /s/ Monique L. Green

Name: Monique L. Green

Title: Vice President

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