Waiver Agreement to Third Amended and Restated Credit Agreement among Sleepmaster L.L.C., Guarantors, and Lenders

Summary

This agreement, dated June 29, 2001, is between Sleepmaster L.L.C. (the borrower), its parent and subsidiary guarantors, and several banks and financial institutions led by First Union National Bank. It temporarily waives certain covenant requirements under a prior credit agreement, specifically extending the deadline to negotiate and determine liquidity levels to July 16, 2001. The waiver is effective once signed by all parties and does not reduce the guarantors' obligations under the original credit agreement. The agreement is governed by North Carolina law.

EX-10.86 3 y52564ex10-86.txt WAIVER AGREEMENT 1 CONFORMED COPY EX. 10.86 WAIVER AGREEMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT THIS WAIVER AGREEMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT (the "Waiver") dated as of June 29, 2001 is to that Third Amended and Restated Credit Agreement dated as of June 30, 2000, (as may be subsequently amended and modified from time to time, the "Credit Agreement"; terms used but not otherwise defined herein shall have the meanings provided in the Credit Agreement), by and among SLEEPMASTER L.L.C., a New Jersey limited liability company (the "Borrower"), SLEEPMASTER HOLDINGS L.L.C., a New Jersey limited liability company (the "Parent") and those Domestic Subsidiaries of the Borrower as may from time to time become party thereto (together with the Parent, collectively, the "Guarantors"), the several banks and other financial institutions identified therein (the "Lenders") and FIRST UNION NATIONAL BANK, as administrative agent for the Lenders thereunder (in such capacity, the "Agent"). W I T N E S S E T H: WHEREAS, the Lenders have established a credit facility for the benefit of the Borrower pursuant to the terms of the Credit Agreement; WHEREAS, the Borrower and the Agent have determined that it will be in the best interest of all parties to extend the time to comply with certain of the covenants set forth in that certain Waiver and Second Amendment To Third Amended and Restated Credit Agreement dated as of May 15, 2001 (the "Second Amendment") and the Borrower requests that the Required Lenders waive any Default or Event of Default that will result from such noncompliance; and WHEREAS, the Required Lenders have agreed to waive certain of the covenants of the Second Amendment on the terms and conditions hereinafter set forth; NOW, THEREFORE, IN CONSIDERATION of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: A. Waiver. The Borrower and the Agent have determined that it will be in the best interest of all parties to extend the time to comply with the requirement to negotiate and determine the liquidity levels on or before June 30, 2001 (i) as set forth in footnote 1 and relating to the amended Section 4.2 of the Credit Agreement in Section 10 of the Second Amendment and (ii) as set forth in footnote 2 and relating to the amended Section 5.9 of the Credit Agreement in Section 17 of the Second Amendment, which failures constitute a Default or an Event of Default under the Credit Agreement. The Required Lenders hereby grant a waiver of compliance with the above-referenced covenants and of any Defaults or Events of Default resulting from such noncompliance; provided that the negotiation and determination of liquidity levels are completed on or prior to July 16, 2001. B. This Waiver shall become effective when it is executed by a duly authorized officer of the Borrower, the Guarantors, the Required Lenders and the Agent. 2 CONFORMED COPY C. The Guarantors acknowledge and consent to all of the terms and conditions of this Waiver and agree that this Waiver and all documents executed in connection herewith do not operate to reduce or discharge the Guarantors' obligations under the Credit Agreement or the other Credit Documents. The Guarantors further acknowledge and agree that the Guarantors have no claims, counterclaims, offsets, or defenses to the Credit Documents and the performance of the Guarantors' obligations thereunder or if the Guarantors did have any such claims, counterclaims, offsets or defenses to the Credit Documents or any transaction related to the Credit Documents, the same are hereby waived, relinquished and released in consideration of the Required Lenders' execution and delivery of this Waiver. D. This Waiver may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original and it shall not be necessary in making proof of this Waiver to produce or account for more than one such counterpart. E. This Waiver and the Credit Agreement shall be deemed to be contracts made under, and for all purposes shall be construed in accordance with the laws of the State of North Carolina. IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Waiver to be duly executed and delivered as of the date and year first above written. BORROWER: SLEEPMASTER L.L.C., a New Jersey limited liability company By: /s/ Les Breiland ------------------------------- Name: Les Breiland ------------------------------- Title: CFO ------------------------------- GUARANTORS: SLEEPMASTER HOLDINGS L.L.C., a New Jersey limited liability company By: /s/ Les Breiland ------------------------------- Name: Les Breiland ------------------------------- Title: CFO ------------------------------- LOWER ROAD ASSOCIATES, L.L.C., a New Jersey limited liability company By: /s/ Les Breiland ------------------------------- Name: Les Breiland ------------------------------- Title: CFO ------------------------------- 3 CONFORMED COPY PALM BEACH BEDDING COMPANY, a Florida corporation By: /s/ Les Breiland ------------------------------- Name: Les Breiland ------------------------------- Title: CFO ------------------------------- HERR MANUFACTURING COMPANY, a Pennsylvania corporation By: /s/ Les Breiland ------------------------------- Name: Les Breiland ------------------------------- Title: CFO ------------------------------- SLEEPMASTER FINANCE CORPORATION, a Delaware corporation By: /s/ Les Breiland ------------------------------- Name: Les Breiland ------------------------------- Title: CFO ------------------------------- STAR BEDDING PRODUCTS, a New Brunswick corporation By: /s/ Les Breiland ------------------------------- Name: Les Breiland ------------------------------- Title: CFO ------------------------------- ADAM WUEST CORPORATION, a Delaware corporation By: /s/ Les Breiland ------------------------------- Name: Les Breiland ------------------------------- Title: CFO ------------------------------- SIMON MATTRESS MANUFACTURING CO. a California corporation By: /s/ Les Breiland ------------------------------- Name: Les Breiland ------------------------------- Title: CFO ------------------------------- 4 CONFORMED COPY CRESCENT SLEEP PRODUCTS COMPANY a Delaware corporation By: /s/ Les Breiland ------------------------------- Name: Les Breiland ------------------------------- Title: CFO ------------------------------- 5 CONFORMED COPY AGENTS AND LENDERS: FIRST UNION NATIONAL BANK, as Administrative Agent and as a Lender By: /s/ G.C. Ullrich ------------------------------- Name: G.C. Ullrich ------------------------------- Title: Senior Vice President ------------------------------- WACHOVIA BANK, N.A. By: /s/ Catherine A. Cowan ------------------------------- Name: Catherine A. Cowan ------------------------------- Title: Vice President ------------------------------- FIRSTAR BANK, N.A. By: /s/ Douglas P. Best ------------------------------- Name: Douglas P. Best ------------------------------- Title: Banking Officer ------------------------------- GMAC BUSINESS CREDIT, LLC By: /s/ Thomas Brent ------------------------------- Name: Thomas Brent ------------------------------- Title: Vice President ------------------------------- FIFTH THIRD BANK By: /s/ John R. Love, Sr. ------------------------------- Name: John R. Love, Sr. ------------------------------- Title: Assistant Vice President ------------------------------- VAN KAMPEN CLO II, LIMITED BY: VAN KAMPEN MANAGEMENT INC., as Collateral Manager By: /s/ Darvin D. Pierce ------------------------------- Name: Darvin D. Pierce ------------------------------- Title: Principal ------------------------------- 6 CONFORMED COPY VAN KAMPEN SENIOR FLOATING RATE FUND By: Van Kampen Investment Advisory Corp. By: /s/ Darvin D. Pierce ------------------------------- Name: Darvin D. Pierce ------------------------------- Title: Principal ------------------------------- VAN KAMPEN CLO I, LIMITED BY: VAN KAMPEN MANAGEMENT INC., as Collateral Manager By: /s/ Darvin D. Pierce ------------------------------- Name: Darvin D. Pierce ------------------------------- Title: Principal ------------------------------- VAN KAMPEN SENIOR INCOME TRUST By: Van Kampen Investment Advisory Corp. By: /s/ Darvin D. Pierce ------------------------------- Name: Darvin D. Pierce ------------------------------- Title: Principal ------------------------------- ANTARES CAPITAL CORPORATION By: /s/ David Mahon ------------------------------- Name: David Mahon ------------------------------- Title: Director ------------------------------- CHASE MANHATTAN BANK, As Trustee of the Antares Funding Trust created under the Trust Agreement dated as of November 30, 1999, as Lender By: /s/ Judith Drummond ------------------------------- Name: Judith Drummond ------------------------------- Title: Vice President ------------------------------- 7 CONFORMED COPY FIRSTRUST BANK By: /s/ Kent Nelson ------------------------------- Name: Kent Nelson ------------------------------- Title: Vice President ------------------------------- BLACK DIAMOND INTERNATIONAL FUNDING, LTD. By: /s/ David Egglishaw ------------------------------- Name: David Egglishaw ------------------------------- Title: Director ------------------------------- BLACK DIAMOND CLO 2000-1 LTD. By: /s/ David Egglishaw ------------------------------- Name: David Egglishaw ------------------------------- Title: Director ------------------------------- BLACK DIAMOND CLO 1998-1 LTD. By: /s/ David Egglishaw ------------------------------- Name: David Egglishaw ------------------------------- Title: Director ------------------------------- HELLER FINANCIAL, INC. By: /s/ Robert M. Reeg ------------------------------- Name: Robert M. Reeg ------------------------------- Title: Assistant Vice President ------------------------------- U.S. BANK NATIONAL ASSOCIATION By: /s/ Matthew A. Ross ------------------------------- Name: Matthew A. Ross ------------------------------- Title: Senior Vice President ------------------------------- 8 CONFORMED COPY EATON VANCE SENIOR INCOME TRUST BY: EATON VANCE MANAGEMENT AS INVESTMENT ADVISOR By: /s/ Payson F. Swaffield ------------------------------- Name: Payson F. Swaffield ------------------------------- Title: Vice President ------------------------------- EATON VANCE INSTITUTIONAL SENIOR LOAN FUND BY: EATON VANCE MANAGEMENT AS INVESTMENT ADVISOR By: /s/ Payson F. Swaffield ------------------------------- Name: Payson F. Swaffield ------------------------------- Title: Vice President ------------------------------- OXFORD STRATEGIC INCOME FUND BY: EATON VANCE MANAGEMENT AS INVESTMENT ADVISOR By: /s/ Payson F. Swaffield ------------------------------- Name: Payson F. Swaffield ------------------------------- Title: Vice President ------------------------------- EATON VANCE CDO II, LTD. BY: EATON VANCE MANAGEMENT AS INVESTMENT ADVISOR By: /s/ Payson F. Swaffield ------------------------------- Name: Payson F. Swaffield ------------------------------- Title: Vice President ------------------------------- EATON VANCE CDO III, LTD. BY: EATON VANCE MANAGEMENT AS INVESTMENT ADVISOR By: /s/ Payson F. Swaffield ------------------------------- Name: Payson F. Swaffield ------------------------------- Title: Vice President ------------------------------- 9 CONFORMED COPY SENIOR DEBT PORTFOLIO By: Boston Management and Research as Investment Advisor By: /s/ Payson F. Swaffield ------------------------------- Name: Payson F. Swaffield ------------------------------- Title: Vice President ------------------------------- SUNTRUST BANK By: /s/ Lauren P. Carrigan ------------------------------- Name: Lauren P. Carrigan ------------------------------- Title: Vice President -------------------------------