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SECOND AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF AUGUST 15, 2003
by and among
TEMPUR-PEDIC, INC.,
TEMPUR PRODUCTION USA, INC.
TEMPUR WORLD HOLDING COMPANY ApS
and
DAN-FOAM ApS
as Borrowers
and
THE OTHER PERSONS PARTY HERETO THAT
ARE DESIGNATED AS CREDIT PARTIES
and
GENERAL ELECTRIC CAPITAL CORPORATION
as Administrative Agent, US L/C Issuer and a Lender
and
LEHMAN COMMERCIAL PAPER INC.
as Syndication Agent
and
NORDEA BANK DANMARK A/S
as European Security Agent and a Lender
and
GE EUROPEAN LEVERAGED FINANCE LIMITED,
as European Loan Agent
and
HSBC BANK PLC
as European Funding Agent
and
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
as Lenders
and
LEHMAN BROTHERS INC. and GECC CAPITAL MARKETS GROUP, INC.
as Joint Lead Arrangers and Joint Book Runners
================================================================================
<PAGE>
INDEX OF APPENDICES
-------------------
Annexes
-------
Annex A - Definitions
Annex B - Commitment Amounts
Annex C - Closing Checklist
Annex D - Pro Forma
Annex E - Lenders' Bank Accounts
Annex F - [Intentionally Omitted]
Annex G - Currency Risk Management Policy
Annex H - [Intentionally Omitted]
Annex I - European Cash Management
Annex J - Mandatory Cost Formulae
Exhibits
--------
Exhibit 1.l(a)(i)(A) - US Term Note (Term Loan A)
Exhibit 1.1(a)(i)(B) - US Term Note (Term Loan B)
Exhibit 1.1(a)(ii)(A) - European Term Note A (Term Loan A)
Exhibit 1.1(b)(i) - US Revolving Note
Exhibit 1.1(b)(ii) - European Revolving Note
Exhibit 1.1(b)(i)(A) - Notice of US Revolving Credit Advance
Exhibit 1.1(b)(ii)(A) - Notice of European Revolving Credit Advance
Exhibit 1.1(d) - Swing Line Note
Exhibit 1.1(e)(iii) - Form of US Letter of Credit Request
Exhibit 1.1(f)(iii) - Form of European Letter of Credit Request
Exhibit 1.2(e) - Notice of Conversion/Continuation
Exhibit 3.1(m) - Form of Subordinated Note
Exhibit 4.6(d)(i) - US Borrowing Base Certificate
Exhibit 4.6(d)(ii) - European Borrowing Base Certificate
Exhibit 4.6(o) - Compliance and Excess Cash Flow Certificate
Exhibit 8.1 - Assignment Agreement
Schedules
---------
Schedule 1.1(c) - Conversion of Loans under Existing Credit Agreement
Schedule 3.1 - Indebtedness
Schedule 3.2 - Liens
Schedule 3.3 - Investments
Schedule 3.4 - Contingent Obligations
Schedule 3.7 - Asset Dispositions
Schedule 3.8 - Affiliate Transactions
Schedule 3.9 - Business Description
Schedule 3.21 - Activities of Ultimate Holdco, Intermediate Holdco,
Holdco,Spanish Holdco
<PAGE>
Schedule 3.23 - Operating Leases
Schedule 5.4(a) - Jurisdictions of Organization and Qualification
Schedule 5.4(b) - Capitalization
Schedule 5.6 - Intellectual Property
Schedule 5.7 - Investigations and Audits
Schedule 5.8 - Employee Matters
Schedule 5.10 - Litigation
Schedule 5.11 - Use of Proceeds
Schedule 5.12 - Real Estate
Schedule 5.13 - Environmental Matters
Schedule 5.14 - ERISA
Schedule 5.16 - Deposit and Disbursement Accounts
Schedule 5.17 - Agreements and Other Documents
Schedule 5.18 - Insurance
Schedule 5.22 - Collateral Agreement Schedules
Schedule 5.23 - Intercompany Payables
3
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
Section 1. AMOUNTS AND TERMS OF LOANS..........................................2
1.1 Loans..............................................................2
1.2 Interest and Applicable Margins...................................16
1.3 Fees..............................................................20
1.4 Payments..........................................................22
1.5 Prepayments.......................................................24
1.6 Maturity..........................................................27
1.7 Loan Accounts.....................................................27
1.8 Yield Protection; Illegality......................................28
1.9 Taxes.............................................................29
1.10 Limitations on Obligations of European Credit Parties.............31
1.11 Borrower Representatives..........................................31
1.12 Single Loan.......................................................32
Section 2. AFFIRMATIVE COVENANTS..............................................32
2.1 Compliance With Laws and Contractual Obligations..................32
2.2 Maintenance of Properties; Insurance..............................33
2.3 Inspection; Lender Meeting........................................33
2.4 Organizational Existence..........................................34
2.5 Environmental Matters.............................................34
2.6 Landlords' Agreements, Mortgagee Agreements and Bailee Letters....35
2.7 Further Assurances................................................35
2.8 Interest Rate Agreement...........................................37
2.9 Escrow............................................................37
2.10 Currency Risk Management Policy...................................37
2.11 Post-Closing Date Matters.........................................37
Section 3. NEGATIVE COVENANTS.................................................37
3.1 Indebtedness......................................................37
3.2 Liens and Related Matters.........................................41
3.3 Investments.......................................................42
3.4 Contingent Obligations............................................43
3.5 Restricted Payments...............................................44
3.6 Restriction on Fundamental Changes................................46
3.7 Disposal of Assets or Subsidiary Stock............................47
3.8 Transactions with Affiliates......................................48
3.9 Conduct of Business...............................................48
3.10 Changes Relating to Indebtedness..................................48
3.11 Fiscal Year.......................................................49
3.12 Press Release; Public Offering Materials..........................49
i
<PAGE>
3.13 Subsidiaries......................................................49
3.14 Bank Accounts; Cash Management....................................49
3.15 Hazardous Materials...............................................50
3.16 ERISA.............................................................50
3.17 Sale Leasebacks...................................................50
3.18 Changes to Material Contracts.....................................50
3.19 Prepayments of Other Indebtedness.................................50
3.20 Real Estate Purchases.............................................51
3.21 Activities of Ultimate Holdco, Intermediate Holdco, Holdco and
Spanish Holdco....................................................51
3.22 Change of Corporate Name or Location..............................51
3.23 Operating Leases..................................................52
3.24 Recapitalization Dividend, Additional Payment and Additional
Dividend..........................................................52
3.25 Holdco Merger.....................................................52
Section 4. FINANCIAL COVENANTS/REPORTING......................................52
4.1 Maximum Capital Expenditures......................................53
4.2 Minimum Fixed Charge Coverage Ratio...............................53
4.3 Minimum Interest Coverage Ratio...................................53
4.4 Maximum Leverage Ratio............................................54
4.5 Maximum Senior Leverage Ratio.....................................54
4.6 Financial Statements and Other Reports............................54
4.7 Accounting Terms; Utilization of GAAP for Purposes of
Calculations Under Agreement......................................59
Section 5. REPRESENTATIONS AND WARRANTIES.....................................59
5.1 Disclosure........................................................59
5.2 No Material Adverse Effect........................................59
5.3 No Conflict.......................................................60
5.4 Organization, Powers, Capitalization and Good Standing............60
5.5 Financial Statements and Projections..............................61
5.6 Intellectual Property.............................................61
5.7 Investigations, Audits, Etc.......................................62
5.8 Employee Matters..................................................62
5.9 Solvency..........................................................62
5.10 Litigation; Adverse Facts.........................................62
5.11 Use of Proceeds; Margin Regulations...............................62
5.12 Ownership of Property; Liens......................................63
5.13 Environmental Matters.............................................63
5.14 ERISA.............................................................64
5.15 Brokers...........................................................66
5.16 Deposit and Disbursement Accounts.................................66
5.17 Agreements and Other Documents....................................66
5.18 Insurance.........................................................66
5.19 Government Regulation.............................................66
ii
<PAGE>
5.20 Subordinated Notes Documents......................................66
5.21 Taxes.............................................................67
5.22 Collateral Documents..............................................67
5.23 Intercompany Payables.............................................67
Section 6. DEFAULT, RIGHTS AND REMEDIES.......................................67
6.1 Event of Default..................................................67
6.2 Suspension or Termination of Commitments..........................70
6.3 Acceleration and other Remedies...................................70
6.4 Performance by Agent..............................................71
6.5 Application of Proceeds and Payments..............................72
6.6 Loss Sharing......................................................73
Section 7. CONDITIONS TO LOANS................................................73
7.1 Conditions to Initial Loans.......................................74
7.2 Conditions to All Loans...........................................74
Section 8. ASSIGNMENT AND PARTICIPATION.......................................75
8.1 Assignment and Participations.....................................75
8.2 Agents............................................................78
8.3 Set Off and Sharing of Payments...................................83
8.4 Disbursement of Funds.............................................84
8.5 Disbursements of Advances; Payment................................84
8.6 Swiss and German Power of Attorney................................87
Section 9. MISCELLANEOUS......................................................87
9.1 Indemnities.......................................................87
9.2 Amendments and Waivers............................................87
9.3 Notices...........................................................88
9.4 Failure or Indulgence Not Waiver; Remedies Cumulative.............90
9.5 Marshaling; Payments Set Aside....................................91
9.6 Severability......................................................91
9.7 Lenders' Obligations Several; Independent Nature of Lenders'
Rights............................................................91
9.8 Headings..........................................................91
9.9 Applicable Law....................................................91
9.10 Successors and Assigns............................................91
9.11 No Fiduciary Relationship Limited Liability.......................91
9.12 Construction......................................................92
9.13 Confidentiality...................................................92
9.14 CONSENT TO JURISDICTION...........................................93
9.15 WAIVER OF JURY TRIAL..............................................93
9.16 Survival of Warranties and Certain Agreements.....................94
9.17 Entire Agreement..................................................94
9.18 Counterparts; Effectiveness.......................................94
iii
<PAGE>
9.19 Replacement of Lenders............................................94
9.20 Delivery of Termination Statements and Mortgage Releases..........96
9.21 Judgment Currency.................................................96
9.22 European Monetary Union...........................................96
9.23 Subordination.....................................................97
iv
<PAGE>
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
--------------------------------------------
This SECOND AMENDED AND RESTATED CREDIT AGREEMENT is dated as of
August 15, 2003 and entered into by and among TWI HOLDINGS, INC., a Delaware
corporation ("Ultimate Holdco"), TEMPUR WORLD, INC., a Delaware corporation
("Intermediate Holdco"), TEMPUR WORLD HOLDINGS, INC., a Delaware corporation
("Holdco"), TEMPUR WORLD HOLDINGS, S.L., a company organized under the laws of
Spain ("Spanish Holdco"), TEMPUR-PEDIC, INC., a Kentucky corporation ("TPI"),
TEMPUR PRODUCTION USA, INC., a Virginia corporation ("TPUSA"), TEMPUR WORLD
HOLDING COMPANY ApS, a company organized under the laws of Denmark ("TWHC"),
DAN-FOAM ApS, a company organized under the laws of Denmark ("DF") (TPI and
TPUSA are sometimes collectively referred to herein as "US Borrowers" and
individually as a "US Borrower"; TWHC and DF are sometimes collectively referred
to herein as "European Borrowers" and individually as a "European Borrower"; and
TPI, TPUSA, TWHC and DF are sometimes collectively referred to as "Borrowers"
and individually as a "Borrower"); the other persons designated as "Credit
Parties" on the signature pages hereof; the financial institutions who are or
hereafter become parties to this Agreement as Lenders; GENERAL ELECTRIC CAPITAL
CORPORATION, a Delaware corporation (in its individual capacity "GE Capital"),
as Administrative Agent, US L/C Issuer and as a Lender; LEHMAN COMMERCIAL PAPER
INC. (in its individual capacity, "LCPI"), as Syndication Agent and as a Lender,
NORDEA BANK DANMARK A/S (in its individual capacity "Nordea"), as European
Security Agent and as a Lender; GE EUROPEAN LEVERAGED FINANCE LIMITED, a company
incorporated under the laws of England and Wales (in its individual capacity "GE
ELF") as European Loan Agent for the European Lenders; and HSBC BANK PLC, a
company incorporated under the laws of England and Wales (in its individual
capacity "HSBC") as European Funding Agent.
R E C I T A L S:
- - - - - - - -
WHEREAS, Borrowers, Ultimate Holdco, Intermediate Holdco, Holdco,
Spanish Holdco, the other Credit Parties signatory thereto, the lenders parties
thereto (the "Existing Lenders"), GE Capital, as administrative agent and Nordea
as European loan agent for certain of the Existing Lenders, are parties to an
Amended and Restated Credit Agreement, dated as of November 1, 2002 (as so
amended and restated and otherwise modified to date, the "Existing Credit
Agreement"); and
WHEREAS, pursuant to and upon the terms and conditions set forth in
the Existing Credit Agreement, the Existing Lenders agreed to make certain loans
and other extensions of credit to Borrowers of up to $170,000,000; and
WHEREAS, pursuant to and upon the terms and conditions set forth in
the Agreement, each of the parties hereto wishes to and agrees to amend and
restate the Existing Credit Agreement on the terms and conditions set forth
herein, including to increase the Commitments to $270,000,000 for the purpose of
paying or funding some portion or all of any of the Recapitalization Dividend,
the Additional Payment and the Mezzanine Debt and the payout of fees, costs and
expenses incurred in connection with such payments; and
<PAGE>
WHEREAS, it is the intent of the parties hereto that this Agreement
not constitute a novation of the obligations and liabilities under the Existing
Credit Agreement or evidence payment and reborrowing of all or any such
obligations and liabilities, that this Agreement amend and restate in its
entirety the Existing Credit Agreement and that from the date hereof, the
Existing Credit Agreement be of no further force and effect except to evidence
the incurrence of the Obligations thereunder, the representations and warranties
made thereunder and the obligations, covenants and liabilities of the parties
thereto prior to the Closing Date; and
WHEREAS, all capitalized terms herein shall have the meanings ascribed
thereto in Annex A hereto which is incorporated herein by reference. All
references to Revolver Agent in any Loan Documents shall be deemed to be
references to Administrative Agent.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Borrowers, Credit Parties, Lenders
and Agents agree that, as of August 15, 2003, the Existing Credit Agreement
(including all Schedules, Annexes and Exhibits thereto) is amended and restated
in its entirety to read as set forth above and as follows:
SECTION 1.
AMOUNTS AND TERMS OF LOANS
--------------------------
1.1 Loans. Subject to the terms and conditions of this Agreement and in
reliance upon the representations and warranties of Borrowers and the other
Credit Parties contained herein:
(a) Term Loans.
(i) (A) Each US Term A Lender agrees, severally and not
jointly, to lend to TPUSA and TPI in one draw in Dollars, on the Closing Date,
subject to Section 1.1(c), its Pro Rata Share of the US Term Loan A described
herein (the "US Term Loan A"), which shall have a total principal amount equal
to $30,000,000; (B) each US Term B Lender agrees, severally and not jointly, to
lend to the US Borrowers in one draw in Dollars, on the Closing Date, subject to
Section 1.1(c), its Pro Rata Share of the US Term Loan B described herein (the
"US Term Loan B" and together with the US Term Loan A, the "US Term Loans" and
each a "US Term Loan"), which shall have a total principal amount equal to
$135,000,000; and
(ii) Each European Term A Lender agrees, severally and not
jointly, to lend to DF in one draw in Dollars or in Euros, on the Closing Date,
subject to Section 1.1(c), its Pro Rata Share of the European Term Loan A
described herein (the "European Term Loan A"), which shall have a total
principal amount equal to the Equivalent Amount of $65,000,000.
The US Term Loans and the European Term Loan A will be referred to
collectively as the "Term Loans."
The US Borrowers shall repay the US Term Loans and DF shall repay its
European Term Loan A through periodic payments on the dates and in the amounts
indicated below ("Scheduled Installments").
2
<PAGE>
US Term Loan A
--------------
Date Scheduled Installment
--------------------------- ---------------------
September 30, 2003 $ 831,000.00
December 31, 2003 $ 831,000.00
March 31, 2004 $ 831,000.00
June 30, 2004 $ 831,000.00
September 30, 2004 $ 831,000.00
December 31, 2004 $ 831,000.00
March 31, 2005 $ 1,107,000.00
June 30, 2005 $ 1,107,000.00
September 30, 2005 $ 1,107,000.00
December 31, 2005 $ 1,107,000.00
March 31, 2006 $ 1,107,000.00
June 30, 2006 $ 1,107,000.00
September 30, 2006 $ 1,107,000.00
December 31, 2006 $ 1,107,000.00
March 31, 2007 $ 1,662,000.00
June 30, 2007 $ 1,662,000.00
September 30, 2007 $ 1,662,000.00
December 31, 2007 $ 1,662,000.00
March 31, 2008 $ 1,986,000.00
June 30, 2008 $ 1,986,000.00
September 30, 2008 $ 1,986,000.00
November 1, 2008 $ 3,552,000.00
US Term Loan B
--------------
Date Scheduled Installment
--------------------------- ---------------------
September 30, 2003 $ 337,500.00
December 31, 2003 $ 337,500.00
March 31, 2004 $ 337,500.00
June 30, 2004 $ 337,500.00
September 30, 2004 $ 337,500.00
December 31, 2004 $ 337,500.00
March 31, 2005 $ 337,500.00
June 30, 2005 $ 337,500.00
September 30, 2005 $ 337,500.00
December 31, 2005 $ 337,500.00
March 31, 2006 $ 337,500.00
June 30, 2006 $ 337,500.00
September 30, 2006 $ 337,500.00
December 31, 2006 $ 337,500.00
March 31, 2007 $ 337,500.00
June 30, 2007 $ 337,500.00
3
<PAGE>
Date Scheduled Installment
--------------------------- ---------------------
September 30, 2007 $ 337,500.00
December 31, 2007 $ 337,500.00
March 31, 2008 $ 337,500.00
June 30, 2008 $ 337,500.00
September 30, 2008 $ 337,500.00
December 31, 2008 $ 337,500.00
March 31, 2009 $ 337,500.00
June 30, 2009 $ 127,237,500.00
European Term Loan A
--------------------
Date Scheduled Installment
--------------------------- ---------------------
September 30, 2003 $ 1,800,500.00
December 31, 2003 $ 1,800,500.00
March 31, 2004 $ 1,800,500.00
June 30, 2004 $ 1,800,500.00
September 30, 2004 $ 1,800,500.00
December 31, 2004 $ 1,800,500.00
March 31, 2005 $ 2,398,500.00
June 30, 2005 $ 2,398,500.00
September 30, 2005 $ 2,398,500.00
December 31, 2005 $ 2,398,500.00
March 31, 2006 $ 2,398,500.00
June 30, 2006 $ 2,398,500.00
September 30, 2006 $ 2,398,500.00
December 31, 2006 $ 2,398,500.00
March 31, 2007 $ 3,601,000.00
June 30, 2007 $ 3,601,000.00
September 30, 2007 $ 3,601,000.00
December 31, 2007 $ 3,601,000.00
March 31, 2008 $ 4,303,000.00
June 30, 2008 $ 4,303,000.00
September 30, 2008 $ 4,303,000.00
November 1, 2008 $ 7,696,000.00
The final installment for each Term Loan, shall in each case and in
all events, equal the entire remaining principal balance of each of the Term
Loans, respectively. Notwithstanding the foregoing, the outstanding principal
balance of the US Term Loan A and the European Term Loan A shall be due and
payable in full on the Commitment Termination Date. The outstanding principal
balance of the US Term Loan B shall be due and payable in full on June 30, 2009
or earlier pursuant to Section 6.3 hereof. Amounts borrowed under this Section
1.l(a) and repaid may not be reborrowed.
4
<PAGE>
The US Term Loan A shall be evidenced by promissory notes
substantially in the form of Exhibit 1.1(a)(i)(A) (each a "US Term Note A" and,
collectively, the "US Term Notes A"), and, except as provided in Section 1.7,
TPUSA and TPI shall execute and deliver a US Term Note A to each US Term A
Lender. The US Term Loan B shall be evidenced by promissory notes substantially
in the form of Exhibit 1.1(a)(i)(B) (each a "US Term Note B" and, collectively,
the "US Term Notes B" and, together with the US Term Notes A, the "US Term
Notes" and, each a "US Term Note"), and, except as provided in Section 1.7,
TPUSA and TPI shall execute and deliver a US Term Note B to each US Term B
Lender. Each US Term Note shall represent the obligation of TPUSA and TPI to pay
the amount of the applicable US Term Lender's applicable US Term Loan A
Commitment or US Term Loan B Commitment, as applicable, together with interest
thereon.
The European Term Loan A shall be evidenced by promissory notes
substantially in the form of Exhibit 1.1(a)(ii)(A) (each a "European Term Note
A" and, collectively, the "European Term Notes A"), and, except as provided in
Section 1.7, DF shall execute and deliver a European Term Note A to each
European Term A Lender. Each European Term Note A shall represent the obligation
of DF to pay the amount of the European Term Loan Commitment of each applicable
European Term A Lender, together with interest thereon.
(b) Revolving Loans.
(i) US Revolving Loan. Each US Revolving Lender agrees,
severally and not jointly, to make available in Dollars to TPI and TPUSA from
time to time until the Commitment Termination Date its Pro Rata Share of
advances (each a "US Revolving Credit Advance") requested by US Borrower
Representative on behalf of TPI hereunder. The Pro Rata Share of the US
Revolving Loan of any US Revolving Lender (including, without duplication, Swing
Line Loans) shall not at any time exceed its separate US Revolving Loan
Commitment. US Revolving Credit Advances may be repaid and reborrowed; provided
that the amount of any US Revolving Credit Advance to be made at any time shall
not exceed US Borrowing Availability. US Borrowing Availability may be further
reduced by Reserves imposed by Administrative Agent in its reasonable credit
judgment and upon 10 days prior written notice to US Borrower Representative.
The US Revolving Loan shall be repaid in full on the Commitment Termination
Date. Except as provided in the last sentence of Section 1.7, TPI and TPUSA
shall execute and deliver to each US Revolving Lender a promissory note to
evidence the US Revolving Loan Commitment of such US Revolving Lender in the
principal amount of the US Revolving Loan Commitment of such US Revolving
Lender, dated the Closing Date and substantially in the form of Exhibit
1.1(b)(i) (each a "US Revolving Note" and, collectively, the "US Revolving
Notes"). If at any time the outstanding US Revolving Loan exceeds the US
Borrowing Base (any such excess US Revolving Loan is herein referred to
collectively as "US Overadvances"), Lenders shall not be obligated to make US
Revolving Credit Advances, no additional US Letters of Credit shall be issued
and the US Revolving Loan must be repaid immediately and US Letters of Credit
cash collateralized, in each case, in an amount sufficient to eliminate any US
Overadvances. All US Overadvances shall constitute Index Rate Loans and shall
bear interest at the Default Rate. US Revolving Credit Advances which are Index
Rate Loans may be requested in any amount. For funding requests for a US
Revolving Credit Advance equal to or greater than $5,000,000, written notice
must be provided by 1:00 p.m. (New York time) one (1) Business Day prior to the
Business Day on which such US Revolving Credit
5
<PAGE>
Advance is to be made and for funding requests less than $5,000,000, written
notice must be provided by 1:00 p.m. (New York time) on the Business Day on
which such US Revolving Credit Advance is to be made. All US Revolving Credit
Advances which are IBOR Loans require three (3) Business Days prior written
notice. Written notices for funding requests shall be in the form attached as
Exhibit 1.1(b)(i)(A) ("Notice of US Revolving Credit Advance").
(ii) European Revolving Loan. Each European Revolving Lender
agrees, severally and not jointly, to make available in Dollars or in an
Alternative Currency to European Borrowers from time to time until the
Commitment Termination Date its Pro Rata Share of advances (each a "European
Revolving Credit Advance") requested by European Borrower Representative on
behalf the European Borrowers hereunder. The Pro Rata Share of the European
Revolving Loan of any European Revolving Lender shall not at any time exceed its
separate European Revolving Loan Commitment. European Revolving Credit Advances
may be repaid and reborrowed; provided that the amount of any European Revolving
Credit Advance to be made at any time shall not exceed European Borrowing
Availability. The Equivalent Amount in Dollars of each European Revolving Credit
Advance shall be recalculated hereunder on each date on which it shall be
necessary to determine the European Borrowing Availability or the European
Revolving Loan Outstandings on such date. European Borrowing Availability may be
further reduced by Reserves, determined jointly by, and imposed jointly by,
Administrative Agent and European Loan Agent in their reasonable credit judgment
and upon 10 days prior written notice to European Borrower Representative. The
European Revolving Loan shall be repaid in full on the Commitment Termination
Date. Except as provided in the last sentence of Section 1.7, each European
Borrower shall execute and deliver to each European Revolving Lender a
promissory note to evidence the European Revolving Loan Commitment of such
European Revolving Lender in the principal amount of the European Revolving Loan
Commitment of such European Revolving Lender, dated the Closing Date and
substantially in the form of Exhibit 1.1(b)(ii) (each a "European Revolving
Note" and, collectively, the "European Revolving Notes"). If at any time the
outstanding European Revolving Loan exceeds the European Borrowing Base (any
such excess European Revolving Loan is herein referred to collectively as
"European Overadvances"), Lenders shall not be obligated to make European
Revolving Credit Advances, no additional European Letters of Credit shall be
issued and the European Revolving Loan must be repaid immediately and European
Letters of Credit cash collateralized, in each case, in an amount sufficient to
eliminate any European Overadvances. All European Overadvances shall constitute
an IBOR Loan having an IBOR Period of one month and shall bear interest at the
Default Rate. All IBOR Loans require three (3) Business Days prior written
notice. Written notices for funding requests shall be in the form attached as
Exhibit 1.1(b)(ii)(A) ("Notice of European Revolving Credit Advance"). A
European Revolving Credit Advance may not be drawn in an Alternative Currency if
(a) any European Revolving Lender notifies the European Funding Agent not later
than 10:00 a.m. (Local Time) on the third Business Day prior to the proposed
European Revolving Credit Advance that deposits of such Alternative Currency are
not readily available to such Lender in an amount comparable with such Lender's
Pro Rata Share of such proposed European Revolving Credit Advance; or (b) the
European Funding Agent determines after consultation with the other European
Revolving Lenders (which determination shall be conclusive) at any time prior to
10:00 a.m. (Local Time) on the date of such proposed European Revolving Credit
Advance that by reason of any change in currency availability, currency exchange
rates or exchange controls it is, or will be, impracticable for such European
Revolving Credit Advance to be made in the requested
6
<PAGE>
Alternative Currency. In such event, the proposed European Revolving Credit
Advance shall be made in Dollars.
(c) Loans Under Existing Credit Agreement. The Credit Parties
acknowledge and agree that as of the Closing Date (i) the outstanding principal
amount of US Revolving Credit Advances under (and as defined in) the Existing
Credit Agreement equals $11,100,000 and that $6,500,000 in principal amount of
such US Revolving Credit Advances are continued as US Revolving Credit Advances
hereunder or converted into one or more US Term Loans as set forth on Schedule
1.1(c) hereto; (ii) the outstanding principal amount of European Revolving
Credit Advances under (and as defined in) the Existing Credit Agreement equals
$2,215,399.03 and that such European Revolving Credit Advances are continued as
European Revolving Credit Advances hereunder or converted into the European Term
Loan A to the extent set forth on Schedule 1.1(c) hereto; (iii) the outstanding
principal amount of the US Term Loan under (and as defined in) the Existing
Credit Agreement equals $61,400,000 and that such US Term Loan is continued as
US Term Loan A hereunder or converted into US Term Loan B to the extent set
forth on Schedule 1.1(c) hereto; (iv) the outstanding principal amount of the
European Term Loan under (and as defined in) the Existing Credit Agreement
equals $52,000,000 and that such European Term Loan is continued as the European
Term Loan A hereunder to the extent set forth on Schedule 1.1(c) hereto; (v) US
Letters of Credit are outstanding under (and as defined in) the Existing Credit
Agreement having a stated amount of $100,000.00; and (vi) European Letters of
Credit are outstanding under (and as defined in) the Existing Credit Agreement
having a stated amount of $4,233,810.56 and such European Letters of Credit are
continued as European Letters of Credit hereunder. All US Term Loan Commitments,
European Term Loan Commitments, US Revolving Loan Commitments and European
Revolving Loan Commitments under (and as defined in) the Existing Credit
Agreement shall hereinafter be assigned and re-allocated among the US Term Loan
A Commitments, US Term Loan B Commitments, European Term Loan Commitments, US
Revolving Loan Commitments and European Revolving Loan Commitments hereunder,
and after giving effect hereto, the percentages of the Commitments are as set
forth on Annex B hereto. Notwithstanding anything set forth herein to the
contrary, in order to effect the continuation of the outstanding Loans
contemplated by the preceding sentence, the amount to be funded on the Closing
Date by each Lender hereunder in respect of its Commitments shall be reduced by
the principal amount of such Lender's Loans under (and as defined in) the
Existing Credit Agreement outstanding on the Closing Date. On the Closing Date
all outstanding IBOR Loans (as defined in the Existing Credit Agreement) to the
US Borrowers to each Lender under the Existing Credit Agreement shall continue
as IBOR Loans hereunder to the extent that the Lender providing those IBOR Loans
under the Existing Credit Agreement continues to provide Loans in an equal or
greater amount hereunder. All other IBOR Loans outstanding to US Borrowers on
the Closing Date under the Existing Credit Agreement will be converted to Index
Rate Loans.
(d) Swing Line Facility.
(i) Administrative Agent shall notify the Swing Line Lender
upon Administrative Agent's receipt of any Notice of US Revolving Credit
Advance. Subject to the terms and conditions hereof, the Swing Line Lender may,
in its discretion, make available from time to time until the Commitment
Termination Date advances (each, a "Swing Line Advance") in accordance with any
such notice. The provisions of this Section 1.1(d)(i) shall not relieve US
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Revolving Lenders of their obligations to make US Revolving Credit Advances
under Section 1.1(b)(i); provided that if the Swing Line Lender makes a Swing
Line Advance pursuant to any such notice, such Swing Line Advance shall be in
lieu of any US Revolving Credit Advance that otherwise may be made by US
Revolving Lenders pursuant to such notice. The aggregate amount of Swing Line
Advances outstanding shall not exceed at any time the lesser of (A) the Swing
Line Commitment and (B) US Borrowing Availability ("Swing Line Availability").
Until the Commitment Termination Date, TPI may from time to time borrow, repay
and reborrow under this Section 1.1(d)(i). Each Swing Line Advance shall be made
pursuant to a Notice of US Revolving Credit Advance delivered by US Borrower
Representative on behalf of TPI and TPUSA to Administrative Agent in accordance
with Section 1.1(b)(i). Unless the Swing Line Lender has received at least one
(1) Business Day's prior written notice from Requisite Lenders instructing it
not to make a Swing Line Advance, the Swing Line Lender shall, notwithstanding
the failure of any condition precedent set forth in Section 7.2 be entitled to
fund that Swing Line Advance, and to have each US Revolving Lender make US
Revolving Credit Advances in accordance with Section 1.1(d)(iii) or purchase
participating interests in accordance with Section 1.1(d)(iv). Notwithstanding
any other provision of this Agreement or the other Loan Documents, the Swing
Line Loan shall constitute an Index Rate Loan. TPI and TPUSA jointly and
severally shall repay the aggregate outstanding principal amount of the Swing
Line Loan upon demand therefor by Administrative Agent. The entire unpaid
balance of the Swing Line Loan and all other noncontingent Obligations shall be
immediately due and payable in full in immediately available funds on the
Commitment Termination Date if not sooner paid in full.
(ii) TPI and TPUSA shall execute and deliver to the Swing Line
Lender a promissory note to evidence the Swing Line Commitment. Such note shall
be in the principal amount of the Swing Line Commitment of the Swing Line
Lender, dated the Closing Date and substantially in the form of Exhibit 1.1(d)
(the "Swing Line Note"). The Swing Line Note shall represent the obligation of
TPI to pay the amount of the Swing Line Commitment or, if less, the aggregate
unpaid principal amount of all Swing Line Advances made to TPI together with
interest thereon as prescribed in Section 1.2.
(iii) The Swing Line Lender, at any time and from time to time in
its sole and absolute discretion but no less frequently than once weekly, shall
on behalf of TPI and TPUSA (and each of TPI and TPUSA hereby irrevocably
authorizes the Swing Line Lender to so act on its behalf) request each US
Revolving Lender (including the Swing Line Lender) to make a US Revolving Credit
Advance to TPI and TPUSA (which shall be an Index Rate Loan) in an amount equal
to that US Revolving Lender's Pro Rata Share of the principal amount of the
Swing Line Loan (the "Refunded Swing Line Loan") outstanding on the date such
notice is given. Unless any of the events described in Sections 6.1(f) and
6.l(g) has occurred (in which event the procedures of Section 1.1(d)(iv) shall
apply) and regardless of whether the conditions precedent set forth in this
Agreement to the making of a US Revolving Credit Advance are then satisfied,
each US Revolving Lender shall disburse directly to Administrative Agent, its
Pro Rata Share of a US Revolving Credit Advance on behalf of the Swing Line
Lender, prior to 3:00 p.m. (New York time), in immediately available funds on
the Business Day next succeeding the date that notice is given. The proceeds of
those US Revolving Credit Advances shall be immediately paid to the Swing Line
Lender and applied to repay the Refunded Swing Line Loan.
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(iv) If, prior to refunding a Swing Line Loan with a US
Revolving Credit Advance pursuant to Section 1.1(d)(iii), one of the events
described in Sections 6.1(f) or 6.1(g) has occurred, then, subject to the
provisions of Section l.1(d)(v) below, each US Revolving Lender shall, on the
date such US Revolving Credit Advance was to have been made for the benefit of
TPI and TPUSA, purchase from the Swing Line Lender an undivided participation
interest in the Swing Line Loan in an amount equal to its Pro Rata Share
(determined with respect to the US Revolving Loan) of such Swing Line Loan. Upon
request, each US Revolving Lender shall promptly transfer to the Swing Line
Lender, in immediately available funds, the amount of its participation
interest.
(v) Each US Revolving Lender's obligation to make US Revolving
Credit Advances in accordance with Section 1.1(d)(iii) and to purchase
participation interests in accordance with Section 1.1(d)(iv) shall be absolute
and unconditional and shall not be affected by any circumstance, including (A)
any setoff, counterclaim, recoupment, defense or other right that such US
Revolving Lender may have against the Swing Line Lender, TPI or any other Person
for any reason whatsoever; (B) the occurrence or continuance of any Default or
Event of Default; (C) any inability of TPI to satisfy the conditions precedent
to borrowing set forth in this Agreement at any time or (D) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing. Swing Line Lender shall be entitled to recover, on demand, from
each US Revolving Lender the amounts required pursuant to Sections 1.1(d)(iii)
or 1.1(d)(iv), as the case may be. If any US Revolving Lender does not make
available such amounts to Administrative Agent or the Swing Line Lender, as
applicable, the Swing Line Lender shall be entitled to recover, on demand, such
amount on demand from such US Revolving Lender, together with interest thereon
for each day from the date of non payment until such amount is paid in full at
the Federal Funds Rate for the first two Business Days and at the Index Rate
thereafter.
(e) US Letters of Credit. The US Revolving Loan Commitment may, in
addition to advances under the US Revolving Loan (including US Swing Line
Advances), be utilized, upon the request of US Borrower Representative on behalf
of TPI, for the issuance or continuation of US Letters of Credit. Immediately
upon the issuance or continuation by a US L/C Issuer of a US Letter of Credit,
and without further action on the part of Administrative Agent or any of the US
Lenders, each US Revolving Lender shall be deemed to have purchased from such US
L/C Issuer a participation in such US Letter of Credit (or in its obligation
under a risk participation agreement with respect thereto) equal to such US
Revolving Lender's Pro Rata Share of the aggregate amount available to be drawn
under such US Letter of Credit. US Letters of Credit outstanding under the
Existing Credit Agreement shall remain outstanding and shall be governed hereby.
(i) US Maximum Amount. The aggregate amount of US Letter of
Credit Obligations with respect to all US Letters of Credit outstanding at any
time shall not exceed $5,000,000 ("US L/C Sublimit").
(ii) Reimbursement. TPI shall be irrevocably and
unconditionally obligated forthwith without presentment, demand, protest or
other formalities of any kind, to reimburse any US L/C Issuer on demand in
immediately available funds for any amounts paid by such US L/C Issuer with
respect to a US Letter of Credit, including all reimbursement payments,
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fees, charges, costs and expenses paid by such US L/C Issuer. TPI hereby
authorizes and directs Administrative Agent, at Administrative Agent's option,
to debit TPI's account (by increasing the outstanding principal balance of the
US Revolving Credit Advances) in the amount of any payment made by a US L/C
Issuer with respect to any US Letter of Credit. All amounts paid by a US L/C
Issuer with respect to any US Letter of Credit that are not repaid as provided
in the first sentence hereof by TPI with the proceeds of a US Revolving Credit
Advance or otherwise shall bear interest at the interest rate applicable to the
portions of the US Revolving Loan which are Index Rate Loans plus, at the
election of Administrative Agent or Requisite Lenders, an additional two percent
(2.00%) per annum. Each US Revolving Lender agrees to fund its Pro Rata Share of
any US Revolving Loan made pursuant to this Section 1.1(e)(ii). In the event
Administrative Agent elects not to debit TPI's account and TPI fails to
reimburse the US L/C Issuer in full on the date of any payment in respect of a
US Letter of Credit, Administrative Agent shall promptly notify each US
Revolving Lender of the amount of such unreimbursed payment and the accrued
interest thereon and each US Revolving Lender, on the next Business Day prior to
3:00 p.m. (New York time), shall deliver to Administrative Agent an amount equal
to its Pro Rata Share thereof in same day funds. Each US Revolving Lender hereby
absolutely and unconditionally agrees to pay to the US L/C Issuer upon demand by
the US L/C Issuer such US Revolving Lender's Pro Rata Share of each payment made
by the US L/C Issuer in respect of a US Letter of Credit and not immediately
reimbursed TPI or satisfied through a debit of TPI's account. Each US Revolving
Lender acknowledges and agrees that its obligations pursuant to this subsection
in respect of US Letters of Credit are absolute and unconditional and shall not
be affected by any circumstance whatsoever, including setoff, counterclaim, the
occurrence and continuance of a Default or an Event of Default or any failure by
TPI to satisfy any of the conditions set forth in Section 7.2. If any US
Revolving Lender fails to make available to the US L/C Issuer the amount of such
US Revolving Lender's Pro Rata Share of any payments made by the US L/C Issuer
in respect of a US Letter of Credit as provided in this Section 1.1(e)(ii), the
US L/C Issuer shall be entitled to recover such amount on demand from such US
Revolving Lender together with interest at the Index Rate.
(iii) Request for US Letters of Credit. US Borrower
Representative shall give Administrative Agent at least two (2) Business Days
prior written notice specifying the date a US Letter of Credit is requested to
be issued, the amount and the name and address of the beneficiary and a
description of the transactions proposed to be supported thereby. If
Administrative Agent informs US Borrower Representative that the US L/C Issuer
cannot issue the requested US Letter of Credit directly, US Borrower
Representative may request that US L/C Issuer arrange for the issuance of the
requested US Letter of Credit under a risk participation agreement with another
financial institution reasonably acceptable to Administrative Agent, US L/C
Issuer and US Borrower Representative. The issuance of any US Letter of Credit
under this Agreement shall be subject to the conditions that the US Letter of
Credit (i) supports a transaction entered into in the ordinary course of
business of US Borrowers and (ii) is in a form and contains such terms and
conditions as are reasonably satisfactory to the US L/C Issuer and, in the case
of standby letters of credit, Administrative Agent. The initial notice
requesting the issuance of a US Letter of Credit shall be accompanied by the
form of the US Letter of Credit and the Master Standby Agreement or Master
Documentary Agreement, as applicable, and an application for a letter of credit,
if any, then required by the US L/C Issuer completed in a manner satisfactory to
such US L/C Issuer. If any provision of any application or reimbursement
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agreement is inconsistent with the terms of this Agreement, then the provisions
of this Agreement, to the extent of such inconsistency, shall control.
(iv) Expiration Dates of US Letters of Credit. The expiration
date of each US Letter of Credit shall be on a date which is not later than the
earlier of (a) one year from its date of issuance or (b) the thirtieth (30/th/)
day prior to the date set forth to in clause (a) of the definition of the term
Commitment Termination Date. Notwithstanding the foregoing, a US Letter of
Credit may provide for automatic extensions of its expiration date for one (1)
or more successive one (1) year periods; provided that the US L/C Issuer has the
right to terminate such US Letter of Credit on each such annual expiration date
and no renewal term may extend the term of the US Letter of Credit to a date
that is later than the fifteenth (15/th/) day prior to the date set forth in
clause (a) of the definition of the term Commitment Termination Date. The US L/C
Issuer may elect not to renew any such US Letter of Credit and, upon direction
by Administrative Agent or Requisite Lenders, shall not renew any such US Letter
of Credit at any time during the continuance of an Event of Default; provided
that in the case of a direction by Administrative Agent or Requisite Lenders,
the US L/C Issuer receives such directions prior to the date notice of
non-renewal is required to be given by the US L/C Issuer and the US L/C Issuer
has had a reasonable period of time to act on such notice.
(v) Obligations Absolute. The obligation of TPI to reimburse
the US L/C Issuer, Administrative Agent and US Revolving Lenders for payments
made in respect of US Letters of Credit issued by the US L/C Issuer shall be
unconditional and irrevocable and shall be paid under all circumstances strictly
in accordance with the terms of this Agreement, including the following
circumstances: (a) any lack of validity or enforceability of any US Letter of
Credit; (b) any amendment or waiver of or any consent or departure from all or
any of the provisions of any US Letter of Credit or any Loan Document; (c) the
existence of any claim, set-off, defense or other right which TPI, any of its
Subsidiaries or Affiliates or any other Person may at any time have against any
beneficiary of any US Letter of Credit, any Agent, any US L/C Issuer, any Lender
or any other Person, whether in connection with this Agreement, any other Loan
Document or any other related or unrelated agreements or transactions; (d) any
draft or other document presented under any US Letter of Credit proving to be
forged, fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect; (e) payment under any US
Letter of Credit against presentation of a draft or other document that does not
substantially comply with the terms of such US Letter of Credit; or (f) any
other act or omission to act or delay of any kind of any US L/C Issuer, any
Agent, any Lender or any other Person or any other event or circumstance
whatsoever that might, but for the provisions of this Section 1.1(e)(v),
constitute a legal or equitable discharge of TPI's obligations hereunder.
(vi) Obligations of US L/C Issuers. Each US L/C Issuer (other
than GE Capital) hereby agrees that it will not issue a US Letter of Credit
hereunder until it has provided Administrative Agent with written notice
specifying the amount and intended issuance date of such US Letter of Credit and
Administrative Agent has returned a written acknowledgment of such notice to US
L/C Issuer. Each US L/C Issuer (other than GE Capital) further agrees to provide
to Administrative Agent: (a) a copy of each US Letter of Credit issued by such
US L/C Issuer promptly after its issuance; (b) a quarterly report summarizing
available amounts under US Letters of Credit issued by such US L/C Issuer, the
dates and amounts of any draws under such US Letters of Credit, the effective
date of any increase or decrease in the face
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amount of any US Letters of Credit during such quarter and the amount of any
unreimbursed draws under such US Letters of Credit; and (d) such additional
information reasonably requested by Administrative Agent from time to time with
respect to the US Letters of Credit issued by such US L/C Issuer. Without
limiting the generality of the foregoing, it is expressly understood and agreed
by US Borrowers that the absolute and unconditional obligation of US Borrowers
to Administrative Agent and US Lenders hereunder to reimburse payments made
under a US Letter of Credit will not be excused by the gross negligence or
willful misconduct of the US L/C Issuer. However, the foregoing shall not be
construed to excuse a US L/C Issuer from liability to US Borrowers to the extent
of any direct damages (as opposed to consequential damages, with US Borrowers
hereby waiving all claims for any consequential damages to the extent permitted
by applicable law) suffered by US Borrowers that are subject to indemnification
under the Master Standby Agreement or the Master Documentary Agreement.
(f) European Letters of Credit. The European Revolving Loan
Commitment may, in addition to advances under the European Revolving Loan, be
utilized, upon the request of European Borrower Representative on behalf of the
applicable European Borrower, for the issuance of European Letters of Credit.
Immediately upon the issuance by a European L/C Issuer of a European Letter of
Credit or on the Closing Date in the case of European Letters of Credit
outstanding under the Existing Credit Agreement, and without further action on
the part of European Loan Agent, European Funding Agent or any of the European
Lenders, each European Revolving Lender shall be deemed to have purchased from
such European L/C Issuer a participation in such European Letter of Credit (or
in its obligation under a risk participation agreement with respect thereto)
equal to such European Revolving Lender's Pro Rata Share of the aggregate amount
available to be drawn under such European Letter of Credit. European Letters of
Credit outstanding under the Existing Credit Agreement shall remain outstanding
and shall be governed hereby.
(i) European Maximum Amount. The aggregate amount of European
Letter of Credit Obligations with respect to all European Letters of Credit
outstanding at any time shall not exceed the Equivalent Amount of $10,000,000
("European L/C Sublimit").
(ii) Reimbursement. European Borrowers shall be irrevocably and
unconditionally obligated forthwith without presentment, demand, protest or
other formalities of any kind, to reimburse any European L/C Issuer on demand in
immediately available funds for any amounts paid by such European L/C Issuer
with respect to a European Letter of Credit, including all reimbursement
payments, fees, charges, costs and expenses paid by such European L/C Issuer.
European Borrowers hereby authorize and direct European Loan Agent, at European
Loan Agent's option, to debit European Borrowers' account (by increasing the
outstanding principal balance of the European Revolving Credit Advances) in the
amount of any payment made by a European L/C Issuer with respect to any European
Letter of Credit. All amounts paid by a European L/C Issuer with respect to any
European Letter of Credit that are not repaid as provided in the first sentence
hereof by European Borrowers with the proceeds of a European Revolving Credit
Advance or otherwise shall bear interest at the interest rate applicable to the
European Revolving Loan plus, at the election of Administrative Agent or
Requisite Lenders, an additional two percent (2.00%) per annum. Each European
Revolving Lender agrees to fund its Pro Rata Share of any European Revolving
Loan made pursuant to this Section 1.1(f)(ii). In the event European Loan Agent
elects not to instruct European Funding Agent to debit European
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Borrowers' account and European Borrowers fail to reimburse the European L/C
Issuer in full on the date of any payment in respect of a European Letter of
Credit, European Loan Agent shall promptly notify each European Revolving Lender
of the amount of such unreimbursed payment and the accrued interest thereon and
each European Revolving Lender, on the next Business Day prior to 3:00 p.m.
(Local Time), shall deliver to European Funding Agent an amount equal to its Pro
Rata Share thereof in same day funds. Each European Revolving Lender hereby
absolutely and unconditionally agrees to pay to the European L/C Issuer upon
demand by the European L/C Issuer such European Revolving Lender's Pro Rata
Share of each payment made by the European L/C Issuer in respect of a European
Letter of Credit and not immediately reimbursed by European Borrowers or
satisfied through a debit of European Borrowers account. Each European Revolving
Lender acknowledges and agrees that its obligations pursuant to this subsection
in respect of European Letters of Credit are absolute and unconditional and
shall not be affected by any circumstance whatsoever, including setoff,
counterclaim, the occurrence and continuance of a Default or an Event of Default
or any failure by European Borrowers to satisfy any of the conditions set forth
in Section 7.2. If any European Revolving Lender fails to make available to the
European L/C Issuer the amount of such European Revolving Lender's Pro Rata
Share of any payments made by the European L/C Issuer in respect of a European
Letter of Credit as provided in this Section 1.1(f)(ii), the European L/C Issuer
shall be entitled to recover such amount on demand from such European Revolving
Lender together with interest at the IBOR Rate with an IBOR Period of one month.
(iii) Request for European Letters of Credit. European Borrower
Representative shall give European Loan Agent, European Funding Agent and
European L/C Issuer at least three (3) Business Days prior written notice
specifying the date a European Letter of Credit is requested to be issued, the
amount and the name and address of the beneficiary and a description of the
transactions proposed to be supported thereby in the form set forth as Exhibit
1.1(f)(iii). If European Loan Agent informs European Borrower Representative
that the European L/C Issuer cannot issue the requested European Letter of
Credit directly, European Borrower Representative may request that European L/C
Issuer arrange for the issuance of the requested European Letter of Credit under
a risk participation agreement with another financial institution reasonably
acceptable to European Loan Agent, European L/C Issuer and European Borrower
Representative. The issuance of any European Letter of Credit under this
Agreement shall be subject to the conditions that the European Letter of Credit
(i) supports a transaction entered into in the ordinary course of business of
European Borrowers and (ii) is in a form and contains such terms and conditions
as are reasonably satisfactory to the European L/C Issuer and, in the case of
standby letters of credit, European Loan Agent. The initial notice requesting
the issuance of a European Letter of Credit shall be accompanied by the form of
the European Letter of Credit and an application for a letter of credit, if any,
then required by the European L/C Issuer completed in a manner satisfactory to
such European L/C Issuer and European Loan Agent. If any provision of any
application or reimbursement agreement is inconsistent with the terms of this
Agreement, then the provisions of this Agreement, to the extent of such
inconsistency, shall control.
(iv) Expiration Dates of European Letters of Credit. The
expiration date of each European Letter of Credit shall be on a date which is
not later than the earlier of (a) one year from its date of issuance or (b) the
thirtieth (30/th/) day prior to the date set forth in clause (a) of the
definition of the term Commitment Termination Date. Notwithstanding the
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foregoing, a European Letter of Credit may provide for automatic extensions of
its expiration date for one (1) or more successive one (1) year periods;
provided that the European L/C Issuer has the right to terminate such European
Letter of Credit on each such annual expiration date and no renewal term may
extend the term of the European Letter of Credit to a date that is later than
the fifteenth (15/th/) day prior to the date set forth in clause (a) of the
definition of the term Commitment Termination Date. The European L/C Issuer may
elect not to renew any such European Letter of Credit and, upon direction by
Administrative Agent, European Loan Agent or Requisite Lenders, shall not renew
any such European Letter of Credit at any time during the continuance of an
Event of Default; provided that in the case of a direction by Administrative
Agent, European Loan Agent or Requisite Lenders, the European L/C Issuer
receives such directions prior to the date notice of non-renewal is required to
be given by the European L/C Issuer and the European L/C Issuer has had a
reasonable period of time to act on such notice.
(v) Obligations Absolute. The obligation of European Borrowers
to reimburse the European L/C Issuer, European Loan Agent, European Funding
Agent and European Revolving Lenders for payments made in respect of European
Letters of Credit issued by the European L/C Issuer shall be unconditional and
irrevocable and shall be paid under all circumstances strictly in accordance
with the terms of this Agreement, including the following circumstances: (a) any
lack of validity or enforceability of any European Letter of Credit; (b) any
amendment or waiver of or any consent or departure from all or any of the
provisions of any European Letter of Credit or any Loan Document; (c) the
existence of any claim, set-off, defense or other right which European
Borrowers, any of their Subsidiaries or Affiliates or any other Person may at
any time have against any beneficiary of any European Letter of Credit, any
Agent, any European L/C Issuer, any Lender or any other Person, whether in
connection with this Agreement, any other Loan Document or any other related or
unrelated agreements or transactions; (d) any draft or other document presented
under any European Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect; (e) payment under any European Letter of Credit against
presentation of a draft or other document that does not substantially comply
with the terms of such European Letter of Credit; or (f) any other act or
omission to act or delay of any kind of any European L/C Issuer, any Agent, any
Lender or any other Person or any other event or circumstance whatsoever that
might, but for the provisions of this Section 1.1(f)(v), constitute a legal or
equitable discharge of European Borrowers' obligations hereunder.
(vi) Obligations of European L/C Issuers. Each European L/C
Issuer hereby agrees that it will not issue a European Letter of Credit
hereunder until it has provided European Loan Agent with written notice
specifying the amount and intended issuance date of such European Letter of
Credit and European Loan Agent has returned a written acknowledgment of such
notice to European L/C Issuer. Each European L/C Issuer further agrees to
provide to European Loan Agent and European Funding Agent: (a) a copy of each
European Letter of Credit issued by such European L/C Issuer promptly after its
issuance; (b) on a change occurring to amounts under European Letters of Credit
the European L/C Issuer shall promptly notify the European Loan Agent of the
change, (c) a quarterly report summarizing available amounts under European
Letters of Credit issued by such European L/C Issuer, the effective date of any
increase or decrease in the face amount of any European Letters of Credit during
such week and the amount of any unreimbursed draws under such European Letters
of Credit; and (d) such additional information reasonably requested by European
Loan Agent from
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time to time with respect to the European Letters of Credit issued by such
European L/C Issuer. European L/C Issuer shall notify European Loan Agent and
European Funding Agent within one (1) Business Day following any draw under a
European Letter of Credit. Without limiting the generality of the foregoing, it
is expressly understood and agreed by European Borrowers that the absolute and
unconditional obligation of European Borrowers to European Loan Agent, European
Funding Agent and European Lenders hereunder to reimburse payments made under a
European Letter of Credit will not be excused by the gross negligence or willful
misconduct of the European L/C Issuer. European Borrowers hereby waive all
claims for any consequential damages or any other damages, other than direct
damages, to the extent permitted by applicable law.
(g) Letter of Credit Sublimits. US Letters of Credit may only be used
for the business and operations of the US Credit Parties and Designated US Cash
Management Credit Parties and (ii) European Letters of Credit may only be used
for the business and operations of the European Credit Parties.
(h) Funding Authorization.
(i) The proceeds of all US Revolving Credit Advances made
pursuant to this Agreement subsequent to the Closing Date are to be funded by
Administrative Agent by wire transfer to the account designated by US Borrower
Representative below (the "US Disbursement Account"):
Bank: Fifth Third Bank
ABA No.: 042000314
Bank Address: 250 West Main Street, Suite 105
Lexington, Kentucky 40512
Account No.: 99964853
Reference: Tempur-Pedic, Inc.
US Borrower Representative shall provide Administrative Agent with written
notice of any change in the foregoing instructions at least three (3) Business
Days before the desired effective date of such change.
(ii) The proceeds of all European Revolving Credit Advances
made pursuant to this Agreement subsequent to the Closing Date are to be funded
by European Funding Agent by wire transfer to the account designated by European
Borrower Representative below (the "European Disbursement Account"):
Bank: Nordea Bank Danmark A/S
SWIFT No.: NDEADKKKXXX
Bank Address: Raadhustorvet 13
SK 8700 Horsens Denmark
Account No.: 2213 6264367830
Reference: Dan-Foam ApS
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European Borrower Representative shall provide European Loan Agent and European
Funding Agent with written notice of any change in the foregoing instructions at
least three (3) Business Days before the desired effective date of such change.
1.2 Interest and Applicable Margins.
(a) Borrowers shall pay interest to Appropriate Agent, as specified
below, for the ratable benefit of Lenders, in accordance with the various Loans
being made by each Lender, in arrears on each applicable Interest Payment Date,
at the following rates: (i) with respect to the US Revolving Credit Advances
which are designated as Index Rate Loans (and for all other Obligations not
otherwise set forth below), to Administrative Agent, the Index Rate plus the
Applicable Revolver Index Margin per annum or, with respect to US Revolving
Credit Advances which are designated as IBOR Loans, at the election of US
Borrower Representative, the applicable IBOR Rate plus the Applicable Revolver
IBOR Margin per annum; (ii) with respect to the European Revolving Credit
Advances, to the European Funding Agent, the applicable IBOR Rate plus the
Applicable Revolver IBOR Margin per annum plus any Mandatory Costs; (iii) with
respect to such portion of the US Term Loan A designated as an Index Rate Loan,
to the Administrative Agent, the Index Rate plus the Applicable Term Loan A
Index Margin per annum or, with respect to such portion of the US Term Loan A
designated as an IBOR Loan, at the election of US Borrower Representative, the
applicable IBOR Rate plus the Applicable Term Loan A IBOR Margin per annum; (iv)
with respect to such portion of the US Term Loan B designated as an Index Rate
Loan, to the Administrative Agent, the Index Rate plus the Applicable Term Loan
B Index Margin per annum or, with respect to such portion of the US Term Loan B
designated as an IBOR Loan, at the election of US Borrower Representative, the
Applicable IBOR Rate plus the Applicable Term Loan B IBOR Margin per annum; (v)
with respect to the European Term Loan A, to the European Funding Agent, the
applicable IBOR Rate plus the Applicable Term Loan A IBOR Margin per annum plus
any Mandatory Costs; and (vi) with respect to the Swing Line Loan, to the
Administrative Agent, the Index Rate plus the Applicable Revolver Index Margin
per annum.
The Applicable Margins will be as follows:
Applicable Revolver Index Margin 1.50%
Applicable Revolver IBOR Margin 3.25%
Applicable Term Loan A Index Margin 1.50%
Applicable Term Loan A IBOR Margin 3.25%
Applicable Term Loan B Index Margin 1.75%
Applicable Term Loan B IBOR Margin 3.50%
The Applicable Margins shall be adjusted (up or down) prospectively on
a quarterly basis as determined by Ultimate Holdco's, Borrowers' and their
Subsidiaries' consolidated financial performance, commencing with the first day
of the first calendar month that occurs more than one (1) day after delivery of
Ultimate Holdco's audited Financial Statements to Lenders for the Fiscal Year
ending December 31, 2003. Adjustments in the Applicable Margins will be
determined by reference to the following grids:
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----------------------------------------------------------------
If Leverage Ratio is: Level of Applicable Margins:
----------------------------------------------------------------
** 3.50 Level I
----------------------------------------------------------------
*** 3.50, but ** 3.00 Level II
----------------------------------------------------------------
*** 3.00 Level III
----------------------------------------------------------------
-----------------------------------------------------------------------------
Applicable Margins Level I Level II Level III
-----------------------------------------------------------------------------
Applicable Revolver IBOR Margin 3.25% 3.00% 3.00%
-----------------------------------------------------------------------------
Applicable Term A Loan IBOR Margin 3.25% 3.00% 3.00%
-----------------------------------------------------------------------------
Applicable Term B Loan IBOR Margin 3.50% 3.25% 3.00%
-----------------------------------------------------------------------------
Applicable Revolver Index Margin 1.50% 1.25% 1.25%
-----------------------------------------------------------------------------
Applicable Term A Loan Index Margin 1.50% 1.25% 1.25%
-----------------------------------------------------------------------------
Applicable Term B Loan Index Margin 1.75% 1.50% 1.25%
-----------------------------------------------------------------------------
All adjustments in the foregoing Applicable Margins after December 31,
2003 shall be implemented quarterly on a prospective basis, commencing on the
first day of the calendar month following the date of delivery to Lenders of the
quarterly unaudited Financial Statements evidencing the need for an adjustment;
provided that such calendar month commences at least 3 Business Days after the
date of delivery of such Financial Statements. In the event the calendar month
following the date of delivery to Lenders of the Financial Statements commences
within 3 Business Days of such delivery, all adjustments shall commence on the
first day of the calendar month next following such date of delivery.
Concurrently with the delivery of those Financial Statements, the US Borrower
Representative shall deliver to Authorized Agents a certificate, signed by its
chief financial officer, setting forth in reasonable detail the basis for the
continuance of, or any change in, the Applicable Margins. Failure to deliver
such Financial Statements within 2 Business Days after the day required for such
delivery pursuant to Section 4.6(a) shall, in addition to any other remedy
provided for in this Agreement, result in an increase in the Applicable Margins
to the highest level set forth in the foregoing grid, until the sixth Business
Day following the delivery of those Financial Statements demonstrating that such
an increase is not required. If any Event of Default has occurred and is
continuing at the time any reduction in the Applicable Margins is to be
implemented, that reduction shall be deferred until the sixth Business Day
following the date on which all Events of Default are waived or cured. If the
Applicable Margins have been adjusted downward based upon Ultimate Holdco's
unaudited quarterly Financial Statements for any Fiscal Quarter and it is later
determined by Administrative Agent based upon Ultimate Holdco's audited
Financial Statements for the Fiscal Year in which such Fiscal Quarter occurs
that (i) such unaudited quarterly Financial Statements for such Fiscal Quarter
have been adjusted in connection with the preparation of such audited Financial
Statement (the "Adjusted Quarterly Financial Statements"), and (ii) such
downward adjustment in the Applicable Margins would not have been made had the
Adjusted Quarterly Financial Statements been used to so adjust the Applicable
Margins, then each Borrower shall pay to Appropriate Agent, for the account of
the Lenders, within five (5) Business Days of such determination, such
additional interest on the Loans that would have been payable hereunder had the
Applicable Margin been adjusted (or not adjusted) on the basis of the Adjusted
Quarterly Financial Statements.
** = Greater Than
*** = Less than or equal to
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(b) If any payment on any Loan becomes due and payable on a day other
than a Business Day, the maturity thereof will be extended to the next
succeeding Business Day (except as set forth in the definition of IBOR Period)
and, with respect to payments of principal, interest thereon shall be payable at
the then applicable rate during such extension.
(c) All computations of Fees calculated on a per annum basis and
interest at the IBOR Rate shall be made by Appropriate Agent on the basis of a
360-day year (or a 365-day year, in the case of Loans denominated in British
pounds (or any other Alternative Currency where market practice so requires)),
in each case for the actual number of days occurring in the period for which
such Fees and interest are payable. All computations of interest at the Index
Rate shall be made by Administrative Agent on the basis of a 365-day or 366-day
year, as applicable. The Index Rate is a floating rate determined for each day.
Each determination by Appropriate Agent of an interest rate and Fees hereunder
shall be final, binding and conclusive on Borrowers, absent manifest error.
(d) (i) So long as an Event of Default has occurred and is continuing
under Section 6.1(f) or (g) and without notice of any kind, or (ii) so long as
any other Event of Default under Section 6.1(a) or under Section 6.1(c) (in the
latter case, as of a result of a breach of any of Sections 4.1 through 4.5) has
occurred and is continuing and at the election of Administrative Agent (or upon
the written request of Requisite Lenders) confirmed by written notice from
Administrative Agent to each Borrower Representative (with a copy to European
Loan Agent and European Funding Agent), the interest rates applicable to the
Loans and the Letter of Credit Fees shall be increased by two percentage points
(2%) per annum above the rates of interest or the rate of such Fees otherwise
applicable hereunder ("Default Rate"), and all outstanding Obligations shall
bear interest at the Default Rate applicable to such Obligations. Interest and
Letter of Credit Fees at the Default Rate shall accrue (i) from the initial date
of such Event of Default in the case of an Event of Default that has occurred
and is continuing under Section 6.1(f) or (g) and (ii) from the date of such
notice of election, in the case of an Event of Default under Section 6.1(a) or
under Section 6.1(c) (in the latter case, as a result of a breach of any of
Sections 4.1 through 4.5), and in each case shall continue to accrue until that
Event of Default is cured or waived and shall be payable upon demand, but in any
event, shall be payable on the next regularly scheduled payment date set forth
herein for such Obligation.
(e) Upon the earlier to occur of (i) receipt by US Borrower
Representative of notice from Administrative Agent of the availability of IBOR
Loans or (ii) the date which is fifteen (15) days after the Closing Date and
upon three (3) Business Days prior notification to the Administrative Agent, US
Borrower Representative may convert all or any part of the outstanding Loans
made to the US Borrowers on the Closing Date as Index Rate Loans to IBOR Loans
subject to the requirements of this Section 1.2(e). US Borrower Representative
shall have the option, subject to the preceding sentence, to (1) convert at any
time all or any part of outstanding US Revolving Credit Advances (other than the
Swing Line Loan) and US Term Loans from Index Rate Loans to IBOR Loans, (2)
convert all or any part of outstanding US Revolving Credit Advances (other than
the Swing Line Loan) and US Term Loans from IBOR Loans to Index Rate Loans,
subject to payment of the IBOR Breakage Fee in accordance with Section 1.3(d) if
such conversion is made prior to the expiration of the IBOR Period applicable
thereto, or (3) continue all or any portion of any US Revolving Credit Advances
(other than the Swing Line Loan) and US Term Loans as an IBOR Loan upon the
expiration of the applicable
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IBOR Period and the succeeding IBOR Period of that continued Loan shall commence
on the first day after the last day of the IBOR Period of the Loan to be
continued. European Borrower Representative shall have the option to continue
all or any portion of any European Revolving Credit Advances and European Term
Loan A as an IBOR Loan upon the expiration of the applicable IBOR Period and the
succeeding IBOR Period of that continued Loan shall commence on the first day
after the last day of the IBOR Period of the Loan to be continued. Any Loan or
group of Loans having the same proposed IBOR Period to be made or continued as,
or converted into, an IBOR Loan must be in a minimum amount of $500,000 (or the
Equivalent Amount in an Alternative Currency) and integral multiples of $100,000
(or the Equivalent Amount in an Alternative Currency) in excess of such amount.
Any such election must be made by 11:00 a.m. (Local Time) on the 3/rd/ Business
Day prior to (1) the date of any proposed Revolving Credit Advance which is to
bear interest at the IBOR Rate, (2) the end of each IBOR Period with respect to
any IBOR Loans to be continued as such, or (3) the date on which US Borrower
Representative wishes to convert any Index Rate Loan to an IBOR Loan for an IBOR
Period designated by US Borrower Representative in such election. If no election
is received with respect to all or any portion of any US Revolving Credit
Advances or the US Term Loans that are an IBOR Loan by 11:00 a.m. (New York
time) on the 3/rd/ Business Day prior to the end of the IBOR Period with respect
thereto, that IBOR Loan shall be converted to an Index Rate Loan at the end of
its IBOR Period. If no election is received with respect to all or any portion
of any European Revolving Credit Advances or the European Term Loan A that is an
IBOR Loan by 11:00 a.m. (Local Time) on the 3/rd/ Business Day prior to the end
of the IBOR Period with respect thereto, that IBOR Loan shall be converted to an
IBOR Loan having an IBOR Period of one month at the end of its IBOR Period. US
Borrower Representative must make such election by notice to Administrative
Agent in writing, by fax or overnight courier. European Borrower Representative
must make such election by notice to European Funding Agent in writing, by fax
or overnight courier. In the case of any conversion or continuation, such
election must be made pursuant to a written notice (a "Notice of
Conversion/Continuation") in the form of Exhibit 1.2(e). No US Revolving Credit
Advance or US Term Loan shall be made, converted into or continued as an IBOR
Loan, if an Event of Default has occurred and is continuing and Administrative
Agent or Requisite Lenders have determined not to make, convert or continue any
such Loan as an IBOR Loan as a result thereof.
(f) Notwithstanding anything to the contrary set forth in this
Section 1.2(f) with respect to the US Revolving Loan and the US Term Loan, if a
court of competent jurisdiction determines in a final order that the rate of
interest payable hereunder exceeds the highest rate of interest permissible
under law (the "Maximum Lawful Rate"), then so long as the Maximum Lawful Rate
would be so exceeded, the rate of interest payable hereunder shall be equal to
the Maximum Lawful Rate; provided, however, that if at any time thereafter the
rate of interest payable hereunder is less than the Maximum Lawful Rate,
Borrowers shall continue to pay interest hereunder at the Maximum Lawful Rate
until such time as the total interest received by Administrative Agent, on
behalf of Lenders, is equal to the total interest that would have been received
had the interest rate payable hereunder been (but for the operation of this
paragraph) the interest rate payable since the Closing Date as otherwise
provided in this Agreement. Thereafter, interest hereunder shall be paid at the
rate(s) of interest and in the manner provided in Sections 1.2(a) through (e),
unless and until the rate of interest again exceeds the Maximum Lawful Rate, and
at that time this paragraph shall again apply. In no event shall the total
interest received by any Lender pursuant to the terms hereof exceed the amount
that such Lender could
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lawfully have received had the interest due hereunder been calculated for the
full term hereof at the Maximum Lawful Rate. If the Maximum Lawful Rate is
calculated pursuant to this paragraph, such interest shall be calculated at a
daily rate equal to the Maximum Lawful Rate divided by the number of days in the
year in which such calculation is made. If, notwithstanding the provisions of
this Section 1.2(f), a court of competent jurisdiction shall determine by a
final, non-appealable order that a Lender has received interest hereunder in
excess of the Maximum Lawful Rate, Administrative Agent shall, to the extent
permitted by applicable law, promptly apply such excess as specified in Section
1.5(e) and thereafter shall refund any excess to Borrowers or as such court of
competent jurisdiction may otherwise order.
1.3 Fees.
(a) Fee Letters. Borrowers shall pay to GE Capital and GE ELF,
individually, the fees specified in that certain fee letter dated as of July 24,
2003, among Borrowers, GE Capital and GE ELF (the "GE Capital Fee Letter"), at
the times specified for payment therein, and shall otherwise comply with all of
the terms thereof. US Borrowers shall pay to LBI, individually, the fees
specified in that certain fee letter dated as of July 24, 2003 among LBI, LCPI
and the Borrowers (the "LBI Fee Letter"), at the times specified for payment
therein, and shall otherwise comply with all of the terms thereof. European
Borrowers shall pay to Nordea, individually, the fees specified in that certain
fee letter dated as of July 24, 2003 among the European Borrowers and Nordea
(the "Nordea Fee Letter"), at the times specified for payment therein, and shall
otherwise comply with all of the terms thereof.
(b) Unused Line Fee. As additional compensation for the US Revolving
Lenders, US Borrowers shall pay to Administrative Agent, for the ratable benefit
of such Lenders, in arrears, on the first Business Day of each January, April,
July and October of each year prior to the Commitment Termination Date and on
the Commitment Termination Date, a Fee for US Borrowers' non-use of available
funds during the immediately preceding quarter (or with respect to the Fee
payable on: (i) the first Business Day of October 2003, during the period
commencing on the Closing Date and ending on and including September 30, 2003,
or (ii) the Commitment Termination Date, during the period commencing the first
day of the quarter in which the Commitment Termination Date occurs and ending on
and including the Commitment Termination Date), which Fee for each day in such
period shall equal: (x) one-half of one percent (0.50%) (the "Applicable Unused
Line Fee Margin") divided by 360 multiplied by (y) the difference between (1)
the US Maximum Amount for such day and (2) the closing balance of the aggregate
US Revolving Loan Outstandings for such day; provided that if the average of the
closing balances of the US Revolving Loan Outstandings for each day during such
period is less than 50% of the US Revolving Loan Commitment, the Applicable
Unused Line Fee Margin shall be increased to three-quarters of one percent
(0.75%) for the applicable period. As additional compensation for the European
Revolving Lenders, European Borrowers shall pay to European Funding Agent, for
the ratable benefit of such Lenders, in arrears, on the first Business Day of
each January, April, July and October of each year prior to the Commitment
Termination Date and on the Commitment Termination Date, a Fee for European
Borrowers' non-use of available funds during the immediately preceding
three-month period (or with respect to the Fee payable on: (i) the first
Business Day of October 2003, during the period commencing on the Closing Date
and ending on and including September 30, 2003, or (ii) the Commitment
Termination Date, during the period commencing the first day of the quarter in
which the
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Commitment Termination Date occurs and ending on and including the Commitment
Termination Date), which Fee for each day in such period shall equal: (x) the
Applicable Unused Line Fee Margin divided by 360 multiplied by (y) the
difference between (1) the European Maximum Amount for such day and (2) the
Equivalent Amount in Dollars of the closing balance of the aggregate European
Revolving Loan Outstandings for such day; provided that if the average of the
Equivalent Amount in Dollars of the closing balances of the European Revolving
Loan Outstandings for each day during such period is less than 50% of the
European Revolving Loan Commitment, the Applicable Unused Line Fee Margin shall
be increased to three-quarters of one percent (0.75%) for the applicable period.
(c) Letter of Credit Fees.
(i) US Letter of Credit Fees. US Borrowers agree to pay to
Administrative Agent for the benefit of US Revolving Lenders, as compensation to
such US Revolving Lenders for US Letter of Credit Obligations incurred
hereunder, (i) all costs and expenses incurred by Administrative Agent or any
Lender on account of such US Letter of Credit Obligations, and (ii) for each day
during which any US Letter of Credit Obligation shall remain outstanding, a fee
(the "US Letter of Credit Fee") in respect of each US Letter of Credit in an
amount equal to the Applicable Revolver IBOR Margin from time to time in effect,
multiplied by the maximum amount available from time to time to be drawn under
such US Letter of Credit. Such fee shall be paid to Administrative Agent for the
benefit of the US Revolving Lenders in arrears, on the first Business Day of
each January, April, July and October and on the Commitment Termination Date. In
addition, US Borrowers shall pay to any US L/C Issuer, on demand, such fees
(including all per annum fees), charges and expenses of such US L/C Issuer in
respect of the issuance, negotiation, acceptance, amendment, transfer and
payment of all US Letters of Credit issued by it or otherwise payable pursuant
to the applications and related documentation under which such US Letters of
Credit are issued.
(ii) European Letter of Credit Fees. European Borrowers agree
to pay to European Funding Agent for the benefit of European Revolving Lenders,
as compensation to such European Revolving Lenders for European Letter of Credit
Obligations incurred hereunder, (i) all costs and expenses incurred by European
Loan Agent, European Funding Agent, the European L/C Issuer or any Lender on
account of such European Letter of Credit Obligations, and (ii) for each day
during which any European Letter of Credit Obligation shall remain outstanding,
a fee (the "European Letter of Credit Fee") in respect of each European Letter
of Credit in an amount equal to the Applicable Revolver IBOR Margin from time to
time in effect, multiplied by the maximum amount available from time to time to
be drawn under such European Letter of Credit. Such fee shall be paid to
European Funding Agent for the benefit of the European Revolving Lenders in
arrears, on the first Business Day of each January, April, July and October and
on the Commitment Termination Date. In addition, European Borrowers shall pay to
any European L/C Issuer, on demand, such fees (including all per annum fees),
charges and expenses of such European L/C Issuer in respect of the issuance,
negotiation, acceptance, amendment, transfer and payment of all European Letters
of Credit or otherwise payable pursuant to the applications and related
documentation under which such European Letters of Credit are issued.
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(d) IBOR Breakage Fee. Upon (i) any default by any US Borrower in
making any borrowing of, conversion into or continuation of any IBOR Loan
following US Borrower Representative's delivery to Administrative Agent of any
IBOR Loan request in respect thereof or (ii) any payment of an IBOR Loan on any
day that is not the last day of the IBOR Period applicable thereto (regardless
of the source of such prepayment and whether voluntary, by acceleration or
otherwise), US Borrowers shall pay Administrative Agent, for the benefit of all
Lenders that funded or were prepared to fund any such IBOR Loan, the IBOR
Breakage Fee. Upon (i) any default by any European Borrower in making any
borrowing of, conversion into or continuation of any IBOR Loan following
European Borrower Representative's delivery to European Loan Agent of any IBOR
Loan request in respect thereof or (ii) any payment of an IBOR Loan on any day
that is not the last day of the IBOR Period applicable thereto (regardless of
the source of such prepayment and whether voluntary, by acceleration or
otherwise), European Borrowers shall pay European Funding Agent, for the benefit
of all Lenders that funded or were prepared to fund any such IBOR Loan, the IBOR
Breakage Fee.
(e) Expenses and Attorneys' Fees. Borrowers agree to promptly pay all
reasonable fees, charges, costs and expenses (including reasonable attorneys'
fees and expenses and (without duplication) the allocated cost of internal legal
staff) incurred by each Authorized Agent in connection with any matters
contemplated by or arising out of the Loan Documents, in connection with the
examination, review, due diligence investigation, documentation, negotiation,
closing and syndication of the transactions contemplated herein and in
connection with the continued administration of the Loan Documents including any
amendments, modifications, consents and waivers. Borrowers agree to promptly pay
reasonable documentation charges assessed by each Authorized Agent for
amendments, waivers, consents and any of the documentation prepared by any
Authorized Agent (including reasonable attorneys' fees and expenses and the
allocated cost of internal legal staff). Borrowers agree to promptly pay all
fees, charges, costs and expenses (including fees, charges, costs and expenses
of attorneys, external auditors (out-of-pocket costs, including fees and
expenses), internal auditors ($750 per audit day per in-house auditor plus
out-of-pocket expenses), appraisers, consultants and advisors and the allocated
cost of internal legal staff) incurred by any Authorized Agent in connection
with any Event of Default, work-out or action to enforce any Loan Document or to
collect any payments due from Borrowers or any other Credit Party. In addition,
in connection with any work-out or action to enforce any Loan Document or to
collect any payments due from Borrowers or any other Credit Party, Borrowers
agree to promptly pay all fees, charges, costs and expenses incurred by Lenders
for one (1) counsel acting for all Lenders other than Agents. All fees, charges,
costs and expenses for which Borrowers are responsible under this Section 1.3(e)
shall be deemed part of the Obligations when incurred, payable upon demand or in
accordance with Section 1.4(d) and secured by the Collateral.
1.4 Payments.
(a) Payments to Administrative Agent. All payments by US Borrowers of
the Obligations shall be without deduction, defense, setoff or counterclaim and
shall be made in same day funds and delivered to Administrative Agent, for the
benefit of Agents and Lenders, as applicable, by wire transfer to the following
account or such other place as Administrative Agent may from time to time
designate in writing.
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ABA No. 021 001 033
Account Number 502 328 54
Deutsche Bank Trust Company Americas
New York, New York
ACCOUNT NAME: GECC/CAF DEPOSITORY
Reference: CFN4927
(b) Payments to European Loan Agent. All payments by European
Borrowers of the Obligations shall be without deduction, defense, setoff or
counterclaim and shall be made in same day funds and delivered to European Loan
Agent, at its account with European Funding Agent for the benefit of Agents and
European Lenders, as applicable, by wire transfer to the following account or
such other place as European Loan Agent may from time to time designate in
writing.
In Dollars:
Pay to: HSBC Bank USA, New York
SWIFT: MRMDUS33
Account Name: HSBC Bank plc, London
SWIFT: MIDLGB22
Account Number: 000023868
Reference: DFSAS/GE Capital/Tempur
In Alternative Currencies:
Pay to: HSBC Bank plc, London
SWIFT: MIDLGB22
Account Name: HSBC Bank plc, London
SWIFT: MIDLGB22
Account Number: 87513834
Reference: DFSAS/GE Capital/Tempur
(c) Receipt of Payments; Currency. Borrowers shall receive credit on
the day of receipt for funds received by the Appropriate Agent by 2:00 p.m.
(Local Time). In the absence of timely receipt, such funds shall be deemed to
have been paid on the next Business Day. Whenever any payment to be made
hereunder shall be stated to be due on a day that is not a Business Day, the
payment may be made on the next succeeding Business Day and such extension of
time shall be included in the computation of the amount of interest and Fees due
hereunder. Subject to the provisions of Section 9.22, all European Revolving
Credit Advances hereunder denominated in an Alternative Currency shall be made,
and all payments hereunder or under any other Loan Document in respect thereof
(whether of principal, interest, Fees or otherwise) shall be made, in such
Alternative Currency. All US Revolving Credit Advances, the US Term Loans the
European Term Loan A, and all European Revolving Credit Advances hereunder
denominated in Dollars, shall be made, and all payments hereunder or under any
other Loan Document in respect thereof (whether of principal, interest, Fees or
otherwise) shall be made, in Dollars. That portion of the European Term Loan A
denominated in Euros shall be made, and all payments hereunder or under any
other Loan Document in respect thereof
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(whether of principal, interest, fees or otherwise) shall be made, in Euros.
Unless otherwise agreed by the applicable Borrower and each Lender and each
Authorized Agent to receive any such payment and except as otherwise provided
above in this Section 1.4(c) all other amounts due hereunder or under any other
Loan Document shall be payable in Dollars.
(d) Revolving Credit Advances. Administrative Agent is authorized to,
and at its sole election may, charge to the US Revolving Loan balance or Swing
Line Loan balance on behalf of each US Borrower and cause to be paid all Fees,
expenses, Charges, costs (including insurance premiums in accordance with
Section 2.2) and interest and Scheduled Installments and Letter of Credit
reimbursement obligations and any amounts required to be deposited with respect
to outstanding Letter of Credit Obligations pursuant to Section 6.3 other than
principal of the US Revolving Loan, owing by US Borrowers under this Agreement
or any of the other Loan Documents if and to the extent US Borrowers fail to pay
promptly any such amounts as and when due, even if the amount of such charges
would exceed US Borrowing Availability at such time. At Administrative Agent's
option and to the extent permitted bylaw, any charges so made shall constitute a
US Revolving Credit Advance hereunder. European Funding Agent at the direction
of the European Loan Agent, shall, charge to the European Revolving Loan balance
on behalf of each European Borrower and cause to be paid all Fees, expenses,
Charges, costs (including insurance premiums in accordance with Section 2.2) and
interest and Scheduled Installments and Letter of Credit reimbursement
obligations and any amounts required to be deposited with respect to outstanding
Letter of Credit Obligations pursuant to Section 6.3 other than principal of the
European Revolving Credit Advances, owing by European Borrowers under this
Agreement or any of the other Loan Documents if and to the extent European
Borrowers fail to pay promptly any such amounts as and when due, even if the
amount of such charges would exceed European Borrowing Availability at such
time. At Administrative Agent's option and to the extent permitted by law, any
charges so made shall constitute a European Revolving Credit Advance hereunder.
1.5 Prepayments.
(a) Voluntary Prepayments of Loans. TPUSA may at any time on at least
3 Business Days' prior written notice by TPUSA to Administrative Agent
voluntarily prepay all or part of the US Term Loans; provided that any such
prepayments shall be in a minimum amount of $3,000,000 and integral multiples of
$500,000 in excess of such amount. DF may at any time on at least 3 Business
Days' prior written notice by DF to the Administrative Agent, European Funding
Agent and the European Loan Agent voluntarily prepay all or part of the European
Term Loan A; provided that any such prepayments shall be in a minimum amount of
$3,000,000 and integral multiples of $500,000 in excess of such amount.
Notwithstanding the foregoing, TPUSA and DF may at any time on at least 3
Business Days' prior written notice by Borrower Representative to Administrative
Agent, European Funding Agent and the European Loan Agent voluntarily prepay all
or part of each of the US Term Loans and the European Term Loan A; provided that
any such prepayments shall be in a minimum amount of $4,000,000, in the
aggregate, and integral multiples of $500,000 in excess of such amount. TPI may
at any time on at least 3 Business Days' prior written notice to Administrative
Agent permanently reduce (but not terminate) the US Revolving Loan Commitment;
provided that (A) any such prepayments shall be in a minimum amount of
$5,000,000 and integral multiples of $500,000 in excess of such amount, (B) the
US Revolving Loan Commitment shall not be reduced to an amount less
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<PAGE>
than $5,000,000, and (C) after giving effect to such reductions, TPI shall
comply with Section 1.1(b)(i). European Borrowers may at any time on at least 3
Business Days' prior written notice by DF to the Administrative Agent, European
Funding Agent and the European Loan Agent permanently reduce (but not terminate)
the European Revolving Loan Commitment; provided that (A) any such prepayments
shall be in a minimum amount of $5,000,000 and integral multiples of $500,000 in
excess of such amount, (B) the European Revolving Loan Commitment shall not be
reduced to an amount less than $5,000,000, and (C) after giving effect to such
reductions, the European Borrowers shall comply with Section 1.1(b)(ii). Any
such voluntary prepayment of any Term Loan must be accompanied by the payment of
any IBOR Breakage Fees, if applicable. In addition, Borrowers may at any time on
at least 5 Business Days' prior written notice by the US Borrower Representative
to the Administrative Agent, European Funding Agent and the European Loan Agent
terminate both the US Revolving Loan Commitment and the European Revolving Loan
Commitment; provided that upon any such termination, all Loans and other
Obligations shall be immediately due and payable in full and all Letter of
Credit Obligations shall be cash collateralized or otherwise satisfied in
accordance with Section 6.3. Any such voluntary prepayment and any such
reduction or termination of the Revolving Loan Commitments must be accompanied
by the payment of any IBOR Breakage Fees, if applicable. Borrowers may
voluntarily repay the Revolving Loans (without any reduction or termination of
the Revolving Loan Commitments) without prior written notice to any Agent. Upon
any such termination of the US Revolving Loan Commitment and the European
Revolving Loan Commitment, each Borrower's right to request US Revolving Credit
Advances and European Revolving Credit Advances, or request that Letter of
Credit Obligations be incurred on its behalf, shall be terminated. Any partial
prepayments of a Term Loan of any Borrower shall be applied pro rata against all
remaining Scheduled Installments until prepaid in full.
(b) Prepayments from Excess Cash Flow. On or before the date that is
15 days after the earlier of (A) the date on which Ultimate Holdco's annual
audited Financial Statements for the immediately preceding Fiscal Year are
delivered pursuant to Section 4.6(b) or (B) the date on which such annual
audited Financial Statements were required to be delivered pursuant to Section
4.6(b) commencing with the Fiscal Year ending December 31, 2003, Borrowers shall
prepay the Loans in an amount equal to (1) seventy-five percent (75%) of Excess
Cash Flow for the immediately preceding Fiscal Year if the Senior Leverage Ratio
for such Fiscal Year is greater than 2.25:1.0, and (2) fifty percent (50%) of
Excess Cash Flow for the immediately preceding Fiscal Year if the Senior
Leverage Ratio for such Fiscal Year is equal to or less than 2.25:1.0 but
greater than 1.75:1.0. If the Senior Leverage Ratio is equal to or less than
1.75:1.0, for any Fiscal Year, no prepayment from Excess Cash Flow shall be
payable with respect to that Fiscal Year. The calculation shall be based on the
audited Financial Statements for Ultimate Holdco and its Subsidiaries. Any
prepayments from Excess Cash Flow paid pursuant to this Section 1.5(b) shall be
made by the applicable Borrower and applied in accordance with Section 1.5(e).
Borrowers shall deliver to Administrative Agent and European Loan Agent not less
than five (5) days prior to the date on which any such payment is due a detailed
calculation of the required prepayment and an aggregation of the specific
contributions to Excess Cash Flow of US Borrowers, considered as a group, and of
European Borrowers, considered as a group, and the resulting proportional
allocation of the prepayments between US Borrowers and European Borrowers.
Aggregate prepayments pursuant to this Section 1.5(b) shall be allocated to the
Obligations of US Borrowers and European Borrowers under Section
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1.5(a) based on the relative contributions of US Borrowers and European
Borrowers to Excess Cash Flow for the applicable Fiscal Year.
(c) Prepayments from Net Proceeds.
(i) Immediately upon receipt by any US Credit Party of any Net
Proceeds in excess of $250,000 during any Fiscal Year, Borrowers shall prepay
the Loans in an amount equal to all such Net Proceeds. Notwithstanding the
foregoing, US Credit Parties may reinvest all such Net Proceeds, within 180
days, in productive replacement fixed assets of a kind then used or usable in
the business of Borrowers. If US Credit Parties do not intend to so reinvest
such Net Proceeds or if the period set forth in the immediately preceding
sentence expires without US Credit Parties having reinvested, such Net Proceeds
or if such Net Proceeds are of the type referred to in clause (ii) of the
definition thereof, Borrowers shall prepay the Loans in an amount equal to such
Net Proceeds or, to the extent that a portion of such Net Proceeds have been
reinvested, the remainder of such Net Proceeds. Any such prepayment shall be
made by the applicable Borrower and applied in accordance with Section l.5(e).
(ii) Immediately upon receipt by any European Credit Party of
Net Proceeds (other than from the sale of the German Property) in excess of
$250,000 (or the Equivalent Amount in an Alternative Currency) during any Fiscal
Year, Borrowers shall prepay the Loans in an amount equal to all such Net
Proceeds. Notwithstanding the foregoing, European Credit Parties may reinvest
all such Net Proceeds (other than from the sale of the German Property), within
180 days, in productive replacement fixed assets of a kind then used or usable
in the business of Borrowers. If European Credit Parties do not intend to so
reinvest such Net Proceeds or if the period set forth in the immediately
preceding sentence expires without European Credit Parties having reinvested
such Net Proceeds or if such Net Proceeds are of the type referred to in clause
(ii) of the definition thereof, Borrowers shall prepay the Loans in an amount
equal to such Net Proceeds or, to the extent that a portion of such Net Proceeds
have been reinvested, the remainder of such Net Proceeds. Any such prepayment
shall be made by the applicable Borrower and applied in accordance with Section
1.5(e); provided, that upon receipt by any European Credit Party of Net Proceeds
from the sale of the German Property during any Fiscal Year, European Borrowers
shall prepay pro rata the remaining Scheduled Installments of the European Term
Loan A.
(d) Prepayments from Issuance of Stock. Immediately upon receipt by
any Credit Party of proceeds of the issuance or reissuance of any Stock, other
than the Excluded Stock Proceeds, the Borrowers shall prepay the Loans on the
date of receipt of the proceeds thereof in an amount equal to all such proceeds,
net of underwriting discounts and commissions and other reasonable costs, fees
and expenses with respect to legal, investment banking, underwriting, brokerage,
accounting and other professional services paid to non-Affiliates in connection
therewith. Any such prepayment shall be made by the applicable Borrowers and
applied in accordance with Section 1.5(e). "Excluded Stock Proceeds" shall mean
(i) proceeds from the exercise of any stock options granted to directors,
officers and employees pursuant to the Stock Option Plan or any other stock
option or bonus plan, (ii) proceeds from the issuance of Stock pursuant to
Section 3.3(d), (e), (n) or (o), and (iii) proceeds of the issuance of Stock of
not more than $5,000,000 in the aggregate by Ultimate Holdco to any Person who
holds Stock in
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Ultimate Holdco on the Closing Date and at the time of such issuance; provided
that no Default or Event of Default has occurred and is continuing.
(e) Application of Proceeds. Any prepayments pursuant to Sections
1.5(b), (c) or (d) shall be made by the applicable Borrowers and applied as
follows: (i) with respect to Excess Cash Flow allocated to any European Borrower
or Net Proceeds or proceeds of business interruption insurance received by any
European Credit Party or proceeds of the issuance or reissuance of Stock
received by any European Credit Party, first, to prepay pro rata the remaining
Scheduled Installments of the European Term Loan A until prepaid in full; and
second, to prepay the principal balance of the European Revolving Credit
Advances until the same have been paid in full, and (ii) with respect to Excess
Cash Flow or proceeds of business interruption insurance allocated to any US
Borrower or Net Proceeds received by any US Credit Party or proceeds of the
issuance or reissuance of Stock received by any US Credit Party, first, to
prepay pro rata the remaining Scheduled Installments of each of the US Term
Loans until prepaid in full; second, to prepay pro rata the remaining Scheduled
Installments of the European Term Loan A until prepaid in full; third to prepay
the principal balance of the US Revolving Credit Advances until paid in full;
and last, to prepay the European Revolving Credit Advances until the same have
been paid in full. None of the Revolving Loan Commitments shall be permanently
reduced by the amount of any such prepayments. Notwithstanding the foregoing,
each of the US Term B Lenders may, in the event of a prepayment pursuant to
Sections 1.5(b), (c) or (d), waive the application of any such prepayment to the
outstanding principal amount of the US Term Loan B under this Section 1.5(e) by
providing written notice of such waiver to Administrative Agent (duly executed
by such US Term B Lender) prior to the application by Administrative Agent of
such prepayment, in which case the amount of such prepayment intended to prepay
US Term Loan B shall be applied to prepay pro rata the remaining Scheduled
Installments of US Term Loan A.
1.6 Maturity. All of the Obligations shall become due and payable as
otherwise set forth herein, but in any event all of the remaining Obligations
shall become due and payable upon termination of this Agreement. Until the
Termination Date, Authorized Agents shall be entitled to retain the security
interests in the Collateral granted under the Collateral Documents and the
ability to exercise all rights and remedies available to them under the Loan
Documents and applicable laws. Notwithstanding anything contained in this
Agreement to the contrary, upon any termination of the US Revolving Loan
Commitment or the European Revolving Loan Commitment, all of the Obligations
shall be due and payable except for the US Term Loan B which shall be due and
payable on June 30, 2009 or earlier pursuant to Section 6.3.
1.7 Loan Accounts. Each Appropriate Agent shall maintain a loan account
(each, a "Loan Account") on its books to record: all Advances and the Term Loan
for which it is Agent, all payments made by Borrowers, and all other debits and
credits as provided in this Agreement with respect to the Loans or any other
Obligations. All entries in the Loan Accounts shall be made in accordance with
Appropriate Agent's customary accounting practices as in effect from time to
time. The balance in the applicable Loan Account, as recorded on Appropriate
Agent's most recent printout or other written statement, shall, absent manifest
error, be presumptive evidence of the amounts due and owing to Agents and
Lenders by Borrowers; provided that any failure to so record or any error in so
recording shall not limit or otherwise affect any Borrower's duty to pay the
Obligations. Each Appropriate Agent shall render to Appropriate Borrower
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Representative a monthly accounting of transactions with respect to the Loans
setting forth the balance of the Loan Account as to each Borrower for the
immediately preceding month. Unless Appropriate Borrower Representative notifies
Appropriate Agent and Administrative Agent, if different, in writing of any
objection to any such accounting (specifically describing the basis for such
objection), within thirty (30) days after the date thereof, each and every such
accounting shall, absent manifest error, be deemed final, binding and conclusive
on Borrowers in all respects as to all matters reflected therein. Only those
items expressly objected to in such notice shall be deemed to be disputed by
Borrowers. Notwithstanding any provision herein contained to the contrary, any
Lender may elect (which election may be revoked) to dispense with the issuance
of Notes to that Lender and may rely on the applicable Loan Account as evidence
of the amount of Obligations from time to time owing to it.
1.8 Yield Protection; Illegality.
(a) Capital Adequacy and Other Adjustments. In the event that any
Lender shall have determined that the adoption after the date hereof of any law,
treaty, governmental (or quasi-governmental) rule, regulation, guideline or
order regarding capital adequacy, reserve requirements or similar requirements
or compliance by any Lender or any corporation controlling such Lender with any
request or directive regarding capital adequacy, reserve requirements or similar
requirements (whether or not having the force of law and whether or not failure
to comply therewith would be unlawful) from any central bank or governmental
agency or body having jurisdiction does or shall have the effect of increasing
the amount of capital, reserves or other funds required to be maintained by such
Lender or any corporation controlling such Lender and thereby reducing the rate
of return on such Lender's or such corporation's capital as a consequence of its
obligations hereunder, then Borrowers shall from time to time within fifteen
(15) days after notice and demand from such Lender (together with the
certificate referred to in the next sentence and with a copy to Appropriate
Agent) pay to Appropriate Agent, for the account of such Lender, additional
amounts sufficient to compensate such Lender for such reduction. A certificate
as to the amount of such cost and showing the basis of the computation of such
cost submitted by such Lender to Appropriate Borrower Representative and
Appropriate Agent shall, absent manifest error, be final, conclusive and binding
for all purposes.
(b) Increased IBOR Funding Costs; Illegality. Notwithstanding
anything to the contrary contained herein, if the introduction of or any change
in any law, rule, regulation, treaty or directive (or any change in the
interpretation thereof) shall make it unlawful, or any central bank or other
Governmental Authority shall assert that it is unlawful, for any Lender to agree
to make or to continue to fund or maintain any IBOR Loan, then, unless that
Lender is able to make or to continue to fund or to maintain such IBOR Loan at
another branch or office of that Lender without, in that Lender's reasonable
opinion, adversely affecting it or its Loans or the income obtained therefrom,
on notice thereof and demand therefor by such Lender to Appropriate Borrower
Representative through Appropriate Agent, (i) the obligation of such Lender to
agree to make or to continue to fund or maintain IBOR Loans shall terminate,
(ii) each US Borrower shall forthwith prepay in full all outstanding IBOR Loans
owing by such US Borrower to such Lender, together with interest accrued
thereon, unless with respect to US Revolving Credit Advances and US Term Loans
that are IBOR Loans, US Borrower Representative on behalf of such US Borrower,
within five (5) Business Days after the delivery of such notice and demand,
converts all IBOR Loans into Index Rate Loans, and (iii) each
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European Borrower shall forthwith prepay in full all outstanding IBOR Loans
owing by such European Borrower to such Lender, together with interest accrued
thereon. If, after the date hereof, the introduction of, change in or
interpretation of any law, rule, regulation, treaty or directive would impose or
increase reserve requirements (other than as taken into account in the
definition of IBOR) or otherwise increase the cost to any Lender of making or
maintaining an IBOR Loan, then US Borrowers or European Borrowers, as
applicable, shall from time to time within twenty (20) days after notice and
demand from Appropriate Agent to Appropriate Borrower Representative (together
with the certificate referred to in the next sentence) pay to Appropriate Agent,
for the account of all such affected Lenders, additional amounts sufficient to
compensate such Lenders for such increased cost. A certificate as to the amount
of such cost and showing the basis of the computation of such cost submitted by
Appropriate Agent on behalf of all such affected Lenders to Appropriate Borrower
Representative shall, absent manifest error, be final, conclusive and binding
for all purposes.
(c) Each Lender shall notify Appropriate Borrower Representative of
any event that will entitle such Lender to compensation under this Section 1.8
as promptly as practicable, but in any event within 120 days after such Lender
obtains actual know |
