Exhibit 10.1

EXECUTION VERSION

 

 

 

CREDIT AGREEMENT

among

TEMPUR SEALY INTERNATIONAL, INC.,

as Parent Borrower,

the Additional Borrowers from Time to Time Parties Hereto,

The Several Lenders from Time to Time Parties Hereto,

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent,

Dated as of April 6, 2016

 

 

JPMORGAN CHASE BANK, N.A.,

BANK OF AMERICA, N.A.,

WELLS FARGO SECURITIES, LLC

and

FIFTH THIRD BANK,

as Lead Arrangers and as Joint Bookrunners

and

BANK OF AMERICA, N.A.,

WELLS FARGO BANK, N.A.

and

FIFTH THIRD BANK

as Co-Syndication Agents

and

SUMITOMO MITSUI BANKING CORPORATION,

BANK OF NOVA SCOTIA

and

MIZUHO BANK, LTD.

as Co-Documentation Agents

 

 

 

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TABLE OF CONTENTS

 

             Page  

SECTION 1. DEFINITIONS

     1     

1.1

  Defined Terms      1     

1.2

  Other Interpretive Provisions      44   

SECTION 2. AMOUNT AND TERMS OF COMMITMENTS

     45     

2.1

  Term Commitments      45     

2.2

  Procedure for Term Loan Borrowing      46     

2.3

  Repayment of Term Loans      46     

2.4

  Revolving Commitments      47     

2.5

  Procedure for Revolving Loan Borrowing      47     

2.6

  Swingline Commitment      48     

2.7

  Procedure for Swingline Borrowing; Refunding of Swingline Loans      49     

2.8

  Commitment Fees, etc      50     

2.9

  Termination or Reduction of Revolving Commitments      50     

2.10

  [Reserved]      51     

2.11

  Optional Prepayments      51     

2.12

  Mandatory Prepayments      51     

2.13

  Conversion and Continuation Options      53     

2.14

  Limitations on Eurocurrency Tranches and Foreign Currency Loans      54     

2.15

  Interest Rates and Payment Dates      54     

2.16

  Computation of Interest and Fees      54     

2.17

  Inability to Determine Interest Rate      55     

2.18

  Pro Rata Treatment and Payments      56     

2.19

  Requirements of Law      57     

2.20

  Taxes      60     

2.21

  Indemnity      64     

2.22

  Change of Lending Office      64     

2.23

  Replacement of Lenders      64     

2.24

  Defaulting Lenders      65     

2.25

  Incremental Facilities      66     

2.26

  Currency Fluctuations      68     

2.27

  Borrower Representative      69     

2.28

  Amend and Extend Transactions      70     

2.29

  Refinancing Facilities      71   

SECTION 3. LETTERS OF CREDIT

     73     

3.1

  L/C Commitment      73     

3.2

  Procedure for Issuance of Letter of Credit      73     

3.3

  Fees and Other Charges      73     

3.4

  L/C Participations      74     

3.5

  Reimbursement Obligation of the Borrowers      75     

3.6

  Obligations Absolute      75     

3.7

  Letter of Credit Payments      75     

3.8

  Applications      76   

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3.9

  Cash Collateralization      76     

3.10

  Currency Adjustments      76   

SECTION 4. REPRESENTATIONS AND WARRANTIES

     76     

4.1

  Financial Condition      76     

4.2

  No Change      77     

4.3

  Existence; Compliance with Law      77     

4.4

  Power; Authorization; Enforceable Obligations      77     

4.5

  No Legal Bar      77     

4.6

  Litigation      78     

4.7

  No Default      78     

4.8

  Ownership of Property; Liens      78     

4.9

  Intellectual Property      78     

4.10

  Taxes      78     

4.11

  Federal Regulations      78     

4.12

  Labor Matters      78     

4.13

  ERISA      79     

4.14

  Investment Company Act; Other Regulations      79     

4.15

  Subsidiaries      79     

4.16

  No Burdensome Restrictions      80     

4.17

  Environmental Matters      80     

4.18

  Accuracy of Information, etc      80     

4.19

  Security Documents      81     

4.20

  Solvency      81     

4.21

  EEA Financial Institutions      82     

4.22

  OFAC; Anti-Money Laundering; Patriot Act      82     

4.23

  Governmental Authorization; Other Consents      82     

4.24

  Insurance      82   

SECTION 5. CONDITIONS PRECEDENT

     82     

5.1

  Conditions to the Closing Date      82     

5.2

  Conditions to Each Extension of Credit On or After the Closing Date      84   
 

5.3

  Conditions to Initial Extension of Credit to Each Additional Borrower      85
    

5.4

  Conditions to the Delayed Draw Funding Date      87   

SECTION 6. AFFIRMATIVE COVENANTS

     87     

6.1

  Financial Statements      87     

6.2

  Certificates; Other Information      88     

6.3

  Payment of Obligations      89     

6.4

  Maintenance of Existence; Compliance      90     

6.5

  Maintenance of Property; Insurance      90     

6.6

  Inspection of Property; Books and Records; Discussions      90     

6.7

  Notices      91     

6.8

  Environmental Laws      91     

6.9

  [Reserved]      91     

6.10

  Additional Collateral, etc      91     

6.11

  Further Assurances      93     

6.12

  Post-Closing Covenants      93   

 

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6.13

  Designation of Subsidiaries      94     

6.14

  Use of Proceeds      95     

6.15

  Anti-Corruption Laws; Sanctions      95     

6.16

  Landlord Consents      95   

SECTION 7. NEGATIVE COVENANTS

     95     

7.1

  Financial Covenants      95     

7.2

  Indebtedness      96     

7.3

  Liens      98     

7.4

  Mergers and Dissolutions      100     

7.5

  Dispositions      101     

7.6

  Restricted Payments      102     

7.7

  Investments      102     

7.8

  Prepayments, etc      104     

7.9

  Transactions with Affiliates      105     

7.10

  Change in Fiscal Year      105     

7.11

  Burdensome Agreements      105     

7.12

  Change in Nature of Business      106     

7.13

  Use of Proceeds      106     

7.14

  Organization Documents      106     

7.15

  Anti-Corruption Laws; Sanctions      106   

SECTION 8. EVENTS OF DEFAULT

     106   

SECTION 9. THE ADMINISTRATIVE AGENT

     109     

9.1

  Appointment      109     

9.2

  Delegation of Duties      109     

9.3

  Exculpatory Provisions      109     

9.4

  Reliance by the Administrative Agent      110     

9.5

  Notice of Default      110     

9.6

  Non-Reliance on the Administrative Agent and Other Lenders      110     

9.7

  Indemnification      111     

9.8

  Administrative Agent in Its Individual Capacity      111     

9.9

  Successor Administrative Agent      111     

9.10

  Arrangers and Syndication Agents      112     

9.11

  Swap Agreements and Cash Management Agreements      112   

SECTION 10. MISCELLANEOUS

     112     

10.1

  Amendments and Waivers      112     

10.2

  Notices      113     

10.3

  No Waiver; Cumulative Remedies      115     

10.4

  Survival of Representations and Warranties      115     

10.5

  Payment of Expenses and Taxes      115     

10.6

  Successors and Assigns; Participations and Assignments      117     

10.7

  Adjustments; Set-off      119     

10.8

  Counterparts      120     

10.9

  Severability      120     

10.10

  Integration      120   

 

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10.11

  Governing Law      121     

10.12

  Submission To Jurisdiction; Waivers      121     

10.13

  Acknowledgements      122     

10.14

  Releases of Guarantees and Liens      122     

10.15

  Judgment Currency      123     

10.16

  Confidentiality      123     

10.17

  [Reserved]      124     

10.18

  WAIVERS OF JURY TRIAL      124     

10.19

  USA Patriot Act      124     

10.20

  Acknowledgement and Consent to Bail-In of EEA Financial Institutions      125
    

10.21

  Additional Borrowers      125   

 

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SCHEDULES:

 

1.1A    Commitments    1.1B    Mortgaged Property    1.1C    Specified Time   
1.1D    Administrative Schedule    4.4    Consents, Authorizations, Filings and
Notices    4.15(a)    Subsidiaries    4.19(a)    UCC Filing Jurisdictions   
4.19(b)    Mortgage Filing Jurisdictions    7.2    Existing Indebtedness    7.3
   Existing Liens    7.7    Existing Investments    7.11    Burdensome
Transactions   

EXHIBITS:

 

A    Form of Guarantee and Collateral Agreement    B    Form of Compliance
Certificate    C    Form of Closing Certificate    D    Form of Mortgage    E   
Form of Assignment and Assumption    F    Form of U.S. Tax Compliance
Certificate    G    [Reserved]    H    Form of Borrowing Notice    I   
[Reserved]    J-1    Form of Additional Borrower Joinder Agreement for Domestic
Subsidiaries    J-2    Form of Additional Borrower Joinder Agreement for Foreign
Subsidiaries    K    Form of Foreign Guarantee Agreement   

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CREDIT AGREEMENT (this “Agreement”), dated as of April 6, 2016, among TEMPUR
SEALY INTERNATIONAL, INC., a Delaware corporation (the “Parent Borrower”), the
Additional Borrowers (as defined below) from time to time parties to this
Agreement, the several banks and other financial institutions or entities from
time to time parties to this Agreement (the “Lenders”) and JPMORGAN CHASE BANK,
N.A., as administrative agent.

The parties hereto hereby agree as follows:

SECTION 1. DEFINITIONS

1.1 Defined Terms. As used in this Agreement, the terms listed in this
Section 1.1 shall have the respective meanings set forth in this Section 1.1.

“2016 Indenture”: the Indenture, dated as of July 10, 2009, among Sealy Mattress
Company, the guarantors named therein and The Bank of New York Mellon Trust
Company, N.A., as trustee.

“2020 Indenture”: the Indenture, dated as of December 19, 2012, among the Parent
Borrower, certain subsidiaries of the Parent Borrower as guarantors, and The
Bank of New York Mellon Trust Company, N.A., as trustee.

“2020 Senior Notes”: the 6.875% Senior Notes of the Parent Borrower due 2020
issued on December 19, 2012 pursuant to the 2020 Indenture.

“2023 Indenture”: the Indenture, dated as of September 24, 2015, among the
Parent Borrower, certain subsidiaries of the Parent Borrower as guarantors, and
The Bank of New York Mellon Trust Company, N.A., as trustee.

“2023 Senior Notes”: the 5.625% Senior Notes of the Parent Borrower due 2023
issued on September 24, 2015 pursuant to the 2023 Indenture.

“ABR”: for any day, a rate per annum equal to the greatest of (a) the Prime Rate
in effect on such day, (b) the Federal Funds Effective Rate in effect on such
day plus  1⁄2 of 1% and (c) the Eurocurrency Rate that would be calculated as of
the Specified Time on such day (or, if such day is not a Business Day, as of the
next preceding Business Day) in respect of a proposed Eurocurrency Loan in
Dollars with a one-month Interest Period plus 1.0%. Any change in the ABR due to
a change in the Prime Rate, the Federal Funds Effective Rate or such
Eurocurrency Rate shall be effective as of the opening of business on the day of
such change in the Prime Rate, the Federal Funds Effective Rate or such
Eurocurrency Rate, respectively.

“ABR Loans”: Loans the rate of interest applicable to which is based upon the
ABR.

“Additional Borrower”: (i) as of the Closing Date, the Closing Date Additional
Borrower and (ii) subject to Section 10.21(b), any Subsidiary that has become a
party hereto as a borrower in accordance with Section 10.21(a); provided that,
for the avoidance of doubt, no Subsidiary shall be an Additional Borrower
hereunder unless and until the Parent Borrower and such Subsidiary have executed
and delivered an Additional Borrower Joinder Agreement and the other conditions
set forth in Section 5.3 have been satisfied with respect to such Additional
Borrower.

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“Additional Borrower Joinder Agreement”: the Joinder Agreement to be executed
and delivered by the Parent Borrower and any Additional Borrower that is not a
party to this Agreement as of the Closing Date, substantially in the form of
Exhibit J-1 or J-2, as applicable.

“Additional Credit Extension Amendment”: an amendment to this Agreement (which
may, at the option of the Administrative Agent in consultation with the Parent
Borrower, be in the form of an amendment and restatement of this Agreement)
providing for any Incremental Term Loans, and/or Incremental Revolving
Commitments pursuant to Section 2.25, Extended Term Loans and/or Extended
Revolving Commitments pursuant to Section 2.28 or Refinancing Term Loans and/or
Replacement Revolving Commitments pursuant to Section 2.29, which shall be
consistent with the applicable provisions of this Agreement and otherwise
satisfactory to the parties thereto. Each Additional Credit Extension Amendment
shall be executed by the Administrative Agent, the Issuing Lenders and/or the
Swingline Lender (to the extent Section 10.1 would require the consent of the
Issuing Lenders and/or the Swingline Lender, respectively, for the amendments
effected in such Additional Credit Extension Amendment), the Loan Parties and
the other parties specified in the applicable Section of this Agreement (but not
any other Lender). Any Additional Credit Extension Amendment may include
conditions for delivery of opinions of counsel and other documentation
consistent with the conditions in Section 5.1 or 5.2 to the extent reasonably
requested by the Administrative Agent or the other parties to such Additional
Credit Extension Amendment.

“Adjustment Date”: as defined in the Applicable Pricing Grid.

“Administrative Agent”: JPMorgan Chase Bank, N.A., together with its affiliates,
as the administrative agent for the Lenders under this Agreement and the other
Loan Documents, together with any of its successors.

“Administrative Schedule”: Schedule 1.1D to this Agreement, which contains
administrative information in respect of (i) each Foreign Currency and each
Foreign Currency Loan and (ii) each L/C Foreign Currency and each Letter of
Credit denominated in an L/C Foreign Currency.

“Affiliate”: as to any Person, any other Person that, directly or indirectly, is
in control of, is controlled by, or is under common control with, such Person.
For purposes of this definition, “control” of a Person means the power, directly
or indirectly, either to (a) vote 10% or more of the securities having ordinary
voting power for the election of directors (or persons performing similar
functions) of such Person or (b) direct or cause the direction of the management
and policies of such Person, whether by contract or otherwise.

“Aggregate Exposure”: with respect to any Lender at any time, an amount equal to
the sum of (i) the aggregate then unpaid principal amount of such Lender’s Term
Loans and (ii) the amount of such Lender’s Revolving Commitment then in effect
or, if the Revolving Commitments have been terminated, the amount of such
Lender’s Revolving Extensions of Credit then outstanding.

“Aggregate Exposure Percentage”: with respect to any Lender at any time, the
ratio (expressed as a percentage) of such Lender’s Aggregate Exposure at such
time to the Aggregate Exposure of all Lenders at such time.

“Aggregate Incremental Amount”: at any time, the sum of the aggregate principal
amount of (a) Incremental Facilities incurred at or prior to such time (assuming
all Incremental Revolving Commitments and Incremental Term Commitments
established at or prior to such time are fully drawn) and (b) Permitted
Incremental Equivalent Debt incurred at or prior to such time.

 

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“Agreement”: as defined in the preamble hereto.

“Albuquerque Bond Indenture”: that certain Trust Indenture, as amended and
modified, among Bernalillo County, New Mexico, as issuer, and The Bank of New
York Trust Company, N.A., as trustee, pursuant to which the Albuquerque Bonds
may be issued.

“Albuquerque Bonds”: the Bernalillo County, New Mexico Taxable Fixed Rate
Unsecured Industrial Revenue Bonds (Tempur Production USA, Inc. Project), Series
2005B, in the aggregate principal amount of up to $25,000,000 under the
Albuquerque Bond Indenture, and sometimes referred to in the Albuquerque Bond
Indenture as the “Self-Funded Bonds” representing the Parent Borrower’s “equity”
in the Albuquerque Project.

“Albuquerque IRB Financing”: the financing for the Albuquerque Project,
including the Albuquerque Bonds, the Albuquerque Bond Indenture and the other
bond documents referenced therein and relating thereto.

“Albuquerque Project”: has the meaning given the term “Project” in the
Albuquerque Bond Indenture.

“Anti-Corruption Laws”: all laws, rules, and regulations of any jurisdiction
applicable to the Parent Borrower or its Subsidiaries from time to time
concerning or relating to bribery or corruption.

“Applicable Margin”: (a) for each Type of Loan other than Incremental Term
Loans, the rate per annum set forth under the relevant column heading below:

 

     ABR Loans   Eurocurrency Loans

Revolving Loans

   0.75%   1.75%

Swingline Loans

   0.75%   N/A

Term Loans

   0.75%   1.75%

; provided that on and after the first Adjustment Date occurring immediately
after the Closing Date, the Applicable Margin with respect to Revolving Loans,
Swingline Loans and Term Loans will be determined pursuant to the Applicable
Pricing Grid; and

(b) for Incremental Term Loans, such per annum rates as shall be agreed to by
the Parent Borrower and the applicable Incremental Term Lenders as shown in the
applicable Additional Credit Extension Amendment.

“Applicable Pricing Grid”: with respect to Term Loans, Revolving Loans,
Swingline Loans and the Commitment Fee Rate, the table set forth below:

 

Level

   Consolidated Total
Leverage Ratio    Type of Loan   Commitment
Fee Rate       ABR   Eurocurrency  

Level I

   < 2.50:1.00    0.25%   1.25%   0.20%

Level II

   ³ 2.50:1.00

but

< 3.50:1.00

   0.50%   1.50%   0.25%

 

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Level III

   ³ 3.50:1.00

but

< 4.00:1.00

   0.75%   1.75%   0.30%

Level IV

   ³ 4.00:1.00

but

< 4.50:1.00

   1.00%   2.00%   0.35%

Level V

   ³ 4.50:1.00    1.25%   2.25%   0.40%

For the purposes of the Applicable Pricing Grid, changes in the Applicable
Margin resulting from changes in the Consolidated Total Leverage Ratio shall
become effective on the date (the “Adjustment Date”) that is three Business Days
after the date on which financial statements are delivered to the Administrative
Agent pursuant to Section 6.1 commencing with the fiscal quarter ending
March 31, 2016 and shall remain in effect until the next change to be effected
pursuant to this paragraph. If any financial statements referred to above are
not delivered within the time periods specified in Section 6.1, then, until the
date that is three Business Days after the date on which such financial
statements are delivered, the highest rate set forth in each column of the
Applicable Pricing Grid shall apply. Each determination of the Consolidated
Total Leverage Ratio pursuant to the Applicable Pricing Grid shall be made in a
manner consistent with the determination thereof pursuant to Section 7.1(b).

“Application”: an application, in such form as the applicable Issuing Lender may
specify from time to time, requesting such Issuing Lender to open a Letter of
Credit.

“Approved Fund”: as defined in Section 10.6(b).

“Arrangers”: the Lead Arrangers and Joint Bookrunners identified on the cover
page of this Agreement.

“Asset Sale”: any Disposition of property or series of related Dispositions of
property permitted by any of clauses (b), (g) and (j) of Section 7.5 that yields
gross proceeds to any Group Member (valued at the initial principal amount
thereof in the case of non-cash proceeds consisting of notes or other debt
securities and valued at fair market value in the case of other non-cash
proceeds) in excess of $2,000,000.

“Assignee”: as defined in Section 10.6(b).

“Assignment and Assumption”: an Assignment and Assumption, substantially in the
form of Exhibit E.

“Available Amount”: at any date, an amount, not less than zero in the aggregate,
determined on a cumulative basis equal to:

(a) $125,000,000; plus

(b) 50% of the aggregate amount of Consolidated Net Income accrued during the
period (treated as one accounting period) from September 30, 2012 to the end of
the most recent fiscal quarter ending prior to the date of the Investment,
Restricted Payment or prepayments, redemptions, purchases, defeasance or other
satisfaction of Junior Financing, as applicable, for which financial statements
have been delivered under Section 6.1 (or if the aggregate amount of
Consolidated Net Income for such period shall be a deficit, minus 100% of such
deficit), plus

 

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(c) the aggregate net cash proceeds (including the fair market value of property
other than cash) received by the Parent Borrower after December 19, 2012 from
the issuance or sale (other than to a Subsidiary of the Parent Borrower or an
employee stock ownership plan or trust established by the Parent Borrower or the
Subsidiary for the benefit of their employees) by the Parent Borrower of its
Capital Stock (other than Disqualified Capital Stock) after December 19, 2012,
net of attorneys’ fees, accountants’ fees, initial purchasers’ or placement
agents’ fees, discounts or commissions and brokerage, consultant and other fees
actually incurred in connection with the issuance or sale and net of taxes paid
or payable as a result thereof, plus

(d) the sum of:

(A) the aggregate net cash proceeds received by the Parent Borrower or any
Restricted Subsidiary from the issuance or sale after December 19, 2012 of
convertible or exchangeable Indebtedness that has been converted into or
exchanged for Capital Stock (other than Disqualified Capital Stock) of the
Parent Borrower, and

(B) the aggregate amount by which Indebtedness of the Parent Borrower or any
Restricted Subsidiary is reduced on the Parent Borrower’s consolidated balance
sheet on or after September 24, 2015 upon the conversion or exchange of any
Indebtedness issued or sold on or prior to September 24, 2015 that is
convertible or exchangeable for Capital Stock (other than Disqualified Capital
Stock) of the Parent Borrower, excluding, in the case of clause (A) or (B):

(x) any Indebtedness issued or sold to the Parent Borrower or a Subsidiary of
the Parent Borrower or an employee stock ownership plan or trust established by
the Parent Borrower or any Subsidiary for the benefit of their employees, and

(y) the aggregate amount of any cash or other assets distributed by the Parent
Borrower or any Restricted Subsidiary upon any such conversion or exchange, plus

(e) an amount equal to the sum, without duplication, of (in each case to the
extent not otherwise included in Consolidated Net Income):

(A) the net reduction in Investments in any Person other than the Parent
Borrower or a Restricted Subsidiary resulting from dividends, repayments of
loans or advances or other transfers of assets made after September 24, 2015, in
each case to the Parent Borrower or any Restricted Subsidiary from that Person,
less the cost of the disposition of those Investments,

(B) the fair market value of the Parent Borrower’s equity interest in an
Unrestricted Subsidiary at the time the Unrestricted Subsidiary is designated a
Restricted Subsidiary after the date hereof; and

(C) with respect to Investments made by the Parent Borrower and its Restricted
Subsidiaries after December 19, 2012, an amount equal to the sum, without
duplication, of the net reduction on such Investments in any sale of any such
Investment to a purchaser other than the Parent Borrower or a Subsidiary of the
Parent Borrower or the release of any Guarantee (except to the extent any
amounts are paid under such Guarantee) that constituted a Investment, plus

 

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(f) all dividends received in cash by the Parent Borrower or a Guarantor after
December 19, 2012 from an Unrestricted Subsidiary of the Parent Borrower, to the
extent such dividends were not otherwise included in Consolidated Net Income
(other than to the extent such dividend represents a return of capital and the
Investment in such Unrestricted Subsidiary was made pursuant to clause (b) of
this definition or to the extent such Investment constituted a permitted
Investment),

in each case, as such amount may be reduced from time to time to the extent that
all or a portion of the Available Amount is applied to make Investments pursuant
to Section 7.7(o), Restricted Payments pursuant to Section 7.6(d)(ii),
prepayments, redemptions, purchases, defeasance or other satisfaction of Junior
Financing pursuant to Section 7.8(a)(v) or any “Restricted Payment” referenced
in Section 4.05(c) (preceding the language “Notwithstanding the foregoing
limitation, the Company may:” in the 2023 Indenture) or Section 4.05(l) of the
2023 Indenture made after December 19, 2012 up to and excluding the Closing
Date.

“Available Revolving Commitment”: as to any Revolving Lender at any time, an
amount equal to the excess, if any, of (a) such Lender’s Revolving Commitment
then in effect over (b) such Lender’s Revolving Extensions of Credit then
outstanding; provided, that in calculating any Lender’s Revolving Extensions of
Credit for the purpose of determining such Lender’s Available Revolving
Commitment pursuant to Section 2.8(a), the aggregate principal amount of
Swingline Loans then outstanding shall be deemed to be zero.

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

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

“Bankruptcy Event”: with respect to any Person, such Person becomes the subject
of a bankruptcy or insolvency proceeding, provided that a Bankruptcy Event shall
not result solely by virtue of any ownership interest, or the acquisition of any
ownership interest, in such Person by a Governmental Authority or
instrumentality thereof; provided, further, that such ownership interest does
not result in or provide such Person with immunity from the jurisdiction of
courts within the United States or from the enforcement of judgments or writs of
attachment on its assets or permit such Person (or such Governmental Authority
or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or
agreements made by such Person.

“Beneficial Owner”: has the meaning assigned to such term in Rule 13d-3 and Rule
13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular “person” (as that term is used in Section 13(d)(3)
of the Exchange Act), such “person” will be deemed to have beneficial ownership
of all securities that such “person” has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence from time to time of a subsequent
condition.

“Benefitted Lender”: as defined in Section 10.7(a).

“Board”: the Board of Governors of the Federal Reserve System of the United
States (or any successor).

 

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“Borrowers”: collectively, the Parent Borrower and the Additional Borrowers, if
any. The parties acknowledge and agree that as of the Closing Date the Parent
Borrower and Tempur-Pedic Management, LLC are the sole Borrowers hereunder.

“Borrowing Date”: any Business Day specified by applicable Borrower as a date on
which such Borrower requests the relevant Lenders to make Loans hereunder.

“Business”: as defined in Section 4.17(b).

“Business Day”: a day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to close,
provided, that (i) with respect to notices and determinations in connection
with, and payments of principal and interest on, Eurocurrency Loans denominated
in Dollars, such day is also a day for trading by and between banks in Dollar
deposits in the London interbank eurodollar market and (ii) with respect to
notices and determinations in connection with, and payments of principal and
interest on, Loans denominated in a Foreign Currency (x) such day is also a day
for trading by and between banks in deposits for the applicable currency in the
interbank eurocurrency market and London, (y) with respect to Loans denominated
in Euros, such day is also a TARGET Day (as determined by the Administrative
Agent) and (z) with respect to Loans denominated in a Foreign Currency other
than Euros, such day is also a day on which banks are open for dealings in such
currency in the city which is the principal financial center of the country of
issuance of the applicable currency.

“Calculation Date”: the last Business Day of each calendar quarter (or any other
day selected by the Administrative Agent); provided that (a) the second Business
Day preceding (or such other Business Day as the Administrative Agent shall deem
applicable with respect to any Foreign Currency in accordance with rate-setting
convention for such currency) (i) each Borrowing Date with respect to any
Foreign Currency Loan or (ii) any date on which a Foreign Currency Loan is
continued shall also be a “Calculation Date”, (b) each Borrowing Date with
respect to any other Loan made hereunder shall also be a “Calculation Date”,
(c) the date of issuance, amendment, renewal or extension of a Letter of Credit
shall also be a Calculation Date and (d) such additional dates as the
Administrative Agent, any Issuing Lender or the Required Lenders shall require.

“Canadian Dollars”: the lawful currency of Canada.

“Capital Lease Obligations”: as to any Person, the obligations of such Person to
pay rent or other amounts under any lease of (or other arrangement conveying the
right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person under GAAP and, for the purposes of this
Agreement, the amount of such obligations at any time shall be the capitalized
amount thereof at such time determined in accordance with GAAP; provided that,
for the avoidance of doubt, the adoption or issuance of any accounting standards
after the Closing Date will not cause any rental obligation that was not or
would not have been a Capital Lease Obligation prior to such adoption or
issuance to be deemed a Capital Lease Obligation.

“Capital Stock”: any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a corporation) and any
and all warrants, rights or options to purchase any of the foregoing, but
excluding any debt securities convertible into any of the foregoing.

“Captive Insurance Subsidiary”: any Restricted Subsidiary of the Parent Borrower
that is subject to regulation as an insurance company (or any Restricted
Subsidiary thereof).

 

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“Cash Equivalents”: (a) securities issued or directly and fully guaranteed or
insured by the United States or any agency or instrumentality thereof (provided
that the full faith and credit of the United States is pledged in support
thereof) having maturities of not more than twelve months from the date of
acquisition, (b) U.S. dollar denominated deposit accounts, time deposits and
certificates of deposit of (i) any Lender, (ii) any domestic commercial bank of
recognized standing having capital and surplus in excess of $500,000,000 or
(iii) any bank whose short-term commercial paper rating from S&P is at least A-1
or the equivalent thereof or from Moody’s is at least P-1 or the equivalent
thereof (collectively, an “Approved Bank”), in each case with maturities of not
more than 364 days from the date of acquisition, (c) commercial paper and
variable or fixed rate notes issued by any Approved Bank (or by the parent
company thereof) or any variable rate notes issued by, or guaranteed by, any
domestic corporation rated A-1 (or the equivalent thereof) or better by S&P or
P-1 (or the equivalent thereof) or better by Moody’s and maturing within twelve
months of the date of acquisition, (d) repurchase agreements entered into by any
Person with a bank or trust company or recognized securities dealer having
capital and surplus in excess of $500,000,000 for direct obligations issued by
or fully guaranteed by the United States in which such Person shall have a
perfected first priority security interest (subject to no other Liens) and
having, on the date of purchase thereof, a fair market value of at least one
hundred percent (100%) of the amount of the repurchase obligations,
(e) Investments (classified in accordance with GAAP as current assets) in money
market investment programs registered under the Investment Company Act of 1940
that are administered by reputable financial institutions having capital of at
least $500,000,000 and the portfolios of which are limited to Investments of the
character described in the foregoing subclauses hereof, and (f) other short-term
investments utilized by Foreign Restricted Subsidiaries in accordance with
normal investment practices for cash management in investments of a type
analogous to the foregoing.

“Cash Management Agreement”: any agreement providing for treasury management,
pooling arrangements, depositary, purchasing card or cash management services,
including in connection with any automated clearing house transfers of funds or
any similar transactions.

“CDOR”: in relation to any Loan denominated in Canadian Dollars:

(a) the applicable Screen Rate; or

(b) (if no Screen Rate is available for the Interest Period of that Loan) the
Interpolated Screen Rate for that Loan,

as of, in the case of paragraph (a) above, the Specified Time on the Quotation
Day for Canadian Dollars and for a period equal in length to the Interest Period
of that Loan.

“CFC”: a “controlled foreign corporation” within the meaning of Section 957 of
the Code.

“CFC Debt”: as defined in the definition of “Foreign Holding Company”.

“Change of Control”: any of the following

(i) the direct or indirect sale, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the properties or assets of the
Parent Borrower and its Subsidiaries, taken as a whole, to any “person” or
“group” (as those terms are used in Section 13(d)(3) of the Exchange Act);

(ii) the consummation of any transaction (including, without limitation, any
merger or consolidation), the result of which is that any “person” (as defined
above), becomes the Beneficial Owner, directly or indirectly, of more than 35%
of the voting Capital Stock of the Parent Borrower, measured by voting power
rather than number of shares;

 

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(iii) the first day on which a majority of the members of the board of directors
of the Parent Borrower are not Continuing Directors;

(iv) the Parent Borrower consolidates with, or merges with or into, any Person,
or any Person consolidates with, or merges with or into, the Parent Borrower, in
any such event pursuant to a transaction in which any of the outstanding voting
Capital Stock of the Parent Borrower or such other Person is converted into or
exchanged for cash, securities or other property, other than any such
transaction where the voting Capital Stock of the Parent Borrower outstanding
immediately prior to such transaction is converted into or exchanged for voting
Capital Stock (other than Disqualified Capital Stock) of the surviving or
transferee Person constituting a majority of the outstanding shares of such
voting Capital Stock of such surviving or transferee Person (immediately after
giving effect to such issuance);

(v) any Borrower (other than the Parent Borrower) shall cease to be a direct or
indirect Wholly Owned Subsidiary of the Parent Borrower (unless otherwise
permitted hereunder, in which case such Person shall cease to be a Borrower
hereunder); or

(vi) a “change in control” as defined in the Senior Notes, any Junior Financing
or any other Indebtedness of the Parent Borrower or its Restricted Subsidiaries
in an aggregate principal amount in excess of $50,000,000.

“Class”: when used in reference to any Loan or borrowing, refers to whether such
Loan, or the Loans comprising such borrowing, are Revolving Loans, Term Loans,
when used in reference to any Commitment, refers to whether such Commitment is a
Revolving Commitment or Term Commitment.

“Closing Date”: the first date on which the conditions precedent set forth in
Section 5.1 and 5.2 have been satisfied, which date is April 6, 2016.

“Closing Date Additional Borrower”: Tempur-Pedic Management, LLC

“Closing Date Refinancing”: as defined in Section 5.2(l).

“Code”: the Internal Revenue Code of 1986, as amended.

“Collateral”: all property of the Loan Parties, now owned or hereafter acquired,
upon which a Lien is or is purported to be created by any Security Document;
provided that the Collateral shall not include any Excluded Collateral.

“Commencement Date”: as defined in Section 8(c).

“Commitment”: as to any Lender, the sum of the Term Commitment and the Revolving
Commitment of such Lender.

“Commitment Fee Rate”: 0.30% per annum; provided, that on and after the first
Adjustment Date occurring immediately after the Closing Date, the Commitment Fee
Rate will be determined pursuant to the Applicable Pricing Grid.

“Commodity Exchange Act”: the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as
amended from time to time, and any successor statute.

 

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“Compliance Certificate”: a certificate duly executed by a Responsible Officer
substantially in the form of Exhibit B.

“Confidential Information Memorandum”: the Confidential Information Memorandum
dated March 2016 and furnished to certain Lenders.

“Consolidated Current Liabilities”: as of any date of determination, the
consolidated current liabilities of the Parent Borrower and its Restricted
Subsidiaries that may properly be classified as current liabilities in
conformity with GAAP, excluding, without duplication, (a) the current portion of
any long-term Indebtedness and (b) the aggregate outstanding principal amount of
the Revolving Loans.

“Consolidated EBITDA”: for any period for the Parent Borrower and its Restricted
Subsidiaries:

(a) Consolidated Net Income for such period, plus

(b) without duplication and to the extent deducted in determining such
Consolidated Net Income for such period, the sum of:

(1) Consolidated Interest Expense for such period,

(2) consolidated income tax expense for such period,

(3) all amounts attributable to depreciation and amortization (including
amortization of deferred financing fees) for such period,

(4) costs, fees, expenses or premiums paid during such period in connection with
(A) the incurrence of Indebtedness by the Parent Borrower or its Restricted
Subsidiaries and (B) amendments, waivers, modifications or repayments of this
Agreement or other Indebtedness,

(5) non-cash charges (other than (x) the write-down of current assets,
(y) accrual of liabilities in the ordinary course of business and (z) any
non-cash charge representing an accrual or reserve for cash expenses in a future
period) for such period, and

(6) any expense or charges incurred during such period in connection with any
permitted issuance of Indebtedness, equity securities or any refinancing
transactions, minus

(c) without duplication:

(1) all cash payments made during such period on account of non-cash charges
added back pursuant to clause (b)(5) above in a previous period and

(2) to the extent included in determining such Consolidated Net Income, any
unusual or non-recurring gains and all non-cash items of income for such period,

all determined on a consolidated basis in accordance with GAAP.

“Consolidated Indebtedness”: as of any date of determination, the aggregate
amount of all Indebtedness of the Parent Borrower and its Restricted
Subsidiaries as of such date (other than any Indebtedness incurred under
Section 7.2(t)); provided that Consolidated Indebtedness shall not include
(i) Escrow Debt until such time as the proceeds of such Escrow Debt have been
released from the applicable escrow account and (ii) any negative outstanding
balance under any cash pooling arrangement to which the Parent Borrower or any
of its Restricted Subsidiaries is a party.

 

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“Consolidated Interest Coverage Ratio”: for any period, the ratio of
(a) Consolidated EBITDA for such period to (b) Consolidated Interest Expense for
such period.

“Consolidated Interest Expense”: for any period for the Parent Borrower and its
Restricted Subsidiaries, all interest expense on a consolidated basis determined
in accordance with GAAP, but in any event, including the interest component
under Capital Lease Obligations and the implied interest component under
Qualified Receivables Transactions and excluding (i) non-cash interest costs of
a one-time or non-recurring nature, (ii) commissions, discounts, yield, and
other fees and charges related to Qualified Receivables Transactions and
(iii) solely for purposes of any determination of the Consolidated Interest
Coverage Ratio, any payments with respect to make-whole premiums or other
breakage costs in connection with the 2020 Notes.

“Consolidated Net Income”: for any period for the Parent Borrower and its
Restricted Subsidiaries, net income (or loss) determined on a consolidated basis
in accordance with GAAP, but excluding:

(a) unusual or non-recurring charges for such period, including restructuring
charges or reserves, severance, relocation costs and one-time compensation
charges (including, without limitation, retention bonuses) and other costs
relating to the closure of facilities or impairment of facilities; provided that
the aggregate amount added back pursuant to this clause (a) shall not exceed,
for any period of four consecutive fiscal quarters, 15% of Consolidated EBITDA
for such period (prior to giving effect to any adjustment pursuant to this
clause (a));

(b) the non-cash effects of purchase accounting under Accounting Standards
Codification of the Financial Accounting Standards Board 805;

(c) any deduction for income (or addition for losses) attributable to the
minority equity interests of third parties in any Restricted Subsidiary except,
in the case of income, to the extent of dividends paid in respect of such period
to the holder of such minority equity interest;

(d) any gain (or loss) realized upon the sale or other disposition of any
property of the Parent Borrower or any of its Restricted Subsidiaries (including
pursuant to any Sale and Leaseback Transaction) that is not sold or otherwise
disposed of in the ordinary course of business;

(e) any gain or loss attributable to the early extinguishment of Indebtedness;

(f) any extraordinary gain or loss or cumulative effect of a change in
accounting principles to the extent disclosed separately on the consolidated
statement of income;

(g) any unrealized gains or losses of the Parent Borrower or its Restricted
Subsidiaries on any Swap Obligations;

(h) the undistributed earnings of any Restricted Subsidiary to the extent that
the declaration or payment of dividends or similar distributions by such
Restricted Subsidiary is not at the time permitted by the terms of any
agreement, instrument, contract or other undertaking to which such Restricted
Subsidiary is a party or by which any of its property is bound or any law,
treaty, rule, regulation or determination of an arbitrator or a court of
competent jurisdiction or other Governmental Authority, in each case, applicable
or binding upon such Restricted Subsidiary or any of its property or to which
such Restricted Subsidiary or any of its property is subject;

 

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(i) costs, fees, expenses or premiums incurred during such period in connection
with the Transactions; and

(j) costs, fees and expenses incurred during such period in connection with
acquisitions (whether or not consummated), or other Investments consisting of
acquisitions of assets or equity constituting a business unit, line of business,
division or entity (whether or not consummated) and dispositions of property
(whether or not consummated), other than dispositions, to the extent considered
Dispositions, of property effected in the ordinary course of business.

Notwithstanding the foregoing, any net income (loss) of any Person (other than
the Parent Borrower) that is not a Restricted Subsidiary shall be excluded in
calculating Consolidated Net Income, except that the Parent Borrower’s equity in
the net income of any such Person for any period shall be included, without
duplication, in such Consolidated Net Income up to the aggregate amount of cash
distributed by the Person during such period to the Parent Borrower or a
Restricted Subsidiary as a dividend or distribution.

“Consolidated Secured Leverage Ratio”: as of any date of determination, the
ratio of (a) (x) the Consolidated Indebtedness secured by Liens on any assets of
the Parent Borrower or such Restricted Subsidiaries at the date of determination
(on a pro forma basis reflecting any Incurrence of Indebtedness and repayment of
Indebtedness made on such date), less (y) the aggregate amount (not to exceed
$150.0 million) of Netted Cash on such date of determination, to (b) the
aggregate amount of Consolidated EBITDA for the Parent Borrower for the four
full fiscal quarters, treated as one period, ending prior to the date of
determination and for which financial statements of the Parent Borrower are
delivered under Section 6.1.

“Consolidated Total Assets”: as of any date, the total assets of the Parent
Borrower and its Restricted Subsidiaries, calculated in accordance with GAAP on
a consolidated basis as of such date.

“Consolidated Total Leverage Ratio”: as of any date of determination, the ratio
of:

(a) (x) Consolidated Indebtedness at the date of determination (on a pro forma
basis reflecting any Incurrence of Indebtedness and repayment of Indebtedness
made on such date), less (y) the aggregate amount (not to exceed $150,000,000)
of Netted Cash on such date of determination, to (b) the aggregate amount of
Consolidated EBITDA for the Parent Borrower for the four full fiscal quarters,
treated as one period, ending prior to such date of determination and for which
financial statements of the Parent Borrower have been delivered pursuant to
Section 6.1.

“Continuing Directors”: as of any date of determination, any member of the board
of directors of the relevant Person who:

(a) was a member of such board of directors on the date of this Agreement; or

(b) was nominated for election or elected to such board of directors with the
approval of a majority of the Continuing Directors who were members of such
board of directors at the time of such nomination or election.

“Contractual Obligation”: as to any Person, any provision of any security issued
by such Person or of any agreement, instrument or other undertaking to which
such Person is a party or by which it or any of its property is bound.

 

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“Convertible Notes”: the 8% Senior Secured Third Lien Convertible Notes due 2016
issued by Sealy Corporation and Sealy Mattress Company pursuant to the Third
Supplemental Indenture, dated as of March 18, 2013, to the 2016 Indenture.

“Credit Agreement Refinancing Facilities”: (a) with respect to any Class of
Revolving Commitments or Revolving Loans, Replacement Revolving Commitments or
Replacement Revolving Loans and (b) with respect to any Class of Term Loans,
Refinancing Term Loans.

“Credit Agreement Refinancing Facility Lenders”: a Lender (including any New
Lender) with a Replacement Revolving Commitment or outstanding Refinancing Term
Loans.

“Credit Party”: the Administrative Agent, each Issuing Lender, the Swingline
Lender or any other Lender.

“Danish Tax Assessment”: the pending income tax assessment from the Danish Tax
Authority and any related assessment from the Danish Tax Authority for
subsequent years and related interest and penalties, as described in the
Parent’s Report on Form 10-K for the year ended December 31, 2015.

“Danish Tax Authority”: SKAT, the Danish tax authority.

“Default”: any of the events specified in Section 8, whether or not any
requirement for the giving of notice, the lapse of time, or both, has been
satisfied.

“Default Rate”: as defined in Section 2.15(c).

“Defaulting Lender”: any Lender that (a) has failed, within two Business Days of
the date required to be funded or paid, to (i) fund any portion of its Loans,
(ii) fund any portion of its participations in Letters of Credit or Swingline
Loans or (iii) pay over to any Credit Party any other amount required to be paid
by it hereunder, unless, in the case of clause (i) above, such Lender notifies
the Administrative Agent in writing that such failure is the result of such
Lender’s good faith determination that a condition precedent to funding
(specifically identified and including the particular default, if any) has not
been satisfied, (b) has notified the Parent Borrower or any Credit Party in
writing, or has made a public statement to the effect, that it does not intend
or expect to comply with any of its funding obligations under this Agreement
(unless such writing or public statement indicates that such position is based
on such Lender’s good faith determination that a condition precedent
(specifically identified and including the particular default, if any) to
funding a loan under this Agreement cannot be satisfied) or generally under
other agreements in which it commits to extend credit, (c) has failed, within
three Business Days after request by a Credit Party, acting in good faith, to
provide a certification in writing from an authorized officer of such Lender
that it will comply with its obligations (and is financially able to meet such
obligations) to fund prospective Loans and participations in then outstanding
Letters of Credit or Swingline Loans under this Agreement, provided that such
Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon
such Credit Party’s receipt of such certification in form and substance
satisfactory to it and the Administrative Agent, or (d) has become the subject
of a Bankruptcy Event or a Bail-In Action.

“Defeased Debt”: as defined in the definition of “Indebtedness”.

“Delayed Draw Commitment”: as to any Lender, the obligation of such Lender, if
any, to make a Delayed Draw Term Loan to the Parent Borrower hereunder on the
Delayed Draw Funding Date in a principal amount not to exceed the amount set
forth under the heading “Delayed Draw Commitment” opposite such Lender’s name on
Schedule 1.1A. The aggregate amount of the Delayed Draw Commitments on the
Closing Date is $100,000,000.

 

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“Delayed Draw Funding Date”: the first date on or after the Closing Date on
which the conditions precedent set forth in Section 5.4 have been satisfied,
which date shall be no later than the six-month anniversary of the Closing Date.

“Delayed Draw Term Loan”: as defined in Section 2.1(b).

“Delayed Draw Termination Date”: as defined in Section 2.1(b).

“Deposit Account”: as defined in the Uniform Commercial Code of any applicable
jurisdiction.

“Deposit Account Control Agreement”: a Deposit Account control agreement to be
executed by each institution maintaining a Deposit Account (other than an
Excluded Account) for the Parent Borrower or any other U.S. Loan Party, in each
case as required by Section 6.10(e).

“Disposition”: with respect to any property, any sale, lease, sale and
leaseback, assignment, conveyance, transfer or other disposition thereof. The
terms “Dispose” and “Disposed of” shall have correlative meanings.

“Disqualified Capital Stock”: any Capital Stock which, by its terms (or by the
terms of any security or other Capital Stock into which it is convertible or for
which it is exchangeable), or upon the happening of any event or condition
(a) matures or is mandatorily redeemable (other than solely for Capital Stock
that is not Disqualified Capital Stock and/or cash in lieu of fractional
shares), pursuant to a sinking fund obligation or otherwise (except as a result
of a change in control or asset sale so long as any right of the holders thereof
upon the occurrence of a change in control or asset sale event shall be subject
to the occurrence of the Termination Date), (b) is redeemable at the option of
the holder thereof (other than solely for Capital Stock that is not Disqualified
Capital Stock and/or cash in lieu of fractional shares), in whole or in part
(except as a result of a change in control or asset sale so long as any right of
the holders thereof upon the occurrence of a change in control or asset sale
event shall be subject to the occurrence of the Termination Date), (c) requires
the payment of any cash dividend or any other scheduled cash payment
constituting a return of capital or (d) is or becomes convertible into or
exchangeable for Indebtedness or any other Capital Stock that would constitute
Disqualified Capital Stock, in each case, prior to the date that is ninety-one
(91) days after the Maturity Date; provided that if such Capital Stock is issued
to any plan for the benefit of employees of the Parent Borrower or its
Restricted Subsidiaries or by any such plan to such employees, such Capital
Stock shall not constitute Disqualified Capital Stock solely because it may be
required to be repurchased by the Parent Borrower or its Restricted Subsidiaries
in order to satisfy applicable statutory or regulatory obligations.

“Disregarded Entity”: any entity treated as disregarded as an entity separate
from its owner under Treasury Regulations Section 301.7701-3.

“Dollar Equivalent”: with respect to an amount denominated in any currency other
than Dollars, the equivalent in Dollars of such amount determined at the
Exchange Rate on the most recent Calculation Date.

“Dollars” and “$”: dollars in lawful currency of the United States.

 

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“Domestic Subsidiary”: any Restricted Subsidiary of the Parent Borrower
organized under the laws of any jurisdiction within the United States.

“Domestic Unrestricted Subsidiary”: any Unrestricted Subsidiary of the Parent
Borrower organized under the laws of any jurisdiction within the United States.

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

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

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

“Environmental Laws”: any and all foreign, federal, state, local or municipal
laws, rules, orders, regulations, statutes, ordinances, codes, decrees,
requirements of any Governmental Authority or other Requirements of Law
(including common law) or agreements with any Person, in each case regulating,
relating to or imposing liability or standards of conduct concerning pollution,
protection of human health or the environment or the management, disposal or
release of, or exposure to, Materials of Environmental Concern, as now or may at
any time hereafter be in effect.

“ERISA”: the Employee Retirement Income Security Act of 1974, as amended from
time to time.

“ERISA Affiliate”: any trade or business (whether or not incorporated) that,
together with any Group Member, is treated as a single employer under
Section 414 of the Code.

“ERISA Event”: (a) the existence with respect to any Plan of a non-exempt
Prohibited Transaction; (b) any Reportable Event; (c) the failure of any Group
Member or ERISA Affiliate to make by its due date a required installment under
Section 430(j) of the Code with respect to any Pension Plan or any failure by
any Pension Plan to satisfy the minimum funding standards (within the meaning of
Section 412 of the Code or Section 302 of ERISA) applicable to such Pension
Plan, whether or not waived; (d) a determination that any Pension Plan is, or is
expected to be, in “at risk” status (within the meaning of Section 430 of the
Code or Section 303 of ERISA); (e) the filing pursuant to Section 412 of the
Code or Section 302 of ERISA of an application for a waiver of the minimum
funding standard with respect to any Pension Plan; (f) the occurrence of any
event or condition which would reasonably be expected to result in the
termination of, or the appointment of a trustee to administer, any Pension Plan
or the incurrence by any Group Member or any ERISA Affiliate of any liability
under Title IV of ERISA with respect to the termination of any Pension Plan,
including but not limited to the imposition of any Lien in favor of the PBGC or
any Pension Plan; (g) the receipt by any Group Member or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Pension Plan or to appoint a trustee to administer any Pension
Plan under Section 4042 of ERISA; (h) the failure by any Group Member or any of
its ERISA Affiliates to make any required contribution to a Multiemployer Plan
pursuant to Sections 431 or 432 of the Code; (i) the incurrence by any Group
Member or any ERISA Affiliate of any liability with respect to the withdrawal or
partial withdrawal from any Pension Plan or Multiemployer Plan; (j) the receipt
by any Group Member or any ERISA Affiliate of any notice, or the

 

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receipt by any Multiemployer Plan from a Group Member or any ERISA Affiliate of
any notice, concerning the imposition of Withdrawal Liability or a determination
that a Multiemployer Plan is, or is expected to be, Insolvent, in
Reorganization, in “endangered” or “critical” status (within the meaning of
Section 432 of the Code or Section 305 of ERISA), or terminated (within the
meaning of Section 4041A of ERISA); or (k) the failure by any Group Member or
any of its ERISA Affiliates to pay when due (after expiration of any applicable
grace period) any installment payment with respect to Withdrawal Liability under
Section 4201 of ERISA.

“Escrow Debt” means Indebtedness incurred in connection with any transaction
permitted hereunder for so long as proceeds thereof have been deposited into an
escrow account on customary terms to secure such Indebtedness pending the
application of such proceeds to finance such transaction.

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

“EURIBOR”: in relation to any Loan denominated in Euros:

(a) the applicable Screen Rate; or

(b) (if no Screen Rate is available for the Interest Period of that Loan) the
Interpolated Screen Rate for that Loan,

as of, in the case of paragraph (a) above, the Specified Time on the Quotation
Day for euro and for a period equal in length to the Interest Period of that
Loan.

“Euro”: the single currency of participating member states of the European
Union.

“Eurocurrency Loans”: Loans the rate of interest applicable to which is based
upon the Eurocurrency Rate.

“Eurocurrency Rate”: with respect to each day during each Interest Period
pertaining to a Eurocurrency Loan, either CDOR, EURIBOR or LIBOR, as applicable.

“Eurocurrency Tranche”: the collective reference to Eurocurrency Loans under a
particular Facility the then current Interest Periods with respect to all of
which begin on the same date and end on the same later date (whether or not such
Loans shall originally have been made on the same day).

“Event of Default”: any of the events specified in Section 8, provided that any
requirement for the giving of notice, the lapse of time, or both, has been
satisfied.

“Exchange Act”: the Securities Exchange Act of 1934, as amended.

“Exchange Rate”: with respect to any non-Dollar currency on any date, the rate
at which such currency may be exchanged into Dollars, as set forth on such date
on the relevant Reuters currency page at or about 11:00 A.M., London time, on
such date. In the event that such rate does not appear on any Reuters currency
page, the “Exchange Rate” with respect to such non-Dollar currency shall be
determined by reference to such other publicly available service for displaying
exchange rates as may be agreed upon by the Administrative Agent and the Parent
Borrower or, in the absence of such agreement, such “Exchange Rate” shall
instead be the Administrative Agent’s spot rate of exchange in the interbank
market where its foreign currency exchange operations in respect of such
non-Dollar currency are then

 

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being conducted, at or about 10:00 A.M., Local Time, on such date for the
purchase of Dollars with such non-Dollar currency, for delivery two Business
Days later (or such other Business Day as the Administrative Agent shall deem
applicable with respect to any currency); provided, that if at the time of any
such determination, no such spot rate can reasonably be quoted, the
Administrative Agent may use any reasonable method as it deems applicable to
determine such rate, and such determination shall be conclusive absent manifest
error.

“Excluded Account”: a Deposit Account (i) which is used for the purpose of
making payroll and withholding tax payments related thereto and other fiduciary
accounts (ii) which is a zero-balance account, (iii) which is a Petty Cash
Account, (iv) not located within the United States and the account holder of
which is Tempur Sealy International Distribution, LLC and (v) which is set forth
on Schedule 10 to the Perfection Certificate under the heading “Accounts to be
closed in Q2 2016” and scheduled to be closed on or prior to September 30, 2016
(provided to the extent any such Deposit Account is not closed by September 30,
2016 (or such later date as may be acceptable to the Administrative Agent) such
Accounts in this clause (v) shall not constitute Excluded Accounts.

“Excluded Collateral”: as defined in the Guarantee and Collateral Agreement.
Excluded Collateral includes: (a) solely with respect to the Obligations or
Guarantee Obligations of any U.S. Person (including any Guarantee Obligations
with respect thereto), any property or assets of any Foreign Subsidiary
(including any Capital Stock owned by a Foreign Subsidiary), (b) any property or
assets of any Captive Insurance Subsidiary or Capital Stock thereof and (c) in
the case of (i) Disregarded Entities the assets of which include stock in any
Foreign Subsidiaries, (ii) Foreign Subsidiaries and (iii) Foreign Holdings
Companies, voting Capital Stock in excess of 65% of the voting Capital Stock
thereof. For the sake of clarity, no Excluded Collateral shall be required to be
pledged to secure any Obligations or Guarantee Obligations of any U.S. Loan
Party (including any Guarantee Obligations with respect thereto) under any Loan
Document.

“Excluded Foreign Subsidiary”: any (i) CFC, (ii) Subsidiary that is owned
directly or indirectly by a CFC and (iii) Foreign Holding Company.

“Excluded Securities Account”: a Securities Account with a balance of less than
$25,000 at any time individually or $100,000 in the aggregate at any time and a
Securities Account containing solely shares of common stock of Parent Borrower.

“Excluded Swap Obligation”: with respect to any Subsidiary Guarantor, (a) any
Swap Obligation if, and to the extent that, and only for so long as, all or a
portion of the guarantee of such Subsidiary Guarantor of, or the grant by such
Subsidiary Guarantor of a security interest to secure, as applicable, such Swap
Obligation (or any guarantee thereof) is or becomes illegal under the Commodity
Exchange Act or any rule, regulation or order of the Commodity Futures Trading
Commission (or the application or official interpretation of any thereof) by
virtue of such Subsidiary Guarantor’s failure to constitute an “eligible
contract participant,” as defined in the Commodity Exchange Act and the
regulations thereunder, at the time the guarantee of (or grant of such security
interest by, as applicable) such Subsidiary Guarantor becomes or would become
effective with respect to such Swap Obligation or (b) any other Swap Obligation
designated as an “Excluded Swap Obligation” of such Subsidiary Guarantor as
specified in any agreement between the relevant Loan Parties and counterparty
applicable to such Swap Obligation, and agreed by the Administrative Agent. If a
Swap Obligation arises under a master agreement governing more than one Swap,
such exclusion shall apply only to the portion of such Swap Obligation that is
attributable to Swaps for which such guarantee or security interest is or
becomes illegal.

 

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“Excluded Taxes”: any of the following Taxes imposed on or with respect to a
Credit Party or required to be withheld or deducted from a payment to a Credit
Party, (a) Taxes imposed on or measured by net income (however denominated),
franchise Taxes and branch profits Taxes, in each case, (i) imposed as a result
of such Credit Party being organized under the laws of, or having its principal
office or, in the case of any Lender, its applicable lending office located in,
the jurisdiction imposing such Tax (or any political subdivision thereof) or
(ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal
withholding Taxes imposed on amounts payable to or for the account of such
Lender (such as a withholding tax levied on interest payments made to that
Lender) with respect to an applicable interest in a Loan or Commitment pursuant
to a law in effect on the date on which (i) such Lender acquires such interest
in the Loan or Commitment (other than pursuant to an assignment request by the
Parent Borrower under Section 2.23) or (ii) such Lender changes its lending
office, except in each case to the extent that, pursuant to Section 2.20,
amounts with respect to such Taxes were payable either to such Lender’s assignor
immediately before such Lender acquired the applicable interest in a Loan or
Commitment or to such Lender immediately before it changed its lending office,
(c) Taxes attributable to such Credit Party’s failure to comply with
Section 2.20(f) and (d) any U.S. Federal withholding Taxes imposed under FATCA
and (f) all penalties and interest with respect to any of the foregoing.

“Existing Credit Agreement”: that certain Credit Agreement, dated as of
December 12, 2012, as amended as of March 13, 2013, as further amended as of
May 16, 2013, as further amended as of July 11, 2013, as further amended as of
October 17, 2014, as further amended as of September 24, 2015 and as further
amended prior to the date hereof, among the Parent Borrower, the several banks
and other financial institutions or entities from time to time parties thereto,
Bank of America, N.A., as administrative agent, and the other agents parties
thereto.

“Extended Revolving Commitment”: any Class of Revolving Commitments the maturity
of which shall have been extended pursuant to Section 2.28.

“Extended Revolving Loans”: any Revolving Loans made pursuant to the Extended
Revolving Commitments.

“Extended Term Loans”: any Class of Term Loans the maturity of which shall have
been extended pursuant to Section 2.28.

“Extension”: as defined in Section 2.28(a).

“Extension Offer”: as defined in Section 2.28(a).

“Facility”: each of (a) the Term Facility; (b) the Revolving Commitments
(including, if applicable, any Incremental Revolving Commitments) and the
extensions of credit made thereunder (the “Revolving Facility”); (c) the
Incremental Term Loans (the “Incremental Term Facility”); and (d) Credit
Agreement Refinancing Facilities and the extensions of credit thereunder.

“Factoring Indebtedness”: at any time, the amount at such time of outstanding
receivables or similar obligations sold by the Parent Borrower or Restricted
Subsidiaries pursuant to factoring agreements with a non-affiliated third party
that would be characterized as principal with respect to Indebtedness if such
factoring agreement were structured as a secured lending transaction rather than
as a purchase of receivables.

“FATCA”: Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof, any agreements entered into
pursuant to Section 1471(b) of the Code, any applicable intergovernmental
agreements with respect thereto, and any fiscal or regulatory legislation or
rules adopted pursuant thereto.

 

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“Federal Funds Effective Rate”: for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
federal funds transactions with members of the Federal Reserve System, as
published on the next succeeding Business Day by the Federal Reserve Bank of New
York; provided, that if the Federal Funds Effective Rate shall be less than
zero, such rate shall be deemed to be zero for purposes of this Agreement.

“Fee Payment Date”: (a) the third Business Day following the last day of each
March, June, September and December and (b) the last day of the Revolving
Commitment Period.

“Flood Documents”: (a) a completed “Life-of-Loan” Federal Emergency Management
Agency standard flood hazard determination and confirmation that the Parent
Borrower has received the notice required pursuant to Section 208.25(i) of
Regulation H of the Board (if applicable) and (b) if any improvement comprising
part of a Mortgaged Property is identified by the Federal Emergency Management
Agency (or any successor agency) as being in a special flood hazard area with
respect to which flood insurance has been made available under Flood Insurance
Laws, a copy of, or a certificate as to coverage under, and a declaration page
relating to, flood insurance in an amount and otherwise sufficient to comply
with all applicable rules and regulations promulgated pursuant to the Flood
Insurance Laws, each of which shall (A) be endorsed or otherwise amended to
include a “standard” or “New York” lender’s loss payable or mortgagee
endorsement (to the extent available), (B) identify the addresses of each
property located in a special flood hazard area, (C) indicate the applicable
flood zone designation, the flood insurance coverage and the deductible relating
thereto, (D) provide that to the extent commercially available the insurer will
give the Administrative Agent forty-five (45) days written notice of
cancellation or non-renewal and (E) shall be otherwise in form and substance
reasonably satisfactory to the Administrative Agent (any such flood insurance, a
“Flood Policy”).

“Flood Insurance Laws”: collectively, (a) National Flood Insurance Reform Act of
1994 (which comprehensively revised the National Flood Insurance Act of 1968 and
the Flood Disaster Protection Act of 1973) as now or hereafter in effect or any
successor statute thereto, (b) the Flood Insurance Reform Act of 2004 as now or
hereafter in effect or any successor statute thereto and (c) the Biggert-Waters
Flood Insurance Reform Act of 2012 as now or hereafter in effect or any
successor statute thereto.

“Flood Policy”: has the meaning assigned to such term in the definition of
“Flood Documents”.

“Foreign Currency”: Canadian Dollars, Pounds Sterling, the Euro and any
additional currencies determined after the Closing Date by mutual agreement of
the Parent Borrower, the Revolving Lenders and the Administrative Agent;
provided each such currency is a lawful currency that is readily available,
freely transferable and not restricted, able to be converted into Dollars and
available in the London interbank deposit market.

“Foreign Currency Loans”: as defined in Section 2.4(a).

“Foreign Currency Sublimit”: $250,000,000.

“Foreign Guarantee Agreement”: the Guarantee Agreement to be executed and
delivered by any Additional Borrower and any of its Material Foreign Restricted
Subsidiaries, substantially in the form of Exhibit K.

 

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“Foreign Holding Company”: any (i) Domestic Subsidiary all or substantially all
of the assets of which consist of the Capital Stock of one or more CFCs and/or
intercompany loans, indebtedness or receivables owed or treated as owed by one
or more CFCs (“CFC Debt”), and (ii) Disregarded Entity all or substantially all
of the assets of which consist of the Capital Stock of one or more Subsidiaries
described in part (i) of this definition.

“Foreign Loan Parties”: any Additional Borrower that is a Foreign Subsidiary and
any other Foreign Subsidiary that is party to the Foreign Guarantee Agreement.

“Foreign Plan”: each employee benefit plan (within the meaning of Section 3(3)
of ERISA, whether or not subject to ERISA) that is not subject to US law and is
maintained or contributed to by any Group Member.

“Foreign Plan Event”: with respect to any Foreign Plan, (a) the failure to make
or, if applicable, accrue in accordance with normal accounting practices, any
employer or employee contributions required by applicable law or by the terms of
such Foreign Plan; (b) the failure to register or loss of good standing with
applicable regulatory authorities of any such Foreign Plan required to be
registered; (c) the failure of any Foreign Plan to comply with any material
provisions of applicable law and regulations or with the material terms of such
Foreign Plan; or (d) the occurrence of any event or the existence of any
circumstance which causes the termination or windup of a Foreign Plan or gives
any Governmental Authority the discretion to order the termination or windup of
a Foreign Plan.

“Foreign Restricted Subsidiary”: any Restricted Subsidiary of the Parent
Borrower that is a Foreign Subsidiary.

“Foreign Subsidiary”: any Subsidiary of the Parent Borrower that is not a
Domestic Subsidiary.

“Funding Office”: the office of the Administrative Agent specified in
Section 10.2 or such other office as may be specified from time to time by the
Administrative Agent as its funding office by written notice to the Parent
Borrower and the Lenders.

“GAAP”: generally accepted accounting principles in the United States as in
effect from time to time; provided that, if the Borrower notifies the
Administrative Agent that the Borrower requests an amendment to any provision
hereof to eliminate the effect of any Accounting Change (as defined below)
occurring after the date hereof in GAAP or in the application thereof on the
operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith. “Accounting Change”
refers to any change in accounting principles required by the promulgation of
any rule, regulation, pronouncement or opinion by the Financial Accounting
Standards Board of the American Institute of Certified Public Accountants or, if
applicable, the SEC. Notwithstanding any other provisions of this Agreement, the
adoption or issuance of any accounting standards after the Closing Date will not
cause any rental obligation that was not or would not have been a Capital Lease
Obligation prior to such adoption or issuance to be deemed a Capital Lease
Obligation.

“Governmental Authority”: any nation or government (including any supra-national
bodies such as the European Union or the European Central Bank), any state or
other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance Commissioners).

 

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“Group Members”: the collective reference to the Parent Borrower and its
respective Restricted Subsidiaries.

“Guarantee and Collateral Agreement”: the Guarantee and Collateral Agreement to
be executed and delivered by the Parent Borrower and each other U.S. Loan Party,
substantially in the form of Exhibit A.

“Guarantee Obligation”: as to any Person (the “guaranteeing person”), any
obligation, including a reimbursement, counterindemnity or similar obligation,
of the guaranteeing Person that guarantees or in effect guarantees, or which is
given to induce the creation of a separate obligation by another Person
(including any bank under any letter of credit) that guarantees or in effect
guarantees, any Indebtedness, leases, dividends or other obligations (the
“primary obligations”) of any other third Person (the “primary obligor”) in any
manner, whether directly or indirectly, including any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect security therefor,
(ii) to advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or
(iv) otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the term
Guarantee Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be the lower of (a) an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantee Obligation is made and (b) such guaranteeing
person’s maximum reasonably anticipated liability in respect thereof as
determined by the Parent Borrower in good faith.

“Immaterial Subsidiary”: at any date, a Restricted Subsidiary of the Parent
Borrower that is not a Material Subsidiary; provided that in no event shall any
Borrower be an Immaterial Subsidiary.

“Impacted Interest Period”: with respect to any Screen Rate, an Interest Period
which shall not be available at the applicable time.

“Impacted Lender”: as defined in Section 2.19(h).

“Incremental Cap”: as defined in Section 2.25(a).

“Incremental Facility”: as defined in Section 2.25(a).

“Incremental Facility Activation Date”: any Business Day on which Parent
Borrower, the other Loan Parties, the Administrative Agent, any Issuing Lender,
the Swingline Lender, any Lender and New Lenders party thereto, as applicable,
shall execute and deliver to the Administrative Agent an Additional Credit
Extension Amendment in respect of an Incremental Facility.

“Incremental Facility Closing Date”: any Business Day designated as such in an
Additional Credit Extension Amendment in respect of an Incremental Facility.

 

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“Incremental Revolving Commitments”: as defined in Section 2.25(a).

“Incremental Revolving Loans”: any revolving loans made pursuant to
Section 2.25(a).

“Incremental Term Commitments”: the commitments (if any) of Lenders (including
New Lenders) to make Incremental Term Loans in accordance with Section 2.25(a)
and the Incremental Term Loans in respect thereof.

“Incremental Term Facility”: as defined in the definition of “Facility”.

“Incremental Term Lenders”: (a) on any Incremental Facility Closing Date
relating to Incremental Term Loans, the Lenders (including any New Lenders)
signatory to the relevant Additional Credit Extension Amendment and
(b) thereafter, each Lender that is a holder of an Incremental Term Loans.

“Incremental Term Loans”: any term loans made pursuant to Section 2.25(a).

“Incremental Term Maturity Date”: with respect to the Incremental Term Loans to
be made pursuant to any Additional Credit Extension Amendment, the maturity date
specified in such Additional Credit Extension Amendment, which date shall not be
earlier than the final maturity of the Term Loans.

“Indebtedness”: of any Person at any date, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of property or services (other than
(i) current trade payables incurred in the ordinary course of such Person’s
business and (ii) any earn-out, purchase price adjustment, indemnification or
similar obligation of such Person until such obligations become a liability on
the balance sheet of such Person in accordance with GAAP), (c) all obligations
of such Person evidenced by notes, bonds, debentures or other similar
instruments, (d) all indebtedness created or arising under any conditional sale
or other title retention agreement with respect to property acquired by such
Person (even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (e) all Capital Lease Obligations of such Person, (f) all obligations
of such Person, contingent or otherwise, as an account party or applicant under
or in respect of bankers’ acceptances, letters of credit, surety bonds or
similar arrangements, (g) the liquidation value of all Disqualified Capital
Stock of such Person, (h) all Receivables Transaction Attributed Indebtedness of
such Person, (i) all Synthetic Lease Attributed Indebtedness of such Person,
(j) all Factoring Indebtedness of such Person, (k) all Guarantee Obligations of
such Person in respect of obligations of the kind referred to in clauses
(a) through (j) above and (l) all obligations of the kind referred to in clauses
(a) through (k) above secured by any Lien on property (including accounts and
contract rights) owned by such Person, whether or not such Person has assumed or
become liable for the payment of such obligation; provided that the amount of
such Indebtedness will be the lesser of the fair market value of such asset at
the date of determination and the amount of Indebtedness so secured, and (m) all
obligations of such Person in respect of Swap Agreements. The Indebtedness of
any Person shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such Person
is liable therefor as a result of such Person’s ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness expressly provide that such Person is not liable therefor; provided
that Indebtedness shall not include any indebtedness that has been defeased in
accordance with GAAP or defeased pursuant to the deposit of cash or Cash
Equivalents (in an amount sufficient to satisfy all such indebtedness at
maturity or redemption, as applicable, and all payments of interest and premium,
if any) in a trust or account created or pledged for the sole benefit of the
holders of such indebtedness, and subject to no other Liens, and the other
applicable terms of the instrument governing such indebtedness (“Defeased
Debt”).

 

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“Indemnified Taxes”: (a) Taxes, other than Excluded Taxes, imposed on or with
respect to any payment made by or on account of any obligation of any Loan Party
under any Loan Document and (b) to the extent not otherwise described in clause
(a) above, Other Taxes.

“Indentures”: the collective reference to the 2016 Indenture, the 2020 Indenture
and the 2023 Indenture.

“Initial Term Commitment”: as to any Lender, the obligation of such Lender, if
any, to make an Initial Term Loan to the Parent Borrower hereunder on the
Closing Date in a principal amount not to exceed the amount set forth under the
heading “Initial Term Commitment” opposite such Lender’s name on Schedule 1.1A.
The aggregate amount of the Initial Term Commitments on the Closing Date is
$500,000,000.

“Initial Term Loan”: as defined in Section 2.1(a).

“Insolvent”: with respect to any Multiemployer Plan, the condition that such
plan is insolvent within the meaning of Section 4245 of ERISA.

“Intellectual Property”: the collective reference to all rights, priorities and
privileges relating to intellectual property, whether arising under United
States, multinational or foreign laws or otherwise, including (i) copyrights and
copyright licenses, (ii) patents and patent licenses, (iii) trademarks, service
marks, domain names, and licenses in respect of any of the foregoing, and all
goodwill associated therewith, (iv) technology, trade secrets, proprietary
information, know-how and processes, and all registrations and applications for
registration in respect of any of the foregoing, and (v) all rights to sue at
law or in equity for any past, present and future infringement or other
impairment thereof, including the right to receive all proceeds and damages
therefrom.

“Interest Payment Date”: (a) as to any ABR Loan (other than any Swingline Loan),
the last day of each March, June, September and December to occur while such
Loan is outstanding and the final maturity date of such Loan, (b) as to any
Eurocurrency Loan having an Interest Period of three months or less, the last
day of such Interest Period, (c) as to any Eurocurrency Loan having an Interest
Period longer than three months, each day that is three months, or a whole
multiple thereof, after the first day of such Interest Period and the last day
of such Interest Period, (d) as to any Loan (other than any Revolving Loan that
is an ABR Loan and any Swingline Loan), the date of any repayment or prepayment
made in respect thereof and (e) as to any Swingline Loan, the day that such Loan
is required to be repaid.

“Interest Period”: as to any Eurocurrency Loan, (a) initially, the period
commencing on the borrowing or conversion date, as the case may be, with respect
to such Eurocurrency Loan and ending seven days or one, two, three or six months
thereafter (in each case to the extent quoted on the applicable Screen Rate page
or successor), as selected by the applicable Borrower in its notice of borrowing
or notice of conversion, as the case may be, given with respect thereto; and
(b) thereafter, each period commencing on the last day of the next preceding
Interest Period applicable to such Eurocurrency Loan and ending seven days or
one, two, three or six months thereafter (in each case to the extent quoted on
the applicable Screen Rate page or successor), as selected by the applicable
Borrower by irrevocable notice to the Administrative Agent not later than 12:00
P.M., Local Time, on the date that is three Business Days prior to the last day
of the then current Interest Period with respect thereto; provided that, all of
the foregoing provisions relating to Interest Periods are subject to the
following:

 

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(i) if any Interest Period would otherwise end on a day that is not a Business
Day, such Interest Period shall be extended to the next succeeding Business Day
unless the result of such extension would be to carry such Interest Period into
another calendar month in which event such Interest Period shall end on the
immediately preceding Business Day;

(ii) no Borrower may select an Interest Period under a particular Facility that
would extend beyond the Maturity Date or beyond the date final payment is due on
the relevant Term Loans, as the case may be; and

(iii) any Interest Period that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the last
Business Day of a calendar month.

“Interpolated Screen Rate”: at any time, for any Interest Period, the rate per
annum (rounded to the same number of decimal places as the relevant Screen
Rates) determined by the Administrative Agent (which determination shall be
conclusive and binding absent manifest error) to be equal to the rate that
results from interpolating on a linear basis between: (a) the applicable Screen
Rate (for the longest period for which the applicable Screen Rate is available
for the applicable currency) that is shorter than the Impacted Interest Period
and (b) the applicable Screen Rate for the shortest period (for which such
Screen Rate is available for the applicable currency) that exceeds the Impacted
Interest Period, in each case, as of the Specified Time on the Quotation Day for
such Interest Period. Notwithstanding anything to the contrary in this
Agreement, if any Interpolated Screen Rate shall be less than zero, such
Interpolated Screen Rate shall be deemed to be zero for purposes of this
Agreement.

“Investment”: as to any Person, any direct or indirect acquisition or investment
by such Person, whether by means of (a) the purchase or other acquisition of
Capital Stock of another Person, (b) a loan, advance or capital contribution to,
guaranty or assumption of debt of, or purchase or other acquisition of any other
debt or equity participation or interest in, another Person, including any
partnership or joint venture interest in such other Person and any arrangement
pursuant to which the investor undertakes any Support Obligation with respect to
Indebtedness or other obligation of such other Person, or (c) the purchase or
other acquisition (in one transaction or a series of transactions) of assets of
another Person that constitute a business unit. For purposes of covenant
compliance, the amount of any Investment shall be the amount actually invested,
without adjustment for subsequent increases or decreases in the value of such
Investment.

“IRS”: the United States Internal Revenue Service.

“Issuing Lender”: each of JPMorgan Chase Bank, N.A., Bank of America, N.A.,
Wells Fargo Bank, N.A. and Fifth Third Bank and any other Revolving Lender
approved by the Administrative Agent and the Parent Borrower that has agreed in
its sole discretion to act as an “Issuing Lender” hereunder, or any of their
respective affiliates, in each case in its capacity as issuer of any Letter of
Credit. Each reference herein to “the Issuing Lender” shall be deemed to be a
reference to the relevant Issuing Lender.

“Judgment Currency”: as defined in Section 10.15(a).

“Judgment Currency Conversion Date”: as defined in Section 10.15(a).

“Junior Financing”: as defined in Section 7.8(a).

 

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“Kentucky Headquarters”: the real property located at 1000 Tempur Way,
Lexington, Kentucky.

“L/C Commitment”: on and after the Closing Date, as to any Issuing Lender, the
obligation of such Issuing Lender, if any, to issue Letters of Credit pursuant
to Section 3.1 in an aggregate amount not to exceed the amount set forth under
the heading “L/C Commitment” opposite such Issuing Lender’s name on Schedule
1.1A or in the Assignment and Assumption pursuant to which such Lender became a
party hereto, as the same may be changed from time to time pursuant to the terms
hereof. The amount of the aggregate L/C Commitments on the Closing Date is
$100,000,000.

“L/C Exposure”: at any time, the total L/C Obligations. The L/C Exposure of any
Revolving Lender at any time shall be its Revolving Percentage of the total L/C
Exposure at such time.

“L/C Foreign Currency”: Canadian Dollars, Pounds Sterling, the Euro and any
additional currencies determined after the Closing Date by mutual agreement of
the Parent Borrower, the Issuing Lenders and the Administrative Agent; provided
each such currency is a lawful currency that is readily available, freely
transferable and not restricted, able to be converted into Dollars and available
in the London interbank deposit market.

“L/C Obligations”: at any time, an amount equal to the sum of (a) the aggregate
then undrawn and unexpired amount of the then outstanding Letters of Credit and
(b) the aggregate amount of drawings under Letters of Credit that have not then
been reimbursed pursuant to Section 3.5.

“L/C Participants”: with respect to any Letter of Credit, the collective
reference to all the Revolving Lenders other than the applicable Issuing Lender
in respect of such Letter of Credit.

“Lender Parent”: with respect to any Lender, any Person as to which such Lender
is, directly or indirectly, a Subsidiary.

“Lenders”: as defined in the preamble hereto, which, for the avoidance of doubt,
shall include the Swingline Lender and/or each Issuing Lender, as the context
may require.

“Letters of Credit”: as defined in Section 3.1(a).

“LIBOR”: in relation to any Loan (other than a Loan denominated in Canadian
Dollars or Euros):

(a) the applicable Screen Rate; or

(b) (if no Screen Rate is available for the Interest Period of that Loan) the
Interpolated Screen Rate for that Loan,

as of, in the case of paragraph (a) above, the Specified Time on the Quotation
Day for the currency of that Loan and for a period equal in length to the
Interest Period of that Loan.

“Lien”: any mortgage, pledge, hypothecation, cash collateral or other similar
deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or other security agreement of any kind or nature whatsoever
(including any conditional sale or other title retention agreement and any
capital lease having substantially the same economic effect as any of the
foregoing).

“Limited Conditionality Acquisition”: as defined in Section 2.25(a).

 

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“Loan”: any loan made by any Lender pursuant to this Agreement.

“Loan Documents”: this Agreement, the Security Documents, the Foreign Guarantee
Agreement, the Notes and any amendment, waiver, supplement or other modification
to any of the foregoing.

“Loan Parties”: the collective reference to the U.S. Loan Parties and the
Foreign Loan Parties.

“Local Time”: (a) with respect to Foreign Currency Loans and Letters of Credit
denominated in Canadian Dollar, Euros or Pounds Sterling, local time in London,
(b) with respect to Foreign Currency Loans denominated in currencies other than
Canadian Dollars, Euros and Pounds Sterling and Letters of Credit denominated in
L/C Foreign Currencies other than Canadian Dollars, Euros and Pounds Sterling,
local time in the Principal Financial Center for the applicable currency and
(b) with respect to any other Loans, local time in New York City. For purposes
of this definition, “Principal Financial Center” means, in the case of any
currency other than Dollars, the principal financial center where such currency
is cleared and settled, as determined by the Administrative Agent.

“Majority Facility Lenders”: with respect to any Facility, the holders of more
than 50% of the aggregate unpaid principal amount of the Term Loans or the Total
Revolving Extensions of Credit, as the case may be, outstanding under such
Facility (or, in the case of the Revolving Facility, prior to any termination of
the Revolving Commitments, the holders of more than 50% of the Total Revolving
Commitments).

“Material Acquisition”: as defined in the definition of “pro forma basis”.

“Material Adverse Effect”: (a) a material adverse change in, or a material
adverse effect upon, the operations, business, assets, properties, liabilities
(actual or contingent) or financial condition of the Parent Borrower and its
Subsidiaries, taken as a whole; (b) a material impairment of the ability of the
Loan Parties, as a whole, to perform their obligations under the Loans
Documents; or (c) a material adverse effect upon the legality, validity, binding
effect or the enforceability against any Loan Party of any Loan Document to
which it is a party or on the rights or remedies, taken as a whole, of the
Administrative Agent or the Lenders hereunder or thereunder.

“Material Disposition”: as defined in the definition of “pro forma basis”.

“Material Foreign Restricted Subsidiary”: any Foreign Restricted Subsidiary that
is a Material Subsidiary.

“Material Real Property”: any owned real property located in the United States
with a fair market value in excess of $10,000,000.

“Material Subsidiary”: as of any date of determination, any Restricted
Subsidiary (a) whose total assets at the last day of the Reference Period ending
on the last day of the most recent fiscal period for which financials have been
delivered pursuant to Section 6.1(a) or (b) were equal to or greater than 3.0%
of the Consolidated Total Assets of the Parent Borrower and its Subsidiaries at
such date or (b) whose revenues during such Reference Period were equal to or
greater than 3.0% of the consolidated revenues of the Parent Borrower and its
Subsidiaries for such period, in each case determined in accordance with GAAP;
provided that if, at any time and from time to time after the Closing Date,
Subsidiaries that are not Material Subsidiaries have, in the aggregate,
(i) total assets at the last day of the most recently ended Reference Period
equal to or greater than 10.0% of the Consolidated Total Assets of

 

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the Parent Borrower and its Subsidiaries at such date or (ii) revenues during
such Reference Period equal to or greater than 10.0% of the consolidated
revenues of the Parent Borrower and its Subsidiaries for such period, in each
case determined in accordance with GAAP, then the Parent Borrower shall, no
later than ten Business Days subsequent to the date on which financial
statements for such fiscal period are delivered pursuant to this Agreement,
designate in writing to the Administrative Agent one or more of such
Subsidiaries as “Material Subsidiaries” such that, following such
designation(s), Immaterial Subsidiaries have, in the aggregate (i) total assets
at the last day of such Reference Period of less than 10.0% of the Consolidated
Total Assets of the Parent Borrower and its Subsidiaries at such date and
(ii) total revenues during such Reference Period of less than 10.0% of the
consolidated revenues of the Parent Borrower and its Subsidiaries for such
period, in each case determined in accordance with GAAP.

“Materials of Environmental Concern”: any gasoline or petroleum (including crude
oil or any fraction thereof) or petroleum products or any hazardous or toxic
substances, materials or wastes, including those defined or regulated as such in
or under any Environmental Law, including asbestos, polychlorinated biphenyls,
radon gas and urea-formaldehyde insulation.

“Maturity Date”: April 6, 2021.

“Moody’s”: as defined in the definition of “Cash Equivalents”.

“Mortgaged Properties”: (x) as of the Closing Date, the real properties listed
on Schedule 1.1B, and (y) any Material Real Property acquired by any Borrower or
Subsidiary Guarantor that is a Domestic Subsidiary or owned by any Subsidiary
Guarantor that is a Domestic Subsidiary acquired after the Closing Date, as to
which the Administrative Agent for the benefit of the Lenders shall be granted a
Lien pursuant to the Mortgages.

“Mortgages”: each of the mortgages and deeds of trust made by any U.S. Loan
Party in favor of, or for the benefit of, the Administrative Agent for the
benefit of the Lenders, substantially in the form of Exhibit D (with such
changes thereto as shall be advisable under the law of the jurisdiction in which
such mortgage or deed of trust is to be recorded or are otherwise reasonably
acceptable to the Administrative Agent).

“Multiemployer Plan”: a multiemployer plan as defined in Section 4001(a)(3) of
ERISA.

“Net Cash Proceeds”: (a) in connection with any Asset Sale or any Recovery
Event, the proceeds thereof received by the Parent Borrower or any Restricted
Subsidiary in the form of cash, Cash Equivalents and marketable U.S. debt
securities (determined in accordance with GAAP) (including any such proceeds
received by way of deferred payment of principal pursuant to a note or
installment receivable or purchase price adjustment receivable or otherwise, but
only as and when received) (provided, that with respect to marketable U.S. debt
securities, such securities shall be included as Net Cash Proceeds only as and
when the proceeds thereof are received), net of attorneys’ fees, accountants’
fees, investment banking fees, amounts required to be applied to the repayment
of Indebtedness secured by a Lien permitted hereunder on any asset that is the
subject of such Asset Sale or Recovery Event (other than any Lien pursuant to a
Security Document) and other customary fees and expenses actually incurred in
connection therewith and net of taxes paid or reasonably estimated to be payable
as a result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements) and (b) in connection with any
incurrence of Indebtedness by the Parent Borrower or any Restricted Subsidiary,
the cash proceeds received from such issuance or incurrence, net of attorneys’
fees, investment banking fees, accountants’ fees, underwriting discounts and
commissions and other customary fees and expenses actually incurred in
connection therewith.

 

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“Netted Cash”: at any day, the aggregate amount of (i) domestic unrestricted
cash and domestic cash equivalents of the Parent Borrower and its Domestic
Subsidiaries and (ii) 60% of the aggregate amount of unrestricted cash and cash
equivalents of Non-Domestic Subsidiaries that are Restricted Subsidiaries. For
the avoidance of doubt, the term “cash equivalents” as set forth in this
definition will be interpreted in accordance with GAAP.

“New Lender”: at any time, any Person that is not an existing Lender and that
agrees to provide any portion of any (a) Loans under Incremental Facilities,
Incremental Revolving Commitments or Incremental Term Commitments in accordance
with Section 2.25 or (b) Credit Agreement Refinancing Facilities pursuant to an
Additional Credit Extension Amendment in accordance with Section 2.20; provided
that such New Lender shall be (x) with respect to Incremental Term Loans,
Incremental Term Commitments or Refinancing Term Loans, an eligible Assignee
with respect to Term Loans and (y) with respect to Incremental Revolving
Commitments or Replacement Revolving Commitments, an eligible Assignee with
respect to Revolving Commitments.

“Non-Consenting Lender”: as defined in Section 2.23.

“Non-Domestic Subsidiary”: any Subsidiary of the Parent Borrower that is not
(a) a Domestic Subsidiary or (b) a Domestic Unrestricted Subsidiary. For the
avoidance of doubt, the term “Non-Domestic Subsidiary” shall include each
Foreign Subsidiary.

“Non-U.S. Lender”: a Lender that is not a U.S. Person.

“Notes”: the collective reference to any promissory note evidencing Loans.

“Obligations”: the unpaid principal of and interest on (including interest
accruing after the maturity of the Loans and Reimbursement Obligations and
interest accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
any Loan Party, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding) the Loans and all other obligations and
liabilities of the Loan Parties to the Administrative Agent or to any Lender
(or, in the case of Specified Swap Agreements and Specified Cash Management
Agreements, any affiliate of the Administrative Agent or any Lender), whether
direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in connection
with, this Agreement, any other Loan Document, the Letters of Credit, any
Specified Swap Agreement, any Specified Cash Management Agreement or any other
document made, delivered or given in connection herewith or therewith, whether
on account of principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses (including all fees, charges and disbursements of counsel to the
Administrative Agent or to any Lender that are required to be paid by any Loan
Party pursuant hereto) or otherwise; provided that for purposes of determining
any Guarantee Obligations of (i) any U.S. Loan Party pursuant to the Guarantee
and Collateral Agreement, the definition of “Obligations” shall not create any
guarantee by any U.S. Loan Party of (or grant of security interest by any U.S.
Loan Party to support, if applicable) any Excluded Swap Obligations; and
(ii) any Foreign Loan Party pursuant to the Foreign Guarantee Agreement, the
definition of “Obligations” shall not create any guarantee by any Foreign Loan
Party of any Excluded Swap Obligations.

“Organization Documents”: (a) with respect to any corporation, the certificate
or articles of incorporation and the bylaws (or equivalent or comparable
constitutive documents with respect to any non-U.S. jurisdiction); (b) with
respect to any limited liability company, the certificate or articles of
formation or organization and the operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

 

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“Other Connection Taxes”: with respect to any Credit Party, Taxes imposed as a
result of a present or former connection between such Credit Party and the
jurisdiction imposing such Tax (other than connections arising from such Credit
Party having executed, delivered, become a party to, performed its obligations
under, received payments under, received or perfected a security interest under,
engaged in any other transaction pursuant to, or enforced, any Loan Document, or
sold or assigned an interest in any Loan or Loan Document).

“Other Taxes”: all present or future stamp, court, or documentary, intangible,
recording, filing or similar Taxes that arise from any payment made under, from
the execution, delivery, performance, enforcement or registration of, from the
receipt or perfection of a security interest under, or otherwise with respect
to, any Loan Document, except any such Taxes that are Other Connection Taxes
imposed with respect to an assignment (other than an assignment made pursuant to
Section 2.23).

“Parent Borrower”: as defined in the preamble hereto.

“Participant”: as defined in Section 10.6(c).

“Participant Register”: as defined in Section 10.6(c).

“Patriot Act”: as defined in Section 10.19(a).

“PBGC”: the Pension Benefit Guaranty Corporation established pursuant to ERISA
and any successor entity performing similar functions.

“Pension Plan”: any Plan subject to the provisions of Title IV of ERISA or
Section 412 of the Code or Section 302 of ERISA.

“Perfection Certificate”: as defined in Section 5.1(i).

“Permitted Acquisition”: any Purchase that satisfies the following conditions:

(a) in the case of an Purchase of 100% of the Capital Stock of any other Person
(exclusive of director qualifying shares or similar shareholdings), the board of
directors (or other comparable governing body) of such other Person shall have
approved the Purchase;

(b) (i) (x) no Default or Event of Default shall exist and be continuing
immediately before or immediately after giving effect thereto on a pro forma
basis or (y) at the election of the Parent Borrower, in the case of a Limited
Conditionality Acquisition being funded with the proceeds of Incremental Term
Loans hereunder, no Default or Event of Default shall exist and be continuing
immediately before or immediately after giving effect thereto on a pro forma
basis as of the date the definitive acquisition agreement for such Limited
Conditionality Acquisition is entered into, (ii) (x) the Parent Borrower shall
be in pro forma compliance with the financial covenants set forth in Section 7.1
as of the last day of the fiscal quarter of the Parent Borrower most recently
ended for which financial statements have been delivered under Section 6.1,
determined on a pro forma basis or (y) at the election of the Parent Borrower,
in the case of a Limited Conditionality Acquisition being funded with the
proceeds of Incremental Term Loans hereunder, the Parent Borrower shall be in
pro forma compliance with the financial covenants set forth in Section 7.1 as
herein provided on the date the definitive

 

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acquisition agreement for such Limited Conditionality Acquisition is entered
into, determined on a pro forma basis as of such date and (iii) the Purchase
Consideration paid to acquire a Person that will not be a Loan Party following
the acquisition thereof, or to acquire property or assets that will not be owned
by a Loan Party, together with all other such acquisitions, shall not exceed
$400,000,000; and

(c) at least five Business Days prior to the consummation of such Purchase, a
Responsible Officer of the Parent Borrower shall provide a compliance
certificate, in form and substance reasonably satisfactory to the Administrative
Agent, affirming compliance with each of the items set forth in clauses (a),
(b) and (c) hereof, as applicable.

“Permitted Business”: any business that is reasonably similar, ancillary,
complementary or related to, or a reasonable extension, development or expansion
of, the businesses in which the Parent Borrower and its Restricted Subsidiaries
are engaged in on the Closing Date.

“Permitted External Refinancing Debt”: any Indebtedness incurred by one or more
of the Borrowers to refinance all or a portion of any existing Class of Term
Loans in the form of one or more series of secured or unsecured debt securities
or loans; provided that (i) the final maturity date of any such Indebtedness
shall not be earlier than the date that is 91 days following the Maturity Date;
(ii) the terms of such Indebtedness shall not provide for any scheduled
repayment, mandatory redemption, sinking fund obligations or other payment
(other than periodic interest payments) prior to the date that is 91 days
following the Maturity Date, other than customary offers to purchase upon a
change of control, asset sale or casualty or condemnation event and customary
acceleration rights upon an event of default; (iii) such debt securities or
loans shall be either (A) solely in the case of debt securities, secured by the
Collateral on a pari passu basis (but without regard to the control of remedies)
with the Obligations and shall not be secured by any property or assets of the
Parent or any Restricted Subsidiary other than Collateral, and a Senior
Representative acting on behalf of the holders of such Indebtedness shall have
become party to a first lien intercreditor agreement or collateral trust
agreement having customary terms and reasonably satisfactory to the
Administrative Agent reflecting the pari passu status of the Liens securing such
Indebtedness, (B) secured by the Collateral on a junior basis (including with
respect to the control of remedies) with the Obligations and shall not be
secured by any property or assets of the Parent or any Subsidiary other than
Collateral, and a Senior Representative acting on behalf of the holders of such
Indebtedness shall have become party to or otherwise subject to the provisions
of a junior lien intercreditor agreement or collateral trust agreement having
customary terms and reasonably satisfactory to the Administrative Agent
reflecting the second (or more junior) lien status of the Liens securing such
Indebtedness or (C) unsecured; (iv) none of the obligors or guarantors with
respect to such Indebtedness shall be a Person that is not a Loan Party; (v) the
terms and conditions (excluding any subordination, pricing, fees, rate floors,
discounts, premiums and optional prepayment or redemption terms) of such
Indebtedness, taken as a whole, shall not be materially less favorable to the
Loan Parties than those applicable to the refinanced Term Loans, except for
covenants or other provisions applicable only to periods after the Maturity
Date; (vi) the principal amount (or accreted value, if applicable) of such
Indebtedness does not exceed the principal amount (or accreted value, if
applicable) of the refinanced Term Loans except by an amount equal to any
interest capitalized, any premium or other reasonable amount paid, and fees and
expenses reasonably incurred, in connection with such refinancing; and
(vii) substantially concurrently with the incurrence or issuance of such debt
securities or loans, 100% of the net proceeds thereof shall be applied to repay
the refinanced Term Loans including accrued interest, fees, costs and expenses
relating thereto. Permitted External Refinancing Debt shall include any
Registered Equivalent Notes issued in exchange therefor.

“Permitted Incremental Equivalent Debt”: any Indebtedness incurred by one or
more of the Borrowers in the form of one or more series of secured or unsecured
debt securities or loans; provided that (i) the final maturity date of any such
Indebtedness not be earlier than the date that is 91 days

 

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following the Maturity Date, (ii) the terms of such Indebtedness shall not
provide for any scheduled repayment, mandatory redemption, sinking fund
obligations or other payment (other than periodic interest payments) prior to
the date that is 91 days following the Maturity Date, other than customary
offers to purchase upon a change of control, asset sale or casualty or
condemnation event and customary acceleration rights upon an event of default,
(iii) such Indebtedness shall be either (A) solely in the case of debt
securities, secured by the Collateral on a pari passu basis (but without regard
to the control of remedies) with the Obligations and shall not be secured by any
property or assets of the Parent Borrower or any Restricted Subsidiary other
than Collateral, and a Senior Representative acting on behalf of the holders of
such Indebtedness shall have become party to a first lien intercreditor or
collateral trust agreement having customary terms and reasonably satisfactory to
the Administrative Agent reflecting the pari passu status of the Liens securing
such Indebtedness, (B) secured by the Collateral on a junior basis (including
with respect to the control of remedies) with the Obligations and shall not be
secured by any property or assets of the Parent Borrower or any Restricted
Subsidiary other than Collateral, and a Senior Representative acting on behalf
of the holders of such Indebtedness shall have become party to or otherwise
subject to the provisions of a junior lien intercreditor agreement or collateral
trust agreement having customary terms and reasonably satisfactory to the
Administrative Agent reflecting the second (or more junior) lien status of the
Liens securing such Indebtedness or (C) unsecured, (iv) none of the obligors or
guarantors with respect to such Indebtedness shall be a Person that is not a
Loan Party and (v) the terms and conditions (excluding any subordination,
pricing, fees, rate floors, discounts, premiums and optional prepayment or
redemption terms) of such Indebtedness, taken as a whole, shall not be
materially less favorable to the Loan Parties than those applicable to the Term
Loans, except for covenants or other provisions applicable only to periods after
the Maturity Date.

“Permitted Liens”: as defined in Section 7.3.

“Permitted Refinancing Indebtedness”: any Indebtedness issued in exchange for,
or the net proceeds of which are used to extend, refinance, renew, replace,
defease or refund (including any Defeased Debt) (collectively, to “Refinance”),
the Indebtedness being Refinanced (or previous refinancings thereof constituting
Permitted Refinancing Indebtedness); provided that (a) the principal amount (or
accreted value, if applicable) of such Permitted Refinancing Indebtedness does
not exceed the principal amount (or accreted value, if applicable) of the
Indebtedness so Refinanced (plus unpaid accrued interest and premium (including
tender premium) thereon, any committed or undrawn amounts and underwriting
discounts, fees, commissions and expenses, associated with such Permitted
Refinancing Indebtedness), (b) (i) such Permitted Refinancing Indebtedness has a
final maturity date equal to or later than the earlier of (x) the final maturity
date of the Indebtedness being Refinanced and (y) 91 days after the Maturity
Date (it being understood that, in each case, any provision requiring an offer
to purchase such Indebtedness as a result of a change of control or asset sale
shall not violate the foregoing restriction) and (ii) such Permitted Refinancing
Indebtedness has a weighted average life to maturity equal to or greater than
the weighted average life to maturity of the Indebtedness being Refinanced,
(c) if the Indebtedness being Refinanced is by its terms subordinated in right
of payment to the Obligations under this Agreement, such Permitted Refinancing
Indebtedness shall be subordinated in right of payment to such Obligations on
terms not materially less favorable to the Loan Parties as those contained in
the documentation governing the Indebtedness being Refinanced, taken as a whole,
(d) no Permitted Refinancing Indebtedness as of the date of incurrence of such
Permitted Refinancing Indebtedness shall have obligors or contingent obligors
that were not as of such date obligors or contingent obligors (or that would not
have been required to become obligors or contingent obligors) in respect of the
Indebtedness being Refinanced (it being understood that the terms of any such
Permitted Refinancing Indebtedness shall not, as of the date of the incurrence
thereof, require any new obligors or contingent obligations that were not as of
such date obligors or required to become obligors or contingent obligors under
the Indebtedness being Refinanced) and (e) if the Indebtedness being Refinanced
is (or would have been required to be) secured by the Collateral, such Permitted
Refinancing Indebtedness may be secured by

 

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such Collateral on terms not materially more favorable, taken as a whole, to the
Secured Parties than the Indebtedness being Refinanced; provided that with
respect to any Indebtedness secured by a Lien on the Collateral, any Liens
securing such Permitted Refinancing Indebtedness shall, to the extent the
Indebtedness being Refinanced was subject to an intercreditor agreement with
respect to the Obligations hereunder, be subject to an intercreditor agreement
that is not materially less favorable, taken as a whole, to the Loan Parties
than the intercreditor agreement outstanding in respect of the Indebtedness
being Refinanced.

“Person”: an individual, partnership, corporation, limited liability company,
business trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.

“Petty Cash Account”: a Deposit Account which has a balance of less than $50,000
at any time individually or $200,000 in the aggregate at any time.

“Plan”: any employee benefit plan as defined in Section 3(3) of ERISA, including
any employee welfare benefit plan (as defined in Section 3(1) of ERISA), any
employee pension benefit plan (as defined in Section 3(2) of ERISA but excluding
any Multiemployer Plan), and any plan which is both an employee welfare benefit
plan and an employee pension benefit plan, and in respect of which any Group
Member or any ERISA Affiliate is (or, if such Plan were terminated, would under
Section 4069 of ERISA be deemed to be) an “employer” as defined in section 3(5)
of ERISA.

“Pledged Stock”: as defined in the Guarantee and Collateral Agreement. For the
avoidance of doubt, the term “Pledged Stock” shall not include any Excluded
Collateral.

“Pounds Sterling”: the lawful currency of the United Kingdom.

“Prime Rate”: the rate of interest per annum publicly announced from time to
time by JPMorgan Chase Bank, N.A. as its prime rate in effect at its principal
office in New York City (the Prime Rate not being intended to be the lowest rate
of interest charged by JPMorgan Chase Bank, N.A. in connection with extensions
of credit to debtors).

“pro forma basis”: in connection with any transaction for which a determination
on a pro forma basis for any period of four consecutive fiscal quarters (each, a
“Reference Period”) is required to be made hereunder, “pro forma basis” shall
mean that such determination shall be made (i) after giving effect to any
Material Acquisition and any Material Disposition during such Reference Period
and to include any Indebtedness incurred, assumed or repaid in connection
therewith (assuming, to the extent such Indebtedness bears interest at a
floating rate, the rate in effect at the time of calculation for the entire
period of calculation) and (ii) assuming that such Material Acquisition or
Material Disposition occurred and such Indebtedness was incurred, assumed or
repaid at the beginning of such Reference Period; provided that any pro forma
calculation made by the Parent Borrower either (i) based on Regulation S-X or
(ii) as calculated in good faith and set forth in an officer’s certificate of
the Parent Borrower (and in the case of this clause (ii), based on audited
financials of the target company or other financials reasonably satisfactory to
the Administrative Agent) shall be acceptable. As used in this definition,
“Material Acquisition” means any acquisition of property or series of related
acquisitions of property that (a) constitutes assets comprising all or
substantially all of an operating unit of a business or constitutes all or
substantially all of the common stock of a Person and (b) involves the payment
of consideration by the Parent Borrower and its Restricted Subsidiaries in
excess of $5,000,000; and “Material Disposition” means any Disposition of
property or series of related Dispositions of property that (a) comprises all or
substantially all of an operating unit of a business or constitutes all or
substantially all of the common stock of a Person and (b) that yields gross
proceeds to the Parent Borrower or any of its Restricted Subsidiaries in excess
of $5,000,000.

 

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“Prohibited Transaction”: as defined in Section 406 of ERISA and
Section 4975(f)(3) of the Code.

“Projections”: as defined in Section 6.2(c).

“Properties”: as defined in Section 4.17(a).

“Proposed Change”: as defined in Section 2.23.

“Purchase”: any transaction, or any series of related transactions, consummated
on or after the date of this Agreement, by which the Parent Borrower or any of
its Restricted Subsidiaries (i) acquires all or substantially all of the assets
of any firm, corporation or limited liability company, or business unit or
division thereof, whether through purchase of assets, merger or otherwise or
(ii) directly or indirectly acquires (in one transaction or as the most recent
transaction in a series of transactions) at least a majority (in number of votes
for the members of the board of directors) of the Capital Stock of a Person.

“Purchase Consideration”: with respect to any Purchase, the aggregate cash and
non-cash consideration for such Purchase. The “Purchase Consideration” for any
Purchase expressly includes Indebtedness assumed in such Purchase and the good
faith estimate by the Parent Borrower of the maximum amount of any deferred
purchase price obligations (including earn-out payments) incurred in connection
with such Purchase. The “Purchase Consideration” for any Purchase expressly
excludes (a) Capital Stock of the Parent Borrower issued to the seller as
consideration for such Purchase and (b) the Net Cash Proceeds of the sale or
issuance of Capital Stock by the Parent Borrower to the extent such Purchase is
made within ninety days of the receipt of such Net Cash Proceeds by the Parent
Borrower.

“Qualified Receivables Transaction”: any transaction or series of transactions
that may be entered into by the Parent Borrower or any Restricted Subsidiary
pursuant to which the Parent Borrower or any Restricted Subsidiary may sell,
convey or otherwise transfer to a newly-formed Restricted Subsidiary or other
special-purpose entity, or any other Person, any accounts or notes receivable
and rights related thereto, provided that (i) all of the terms and conditions of
such transaction or series of transactions, including without limitation the
amount and type of any recourse to the Parent Borrower or any Restricted
Subsidiary with respect to the assets transferred, are reasonably acceptable to
the Administrative Agent, and (ii) the aggregate Receivables Transaction
Attributed Indebtedness of the Parent Borrower or any Restricted Subsidiary
incurred in all such transactions outstanding at any time does not exceed
$200,000,000.

“Quotation Day”: in relation to any period for which an interest rate is to be
determined:

(i) if the currency is Pounds Sterling or Canadian Dollars, the first day of
that period;

(ii) if the currency is the Euro, two TARGET Days before the first day of that
period; or

(iii) for any other currency, two Business Days before the first day of that
period,

unless market practice differs in the Relevant Interbank Market for a currency,
in which case the Quotation Day for that currency will be determined by the
Agent in accordance with market practice in the Relevant Interbank Market (and
if quotations would normally be given by leading banks in the Relevant Interbank
Market on more than one day, the Quotation Day will be the last of those days).

 

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“Real Estate Collateral Requirement”: at any time, subject to (x) the applicable
limitations set forth in this Agreement and/or any other Loan Document and
(y) the time periods (and extensions thereof) set forth in Section 6.10 and
Section 6.12, the requirement that the Administrative Agent shall have received
(i) a Mortgage with respect to each Mortgaged Property, delivered pursuant to
Section 6.10 or Section 6.12, duly executed by the record owner of such
Mortgaged Property granting a Lien on such Mortgaged Property subject to no
other Liens other than Liens permitted by Section 7.3, (ii) a policy or policies
of title insurance reasonably acceptable to the Administrative Agent, naming the
Administrative Agent as the insured for the benefit of the Lenders, issued by a
nationally recognized title insurance company reasonably acceptable to the
Administrative Agent insuring the Lien of each such Mortgage in the amount of
the fair market value of the land and improvements thereon as reasonably
determined by the Parent Borrower as a valid and enforceable Lien on the
Mortgaged Property described therein subject to no Liens other than Liens
permitted by Section 7.3, together with such endorsements, coinsurance and
reinsurance as the Administrative Agent may reasonably request, and (iii) such
surveys, appraisals, legal opinions and other documents as the Administrative
Agent may reasonably request with respect to any such Mortgage or Mortgaged
Property; provided however, that no new survey will be required of any Mortgaged
Property if there is a survey available for such Mortgaged Property that is
acceptable to the issuer of the title insurance policy to issue customary
survey-related endorsements thereto; provided, further, in any jurisdiction in
which a mortgage tax or similar charge is assessed on the making or filing of a
mortgage or deed of trust, the amount of the Obligation secured by such mortgage
or deed of trust shall be limited to the fair market value of the land and
improvements subject thereto as reasonably determined by the Parent Borrower.

“Receivables Entity”: a Wholly Owned Subsidiary of the Parent Borrower (or
another Person formed for the purposes of engaging in a Qualified Receivables
Transaction with the Parent Borrower in which the Parent Borrower or any
Subsidiary of the Parent Borrower makes an Investment and to which the Parent
Borrower or any Subsidiary of the Parent Borrower transfers accounts receivable
and related assets) which engages in no activities other than in connection with
the financing of accounts receivable of the Parent Borrower and its
Subsidiaries, all proceeds thereof and all rights (contractual or other),
collateral and other assets relating thereto, and any business or activities
incidental or related to that business, and (with respect to any Receivables
Entity formed after the Closing Date) which is designated by the board of
directors of the Parent Borrower (as provided below) as a Receivables Entity and

(a) no portion of the Indebtedness or any other obligations (contingent or
otherwise) of which

(1) is guaranteed by the Parent Borrower or any Restricted Subsidiary of the
Parent Borrower (excluding guarantees of obligations (other than the principal
of, and interest on, Indebtedness) pursuant to Standard Securitization
Undertakings),

(2) is recourse to or obligates the Parent Borrower or any Restricted Subsidiary
of the Parent Borrower in any way other than pursuant to Standard Securitization
Undertakings, or

(3) subjects any property or asset of the Parent Borrower or any Restricted
Subsidiary of the Parent Borrower, directly or indirectly, contingently or
otherwise, to the satisfaction thereof, other than pursuant to Standard
Securitization Undertakings;

 

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(b) with which neither the Parent Borrower nor any Restricted Subsidiary of the
Parent Borrower has any material contract, agreement, arrangement or
understanding other than on terms which the Parent Borrower reasonably believes
to be no less favorable to the Parent Borrower or the Restricted Subsidiary than
those that might be obtained at the time from Persons that are not Affiliates of
the Parent Borrower, and

(c) to which neither the Parent Borrower nor any Restricted Subsidiary of the
Parent Borrower has any obligation to maintain or preserve the entity’s
financial condition or cause the entity to achieve certain levels of operating
results other than pursuant to Standard Securitization Undertakings.

Any designation of this kind by the board of directors of the Parent Borrower
shall be evidenced to the Administrative Agent by filing with the Administrative
Agent a certified copy of the resolution of the board of directors of the Parent
Borrower giving effect to the designation and a certificate of a Responsible
Officer of the Parent Borrower certifying that the designation complied with the
foregoing conditions.

“Receivables Transaction Attributed Indebtedness”: the amount of obligations
outstanding under the legal documents entered into as part of any Qualified
Receivables Transaction on any date of determination that would be characterized
as principal if such Qualified Receivables Transaction were structured as a
secured lending transaction rather than as a purchase.

“Recovery Event”: any settlement of or payment in respect of any property or
casualty insurance claim or any condemnation proceeding relating to any asset of
any Group Member.

“Reference Period”: as defined in the definition of “pro forma basis”.

“Refinanced Term Loans”: as defined in Section 2.29(a).

“Refinancing Term Loans”: one or more new Classes of Term Loans that result from
an Additional Credit Extension Amendment in accordance with Section 2.28.

“Refunded Swingline Loans”: as defined in Section 2.7.

“Register”: as defined in Section 10.6(b).

“Registered Equivalent Notes”: with respect to any debt securities originally
issued in a Rule 144A or other private placement transaction under the
Securities Act of 1933, as amended, substantially identical notes (having the
same guarantees) issued in a dollar-for-dollar exchange therefore pursuant to an
exchange offer registered with the SEC.

“Regulation U”: Regulation U of the Board as in effect from time to time.

“Reimbursement Obligation”: the obligation of the applicable Borrower to
reimburse the applicable Issuing Lender pursuant to Section 3.5 for amounts
drawn under Letters of Credit.

“Reinvestment Deferred Amount”: with respect to any Reinvestment Event, the
aggregate Net Cash Proceeds received by any Group Member in connection therewith
that are not applied to prepay the Term Loans pursuant to Section 2.12(b) as a
result of the delivery of a Reinvestment Notice.

“Reinvestment Event”: any Asset Sale or Recovery Event in respect of which the
Parent Borrower has delivered a Reinvestment Notice.

 

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“Reinvestment Notice”: a written notice executed by a Responsible Officer
stating that no Event of Default has occurred and is continuing and that the
Parent Borrower (directly or indirectly through a Restricted Subsidiary) intends
and expects to use all or a specified portion of the Net Cash Proceeds of an
Asset Sale or Recovery Event to acquire or repair assets useful in its business.

“Reinvestment Prepayment Amount”: with respect to any Reinvestment Event, the
Reinvestment Deferred Amount relating thereto less any amount expended prior to
the relevant Reinvestment Prepayment Date to acquire or repair assets useful in
the Parent Borrower’s business.

“Reinvestment Prepayment Date”: with respect to any Reinvestment Event, the
earlier of (a) the date occurring twelve months after such Reinvestment Event
and (b) the date on which the Parent Borrower shall have determined not to, or
shall have otherwise ceased to, acquire or repair assets useful in the Parent
Borrower’s business with all or any portion of the relevant Reinvestment
Deferred Amount.

“Relevant Interbank Market”: (a) in relation to the Euro, the European interbank
market, (b) in relation to Canadian Dollars, the Canadian interbank market and
(c) in relation to any other currency, the London interbank market.

“Reorganization”: with respect to any Multiemployer Plan, the condition that
such plan is in reorganization within the meaning of Section 4241 of ERISA.

“Replaced Revolving Commitments”: as defined in Section 2.29(a).

“Replacement Revolving Commitments”: one or more new Classes of Revolving
Commitments established pursuant to an Additional Credit Extension Amendment in
accordance with Section 2.29.

“Replacement Revolving Lender”: a Revolving Lender with a Replacement Revolving
Commitment or an outstanding Replacement Revolving Loan.

“Replacement Revolving Loans”: Revolving Loans made pursuant to Replacement
Revolving Commitments.

“Reportable Event”: any of the events set forth in Section 4043(c) of ERISA or
the regulations issued thereunder, with respect to a Pension Plan, other than
those events as to which notice is waived.

“Required Lenders”: at any time, the holders of more than 50% of the sum of
(i) the aggregate unpaid principal amount of the Term Loans then outstanding and
(ii) the Total Revolving Commitments then in effect or, if the Revolving
Commitments have been terminated, the Total Revolving Extensions of Credit then
outstanding.

“Requirement of Law”: as to any Person, the Certificate of Incorporation and
By-Laws or other organizational or governing documents of such Person, and any
law, treaty, rule or regulation or determination of an arbitrator or a court or
other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.

“Reset Date”: as defined in Section 2.26(a).

 

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“Responsible Officer”: the chief executive officer, president, chief financial
officer or treasurer of the Parent Borrower, but in any event, with respect to
financial matters, the chief financial officer of the Parent Borrower.

“Restricted Payments”: any dividend or other distribution (whether in cash,
securities or other property) by the Parent Borrower in respect of its Capital
Stock, or any payment (whether in cash, securities or other property) including
any sinking fund payment or similar deposit, for or on account of the purchase,
redemption, retirement, acquisition, cancellation or termination of any Capital
Stock of the Parent Borrower or its Restricted Subsidiaries or any option,
warrant or other right to acquire any such Capital Stock of the Parent Borrower
or its Restricted Subsidiaries.

“Restricted Subsidiary”: any Subsidiary that is not an Unrestricted Subsidiary.

“Revolving Commitment”: on and after the Closing Date, as to any Lender, the
obligation of such Lender, if any, to make Revolving Loans and participate in
Swingline Loans and Letters of Credit in an aggregate principal and/or face
amount not to exceed the amount set forth under the heading “Revolving
Commitment” opposite such Lender’s name on Schedule 1.1A or in the Assignment
and Assumption pursuant to which such Lender became a party hereto, as the same
may be changed from time to time pursuant to the terms hereof. The amount of the
Total Revolving Commitments on the Closing Date is $500,000,000.

“Revolving Commitment Period”: the period from and including the Closing Date to
the Maturity Date.

“Revolving Extensions of Credit”: as to any Revolving Lender at any time, an
amount equal to the sum of (a) the aggregate principal amount of all Revolving
Loans (other than Foreign Currency Loans) held by such Lender then outstanding,
(b) such Lender’s Revolving Percentage of the L/C Obligations then outstanding
(including such Lender’s Revolving Percentage of the Dollar Equivalent of L/C
Obligations outstanding in a currency other than Dollars), (c) such Lender’s
Revolving Percentage of the aggregate principal amount of Swingline Loans then
outstanding and (d) such Lender’s Revolving Percentage of the Dollar Equivalent
of the aggregate principal amount of Foreign Currency Loans then outstanding.

“Revolving Facility”: as defined in the definition of “Facility”.

“Revolving Lender”: each Lender that has a Revolving Commitment or that holds
Revolving Loans.

“Revolving Loans”: as defined in Section 2.4(a).

“Revolving Percentage”: as to any Revolving Lender at any time, the percentage
which such Lender’s Revolving Commitment then constitutes of the Total Revolving
Commitments or, at any time after the Revolving Commitments shall have expired
or terminated, the percentage which the aggregate principal amount of such
Lender’s Revolving Loans then outstanding constitutes of the aggregate principal
amount of the Revolving Loans then outstanding, provided, that, in the event
that the Revolving Loans are paid in full prior to the reduction to zero of the
Total Revolving Extensions of Credit, the Revolving Percentages shall be
determined in a manner designed to ensure that the other outstanding Revolving
Extensions of Credit shall be held by the Revolving Lenders on a comparable
basis. Notwithstanding the foregoing, in the case of Section 2.25 when a
Defaulting Lender shall exist, Revolving Percentages shall be determined without
regard to any Defaulting Lender’s Revolving Commitment.

 

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“S&P”: as defined in the definition of “Cash Equivalents”.

“Sale and Leaseback Transaction”: with respect to the Parent Borrower or any of
its Subsidiaries, any arrangement, directly or indirectly, with any Person
(other than a Loan Party) whereby the Parent Borrower or such Subsidiary shall
sell or transfer any property, real or personal, used or useful in its business,
whether now owned or hereafter acquired, and thereafter rent or lease such
property or other property that it intends to use for substantially the same
purpose or purposes as the property being sold or transferred.

“Sanctions”: economic or financial sanctions or trade embargoes imposed,
administered or enforced from time to time by (a) the U.S. government, including
those administered by the Office of Foreign Assets Control of the U.S.
Department of the Treasury or the U.S. Department of State, or (b) the United
Nations Security Council, the European Union, Canada or Her Majesty’s Treasury
of the United Kingdom.

“Sanctioned Country”: at any time, a country or territory which is itself the
subject or target of any comprehensive Sanctions (as of the Closing Date, Cuba,
Iran, North Korea, Sudan, the Crimea region of Ukraine and Syria).

“Sanctioned Person”: at any time, (a) any Person listed in any Sanctions-related
list of designated Persons maintained by the Office of Foreign Assets Control of
the U.S. Department of the Treasury, the U.S. Department of State, the United
Nations Security Council, the European Union, Canada or any EU member state,
(b) any Person located, organized or resident in a Sanctioned Country or (c) any
Person owned or controlled by any such Person or Persons.

“Screen Rate”:

(a) in relation to CDOR, with respect to any Interest Period, (i) the annual
rate of interest determined with reference to the arithmetic average of the
discount rate quotations of all institutions listed for Canadian
Dollar-denominated bankers’ acceptances with a tenor equal to such Interest
Period displayed and identified as such on the CDOR page of the Reuters screen
(or on any successor or substitute page on such screen or service that displays
such rate, or on the appropriate page of such other information service that
publishes such rate as shall be selected by the Administrative Agent from time
to time in its reasonable discretion) as of the Specified Time on the Quotation
Day for such Interest Period (as adjusted by the Administrative Agent after the
Specified Time to reflect any error in the posted rate of interest or in the
posted average annual rate of interest);

(b) in relation to EURIBOR, the euro interbank offered rate administered by the
Banking Federation of the European Union (or any other Person which takes over
the administration of that rate) for the relevant period displayed on page
EURIBOR01 of the Reuters screen (or any replacement Reuters page which displays
that rate, or on the appropriate page of such other information service that
publishes such rate as shall be selected by the Administrative Agent from time
to time in its reasonable discretion); and

(c) in relation to LIBOR, the London interbank offered rate administered by ICE
Benchmark Association (or any other Person that takes over the administration of
that rate) for the relevant currency and period displayed on pages LIBOR01 or
LIBOR02 of the Reuters screen (or any replacement Reuters page which displays
that rate, or on the appropriate page of such other information service that
publishes such rate as shall be selected by the Administrative Agent from time
to time in its reasonable discretion);

 

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provided, however, that if any Screen Rate shall be less than zero, such Screen
Rate shall be deemed to be zero for purposes of this Agreement.

“SEC”: the Securities and Exchange Commission, any successor thereto and any
analogous Governmental Authority.

“Section 16 Officer”: has the meaning assigned to the term “officer” as defined
in Rule 16a-1(f) under the Exchange Act.

“Secured Parties”: has the meaning assigned to such term in the Guarantee and
Collateral Agreement.

“Securities Account”: as defined in the Uniform Commercial Code of any
applicable jurisdiction.

“Securities Account Control Agreement”: a Securities Account control agreement
to be executed by each institution maintaining a Securities Account (other than
an Excluded Securities Account) for the Parent Borrower or any other U.S. Loan
Party, in each case as required by Section 6.10(f).

“Security Documents”: the collective reference to the Guarantee and Collateral
Agreement, the Mortgages and all other security documents hereafter delivered to
the Administrative Agent granting a Lien on any property of any Person to secure
the obligations and liabilities of any Loan Party under any Loan Document.

“Senior Notes”: the collective reference to the 2020 Notes, the 2023 Notes and
the Convertible Notes.

“Senior Representative”: with respect to any Indebtedness, the trustee,
administrative agent, collateral agent, security agent or similar agent under
the indenture or other agreement pursuant to which such Indebtedness is issued,
incurred or otherwise obtained, as the case may be, and each of their successors
in such capacities.

“Solvent”: when used with respect to any Person, means that, as of any date of
determination, (a) the amount of the “present fair saleable value” of the assets
of such Person will, as of such date, exceed the amount of all “liabilities of
such Person, contingent or otherwise”, as of such date, as such quoted terms are
determined in accordance with applicable federal and state laws governing
determinations of the insolvency of debtors, (b) the fair value of the assets of
such Person will, as of such date, be greater than the amount that will be
required to pay the liability of such Person on its debts as such debts become
absolute and matured, (c) such Person will not have, as of such date, an
unreasonably small amount of capital with which to conduct its business, and
(d) such Person will be able to pay its debts as they mature. For purposes of
this definition, (i) “debt” means liability on a “claim”, and (ii) “claim” means
any (x) right to payment, whether or not such a right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured or unsecured or (y) right to an equitable
remedy for breach of performance if such breach gives rise to a right to
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured
or unsecured; provided that the amount of any contingent or disputed liability
at any time shall be computed as the amount that would reasonably be expected to
become an actual and matured liability at such time.

“Specified Cash Management Agreement”: any Cash Management Agreement between a
Borrower or any Subsidiary Guarantor and any Lender or affiliate thereof, which
has been designated by such Lender and the Parent Borrower, by notice to the
Administrative Agent not later than 90 days after the execution and delivery by
the applicable Borrower or such Subsidiary Guarantor, as applicable, as a
“Specified Cash Management Agreement”.

 

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“Specified Swap Agreement”: any Swap Agreement in respect of interest rates or
currency exchange rates entered into by a Borrower or any Subsidiary Guarantor
and any Person that is a Lender or an affiliate of a Lender at the time such
Swap Agreement is entered into.

“Specified Time”: the applicable time and day as determined in accordance with
Schedule 1.1C.

“Standard Securitization Undertakings” means representations, warranties,
covenants and indemnities entered into by the Parent Borrower or any Subsidiary
of the Parent Borrower which are customary in an accounts receivable
securitization transaction involving a comparable company.

“Statutory Reserve Rate”: a fraction (expressed as a decimal), the numerator of
which is the number one and the denominator of which is the number one minus the
aggregate of the maximum reserve percentages (including any marginal, special,
emergency or supplemental reserves) expressed as a decimal established by the
Board to which the relevant Lender is subject with respect to the Eurocurrency
Rate, for eurocurrency funding (currently referred to as “Eurocurrency
Liabilities” in Regulation D of the Board). Such reserve percentages shall
include those imposed pursuant to such Regulation D. Eurocurrency Loans shall be
deemed to constitute eurocurrency funding and to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or offsets
that may be available from time to time to any Lender under such Regulation D or
any comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.

“Subsidiary”: as to any Person, a corporation, partnership, limited liability
company or other entity of which shares of stock or other ownership interests
having ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to elect a
majority of the board of directors or other managers of such corporation,
partnership or other entity are at the time owned, or the management of which is
otherwise controlled, directly or indirectly through one or more intermediaries,
or both, by such Person. Unless otherwise qualified, all references to a
“Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary
or Subsidiaries of the Parent Borrower. Notwithstanding any provision herein to
the contrary, Comfort Revolution LLC shall not be considered a Subsidiary of the
Parent Borrower for purposes of this Agreement or the other Loan Documents prior
to the earliest date on which (x) the Parent Borrower or one or more of its
Subsidiaries owns 100% of the equity interests of Comfort Revolution LLC,
(y) Comfort Revolution LLC becomes a Subsidiary Guarantor hereunder or (z) the
Parent Borrower has notified the Administrative Agent in writing that Comfort
Revolution LLC shall become a Subsidiary Guarantor and a Subsidiary hereunder
and Comfort Revolution LLC and the Administrative Agent have each signed the
necessary Loan Documents under Section 6.10 hereof for Comfort Revolution LLC to
become a Subsidiary Guarantor hereunder.

“Subsidiary Guarantor”: each Restricted Subsidiary of the Parent Borrower other
than any Excluded Foreign Subsidiary, any Captive Insurance Subsidiary and any
Immaterial Subsidiary; provided that any applicable Subsidiary Guarantor shall
cease to be a Subsidiary Guarantor upon release from its Guarantee Obligation in
respect of the Obligations pursuant to the terms hereof or any Security
Document; provided further that any Restricted Subsidiary not required to become
a Subsidiary Guarantor pursuant to the terms of this Agreement that elects by
written notice to the Administrative Agent to become a party to a Loan Document
as a guarantor of the Obligations of the Parent Borrower shall be a Subsidiary
Guarantor.

 

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“Support Obligations”: as to any Person, (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect,
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Lien). The amount of any
Support Obligations shall be deemed to be an amount equal to the stated or
determinable amount of the related primary obligation, or portion thereof, in
respect of which such Support Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof as
determined by the guaranteeing Person in good faith.

“Swap”: any agreement, contract, or transaction that constitutes a “swap” within
the meaning of section 1a(47) of the Commodity Exchange Act.

“Swap Agreement”: any agreement with respect to any swap, forward, future or
derivative transaction or option or similar agreement involving, or settled by
reference to, one or more rates, currencies, commodities, equity or debt
instruments or securities, or economic, financial or pricing indices or measures
of economic, financial or pricing risk or value or any similar transaction or
any combination of these transactions; provided that no phantom stock or similar
plan providing for payments only on account of services provided by current or
former directors, officers, employees or consultants of the Parent Borrower or
any of its Restricted Subsidiaries shall be a “Swap Agreement”.

“Swap Obligation”: with respect to any Person, any obligation to pay or perform
under any Swap.

“Swap Termination Value”: in respect of any one or more Swap Agreements, after
taking into account the effect of any legally enforceable netting agreement
relating to such Swap Agreements, (a) for any date on or after the date such
Swap Agreements have been closed out and termination values determined in
accordance therewith, such termination values, and (b) for any date prior to the
date referenced in clause (a), the amounts determined as the mark-to-market
values for such Swap Agreements, as determined based upon one or more mid-market
or other readily available quotations provided by any recognized dealer in such
Swap Agreements (which may include a Lender or any Affiliate of a Lender).

“Swingline Commitment”: the agreement of the Swingline Lender to make Swingline
Loans pursuant to Section 2.6 in an aggregate principal amount at any one time
outstanding not to exceed $50,000,000.

“Swingline Exposure”: at any time, the sum of the aggregate amount of all
outstanding Swingline Loans at such time. The Swingline Exposure of any
Revolving Lender at any time shall be the

 

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sum of (i) for any Revolving Lender (other than in the case of any Swingline
Loan made by the Swingline Lender in its capacity as the Swingline Lender), the
amount equivalent to its Revolving Percentage of the total Swingline Exposure at
such time related to such Swingline Loans, and (ii) for the Swingline Lender,
the aggregate principal amount of all Swingline Loans made by such Swingline
Lender outstanding at such time less the participation amounts otherwise funded
by the Revolving Lenders other than the Swingline Lender.

“Swingline Lender”: JPMorgan Chase Bank, N.A. in its capacity as the lender of
Swingline Loans.

“Swingline Loans”: as defined in Section 2.6.

“Swingline Participation Amount”: as defined in Section 2.7.

“Syndication Agent”: the Co-Syndication Agents identified on the cover page of
this Agreement.

“Synthetic Lease Attributed Indebtedness”: with respect to any Person, on any
date, in respect of any so-called synthetic, off-balance sheet or tax retention
lease considered borrowed money indebtedness for United States federal income
tax purposes, but is classified as an operating lease in accordance with GAAP,
the capitalized amount of the remaining lease payments under the relevant lease
or agreement that would appear on a balance sheet of such Person prepared as of
such date in accordance with GAAP if such lease were accounted for as a capital
lease.

“TARGET Day”: any day on which (i) TARGET2 is open for settlement of payments in
Euro and (ii) banks are open for dealings in deposits in Euro in the London
interbank market.

“TARGET2”: the Trans-European Automated Real-time Gross Settlement Express
Transfer payment system which utilizes a single shared platform and which was
launched on November 19, 2007.

“Tax Authority”: any government, state, or municipality or any local, state,
federal, or other fiscal, revenue, customs, or excise authority, body, or
official competent to impose, administer, levy, assess, or collect any Taxes.

“Taxes”: all present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholding), assessments, fees or other charges
in the nature of taxes imposed by any Governmental Authority, including any
interest, additions to tax or penalties applicable thereto.

“Term Commitment”: as to any Lender, collectively, such Lender’s Initial Term
Commitment and such Lender’s Delayed Draw Commitment.

“Term Facility”: the Term Commitments and the Term Loans made available
thereunder.

“Term Lenders”: the collective reference to the Initial Term Lenders, the
Delayed Draw Term Lenders, the Lenders (including New Lenders) in respect of the
Credit Agreement Refinancing Facilities and the Incremental Term Lenders.

“Term Loans”: the collective reference to the Initial Term Loans, the Delayed
Draw Term Loans, Refinancing Term Loans and the Incremental Term Loans.

 

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“Term Percentage”: as to any Term Lender at any time, the percentage which the
aggregate principal amount of such Lender’s Term Loans then outstanding
constitutes of the aggregate principal amount of all Term Loans then
outstanding.

“Termination Date”: as defined in Section 10.14(c).

“Total Revolving Commitments”: at any time, the aggregate amount of the
Revolving Commitments then in effect.

“Total Revolving Extensions of Credit”: at any time, the aggregate amount of the
Revolving Extensions of Credit of the Revolving Lenders outstanding at such
time.

“Transactions”: collectively, (i) the execution and delivery of this Agreement
and each other Loan Document and the Loans to be made hereunder and the use of
proceeds thereof, (ii) the Closing Date Refinancing and (iii) the payment of
fees and expenses in connection with the foregoing.

“Transferee”: any Assignee or Participant.

“Type”: as to any Loan, its nature as an ABR Loan or a Eurocurrency Loan.

“Unfunded Pension Liability”: the excess of a Pension Plan’s benefit liabilities
under Section 4001(a)(16) of ERISA, over the current value of that Pension
Plan’s assets, determined in accordance with the assumptions used for funding
the Pension Plan for purposes of Section 430 of the Internal Revenue Code for
the applicable plan year.

“United States”: the United States of America.

“Unrestricted Subsidiary”: any Subsidiary designated by the Parent Borrower as
an Unrestricted Subsidiary pursuant to Section 6.13 and any Subsidiary of any
such Unrestricted Subsidiary; provided that in no event shall any Borrower be an
Unrestricted Subsidiary.

“U.S. Loan Parties”: the Parent Borrower, each Additional Borrower that is a
Domestic Subsidiary and each Subsidiary Guarantor that is a Domestic Subsidiary.

“U.S. Person”: a “United States person” within the meaning of
Section 7701(a)(30) of the Code.

“U.S. Tax Compliance Certificate”: as defined in Section 2.20(f)(ii)(B).

“Wholly Owned Domestic Subsidiary”: any Domestic Subsidiary that is a Wholly
Owned Subsidiary of the Parent Borrower.

“Wholly Owned Subsidiary”: as to any Person, any other Person all of the Capital
Stock of which (other than directors’ qualifying shares required by law) is
owned by such Person directly and/or through other Wholly Owned Subsidiaries.

“Wholly Owned Subsidiary Guarantor”: any Subsidiary Guarantor that is a Wholly
Owned Subsidiary of the Parent Borrower.

“Withdrawal Liability”: any liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Title IV of ERISA.

 

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

1.2 Other Interpretive Provisions. (a) Unless otherwise specified therein, all
terms defined in this Agreement shall have the defined meanings when used in the
other Loan Documents or any certificate or other document made or delivered
pursuant hereto or thereto.

(b) As used herein and in the other Loan Documents, and any certificate or other
document made or delivered pursuant hereto or thereto, (i) accounting terms
relating to any Group Member or any Unrestricted Subsidiary not defined in
Section 1.1 and accounting terms partly defined in Section 1.1, to the extent
not defined, shall have the respective meanings given to them under GAAP
(provided that all terms of an accounting or financial nature used herein shall
be construed, and all computations of amounts and ratios referred to herein
shall be made without giving effect to (x) any election under Accounting
Standards Codification 825-10-25 (previously referred to as Statement of
Financial Accounting Standards 159) (or any other Accounting Standards
Codification or Financial Accounting Standard having a similar result or effect)
to value any Indebtedness or other liabilities of the Parent Borrower or any
Subsidiary at “fair value”, as defined therein and (y) any treatment of
Indebtedness in respect of convertible debt instruments under Accounting
Standards Codification 470-20 (or any other Accounting Standards Codification or
Financial Accounting Standard having a similar result or effect) to value any
such Indebtedness in a reduced or bifurcated manner as described therein, and
such Indebtedness shall at all times be valued at the full stated principal
amount thereof), (ii) the words “include”, “includes” and “including” shall be
deemed to be followed by the phrase “without limitation”, (iii) the word “incur”
shall be construed to mean incur, create, issue, assume, become liable in
respect of or suffer to exist (and the words “incurred” and “incurrence” shall
have correlative meanings), (iv) the words “asset” and “property” shall be
construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, Capital Stock,
securities, revenues, accounts, leasehold interests and contract rights,
(v) references to agreements or other Contractual Obligations shall, unless
otherwise specified, be deemed to refer to such agreements or Contractual
Obligations as amended, supplemented, restated or otherwise modified from time
to time, and (vi) references to accounting determinations to be made “on” or “as
of” a particular day or date shall, unless otherwise specified, be construed to
mean as of the close of business in Local Time on such day.

(c) Prior to the first delivery of financial statements pursuant to Section 6.1,
with respect to any provision requiring a calculation of Consolidated Total
Leverage Ratio and/or Consolidated Secured Leverage Ratio hereunder (other than,
for avoidance of doubt, for purposes of the definition of “Applicable Margin” or
“Applicable Pricing Grid”), such calculation shall be based on a certificate by
the chief financial officer of the Parent Borrower dated as of Closing Date and
delivered to the Credit Parties hereunder setting forth computations of such
financial ratios in reasonable detail satisfactory to the Administrative Agent.

(d) The words “hereof”, “herein” and “hereunder” and words of similar import,
when used in this Agreement, shall refer to this Agreement as a whole and not to
any particular provision of this Agreement, and Section, Schedule and Exhibit
references are to this Agreement unless otherwise specified.

(e) The meanings given to terms defined herein shall be equally applicable to
both the singular and plural forms of such terms.

 

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(f) Notwithstanding any other provision hereof or of any other Loan Document, no
Excluded Foreign Subsidiary shall be required to guarantee (or provide
collateral security for), any Obligations or Guarantee Obligations of any U.S.
Person (including any Guarantee Obligations with respect thereto), and no
Excluded Collateral shall be pledged with respect thereto. Notwithstanding any
other provision hereof or of any other Loan Document, the provisions set forth
herein and in the other Loan Documents applicable to any Additional Borrower
shall be inapplicable to any Subsidiary unless and until such Subsidiary becomes
an Additional Borrower pursuant to the provisions of Section 10.21 hereof (and
shall be effective as to such Additional Borrower only so long as such
Subsidiary remains an Additional Borrower).

(g) Wherever in this Agreement in connection with a borrowing, conversion,
continuation or prepayment of a Revolving Loan, the issuance, amendment or
extension of a Letter of Credit or any assignment, any required minimum or
multiple amount, is expressed in Dollars, but such borrowing, Loan or Letter of
Credit or any such assignment is denominated in a Foreign Currency, such amount
expressed in Dollars shall be deemed to be an amount expressed in the applicable
Foreign Currency.

(h) In connection with a Limited Conditionality Acquisition, if compliance with
any financial ratio with respect to the incurrence of Indebtedness or the making
of Permitted Acquisitions (but, for the avoidance of doubt, excluding, for
purposes of calculating the financial covenants set forth in Section 7.1, or for
purposes of determining the Applicable Margin) is being determined on the date
the definitive acquisition agreement for such Limited Conditionality Acquisition
is entered into, then on or following the date of such determination and prior
to the earlier of the date on which such Limited Conditionality Acquisition is
consummated or the definitive agreement for such Limited Conditionality
Acquisition is terminated, any determination of the Consolidated Total Leverage
Ratio or the Consolidated Secured Leverage Ratio shall be calculated on a pro
forma basis assuming such Limited Conditionality Acquisition and other
transactions in connection therewith (including any incurrence of Indebtedness
and the use of proceeds thereof) have been consummated, except to the extent
that such calculation would result in a lower Consolidated Total Leverage Ratio
or Consolidated Secured Leverage Ratio than would apply if such calculation was
made without giving pro forma effect to such Limited Conditionality Acquisition
and the other transactions to be entered into in connection therewith (including
any incurrence of Indebtedness and the use of proceeds thereof).

SECTION 2. AMOUNT AND TERMS OF COMMITMENTS

2.1 Term Commitments. (a) Subject to the terms and conditions hereof, each Term
Lender severally agrees to make a term loan (an “Initial Term Loan”) in Dollars
to the applicable Borrower on the Closing Date in an amount equal to the amount
of the Initial Term Commitment of such Term Lender.

(b) Subject to the terms and conditions hereof, each Term Lender severally
agrees to make a term loan (an “Delayed Draw Term Loan”) in Dollars to the
Parent Borrower or the Closing Date Additional Borrower on the Delayed Draw
Funding Date in an amount equal to the amount of the Delayed Draw Commitment (or
such lesser amount as may be requested by applicable Borrower) of such Term
Lender. The Delayed Draw Commitments shall terminate on the earlier of the
(a) the Delayed Draw Funding Date and (b) the date that is six months after the
Closing Date (such earlier date, the “Delayed Draw Termination Date”).

(c) The Term Loans may from time to time be Eurocurrency Loans or ABR Loans, as
determined by the applicable Borrower and notified to the Administrative Agent
in accordance with Sections 2.2 and 2.13.

 

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2.2 Procedure for Term Loan Borrowing. The applicable Borrower shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent (x) with respect to the Initial Term Loans, prior to 1:00
P.M., New York City time, one Business Days prior to the anticipated Closing
Date and (y) with respect to the Delayed Draw Term Loans, prior to 1:00 P.M.,
New York City time, one Business Day prior to the anticipated Delayed Draw
Funding Date), substantially in the form of Exhibit H, requesting that the Term
Lenders make the Term Loans on the Closing Date or the Delayed Draw Funding
Date, as applicable, and specifying the amount to be borrowed. Upon receipt of
such notice the Administrative Agent shall promptly notify each Term Lender
thereof. Not later than 12:00 Noon, New York City time, on the Closing Date or
the Delayed Draw Funding Date, as applicable, each Term Lender shall make
available to the Administrative Agent at the Funding Office an amount in
immediately available funds in Dollars equal to the Term Loan or Term Loans to
be made by such Lender. The Administrative Agent shall credit the account of the
applicable Borrower on the books of such office of the Administrative Agent with
the aggregate of the amounts made available to the Administrative Agent by the
Term Lenders in immediately available funds.

2.3 Repayment of Term Loans. (a) The Term Loans of each Term Lender shall mature
in consecutive quarterly installments, each of which shall be in an amount in
Dollars equal to such Lender’s Term Percentage multiplied by the percentage set
forth below of the original principal amount of the Initial Term Loans made on
the Closing Date plus, from and after the Delayed Draw Funding Date, the
original principal amount of the Delayed Draw Term Loans made on the Delayed
Draw Funding Date; provided that each installment set forth hereunder shall be
reduced by the application of any prepayments of the Term Loans as provided in
Sections 2.11 and 2.12 hereof; provided further that the outstanding balance of
the Term Loans shall be paid on the Maturity Date:

 

Date

   Percentage of the original principal
amount of the Term Loans to be repaid

September 30, 2016

   1.25%

December 31, 2016

   1.25%

March 31, 2017

   1.25%

June 30, 2017

   1.25%

September 30, 2017

   1.25%

December 31, 2017

   1.25%

March 31, 2018

   1.25%

June 30, 2018

   1.25%

September 30, 2018

   1.25%

December 31, 2018

   1.25%

March 31, 2019

   1.25%

June 30, 2019

   1.25%

September 30, 2019

   1.875%

December 31, 2019

   1.875%

March 31, 2020

   1.875%

June 30, 2020

   1.875%

September 30, 2020

   2.50%

December 31, 2020

   2.50%

March 31, 2021

   2.50%

(b) The Incremental Term Loans of each Incremental Term Lender shall mature in
consecutive installments (which shall be no more frequent than quarterly) as
specified in the Additional Credit Extension Amendment pursuant to which such
Incremental Term Loans were made; provided that each installment with respect to
any tranche of Incremental Term Loans shall be reduced by the application of any
prepayments to such tranche of Incremental Term Loans as provided in Sections
2.11 and 2.12 hereof.

 

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2.4 Revolving Commitments. (a) Subject to the terms and conditions hereof, each
Revolving Lender severally agrees to make revolving credit loans (“Revolving
Loans”) in Dollars or in one or more Foreign Currencies (such Revolving Loans,
“Foreign Currency Loans”) to the Borrowers from time to time during the
Revolving Commitment Period in an aggregate principal amount at any one time
outstanding which, when added (after giving effect to the use of proceeds
thereof) to the sum of (i) such Lender’s Revolving Percentage of the sum of
(x) the L/C Obligations then outstanding and (y) the aggregate principal amount
of the Revolving Loans (including the Dollar Equivalent of Foreign Currency
Loans) then outstanding, (ii) such Lender’s Swingline Exposure then outstanding,
does not exceed the amount of such Lender’s Revolving Commitment and (iii) the
Total Revolving Extensions of Credit outstanding at such time (including the
Dollar Equivalent of any Revolving Extensions of Credit outstanding in
currencies other than Dollars) does not exceed the Total Revolving Commitments.
During the Revolving Commitment Period the Borrowers may use the Revolving
Commitments by borrowing, prepaying the Revolving Loans in whole or in part, and
reborrowing, all in accordance with the terms and conditions hereof. Revolving
Loans may from time to time be Eurocurrency Loans or (other than in the case of
Foreign Currency Loans) ABR Loans, as determined by the applicable Borrower and
notified to the Administrative Agent in accordance with Sections 2.5 and 2.13.

(b) Subject to the terms and conditions hereof, each Revolving Lender agrees to
make Foreign Currency Loans to the Borrowers from time to time during the
Revolving Commitment Period; provided that (i) after giving effect to the
requested Foreign Currency Loan, the Dollar Equivalent of the sum of the
aggregate principal amount of Foreign Currency Loans and any L/C Exposure
denominated in any L/C Foreign Currency outstanding at such time does not exceed
the Foreign Currency Sublimit, (ii) after giving effect to the requested Foreign
Currency Loan (and the use of proceeds thereof), the sum of (x) such Lender’s
Revolving Percentage of the sum of (1) the L/C Obligations then outstanding
(including the Dollar Equivalent of any L/C obligations denominated in any L/C
Foreign Currency) and (2) the aggregate principal amount of the Revolving Loans
(including the Dollar Equivalent of Foreign Currency Loans) then outstanding and
(y) such Lender’s Swingline Exposure then outstanding, does not exceed the
amount of such Lender’s Revolving Commitment and (iii) the Total Revolving
Extensions of Credit outstanding at such time (including the Dollar Equivalent
of any Revolving Extensions of Credit outstanding in currencies other than
Dollars) does not exceed the Total Revolving Commitments. The Foreign Currency
Loans shall be Eurocurrency Loans.

(c) Each Borrower shall repay all of its outstanding Revolving Loans, including
Foreign Currency Loans, on the Maturity Date.

(d) Notwithstanding anything to the contrary contained herein, each Lender at
its option may make any Loan to any Additional Borrower by causing any domestic
or foreign branch or Affiliate of such Lender to make such Loan; provided that
any exercise of such option shall not affect the obligation of such Additional
Borrower to repay such Loan in accordance with the terms of this Agreement and
shall not cause any Borrower or other Loan Party to incur as of the date of the
exercise of such option any greater liability than it shall then have under
Section 2.19 or Section 2.20(a).

2.5 Procedure for Revolving Loan Borrowing. (a) Any Borrower may borrow under
the Available Revolving Commitments in Dollars during the Revolving Commitment
Period on any Business Day, provided that such Borrower shall give the
Administrative Agent irrevocable notice, substantially in the form of Exhibit H
(which notice must be received by the Administrative Agent prior to (i) 12:00
P.M., New York City time, three Business Days prior to the requested Borrowing
Date, in the case of Eurocurrency Loans, or (ii) 12:00 P.M., New York City time,
on the requested Borrowing Date, in

 

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the case of ABR Loans) (provided that any such notice of a borrowing of ABR
Loans under the Revolving Facility to finance payments required by Section 3.5
may be given not later than 10:00 A.M., New York City time, on the date of the
proposed borrowing), specifying (A) the applicable Borrower, (B) the amount and
Type of Revolving Loans to be borrowed, (C) the requested Borrowing Date and
(D) in the case of Eurocurrency Loans, the respective amounts of each such Type
of Loan (and the respective lengths of the initial Interest Period therefor).
Each borrowing under the Revolving Commitments in Dollars shall be in an amount
equal to (x) in the case of ABR Loans, $500,000 or a whole multiple of $100,000
in excess thereof (or, if the then aggregate Available Revolving Commitments are
less than $500,000, such lesser amount) and (y) in the case of Eurocurrency
Loans, $5,000,000 or a whole multiple of $500,000 in excess thereof; provided,
that the Swingline Lender may request, on behalf of the Borrowers, borrowings
under the Revolving Commitments that are ABR Loans in other amounts pursuant to
Section 2.7. Upon receipt of any such notice from the applicable Borrower, the
Administrative Agent shall promptly notify each Revolving Lender thereof. Each
Revolving Lender will make the amount of its pro rata share of each borrowing
available to the Administrative Agent for the account of the applicable Borrower
at the Funding Office prior to 1:00 P.M., New York City time, on the Borrowing
Date requested by the applicable Borrower in funds immediately available to the
Administrative Agent. Such borrowing will then be made available to the
applicable Borrower by the Administrative Agent crediting the account of the
applicable Borrower on the books of such office with the aggregate of the
amounts made available to the Administrative Agent by the Revolving Lenders and
in like funds as received by the Administrative Agent.

(b) Any Borrower may borrow under the Available Revolving Commitments in any
Foreign Currency during the Revolving Commitment Period on any Business Day;
provided that such Borrower shall give the Administrative Agent irrevocable
notice (which notice must be received by the Administrative Agent prior to 3:00
P.M., Local Time, four Business Days prior to the requested Borrowing Date),
specifying (i) the applicable Borrower, (ii) the amount of Foreign Currency
Loans to be borrowed, (iii) the Foreign Currency in which such Foreign Currency
Loans will be denominated, (iv) the requested Borrowing Date, (v) the length of
the initial Interest Period therefor and (vi) the applicable account of such
Borrower to which such funds will be credited or disbursed. Upon receipt of any
such notice from the applicable Borrower, the Administrative Agent shall
promptly notify each Revolving Lender thereof. Each borrowing of Foreign
Currency Loans in a particular Foreign Currency shall be in a minimum amount as
set forth on the Administrative Schedule. With respect to any borrowing of
Foreign Currency Loans, the Foreign Currency Loan of each Revolving Lender shall
be in an amount equal to its Revolving Percentage of the applicable borrowing.
On each Borrowing Date, each Revolving Lender will make the amount of its share
of such borrowing available to the Administrative Agent at the applicable office
specified on the Administrative Schedule, prior to the time specified on the
Administrative Schedule for the relevant Foreign Currency, in the relevant
Foreign Currency in funds immediately available. Such borrowing will then be
made available to the applicable Borrower in like funds as received by the
Administrative Agent, by the Administrative Agent crediting or disbursing the
aggregate of the amounts made available to the Administrative Agent by the
Revolving Lenders to the account set forth by the applicable Borrower in the
applicable borrowing notice.

2.6 Swingline Commitment. (a) Subject to the terms and conditions hereof,
(i) the Swingline Lender agrees to make a portion of the credit otherwise
available to the Borrowers under the Revolving Commitments from time to time
during the Revolving Commitment Period by making swing line loans (“Swingline
Loans”) in Dollars to the Borrowers; provided that (i) any Swingline Loan shall
be made in the sole discretion of the Swingline Lender, (ii) the aggregate
principal amount of Swingline Loans outstanding at any time shall not exceed the
Swingline Commitment then in effect (notwithstanding that the Swingline Loans
outstanding at any time, when aggregated with the Swingline Lender’s other
outstanding Revolving Loans, may exceed the Swingline Commitment then in effect)
and, (iii) the sum of (x) the Swingline Exposure of such Swingline Lender (in
its capacity as a Swingline

 

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Lender and a Revolving Lender), (y) the aggregate principal amount of
outstanding Revolving Loans made by such Swingline Lender (in its capacity as a
Revolving Lender) and (z) the L/C Exposure of such Swingline Lender (in its
capacity as a Revolving Lender) shall not exceed its Revolving Commitment then
in effect and (iv) no Borrower shall request, and the Swingline Lender shall not
make, any Swingline Loan if, after giving effect to the making of such Swingline
Loan, the aggregate amount of the Available Revolving Commitments would be less
than zero. During the Revolving Commitment Period, the Borrowers may use the
Swingline Commitment by borrowing, repaying and reborrowing, all in accordance
with the terms and conditions hereof. Swingline Loans shall be ABR Loans only.

(b) Each Borrower shall repay to the Swingline Lender the then unpaid principal
amount of each Swingline Loan made to such Borrower on the earlier of the
Maturity Date and the first date after such Swingline Loan is made that is the
last day of a calendar month and is at least two Business Days after such
Swingline Loan is made; provided that on each date that a Revolving Loan is
borrowed, the applicable Borrower shall repay all of its Swingline Loans then
outstanding.

2.7 Procedure for Swingline Borrowing; Refunding of Swingline Loans.
(a) Whenever any Borrower desires that the Swingline Lender make Swingline
Loans, it shall give the Swingline Lender irrevocable telephonic notice
confirmed promptly in writing (which telephonic notice must be received by the
Swingline Lender not later than 1:30 P.M., New York City time, on the proposed
Borrowing Date), specifying (i) the applicable Borrower, (ii) the amount to be
borrowed and (iii) the requested Borrowing Date (which shall be a Business Day
during the Revolving Commitment Period). Each Swingline Loan made under the
Swingline Commitment shall be in an amount equal to $500,000 or a whole multiple
of $100,000 in excess thereof. If the Swingline Lender agrees, in its sole
discretion, to make a Swingline Loan, not later than 3:30 P.M., New York City
time, on the Borrowing Date specified in a notice in respect of Swingline Loans,
the Swingline Lender shall make available to the Administrative Agent at the
Funding Office an amount in immediately available funds equal to the amount of
the Swingline Loan to be made by the Swingline Lender. The Administrative Agent
shall make the proceeds of such Swingline Loan available to the applicable
Borrower on such Borrowing Date by depositing such proceeds in the account of
the applicable Borrower with the Administrative Agent on such Borrowing Date in
immediately available funds.

(b) The Swingline Lender, at any time and from time to time in its sole and
absolute discretion may, on behalf of the applicable Borrower (and each Borrower
hereby irrevocably directs the Swingline Lender to act on its behalf), on notice
given by the Swingline Lender no later than 1:30 P.M., New York City time,
request each Revolving Lender to make, and each Revolving Lender hereby agrees
to make, a Revolving Loan in an amount equal to such Revolving Lender’s
Revolving Percentage of the aggregate amount of the Swingline Loans (the
“Refunded Swingline Loans”), outstanding on the date of such notice, to repay
the Swingline Lender. Each Revolving Lender shall make the amount of such
Revolving Loan available to the Administrative Agent at the Funding Office in
immediately available funds, not later than 3:30 P.M., New York City time, on
the date of such notice. The proceeds of such Revolving Loans shall be
immediately made available by the Administrative Agent to the Swingline Lender
for application by the Swingline Lender to the repayment of the Refunded
Swingline Loans. Each Borrower irrevocably authorizes the Swingline Lender to
charge such Borrower’s accounts with the Administrative Agent (up to the amount
available in each such account) in order to immediately pay the amount of such
Refunded Swingline Loans of such Borrower to the extent amounts received from
the Revolving Lenders are not sufficient to repay in full such Refunded
Swingline Loans.

(c) If prior to the time a Revolving Loan would have otherwise been made
pursuant to Section 2.7(b), one of the events described in Section 8(f) shall
have occurred and be continuing with respect to any Borrower or if for any other
reason, as determined by the Swingline Lender in its sole discretion, Revolving
Loans may not be made as contemplated by Section 2.7(b), each Revolving Lender

 

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shall, on the date such Revolving Loan was to have been made pursuant to the
notice referred to in Section 2.7(b), purchase for cash an undivided
participating interest in the then outstanding Swingline Loans by paying to the
Swingline Lender an amount (the “Swingline Participation Amount”) equal to
(i) such Revolving Lender’s Revolving Percentage times (ii) the sum of the
aggregate principal amount of Swingline Loans then outstanding that were to have
been repaid with such Revolving Loans.

(d) Whenever, at any time after the Swingline Lender has received from any
Revolving Lender such Lender’s Swingline Participation Amount, the Swingline
Lender receives any payment on account of the Swingline Loans, the Swingline
Lender will distribute to such Lender its Swingline Participation Amount
(appropriately adjusted, in the case of interest payments, to reflect the period
of time during which such Lender’s participating interest was outstanding and
funded and, in the case of principal and interest payments, to reflect such
Lender’s pro rata portion of such payment if such payment is not sufficient to
pay the principal of and interest on all Swingline Loans then due); provided,
however, that in the event that such payment received by the Swingline Lender is
required to be returned, such Revolving Lender will return to the Swingline
Lender any portion thereof previously distributed to it by the Swingline Lender.

(e) Each Revolving Lender’s obligation to make the Loans referred to in
Section 2.7(b) and to purchase participating interests pursuant to
Section 2.7(c) shall be absolute and unconditional and shall not be affected by
any circumstance, including (i) any setoff, counterclaim, recoupment, defense or
other right that such Revolving Lender or any Borrower may have against the
Swingline Lender, any Borrower or any other Person for any reason whatsoever,
(ii) the occurrence or continuance of a Default or an Event of Default or the
failure to satisfy any of the other conditions specified in Section 5, (iii) any
adverse change in the condition (financial or otherwise) of any Borrower,
(iv) any breach of this Agreement or any other Loan Document by any Borrower,
any other Loan Party or any other Revolving Lender or (v) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing.

2.8 Commitment Fees, etc. (a) The Parent Borrower agrees to pay to the
Administrative Agent for the account of each Revolving Lender a commitment fee
for the period from and including the Closing Date to the last day of the
Revolving Commitment Period, computed at the Commitment Fee Rate on the average
daily amount of the Available Revolving Commitment of such Lender during the
period for which payment is made, due and payable quarterly in arrears on each
Fee Payment Date, commencing on the first such date to occur after the Closing
Date.

(b) The Parent Borrower agrees to pay to the Administrative Agent for the
account of each Lender with a Delayed Draw Commitment a commitment fee for the
period from and including the Closing Date to but including the Delayed Draw
Termination Date, computed at the Commitment Fee Rate on the amount of the
Delayed Draw Commitment of such Lender during such period, due and payable on
the Delayed Draw Termination Date.

(c) The Parent Borrower agrees to pay to the Administrative Agent the fees in
the amounts and on the dates as set forth in any fee agreements with the
Administrative Agent and to perform any other obligations contained therein.

2.9 Termination or Reduction of Revolving Commitments. The Parent Borrower shall
have the right, upon not less than three Business Days’ notice to the
Administrative Agent, to terminate the Revolving Commitments or, from time to
time, to reduce the amount of the Revolving Commitments; provided that no such
termination or reduction of Revolving Commitments shall be permitted if after
giving effect thereto and to any prepayments of the Revolving Loans and
Swingline Loans made on the effective date thereof, the Total Revolving
Extensions of Credit would exceed the

 

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Total Revolving Commitments. Any such reduction shall be in an amount equal to
$1,000,000, or a whole multiple thereof, and shall reduce permanently the
Revolving Commitments then in effect. Any notice of termination given by the
Parent Borrower may state that such notice is conditioned upon the effectiveness
of other credit facilities or capital raising, in which case such notice may be
revoked by the Parent Borrower (by notice to the Administrative Agent prior to
the specified effective date) if such condition is not satisfied.

2.10 [Reserved].

2.11 Optional Prepayments. The Borrowers may at any time and from time to time
prepay the Loans, in whole or in part, without premium or penalty, upon
irrevocable notice delivered to the Administrative Agent no later than (a) 12:00
P.M., New York City time, three Business Days prior thereto, in the case of
Eurocurrency Loans (other than Foreign Currency Loans), (b) no later than 12:00
P.M., New York City time, on the date of such prepayment, in the case of ABR
Loans and (c) no later than the time set forth thereof for the relevant Foreign
Currency on the Administrative Schedule in the case of Foreign Currency Loans,
which notice shall, in each case, specify the date and amount of prepayment, the
Loans to be prepaid and whether the prepayment is of Eurocurrency Loans
denominated in Dollars, Foreign Currency Loans (and if a Foreign Currency Loan
is to be prepaid, the Foreign Currency in which such Loans are denominated) or
ABR Loans; provided, that if a Eurocurrency Loan is prepaid on any day other
than the last day of the Interest Period applicable thereto, the applicable
Borrower shall also pay any amounts owing pursuant to Section 2.21. Upon receipt
of any such notice the Administrative Agent shall promptly notify each relevant
Lender thereof. If any such notice is given, the amount specified in such notice
shall be due and payable on the date specified therein, together with (except in
the case of Revolving Loans that are ABR Loans and Swingline Loans) accrued
interest to such date on the amount prepaid; provided, however, that any notice
of prepayment given by any Borrower may state that such prepayment notice is
conditioned upon the effectiveness of other credit facilities or capital
raising, in which case such notice may be revoked by such Borrower (by notice to
the Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Partial prepayments of Term Loans and Revolving
Loans (other than Foreign Currency Loans) shall be in an aggregate principal
amount of $500,000 or a whole multiple thereof. Partial prepayments of Swingline
Loans shall be in an aggregate principal amount of $100,000 or a whole multiple
thereof. Partial prepayments of Foreign Currency Loans shall be in a minimum
amount as set forth for the relevant Foreign Currency on the Administrative
Schedule. Optional prepayments shall be applied to the prepayment of Term Loans
as directed by the Parent Borrower.

2.12 Mandatory Prepayments. (a) If any Indebtedness shall be issued or incurred
by any Group Member (excluding any Indebtedness incurred in accordance with
Section 7.2 (other than any Credit Agreement Refinancing Facilities or Permitted
External Refinancing Debt)), an amount equal to 100% of the Net Cash Proceeds
thereof shall be applied on the date of such issuance or incurrence toward the
prepayment of the Term Loans as set forth in Section 2.12(d).

(b) Subject to Section 2.12(e), if on any date any Group Member shall receive
Net Cash Proceeds from any Asset Sale or Recovery Event, which, together with
the Net Cash Proceeds received from all other Asset Sales or Recovery Events in
such fiscal year exceed $40,000,000, then, unless a Reinvestment Notice shall be
delivered in respect thereof, an amount equal to such Net Cash Proceeds in
excess of $40,000,000, and an amount equal to all Net Cash Proceeds received
thereafter in such fiscal year, shall be applied on such date of receipt toward
the prepayment of the Term Loans as set forth in Section 2.12(d); provided,
that, notwithstanding the foregoing, on each Reinvestment Prepayment Date, an
amount equal to the Reinvestment Prepayment Amount with respect to the relevant
Reinvestment Event shall be applied toward the prepayment of the Term Loans as
set forth in Section 2.12(d).

 

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(c) [Reserved].

(d) Amounts to be applied in connection with prepayments made pursuant to
Section 2.12 shall be applied to the prepayment of the Term Loans in accordance
with Section 2.18(b). Each prepayment of the Term Loans under Section 2.12 shall
be accompanied by accrued interest to the date of such prepayment on the amount
prepaid.

(e) Notwithstanding any provision to the contrary in this Agreement, the
following amounts shall be excluded from the calculation of the amount of Net
Cash Proceeds from any Asset Sale or Recovery Event, as applicable:

(i) any Net Cash Proceeds from any Asset Sale by a Foreign Subsidiary or Net
Cash Proceeds from any Recovery Event with respect to a Foreign Subsidiary, as
applicable, the distribution of which by a Foreign Subsidiary to the Parent
Borrower or a Domestic Subsidiary or any holder of Capital Stock of such Foreign
Subsidiary is prohibited or delayed by applicable local law. Any amount that is
excluded from the calculation of Net Cash Proceeds in accordance with this
Section 2.12(e)(i) will not be required to be applied to repay Loans at the
times provided in Section 2.12(b) and may be deducted from any amounts otherwise
due under Section 2.12(b), so long, but only so long, as the applicable local
law will not permit a distribution of those funds by the Foreign Subsidiary (the
Parent Borrower hereby agreeing to use commercially reasonable efforts to take
and to use commercially reasonable efforts to cause the applicable Foreign
Subsidiary to take all commercially reasonable actions required by the
applicable law to eliminate such limitations). Once the distribution of any of
such affected Net Cash Proceeds is permitted under the applicable local law, the
Parent Borrower shall prepay the Term Loans (not later than five (5) Business
Days after such distribution is permitted) by an amount equal to such portion of
such affected amount, except, for the avoidance of doubt, to the extent that a
Reinvestment Notice has been or shall be validly delivered pursuant to
Section 2.12(b) in respect of such Net Cash Proceeds or to the extent
Section 2.12(e)(ii) precludes such prepayment; and

(ii) any Net Cash Proceeds from any Asset Sale by a Foreign Subsidiary or Net
Cash Proceeds from any Recovery Event with respect to a Foreign Subsidiary, in
each case, to the extent that the Parent Borrower has determined in its
reasonable judgment that the distribution of any of or all such items to the
Parent Borrower or any Domestic Subsidiary or any holder of Capital Stock of
such Foreign Subsidiary would have any adverse tax consequence (the Parent
Borrower hereby agreeing to use commercially reasonable efforts to take and to
use commercially reasonable efforts to cause the applicable Foreign Subsidiary
to take all commercially reasonable actions required by the applicable law to
avoid any such adverse tax consequence). Any amount that is excluded from the
calculation of Net Cash Proceeds in accordance with this paragraph 2.12(e)(ii)
will not be required to be applied to repay Loans at the times provided in
Section 2.12(b) and may be deducted from any amounts otherwise due under
Section 2.12(b). Once the Parent Borrower determines in its reasonable judgment
that a distribution of any of such affected Net Cash Proceeds would cease to
result in adverse tax consequences, the Parent Borrower shall prepay the Term
Loans (not later than five (5) Business Days after such determination) by an
amount equal to such portion of such affected amount, except, for the avoidance
of doubt, to the extent that a Reinvestment Notice has been or shall be validly
delivered pursuant to Section 2.12(b) in respect of such Net Cash Proceeds or to
the extent Section 2.12(e)(i) precludes such prepayment.

Notwithstanding anything to the contrary in this Section 2.12, in no event shall
any Group Member be required to repatriate cash of Non-Domestic Subsidiaries to
the United States.

 

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(f) If, on any date, (i) the aggregate Dollar Equivalents of the sum of the
aggregate outstanding principal amounts of Foreign Currency Loans and any
outstanding L/C Obligations denominated in any L/C Foreign Currency exceeds an
amount equal to 105% of the Foreign Currency Sublimit, the Borrowers shall,
without notice or demand, immediately repay such of the outstanding Foreign
Currency Loans and cash collateralize any outstanding Letters of Credit
denominated in any L/C Foreign Currency in an aggregate principal amount such
that, after giving effect thereto, the aggregate Dollar Equivalents of the
outstanding principal amounts of Foreign Currency Loans does not exceed the
Foreign Currency Sublimit or (ii) the Total Revolving Extensions of Credit
(including the Dollar Equivalents of any Revolving Extensions of Credit
outstanding in a currency other than Dollars) exceed the Total Revolving
Commitments, and the Total Revolving Extensions of Credit (including the Dollar
Equivalents of any Revolving Extensions of Credit outstanding in a currency
other than Dollars) exceed the Total Revolving Commitments for two consecutive
Business Days thereafter, then on such second Business Day thereafter, the
Borrowers shall, without notice or demand, immediately repay such of the
outstanding Revolving Extensions of Credit and cash collateralize any
outstanding Letters of Credit in an aggregate principal amount such that, after
giving effect thereto, the Total Revolving Extensions of Credit (including the
Dollar Equivalents of any Revolving Extensions of Credit outstanding in a
currency other than Dollars) do not exceed the Total Revolving Commitments.

2.13 Conversion and Continuation Options. (a) The applicable Borrower may elect
from time to time to convert Eurocurrency Loans that are denominated in Dollars
to ABR Loans by giving the Administrative Agent prior irrevocable notice of such
election no later than 12:00 P.M., New York City time, on the Business Day
preceding the proposed conversion date, provided that any such conversion of
Eurocurrency Loans may only be made on the last day of an Interest Period with
respect thereto. The applicable Borrower may elect from time to time to convert
ABR Loans to Eurocurrency Loans by giving the Administrative Agent prior
irrevocable notice of such election no later than 12:00 P.M., New York City
time, on the third Business Day preceding the proposed conversion date (which
notice shall specify the length of the initial Interest Period therefor),
provided that no ABR Loan under a particular Facility may be converted into a
Eurocurrency Loan when any Event of Default has occurred and is continuing and
the Administrative Agent or the Majority Facility Lenders in respect of such
Facility have determined in its or their sole discretion not to permit such
conversions. Upon receipt of any such notice the Administrative Agent shall
promptly notify each relevant Lender thereof.

(b) Any Eurocurrency Loan may be continued as such upon the expiration of the
then current Interest Period with respect thereto by the applicable Borrower
giving irrevocable notice to the Administrative Agent, in accordance with the
applicable provisions of the term “Interest Period” set forth in Section 1.1, of
the length of the next Interest Period to be applicable to such Loans, provided
that no Eurocurrency Loan under a particular Facility may be continued as such
(i) when any Event of Default has occurred and is continuing and the
Administrative Agent has or the Majority Facility Lenders in respect of such
Facility have determined in its or their sole discretion not to permit such
continuations or (ii) if an Event of Default specified in clause (i) or (ii) of
Section 8(f) with respect to any Borrower is in existence, provided, further,
that (i) with respect to Eurocurrency Loans denominated in Dollars, if the
applicable Borrower shall fail to give any required notice as described above in
this paragraph or if such continuation is not permitted pursuant to the
preceding proviso any such Loans shall be automatically converted to ABR Loans
on the last day of such then expiring Interest Period and (ii) with respect to
Eurocurrency Loans denominated in a currency other than Dollars, (x) if the
applicable Borrower shall fail to give any required notice as described above in
this paragraph, such Loans shall be continued as Eurocurrency Loans with a
three-month Interest Period and (y) if such continuation is not permitted
pursuant to the preceding proviso any such Loans shall be subject to a rate of
interest determined pursuant to negotiations (for a period of not more than
thirty days) between the Administrative Agent and the Parent Borrower with a
view to agreeing a substitute basis for determining the rate of interest and,
pending such negotiations, the rate of interest on each Revolving Lender’s share
of the relevant Foreign

 

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Currency Loan for the relevant Interest Period shall be the percentage rate per
annum which is the sum of (A) the Applicable Margin and (B) the rate notified to
the Administrative Agent by that Revolving Lender as soon as practicable and in
any event before interest is due to be paid in respect of that Interest Period,
to be that which expresses as a percentage rate per annum the cost to the
relevant Revolving Lender of funding its participation in that Foreign Currency
Loan from whatever source it may reasonably select (which if negative shall be
deemed to be zero), and the relevant Revolving Lender shall provide a
certificate to the Administrative Agent setting out in reasonable detail how it
has calculated such cost, provided that nothing in this clause (y) shall require
such Revolving Lender to disclose information that it is prevented from
disclosing pursuant to any applicable laws, regulations or confidentiality
obligations, and any alternative basis agreed pursuant to the foregoing shall be
binding on all Loan Parties; and provided further that any such Eurocurrency
Loan is continued in the same currency. Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof.

2.14 Limitations on Eurocurrency Tranches and Foreign Currency Loans.
Notwithstanding anything to the contrary in this Agreement, all borrowings,
conversions and continuations of Eurocurrency Loans denominated in Dollars and
all selections of Interest Periods shall be in such amounts and be made pursuant
to such elections so that, (a) after giving effect thereto, the aggregate
principal amount of the Eurocurrency Loans denominated in Dollars comprising
each Eurocurrency Tranche shall be equal to $1,000,000 or a whole multiple of
$1,000,000 in excess thereof and (b) no more than ten Eurocurrency Tranches
denominated in Dollars shall be outstanding at any one time. There shall be no
more than six Foreign Currency Loans denominated in Foreign Currencies
outstanding at any time.

2.15 Interest Rates and Payment Dates. (a) Each Eurocurrency Loan shall bear
interest for each day during each Interest Period with respect thereto at a rate
per annum equal to the Eurocurrency Rate determined for such day plus the
Applicable Margin.

(b) Each ABR Loan shall bear interest at a rate per annum equal to the ABR plus
the Applicable Margin.

(c) (i) If all or a portion of the principal amount of any Loan or Reimbursement
Obligation shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a rate
per annum equal to (x) in the case of the Loans, the rate that would otherwise
be applicable thereto pursuant to the foregoing provisions of this Section plus
2% or (y) in the case of Reimbursement Obligations, the rate applicable to ABR
Loans under the Revolving Facility plus 2% and (ii) if all or a portion of any
interest payable on any Loan or Reimbursement Obligation or any commitment fee
or other amount payable hereunder shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise), such overdue amount shall bear
interest at a rate per annum equal to the rate then applicable to ABR Loans
under the relevant Facility plus 2% (or, in the case of any such other amounts
that do not relate to a particular Facility, the rate then applicable to ABR
Loans under the Revolving Facility plus 2%), in each case, with respect to
clauses (i) and (ii) above, from the date of such non-payment until such amount
is paid in full (as well after as before judgment) (such increased rate, in each
case, as applicable, the “Default Rate”).

(d) Interest shall be payable in arrears on each Interest Payment Date, provided
that interest accruing pursuant to paragraph (c) of this Section shall be
payable from time to time on demand.

2.16 Computation of Interest and Fees. (a) Interest and fees payable pursuant
hereto shall be calculated on the basis of a 360-day year for the actual days
elapsed, except that, with respect to (i) ABR Loans the rate of interest on
which is calculated on the basis of the Prime Rate, the interest thereon shall
be calculated on the basis of a 365- (or 366-, as the case may be) day year for
the actual days

 

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elapsed and (ii) Loans denominated in Pounds Sterling or Canadian Dollars, the
interest thereon shall be calculated on the basis of a 365-day year for the
actual days elapsed; provided that with respect to Loans denominated in a
Foreign Currency, the interest thereon shall be calculated in accordance with
market practice, if market practice differs from the foregoing. The
Administrative Agent shall as soon as practicable notify the Parent Borrower and
the relevant Lenders of each determination of a Eurocurrency Rate. Any change in
the interest rate on a Loan resulting from a change in the ABR shall become
effective as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify the
Parent Borrower and the relevant Lenders of the effective date and the amount of
each such change in interest rate.

(b) Each determination of an interest rate by the Administrative Agent pursuant
to any provision of this Agreement shall be conclusive and binding on the
Borrowers and the Lenders in the absence of manifest error. The Administrative
Agent shall, at the request of the Parent Borrower, deliver to the Parent
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to Section 2.15(a).

2.17 Inability to Determine Interest Rate. If prior to the first day of any
Interest Period:

(i) the Administrative Agent shall have reasonably determined (which
determination shall be conclusive and binding upon the Borrowers) that, by
reason of circumstances affecting the relevant market, adequate and reasonable
means do not exist for ascertaining the Eurocurrency Rate for such Interest
Period, or

(ii) the Administrative Agent shall have received notice from the Majority
Facility Lenders in respect of the relevant Facility that the Eurocurrency Rate
determined or to be determined for such Interest Period will not adequately and
fairly reflect the cost to such Lenders (as conclusively certified by such
Lenders) of making or maintaining their affected Loans during such Interest
Period,

the Administrative Agent shall give telecopy or telephonic notice thereof to the
Parent Borrower and the relevant Lenders as soon as practicable thereafter. If
such notice is given (A) in respect of Eurocurrency Loans denominated in
Dollars, (x) any Eurocurrency Loans under the relevant Facility requested to be
made on the first day of such Interest Period shall be made as ABR Loans,
(y) any Loans under the relevant Facility that were to have been converted on
the first day of such Interest Period to Eurocurrency Loans shall be continued
as ABR Loans and (z) any outstanding Eurocurrency Loans under the relevant
Facility shall be converted, on the last day of the then-current Interest
Period, to ABR Loans and (B) in respect of Foreign Currency Loans, any Foreign
Currency Loans requested to be made on the first day of such Interest Period
and/or any outstanding Foreign Currency Loans shall be subject to a rate of
interest determined pursuant to negotiations (for a period of not more than
thirty days) between the Administrative Agent and the Parent Borrower with a
view to agreeing a substitute basis for determining the rate of interest and,
pending such negotiations, the rate of interest on each Revolving Lender’s share
of the relevant Foreign Currency Loan for the relevant Interest Period shall be
the percentage rate per annum which is the sum of (1) the Applicable Margin and
(2) the rate notified to the Administrative Agent by that Revolving Lender as
soon as practicable and in any event before interest is due to be paid in
respect of that Interest Period, to be that which expresses as a percentage rate
per annum the cost to the relevant Revolving Lender of funding its participation
in that Foreign Currency Loan from whatever source it may reasonably select
(which if negative shall be deemed to be zero), and the relevant Revolving
Lender shall provide a certificate to the Administrative Agent setting out in
reasonable detail how it has calculated such cost, provided that nothing in this
clause (B) shall require such Revolving Lender to disclose information that it
is prevented from disclosing pursuant to any applicable laws, regulations or
confidentiality obligations, and any alternative basis agreed pursuant to the
foregoing shall be binding on

 

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all Loan Parties. Until such notice has been withdrawn by the Administrative
Agent, no further Eurocurrency Loans under the relevant Facility shall be made
or continued as such, nor shall the Borrowers have the right to convert Loans
under the relevant Facility to Eurocurrency Loans.

2.18 Pro Rata Treatment and Payments. (a) Each borrowing by any Borrower from
the Lenders hereunder, each payment by the Parent Borrower on account of any
commitment fee and any reduction of the Commitments of the Lenders shall be made
pro rata according to the respective Term Percentages or Revolving Percentages,
as the case may be, of the relevant Lenders.

(b) Each payment (including each prepayment pursuant to Section 2.12 but
excluding any prepayment pursuant to Section 2.11) by the Parent Borrower on
account of principal of and interest on the Term Loans shall be made pro rata
according to the respective outstanding principal amounts of the Term Loans then
held by the Term Lenders. The amount of each principal prepayment of the Term
Loans pursuant to Section 2.12 shall be applied to scheduled installments of the
Term Loans in inverse order of maturity. Each prepayment pursuant to
Section 2.11 by the Parent Borrower on account of principal of and interest on
the Term Loans shall be made pro rata according to the respective principal
amounts of the Term Loans then held by the Term Lenders and shall be applied to
the installments of the Term Loans as elected by the Parent Borrower. Amounts
prepaid on account of the Term Loans may not be reborrowed.

(c) Each payment (including each prepayment) by any Borrower on account of
principal of and interest on the Revolving Loans (other than Foreign Currency
Loans) shall be made pro rata according to the respective outstanding principal
amounts of the Revolving Loans then held by the Revolving Lenders.

(d) Each payment (including each prepayment) by any Borrower on account of
principal of and interest on any Foreign Currency Loan shall be made pro rata
according to the respective outstanding principal amounts of such Foreign
Currency Loan then held by the applicable Revolving Lenders.

(e) All payments (including prepayments) to be made by any Borrower hereunder,
whether on account of principal, interest, fees or otherwise (other than in
respect of the principal or interest on the Foreign Currency Loans), shall be
made without setoff or counterclaim and shall be made prior to 1:00 P.M., New
York City time, on the due date thereof to the Administrative Agent, for the
account of the Lenders, at the Funding Office, in Dollars and in immediately
available funds. All payments (including prepayments) to be made by any Borrower
hereunder on account of principal or interest on the Foreign Currency Loans
shall be made in the relevant Foreign Currency, without setoff and counterclaim
and shall be made on the due date thereof to the Administrative Agent, for the
account of the applicable Revolving Lenders, at the office, and prior to the
time for payment for the relevant currency, set forth on the Administrative
Schedule. The Administrative Agent shall distribute such payments to each
relevant Lender promptly upon receipt in like funds as received, net of any
amounts owing by such Lender pursuant to Section 9.7. If any payment hereunder
(other than payments on the Eurocurrency Loans) becomes due and payable on a day
other than a Business Day, such payment shall be extended to the next succeeding
Business Day. If any payment on a Eurocurrency Loan becomes due and payable on a
day other than a Business Day, the maturity thereof shall be extended to the
next succeeding Business Day unless the result of such extension would be to
extend such payment into another calendar month, in which event such payment
shall be made on the immediately preceding Business Day. In the case of any
extension of any payment of principal pursuant to the preceding two sentences,
interest thereon shall be payable at the then applicable rate during such
extension.

 

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(f) Unless the Administrative Agent shall have been notified in writing by any
Lender prior to a borrowing that such Lender will not make the amount that would
constitute its share of such borrowing available to the Administrative Agent,
the Administrative Agent may assume that such Lender is making such amount
available to the Administrative Agent, and the Administrative Agent may, in
reliance upon such assumption, make available to the applicable Borrower a
corresponding amount. If such amount is not made available to the Administrative
Agent by the required time on the Borrowing Date therefor, such Lender shall pay
to the Administrative Agent, on demand, such amount with interest thereon, at a
rate per annum equal to the greater of (i) the daily average Federal Funds
Effective Rate and (ii) a rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation, for the period
until such Lender makes such amount immediately available to the Administrative
Agent. A certificate of the Administrative Agent submitted to any Lender with
respect to any amounts owing under this paragraph shall be conclusive in the
absence of manifest error. If such Lender’s share of such borrowing is not made
available to the Administrative Agent by such Lender, the Administrative Agent
shall also be entitled to recover such amount with interest thereon at the rate
per annum equal to the greater of (i) the daily average Federal Funds Effective
Rate and (ii) a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation, for the period until such
Lender makes such amount immediately available to the Administrative Agent, on
demand, from the applicable Borrower.

(g) Unless the Administrative Agent shall have been notified in writing by any
Borrower prior to the date of any payment due to be made by such Borrower
hereunder that such Borrower will not make such payment to the Administrative
Agent, the Administrative Agent may assume that such Borrower is making such
payment, and the Administrative Agent may, but shall not be required to, in
reliance upon such assumption, make available to the Lenders their respective
pro rata shares of a corresponding amount. If such payment is not made to the
Administrative Agent by such Borrower within three Business Days after such due
date, the Administrative Agent shall be entitled to recover, on demand, from
each Lender to which any amount which was made available pursuant to the
preceding sentence, such amount with interest thereon at the rate per annum
equal to the greater of (i) the daily average Federal Funds Effective Rate and
(ii) a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation, for the period until such Lender makes
such amount immediately available to the Administrative Agent. Nothing herein
shall be deemed to limit the rights of the Administrative Agent or any Lender
against such Borrower.

(h) If any Lender shall fail to make any payment required to be made by it
pursuant to Section 2.7(b), 2.7(c), 2.18(f), 2.20(e), 3.4(a) or 9.7, then the
Administrative Agent may, in its discretion and notwithstanding any contrary
provision hereof, (i) apply any amounts thereafter received by the
Administrative Agent for the account of such Lender for the benefit of the
Administrative Agent, the Swingline Lender or the Issuing Lender to satisfy such
Lender’s obligations to it under such Sections until all such unsatisfied
obligations are fully paid, and/or (ii) hold any such amounts in a segregated
account as cash collateral for, and application to, any future funding
obligations of such Lender under any such Section, in the case of each of
clauses (i) and (ii) above, in any order as determined by the Administrative
Agent in its discretion.

2.19 Requirements of Law. (a) If the adoption of or any change in any reserve
requirements prescribed for eurocurrency funding (currently referred to as
“Eurocurrency Liabilities” in Regulation D of the Board) maintained by a member
bank of the Federal Reserve System shall be made subsequent to the Closing Date,
and the result of such requirement shall be to increase the cost to any Lender
of making or maintaining any Eurocurrency Loans and such Lender shall have
requested, by notice to the Parent Borrower and the Administrative Agent (which
notice shall specify the Statutory Reserve Rate applicable to such Lender),
compensation under this paragraph, then the Parent Borrower will pay to such
Lender (until the earlier of the date such requirement is no longer in effect or
the date such Lender shall withdraw such request) amounts sufficient to
compensate such Lender for such additional costs of making or maintaining such
Eurocurrency Loans.

 

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(b) If the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof by any central bank or other Governmental
Authority or compliance by any Lender with any request or directive (whether or
not having the force of law) from any central bank or other Governmental
Authority made subsequent to the Closing Date:

(i) shall subject any Credit Party to any Taxes (other than Indemnified Taxes
and Excluded Taxes) on its loans, loan principal, letters of credit,
commitments, or other obligations, or its deposits, reserves, other liabilities
or capital attributable thereto;

(ii) shall, without duplication of reserves or other deposits contemplated by
Section 2.19(a), impose, modify or hold applicable any reserve, special deposit,
compulsory loan, insurance charge or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or other
extensions of credit (or participations therein) by, or any other acquisition of
funds by, any office of such Lender that is not otherwise included in the
determination of the Eurocurrency Rate; or

(iii) shall impose on such Lender any other condition (other than Taxes);

and the result of any of the foregoing is to increase the cost to such Lender or
such other Credit Party, converting into, continuing or maintaining Loans or
issuing or participating in Letters of Credit, or to reduce any amount
receivable hereunder in respect thereof, then, in any such case, the Parent
Borrower shall promptly pay such Lender or such other Credit Party, upon its
demand, any additional amounts necessary to compensate such Lender or such other
Credit Party for such increased cost or reduced amount receivable. If any Lender
or such other Credit Party becomes entitled to claim any additional amounts
pursuant to this paragraph, it shall promptly notify the Parent Borrower (with a
copy to the Administrative Agent) of the event by reason of which it has become
so entitled.

(c) If any Lender shall have determined that the adoption of or any change in
any Requirement of Law regarding capital or liquidity requirements or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital or liquidity requirements (whether or not having the force of law) from
any Governmental Authority made subsequent to the Closing Date shall have the
effect of reducing the rate of return on such Lender’s or such corporation’s
capital as a consequence of its obligations hereunder or under or in respect of
any Letter of Credit to a level below that which such Lender or such corporation
could have achieved but for such adoption, change or compliance (taking into
consideration such Lender’s or such corporation’s policies with respect to
capital adequacy or liquidity) by an amount reasonably deemed by such Lender to
be material, then from time to time, after submission by such Lender to the
Parent Borrower (with a copy to the Administrative Agent) of a written request
therefor, the Parent Borrower shall pay to such Lender such additional amount or
amounts as will compensate such Lender or such corporation for such reduction.

(d) Notwithstanding anything herein to the contrary, (i) all requests, rules,
guidelines, requirements and directives promulgated by the Bank for
International Settlements, the Basel Committee on Banking Supervision (or any
successor or similar authority) or by United States or foreign regulatory
authorities, in each case pursuant to Basel III, and (ii) the Dodd-Frank Wall
Street Reform and Consumer Protection Act and all requests, rules, guidelines,
requirements and directives thereunder or issued in connection therewith or in
implementation thereof, shall in each case be deemed to be a change in a
Requirement of Law, regardless of the date enacted, adopted, issued or
implemented.

 

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(e) If by reason of any change in a Requirement of Law subsequent to the Closing
Date, disruption of currency or foreign exchange markets, war or civil
disturbance or similar event, the funding of any Foreign Currency Loan in any
relevant Foreign Currency or the funding of any Foreign Currency Loan in any
relevant Foreign Currency to an office located other than in New York shall be
impossible or such Foreign Currency is no longer available or readily
convertible to Dollars, or the Dollar Equivalent of such Foreign Currency is no
longer readily calculable, then, at the election of any affected Lender, no
Foreign Currency Loans in the relevant currency shall be made or any Foreign
Currency Loan in the relevant currency shall be made to an office of the
Administrative Agent located in New York, as the case may be.

(f) (i) If payment in respect of any Foreign Currency Loan shall be due in a
currency other than Dollars and/or at a place of payment other than New York and
if, by reason of any change in a Requirement of Law subsequent to the Closing
Date, disruption of currency or foreign exchange markets, war or civil
disturbance or similar event, payment of such Obligations in such currency or
such place of payment shall be impossible or such Foreign Currency is no longer
available or readily convertible to Dollars, or the Dollar Equivalent of such
Foreign Currency is no longer readily calculable, then, at the election of any
affected Lender, the applicable Borrower shall make payment of such Loan in
Dollars (based upon the Exchange Rate in effect for the day on which such
payment occurs, as determined by the Administrative Agent in accordance with the
terms hereof) and/or in New York or (ii) if any Foreign Currency in which Loans
are outstanding is redenominated then, at the election of any affected Lender,
such affected Loan and all obligations of the applicable Borrower in respect
thereof shall be converted into obligations in Dollars (based upon the Exchange
Rate in effect on such date, as determined by the Administrative Agent in
accordance with the terms hereof), and, in each case, the applicable Borrower
shall indemnify the Lenders, against any currency exchange losses or reasonable
out-of-pocket expenses that it shall sustain as a result of such alternative
payment.

(g) A certificate as to any additional amounts payable pursuant to Sections
2.19(a), (b) or (c) submitted by any Lender to the Parent Borrower (with a copy
to the Administrative Agent) shall be conclusive in the absence of manifest
error. Notwithstanding anything to the contrary in this Section, no Borrower
shall be required to compensate a Lender pursuant to this Section for any
amounts incurred more than nine months prior to the date that such Lender
notifies the Parent Borrower of such Lender’s intention to claim compensation
therefor; provided that, if the circumstances giving rise to such claim have a
retroactive effect, then such nine-month period shall be extended to include the
period of such retroactive effect. The obligations of the Borrowers pursuant to
this Section shall survive the termination of this Agreement and the payment of
the Loans and all other amounts payable hereunder.

(h) If the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof by any central bank or other Governmental
Authority or compliance by any Lender with any request or directive (whether or
not having the force of law) from any central bank or other Governmental
Authority made subsequent to the Closing Date shall make it unlawful for any
Lender to issue, make, maintain, fund or charge interest with respect to any
extension of credit to any Additional Borrower or to give effect to its
obligations as contemplated by this Agreement with respect to any extension of
credit to any Additional Borrower, then, upon written notice by such Lender
(each such Lender providing such notice, an “Impacted Lender”) to the Parent
Borrower and the Administrative Agent:

(i) the obligations of the Lenders hereunder to make extensions of credit to
such Additional Borrower shall forthwith be (x) suspended until each Impacted
Lender notifies the Parent Borrower and the Administrative Agent in writing that
it is no longer unlawful for such Lender to issue, make, maintain, fund or
charge interest with respect to any extension of credit to such Additional
Borrower or (y) to the extent required by law, cancelled;

 

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(ii) if it shall be unlawful for any Impacted Lender to maintain or charge
interest with respect to any outstanding Loan to such Additional Borrower, such
Additional Borrower shall repay (or at its option and to the extent permitted by
law, assign to the Parent Borrower) (x) all outstanding ABR Loans made to such
Additional Borrower within three Business Days or such earlier period as
required by law and (y) all outstanding Eurocurrency Loans made to such
Additional Borrower on the last day of the then current Interest Periods with
respect to such Eurocurrency Loans or within such earlier period as required by
law; and

(iii) if it shall be unlawful for any Impacted Lender to maintain, charge
interest or hold any participation with respect to any Letter of Credit issued
on behalf of such Additional Borrower, such Additional Borrower shall deposit in
a cash collateral account opened by the Administrative Agent an amount equal to
the L/C Obligations with respect to such Letters of Credit within three Business
Days or within such earlier period as required by law.

2.20 Taxes. (a) Any and all payments by or on account of any obligation of any
Loan Party under any Loan Document shall be made without deduction or
withholding for any Taxes, except as required by applicable law. Notwithstanding
the preceding sentence, if any applicable law (as determined in the good faith
discretion of an applicable withholding agent or Loan Party, as the case may be)
requires the deduction or withholding of any Tax from any such payment by a
withholding agent or Loan Party, as the case may be, then the applicable
withholding agent shall be entitled to make such deduction or withholding and
shall timely pay the full amount deducted or withheld to the relevant
Governmental Authority in accordance with applicable law and, if such Tax is an
Indemnified Tax, then the sum payable by the applicable Loan Party to the
applicable Credit Party shall be increased as necessary so that, after such
deduction or withholding has been made (including such deductions and
withholdings for Indemnified Taxes applicable to additional sums payable under
this Section 2.20), the amount received by the applicable Credit Party equals
the sum it would have received had no such deduction or withholding been made.

(b) The Loan Parties shall severally timely pay to the relevant Governmental
Authority in accordance with applicable law, or at the option of the
Administrative Agent timely reimburse it for, any Other Taxes.

(c) As soon as practicable after any payment of Taxes by any Loan Party or the
Administrative Agent to a Governmental Authority pursuant to this Section 2.20,
such Loan Party shall deliver to the Administrative Agent, or the Administrative
Agent shall deliver to the Loan Party, as the case may be, the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent or the Loan
Party, as the case may be.

(d) The Loan Parties shall jointly and severally, within 10 days after demand
therefor, for the full amount of any Indemnified Taxes (including Indemnified
Taxes imposed or asserted on or attributable to amounts payable under this
Section) paid by such Credit Party and any reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability delivered to the
Parent Borrower by a Lender (with a copy to the Administrative Agent), or by the
Administrative Agent on its own behalf or on behalf of a Lender, shall be
conclusive absent manifest error.

(e) Each Lender shall severally indemnify the Administrative Agent, within 10
days after demand therefor, for (i) any Taxes attributable to such Lender (but
only to the extent that any Loan Party has not already indemnified the
Administrative Agent for such Indemnified Taxes and without limiting

 

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the obligation of the Loan Parties to do so) and (ii) any Taxes attributable to
such Lender’s failure to comply with the provisions of Section 10.6(c) relating
to the maintenance of a Participant Register, in either case, that are payable
or paid by the Administrative Agent in connection with any Loan Document, and
any reasonable expenses arising therefrom or with respect thereto, whether or
not such Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or
liability delivered to any Lender by the Administrative Agent shall be
conclusive absent manifest error. Each Lender hereby authorizes the
Administrative Agent or the Borrowers to set off and apply any and all amounts
at any time owing to such Lender under any Loan Document or otherwise payable by
the Administrative Agent to the Lender from any other source against any amount
due to the Administrative Agent or the Borrowers under this paragraph (e).

(f) (i) Any Lender that is entitled to an exemption from or reduction of
withholding Tax with respect to payments made under any Loan Document shall
deliver to the Parent Borrower and the Administrative Agent, at the time or
times reasonably requested by the Parent Borrower or the Administrative Agent,
such properly completed and executed documentation reasonably requested by the
Parent Borrower or the Administrative Agent as will permit such payments to be
made without withholding or at a reduced rate of withholding. In addition, any
Lender, if reasonably requested by the Parent Borrower or the Administrative
Agent, shall deliver such other documentation prescribed by applicable law or
reasonably requested by the Parent Borrower or the Administrative Agent as will
enable the Parent Borrower or the Administrative Agent to determine whether or
not such Lender is subject to backup withholding or information reporting
requirements. Notwithstanding anything to the contrary in the preceding two
sentences, the completion, execution and submission of such documentation (other
than such documentation set forth in Section 2.20(f)(ii)(A), (ii)(B) and (ii)(D)
below) shall not be required if in the Lender’s reasonable judgment such
completion, execution or submission would subject such Lender to any material
unreimbursed cost or expense or would materially prejudice the legal or
commercial position of such Lender.

(ii) Without limiting the generality of the foregoing, in the event that any
Borrower is a U.S. Person,

(A) any Lender that is a U.S. Person shall deliver to the Parent Borrower and
the Administrative Agent on or prior to the date on which such Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Parent Borrower or the Administrative Agent), executed
originals of IRS Form W-9 certifying that such Lender is exempt from U.S.
Federal backup withholding tax;

(B) any Non-U.S. Lender shall, to the extent it is legally entitled to do so,
deliver to the Parent Borrower and the Administrative Agent (in such number of
copies as shall be requested by the recipient) on or prior to the date on which
such Non-U.S. Lender becomes a Lender under this Agreement (and from time to
time thereafter upon the reasonable request of the Parent Borrower or the
Administrative Agent), whichever of the following is applicable:

 

  (1) in the case of a Non-U.S. Lender claiming the benefits of an income tax
treaty to which the United States is a party (x) with respect to payments of
interest under any Loan Document, executed originals of IRS Form W-8BEN or IRS
Form W-8BEN-E, as applicable, establishing an exemption from, or reduction of,
U.S. Federal withholding Tax pursuant to the “interest” article of such tax
treaty and (y) with respect to any other applicable payments under any Loan
Document, IRS Form W8BEN or IRS Form W-8BEN-E, as applicable, establishing an
exemption from, or reduction of, U.S. Federal withholding Tax pursuant to the
“business profits” or “other income” article of such tax treaty;

 

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  (2) executed originals of IRS Form W-8ECI;

 

  (3) in the case of a Non-U.S. Lender claiming the benefits of the exemption
for portfolio interest under Section 881(c) of the Code, (x) a certificate
substantially in the form of Exhibit F-1 to the effect that such Non-U.S. Lender
is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10
percent shareholder” of any of the Borrowers within the meaning of
Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation”
described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance
Certificate”) and (y) executed originals of IRS Form W8BEN or IRS Form W-8BEN-E,
as applicable; or

 

  (4) to the extent a Non-U.S. Lender is not the beneficial owner, executed
originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN,
IRS Form W-8BEN-E, a U.S. Tax Compliance Certificate substantially in the form
of Exhibit F-2 or Exhibit F-3, IRS Form W-9, and/or other certification
documents from each beneficial owner, as applicable; provided that if the
Non-U.S. Lender is a partnership and one or more direct or indirect partners of
such Non-U.S. Lender are claiming the portfolio interest exemption, such
Non-U.S. Lender may provide a U.S. Tax Compliance Certificate substantially in
the form of Exhibit F-4 on behalf of each such direct and indirect partner;

(C) any Non-U.S. Lender shall, to the extent it is legally entitled to do so,
deliver to the Parent Borrower and the Administrative Agent (in such number of
copies as shall be requested by the recipient) on or prior to the date on which
such Non-U.S. Lender becomes a Lender under this Agreement (and from time to
time thereafter upon the reasonable request of the Parent Borrower or the
Administrative Agent), executed originals of any other form prescribed by
applicable law as a basis for claiming exemption from or a reduction in U.S.
Federal withholding Tax, duly completed, together with such supplementary
documentation as may be prescribed by applicable law to permit the Parent
Borrower or the Administrative Agent to determine the withholding or deduction
required to be made; and

(D) if a payment made to a Lender under any Loan Document would be subject to
U.S. Federal withholding Tax imposed by FATCA if such Lender were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender
shall deliver to the Parent Borrower and the Administrative Agent at the time or
times prescribed by law and at such time or times reasonably requested by the
Parent Borrower or the Administrative Agent such documentation prescribed by
applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code)
and such additional documentation reasonably requested by the Parent Borrower or
the Administrative Agent as may be necessary for the Parent Borrower and the
Administrative Agent to comply with their obligations under FATCA and to
determine that such Lender has complied with such Lender’s obligations under
FATCA or to determine the amount to deduct and withhold from such payment.
Solely for purposes of this clause (D), “FATCA” shall include any amendments
made to FATCA after the date of this Agreement. For purposes of determining
withholding Taxes imposed under FATCA, from and after the Closing Date, the
Borrowers and the Administrative Agent shall treat (and the Lenders hereby
authorize the Administrative Agent to treat) this Agreement as not qualifying as
a “grandfathered obligation” within the meaning of Treasury Regulation
Section 1.1471-2(b)(2)(i).

 

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(iii) Each Lender shall, to the extent it is legally entitled to do so, deliver
to the Parent Borrower and Administrative Agent, at the time or times and in
such number of copies as shall be reasonably requested by the recipient,
executed copies of any form prescribed by applicable law (other than any form
required to be delivered pursuant to Section 2.20(f)(i) or (ii)) as a basis for
claiming exemption from or a reduction in withholding Tax imposed by the
jurisdiction in which any relevant Loan Party is organized or located, duly
completed, together with such supplementary documentation as may be prescribed
by applicable law to (X) permit such Loan Party or Administrative Agent to
determine the withholding or deduction required to be made; or (Y) obtain
authorization from any relevant Tax Authority to permit such Loan Party to make
that payment without, or with a reduction in, withholding Tax. The Lender shall
cooperate with such Loan Party, the Administrative Agent, and the Tax Authority
in doing anything necessary to enable payment to be made without, or with a
reduction in, withholding Tax. Notwithstanding anything to the contrary in this
Section 2.20(f)(iii), the completion, execution and submission of such forms or
other documentation shall not be required if in the Lender’s reasonable judgment
such completion, execution or submission would subject such Lender to any
unreimbursed cost or would materially prejudice the legal or commercial position
of such Lender.

Each Lender agrees that if any form or certification it previously delivered
expires or becomes obsolete or inaccurate in any respect, it shall update such
form or certification or promptly notify the Parent Borrower and the
Administrative Agent in writing of its legal inability to do so.

(g) If any party determines, in its sole discretion exercised in good faith,
that it has received a refund or credit of any Taxes as to which it has been
indemnified pursuant to this Section 2.20 (including by the payment of
additional amounts pursuant to this Section 2.20), it shall pay to the
indemnifying party an amount equal to such refund or credit (but only to the
extent of indemnity payments made, including additional amounts paid, under this
Section with respect to the Taxes giving rise to such refund or credit), net of
all reasonable out-of-pocket expenses (including Taxes) of such indemnified
party and without interest (other than any interest paid by the relevant
Governmental Authority with respect to such refund or credit). Such indemnifying
party, upon the request of such indemnified party, shall repay to such
indemnified party the amount paid over pursuant to this paragraph (g) (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) in the event that such indemnified party is required to repay such
refund or credit to such Governmental Authority. Notwithstanding anything to the
contrary in this paragraph (g), in no event will the indemnified party be
required to pay any amount to an indemnifying party pursuant to this paragraph
(g) the payment of which would place the indemnified party in a less favorable
net after-Tax position than the indemnified party would have been in if the
indemnification payments or additional amounts giving rise to such refund or
credit had never been paid. This paragraph shall not be construed to require any
indemnified party to make available its Tax returns (or any other information
relating to its Taxes that it deems confidential) to the indemnifying party or
any other Person.

(h) Each party’s obligations under this Section 2.20 shall survive the
resignation or replacement of the Administrative Agent or any assignment of
rights by, or the replacement of, a Lender, the termination of the Commitments
and the repayment, satisfaction or discharge of all obligations under the Loan
Documents.

(i) For purposes of this Section 2.20, the term “Lender” includes the Issuing
Lender and the Swingline Lender.

 

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2.21 Indemnity. Each Borrower agrees to indemnify each Lender for, and to hold
each Lender harmless from, any loss or expense that such Lender may sustain or
incur as a consequence of (a) the failure of such Borrower in making a borrowing
of, conversion into, conversion from or continuation of Eurocurrency Loans after
such Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) the failure of such Borrower in making any
prepayment of or conversion from Eurocurrency Loans after such Borrower has
given a notice thereof in accordance with the provisions of this Agreement or
(c) the making of a payment by such Borrower of Eurocurrency Loans on a day that
is not the last day of an Interest Period with respect thereto. Such
indemnification may include an amount equal to the excess, if any, of (i) the
amount of interest that would have accrued on the amount so prepaid, or not so
borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
such Interest Period (or, in the case of a failure to borrow, convert or
continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Loans provided
for herein (excluding, however, the Applicable Margin included therein, if any)
over (ii) the amount of interest (as reasonably determined by such Lender) that
would have accrued to such Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the interbank eurocurrency
market. A certificate as to any amounts payable pursuant to this Section
submitted to the Parent Borrower by any Lender shall be conclusive in the
absence of manifest error. This covenant shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.

2.22 Change of Lending Office. Each Lender agrees that, upon the occurrence of
any event giving rise to the operation of Section 2.19 or 2.20(a) with respect
to such Lender, it will, if requested by the Parent Borrower, use reasonable
efforts to designate another lending office for any Loans affected by such event
or assign its rights and obligations hereunder to another of its offices,
branches or affiliates with the object of avoiding or minimizing the
consequences of such event; provided, that such designation is made on terms
that, in the sole judgment of such Lender, cause such Lender and its lending
offices to suffer no economic, legal or regulatory disadvantage, and provided,
further, that nothing in this Section shall affect or postpone any of the
obligations of the Borrowers or the rights of any Lender pursuant to
Section 2.19 or 2.20(a).

2.23 Replacement of Lenders. The Parent Borrower shall be permitted to replace
any Lender if (a) the Lender requests reimbursement for amounts owing pursuant
to Section 2.19 or 2.20(a) or if the Loan Parties are required to pay
Indemnified Taxes or additional amounts with respect thereto to any Governmental
Authority for the account of any Lender pursuant to Section 2.20(a), (b) the
Lender is then a Defaulting Lender, or (c) the Lender (the “Non-Consenting
Lender”) does not consent to any proposed amendment, supplement, modification,
consent or waiver of any provision of this Agreement or any other Loan Document
(a “Proposed Change”) that requires the consent of each of the Lenders or each
of the Lenders affected thereby (so long as the consent of the Required Lenders
has been obtained), with a replacement financial institution; provided that
(i) such replacement does not conflict with any Requirement of Law, (ii) no
Event of Default shall have occurred and be continuing at the time of such
replacement, (iii) prior to any such replacement, such Lender shall have taken
no action under Section 2.22 so as to eliminate the continued need for payment
of amounts owing pursuant to Section 2.19 or 2.20(a), (iv) the replacement
financial institution shall purchase, at par, all Loans and other amounts owing
to such replaced Lender on or prior to the date of replacement, (v) each
Borrower shall be liable to such replaced Lender under Section 2.21 if any
Eurocurrency Loan of such Borrower owing to such replaced Lender shall be
purchased other than on the last day of the Interest Period relating thereto,
(vi) to the extent the Administrative Agent, the Swingline Lender and/or any
Issuing Lender would have consent rights over an assignment of the applicable
Loans or Commitments to the replacement financial institution pursuant to
Section 10.6, the replacement financial institution shall be reasonably
satisfactory to the Administrative Agent, the Swingline Lender and/or such
Issuing Lender (vii) the replaced Lender shall be

 

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obligated to make such replacement in accordance with the provisions of
Section 10.6 (provided that the Parent Borrower shall be obligated to pay the
registration and processing fee referred to therein), (viii) until such time as
such replacement shall be consummated, the Borrowers shall pay all additional
amounts (if any) required pursuant to Section 2.19 or 2.20(a), as the case may
be and (ix) any such replacement shall not be deemed to be a waiver of any
rights that the Borrowers, the Administrative Agent or any other Lender shall
have against the replaced Lender. Each party hereto agrees that an assignment
required pursuant to this paragraph may be effected pursuant to an Assignment
and Assumption executed by the Parent Borrower, the Administrative Agent and the
assignee and that the Lender required to make such assignment need not be a
party thereto.

2.24 Defaulting Lenders. Notwithstanding any provision of this Agreement to the
contrary, if any Lender becomes a Defaulting Lender, then the following
provisions shall apply for so long as such Lender is a Defaulting Lender:

(a) fees shall cease to accrue on the unfunded portion of the Revolving
Commitment of such Defaulting Lender pursuant to Section 2.8(a) and 2.8(b);

(b) the Revolving Commitment and Revolving Extensions of Credit of such
Defaulting Lender shall not be included in determining whether the Required
Lenders have taken or may take any action hereunder (including any consent to
any amendment, waiver or other modification pursuant to Section 10.1); provided,
that this clause (b) shall not apply to the vote of a Defaulting Lender in the
case of an amendment, waiver or other modification requiring the consent of such
Lender or each Lender affected thereby;

(c) if any Swingline Exposure or L/C Exposure exists at the time such Lender
becomes a Defaulting Lender then:

(i) all or any part of the Swingline Exposure (other than the portion of such
Swingline Exposure referred to in clause (ii) of the definition of such term)
and L/C Exposure of such Defaulting Lender shall be reallocated among the
non-Defaulting Lenders in accordance with their respective Revolving Percentages
but only to the extent the sum of all non-Defaulting Lenders’ Revolving
Extensions of Credit plus such Defaulting Lender’s Swingline Exposure and L/C
Exposure does not exceed the total of all non-Defaulting Lenders’ Revolving
Commitments;

(ii) if the reallocation described in clause (i) above cannot, or can only
partially, be effected, the Borrowers shall within one Business Day following
notice by the Administrative Agent (x) first, prepay such Swingline Exposure and
(y) second, cash collateralize for the benefit of the Issuing Lender only the
Borrowers’ obligations corresponding to such Defaulting Lender’s L/C Exposure
(after giving effect to any partial reallocation pursuant to clause (i) above)
in accordance with the procedures set forth in Section 8 for so long as such L/C
Exposure is outstanding for so long as the circumstances giving rise to such
obligation to provide such cash collateral remain relevant (which cash
collateralization requirement shall be satisfied by the Borrowers depositing
such cash collateral into an account opened by the Administrative Agent);

(iii) if the Borrowers cash collateralize any portion of such Defaulting
Lender’s L/C Exposure pursuant to clause (ii) above, the Borrowers shall not be
required to pay any fees to such Defaulting Lender pursuant to Section 3.3(a)
with respect to such Defaulting Lender’s L/C Exposure during the period such
Defaulting Lender’s L/C Exposure is cash collateralized;

 

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(iv) if the L/C Exposure of the Defaulting Lenders is reallocated pursuant to
clause (i) above, then the fees payable to the Lenders pursuant to
Section 2.8(a) and Section 3.3(a) shall be adjusted in accordance with such
Defaulting Lender’s Revolving Percentages; and

(v) if all or any portion of such Defaulting Lender’s L/C Exposure is neither
reallocated nor cash collateralized pursuant to clause (i) or (ii) above, then,
without prejudice to any rights or remedies of the Issuing Lender or any other
Lender hereunder, all fees payable under Section 3.3(a) with respect to such
Defaulting Lender’s L/C Exposure shall be payable to the Issuing Lender until
and to the extent that such L/C Exposure is reallocated and/or cash
collateralized; and

(d) so long as such Lender is a Defaulting Lender, the Swingline Lender shall
not be required to fund any Swingline Loan and the Issuing Lender shall not be
required to issue, amend or increase any Letter of Credit, unless it is
satisfied that the related exposure and the Defaulting Lender’s then outstanding
L/C Exposure will be 100% covered by the Revolving Commitments of the
non-Defaulting Lenders and/or cash collateral will be provided by the Borrowers
in accordance with Section 2.24(c), and participating interests in any newly
made Swingline Loan or any newly issued or increased Letter of Credit shall be
allocated among non-Defaulting Lenders in a manner consistent with
Section 2.24(c)(i) (and such Defaulting Lender shall not participate therein).

If a Bankruptcy Event with respect to a Lender Parent of any Lender shall occur
following the Closing Date and for so long as such event shall continue, the
Swingline Lender shall not be required to fund any Swingline Loan and the
Issuing Lender shall not be required to issue, amend or increase any Letter of
Credit, unless the Swingline Lender or the Issuing Lender, as the case may be,
shall have entered into arrangements with the Parent Borrower or such Lender,
satisfactory to the Swingline Lender or the Issuing Lender, as the case may be,
to defease any risk to it in respect of such Lender hereunder.

In the event that the Administrative Agent, the Parent Borrower, the Swingline
Lender and the Issuing Lender each agrees that a Defaulting Lender has
adequately remedied all matters that caused such Lender to be a Defaulting
Lender, then the Swingline Exposure and L/C Exposure of the Lenders shall be
readjusted to reflect the inclusion of such Lender’s Revolving Commitment, and
on such date such Lender shall purchase at par such of the Loans of the other
Lenders (other than Swingline Loans) as the Administrative Agent shall determine
may be necessary in order for such Lender to hold such Loans in accordance with
its Revolving Percentage, in accordance with its ratable share thereof.

2.25 Incremental Facilities. (a) The Parent Borrower and any one or more Lenders
(including New Lenders) may from time to time agree that such Lenders shall
make, obtain or increase the amount of their Incremental Term Loans or Revolving
Commitments (any such increased Revolving Commitments, “Incremental Revolving
Commitments” and any facility under which such Incremental Term Loans or
Incremental Revolving Commitments are made available, an “Incremental
Facility”), as applicable, by executing and delivering to the Administrative
Agent an Additional Credit Extension Amendment specifying (i) the amount of such
increase and the Facility or Facilities involved, (ii) the applicable
Incremental Facility Closing Date and (iii) in the case of Incremental Term
Loans, (w) the applicable Incremental Term Maturity Date, (x) the amortization
schedule for such Incremental Term Loans and (y) the Applicable Margin for such
Incremental Term Loans; provided, that:

(A) the aggregate principal amount (or committed amount, if applicable) of all
Incremental Term Loans and Incremental Revolving Commitments, together with the
aggregate principal amount of any Permitted Incremental Equivalent Debt and the
outstanding principal amount (or committed amount, if applicable) of any Term
Loans or Revolving Commitments, shall not exceed $500,000,000 (such amount, the
“Incremental Cap”);

 

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(B) (x) with respect to any Incremental Term Loans being incurred to finance a
Permitted Acquisition designated by the Parent Borrower as a “Limited
Conditionality Acquisition”, no Default or Event of Default has occurred and is
continuing as of the date of entry into the applicable acquisition, merger or
similar agreement governing such acquisition or (y) otherwise, as of the
applicable Incremental Facility Activation Date, immediately prior to and after
giving effect to any Additional Credit Extension Amendment (including the making
of any Incremental Term Loans or Incremental Revolving Commitments pursuant
thereto), no Default or Event of Default has occurred and is continuing or shall
result therefrom;

(C) the Parent Borrower shall be in compliance, as of any Incremental Facility
Activation Date, on a pro forma basis (including giving pro forma effect to the
applicable Additional Credit Extension Amendment (including the making of any
Incremental Term Loans and any Incremental Revolving Commitments thereunder (and
assuming, in the case of any Additional Credit Extension Amendment with respect
to Incremental Revolving Commitments that such commitments are fully drawn) and
any Permitted Acquisition made with the proceeds thereof)), with the financial
covenants set forth in Section 7.1, recomputed as of the last day of the most
recently ended fiscal quarter of the Parent Borrower for which financial
statements are available;

(D) each of the representations and warranties made by any Loan Party in or
pursuant to the Loan Documents shall be true and correct in all material
respects (except that any representation or warranty which is already qualified
as to materiality or by reference to Material Adverse Effect shall be true and
correct in all respects) (x) with respect to Incremental Term Loans being
incurred to finance a Limited Conditionality Acquisition, as of the date of
execution and delivery of the applicable acquisition, merger or similar
agreement governing such acquisition (provided that, if agreed by the Lenders
providing such Incremental Term Loans, then at the written election of the
Parent Borrower, the only representations and warranties that shall be required
to be true and correct shall be those as are customarily required to be so true
and correct in an acquisition subject to limited conditionality (which
representations and warranties shall be required to be true and correct in all
material respects as of the applicable Incremental Facility Activation Date,
unless stated to relate to a specific earlier date, in which case, such
representations and warranties shall be required to be so true and correct in
all material respects as of such earlier date)) or (y) otherwise, as of the
applicable Incremental Facility Activation Date, immediately prior to and after
giving effect to the applicable Additional Credit Extension Amendment (including
the making of any Incremental Term Loans or Incremental Revolving Commitments
(or Revolving Loans in respect thereof) pursuant thereto), in each case, unless
stated to relate to a specific earlier date, in which case, such representations
and warranties shall be true and correct in all material respects as of such
earlier date;

(E) the weighted average life to maturity of any Incremental Term Facility shall
be no earlier than the weighted average life to maturity of the Term Facility;

(F) all Incremental Term Loans and any Revolving Loans made in respect of
Incremental Revolving Commitments shall rank pari passu in right of payment and
right of security in respect of the Collateral with the Term Loans and the
Revolving Loans and none of the obligors or guarantors with respect thereto
shall be a Person that is not a Loan Party;

 

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(G) except with respect to pricing and fees or as otherwise set forth in this
Section 2.25(a), all terms of any Incremental Term Facility, if not consistent
with the applicable existing Term Facility, shall be reasonably satisfactory to
the Administrative Agent; provided that each Incremental Term Facility shall
share ratably in any prepayments of the applicable Term Facility unless the
Parent Borrower and the lenders in respect of such Incremental Term Facility
elect lesser payments;

(H) any Incremental Revolving Commitments and the Revolving Loans in respect
thereof shall be pursuant to the terms hereof otherwise applicable to the
Revolving Facility and such Incremental Revolving Commitments shall become
Revolving Commitments under this Agreement after giving effect to such
Additional Credit Extension Amendment;

(I) without the consent of the Administrative Agent, (x) each increase effected
pursuant to this paragraph shall be in a minimum amount of at least $50,000,000
and (y) no more than five Incremental Facility Closing Dates may be selected by
the Parent Borrower after the Closing Date; and

(J) no Lender shall have any obligation to participate in any increase described
in this paragraph unless it agrees to do so in its sole discretion.

(b) [Reserved].

(c) Unless otherwise agreed by the Administrative Agent, on each Incremental
Facility Closing Date with respect to the Revolving Facility, each Borrower
shall borrow Revolving Loans under the relevant increased Revolving Commitments
from each Lender participating in the relevant increase in an amount determined
by reference to the amount of each Type of Loan of such Borrower (and, in the
case of Eurocurrency Loans, of each Eurocurrency Tranche) which would then have
been outstanding from such Lender if (i) each such Type or Eurocurrency Tranche
had been borrowed or effected by such Borrower on such Incremental Facility
Closing Date and (ii) the aggregate amount of each such Type or Eurocurrency
Tranche requested to be so borrowed or effected by such Borrower had been
proportionately increased. The Eurocurrency Rate applicable to any Eurocurrency
Loan borrowed pursuant to the preceding sentence shall equal the Eurocurrency
Rate then applicable to the Eurocurrency Loans of the other Lenders in the same
Eurocurrency Tranche (or, until the expiration of the then-current Interest
Period, such other rate as shall be agreed upon between the Parent Borrower and
the relevant Lender).

(d) Notwithstanding anything to the contrary in this Agreement, each of the
parties hereto hereby agrees that, on each Incremental Facility Closing Date,
this Agreement shall be amended to the extent (but only to the extent) necessary
to reflect the existence and terms of the Incremental Term Loans or Revolving
Commitments evidenced thereby. Any such amendment may be effected in writing by
the Administrative Agent and the Parent Borrower and furnished to the other
parties hereto.

2.26 Currency Fluctuations

(a) No later than 11:00 A.M. (Local Time) on each Calculation Date, the
Administrative Agent shall determine the Exchange Rate as of such Calculation
Date with respect to each applicable Foreign Currency, provided that, upon
receipt of a borrowing notice pursuant to Section 2.5(b), the Administrative
Agent shall determine the Exchange Rate with respect to the relevant Foreign
Currency on the related Calculation Date (it being acknowledged and agreed that
the Administrative Agent shall use such Exchange Rate for the purposes of
determining compliance with Section 2.4(b) with respect to such borrowing
notice). The Exchange Rates so determined shall become effective on the relevant
Calculation

 

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Date (a “Reset Date”), shall remain effective until the next succeeding Reset
Date and shall for all purposes of this Agreement (other than Section 10.15 and
any other provision expressly requiring the use of a current Exchange Rate) be
the Exchange Rates employed in converting any amounts between Dollars and any
Foreign Currency.

(b) No later than 11:00 A.M. (Local Time) on each Reset Date, the Administrative
Agent shall determine the aggregate amount of the Dollar Equivalents of (i) the
principal amounts of the Foreign Currency Loans then outstanding (after giving
effect to any Foreign Currency Loans to be made or repaid on such date) and
(ii) the L/C Obligations then outstanding in a currency other than Dollars.

(c) The Administrative Agent shall promptly notify the Parent Borrower and the
Revolving Lenders of each determination of an Exchange Rate hereunder.

2.27 Borrower Representative

(a) Each Additional Borrower hereby irrevocably designates and appoints the
Parent Borrower as its agent, attorney-in-fact and legal representative on its
behalf for all purposes hereunder, including delivering borrowing and conversion
notices, compliance or similar certificates; giving instructions with respect to
the disbursement of the proceeds of the Loans; paying, prepaying and reducing
Loans, Commitments or any other amounts owing under the Loan Documents;
selecting interest rate options; giving, receiving, accepting and rejecting all
other notices, consents or other communications hereunder or under any of the
other Loan Documents; and taking all other actions (including in respect of
compliance with covenants) on behalf of such Additional Borrower under the Loan
Documents. The Parent Borrower hereby accepts such appointment. The
Administrative Agent and each Lender may regard any notice or other
communication pursuant to any Loan Document from the Parent Borrower on behalf
of any Additional Borrower as a notice or communication from such Additional
Borrower. Each warranty, covenant, agreement and undertaking made by the Parent
Borrower on behalf of any Additional Borrower shall be deemed for all purposes
to have been made by such Additional Borrower and shall be binding upon and
enforceable against such Additional Borrower to the same extent as if the same
had been made directly by such Additional Borrower. Any action, notice,
delivery, receipt, acceptance, approval, rejection or any other undertaking
under any of the Loan Documents to be made by the Parent Borrower in respect of
the Obligations of any Additional Borrower shall be deemed, where applicable, to
be made in the Parent Borrower’s capacity as representative and agent on behalf
of such Additional Borrower, and any such action, notice, delivery, receipt,
acceptance, approval, rejection or other undertaking shall be deemed for all
purposes to have been made by such Additional Borrower, and shall be binding
upon and enforceable against such Additional Borrower to the same extent as if
the same had been made directly by such Additional Borrower.

(b) Each Additional Borrower that is not an Excluded Foreign Subsidiary hereby
severally agrees to indemnify each Lender and the Administrative Agent and hold
each Lender and the Administrative Agent harmless against any and all liability,
expense, loss or claim of damage or injury, made against the Lenders and the
Administrative Agent by such Additional Borrower or by any third party
whosoever, arising from or incurred by reason of the Lenders’ or the
Administrative Agent’s relying on any instructions of the Parent Borrower on
behalf of such Additional Borrower, except that such Additional Borrower will
have no liability under this subsection 2.27(b) with respect to any liability
that is found by a court of competent jurisdiction to have resulted from the
gross negligence or willful misconduct of such Lender or the Administrative
Agent or such Lender or the Administrative Agent’s material breach of this
Agreement. The agreements in this Section 2.27(b) shall survive the termination
of this Agreement and the repayment of the Loans and all other amounts payable
hereunder

 

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2.28 Amend and Extend Transactions.

(a) The Parent Borrower may, by written notice to the Administrative Agent from
time to time, request an extension (each, an “Extension”) of the maturity or
termination date of any Class of Revolving Commitments and/or Term Loans to the
extended maturity or termination date specified in such notice. Such notice
shall set forth (i) the amount of the applicable Class of Revolving Commitments
and/or Term Loans to be extended (which shall be in minimum increments of
$1,000,000 and a minimum amount of $5,000,000 or, in the case of Foreign
Currency Loans, the Dollar Equivalent thereof), (ii) the date on which such
Extension are requested to become effective (which shall be not less than 10
Business Days nor more than 60 days after the date of such Extension request (or
such longer or shorter periods as the Administrative Agent shall agree)) and
(iii) identifying the relevant Class of Revolving Commitments and/or Term Loans
to which the Extension request relates. Each Lender of the applicable Class
shall be offered (an “Extension Offer”) an opportunity to participate in such
Extension on a pro rata basis and on the same terms and conditions as each other
Lender of such Class pursuant to procedures established by, or reasonably
acceptable to, the Administrative Agent. If the aggregate principal amount of
Term Loans (calculated on the face amount thereof) or Revolving Commitments in
respect of which Lenders shall have accepted the relevant Extension Offer shall
exceed the maximum aggregate principal amount of Term Loans or Revolving
Commitments, as applicable, offered to be extended by the Parent Borrower
pursuant to such Extension Offer, then the Term Loans or Revolving Commitments,
as applicable, of Lenders of the applicable Class shall be extended ratably up
to such maximum amount based on the respective principal amounts (but not to
exceed actual holdings of record) with respect to which such Lenders have
accepted such Extension Offer.

(b) It shall be a condition precedent to the effectiveness of any Extension that
(i) no Default or Event of Default shall have occurred and be continuing
immediately prior to and immediately after giving effect to such Extension,
(ii) the representations and warranties set forth in Section 4 and in each other
Loan Document shall be true and correct in all material respects on and as of
the date of such Extension, (iii) the Issuing Lenders and the Swingline Lender
shall have consented to any Extension of the Revolving Commitments, to the
extent that such extension provides for the issuance of Letters of Credit or
making of Swingline Loans at any time during the extended period and (iv) the
terms of such Extended Revolving Commitments and Extended Term Loans shall
comply with Section 2.28(c).

(c) The terms of each Extension shall be determined by the Parent Borrower and
the applicable extending Lenders and set forth in an Additional Credit Extension
Amendment; provided that (i) the final maturity date of any Extended Term Loan
or Extended Revolving Commitment shall be no earlier than the maturity or
termination date of the Class of Term Loans or Revolving Commitments being
extended, (ii)(A) there shall be no scheduled amortization of the Extended
Revolving Commitments and (B) the weighted average life to maturity of the
Extended Term Loans shall be no shorter than the remaining weighted average life
to maturity of the Class of Term Loans being extended, (iii) the Extended
Revolving Loans and the Extended Term Loans will rank pari passu in right of
payment and with respect to security with the Revolving Loans and the Term Loans
and (A) there shall be no additional Collateral with respect thereto not
constituting security for the Obligations and (B) none of the obligors or
guarantors with respect thereto shall be a Person that is not a Loan Party,
(iv) the interest rate margin, rate floors, fees, original issue discounts and
premiums applicable to any Extended Term Loans or Extended Revolving Commitments
(and the Extended Revolving Loans thereunder) shall be determined by the Parent
Borrower and the lenders providing such Extended Term Loans or Extended
Revolving Commitments, as applicable and (v) to the extent the terms of the
Extended Term Loans or the Extended Revolving Commitments are inconsistent with
the terms set forth herein (except as set forth in clauses (i) through
(iv) above), such terms shall be reasonably satisfactory to the Administrative
Agent.

(d) In connection with any Extension, the Borrowers, the Administrative Agent
and each applicable extending Lender shall execute and deliver to the
Administrative Agent an Additional Credit Extension Amendment and such other
documentation as the Administrative Agent shall reasonably

 

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specify to evidence the Extension. The Administrative Agent shall promptly
notify each Lender as to the effectiveness of each Extension. Any Additional
Credit Extension Amendment may, without the consent of any other Lender, effect
such amendments to this Agreement and the other Loan Documents as may be
necessary or appropriate, in the reasonable opinion of the Administrative Agent
and the Parent Borrower, to implement the terms of any such Extension, including
any amendments necessary to establish Extended Term Loans or Extended Revolving
Commitments as a new Class or tranche of Term Loans or Revolving Commitments, as
applicable, and such other technical amendments as may be necessary or
appropriate in the reasonable opinion of the Administrative Agent and the Parent
Borrower in connection with the establishment of such new Class or tranche
(including to preserve the pro rata treatment of the extended and non-extended
Classes or tranches and to provide for the reallocation of participation in
Letters of Credit or Swingline Loans upon the expiration or termination of the
commitments under any Class or tranche), in each case on terms not inconsistent
with this Section 2.28.

2.29 Refinancing Facilities.

(a) The Parent Borrower may, by written notice to the Administrative Agent from
time to time, request (x) Replacement Revolving Commitments to replace all or a
portion of any existing Class of Revolving Commitments (the “Replaced Revolving
Commitments”) in an aggregate amount not to exceed the aggregate amount of the
Replaced Revolving Commitments plus any accrued interest, fees, costs and
expenses related thereto and (y) Refinancing Term Loans to refinance all or a
portion of any existing Class of Term Loans (the “Refinanced Term Loans”) in an
aggregate principal amount not to exceed the aggregate principal amount of the
Refinanced Term Loans plus any accrued interest, fees, costs and expenses
related thereto (including any original issue discount or upfront fees). Such
notice shall set forth (i) the amount of the applicable Credit Agreement
Refinancing Facility (which shall be in minimum increments of $1,000,000 and a
minimum amount of $5,000,000), (ii) the date on which the applicable Credit
Agreement Refinancing Facility is to become effective (which shall not be less
than 10 Business Days nor more than 60 days after the date of such notice (or
such longer or shorter periods as the Administrative Agent shall agree)) and
(iii) whether such Credit Agreement Refinancing Facilities are Replacement
Revolving Commitments or Refinancing Term Loans. The Parent Borrower may seek
Credit Agreement Refinancing Facilities from existing Lenders (each of which
shall be entitled to agree or decline to participate in its sole discretion) or
any Additional Lender.

(b) It shall be a condition precedent to the effectiveness of any Credit
Agreement Refinancing Facility and the incurrence of any Refinancing Term Loans
that (i) no Default or Event of Default shall have occurred and be continuing
immediately prior to or immediately after giving effect to such Credit Agreement
Refinancing Facility or the incurrence of such Refinancing Term Loans, as
applicable, (ii) the representations and warranties set forth in Section 4 and
in each other Loan Document shall be true and correct in all material respects
on and as of the date such Credit Agreement Refinancing Facility becomes
effective and the Refinancing Term Loans are made; (iii) the terms of the Credit
Agreement Refinancing Facility shall comply with Section 2.29(c) and
(iv) (x) substantially concurrently with the incurrence of any such Refinancing
Term Loans, 100% of the proceeds thereof shall be applied to repay the
Refinanced Term Loans (including to pay accrued interest, fees and premiums (if
any) payable in connection therewith) and (y) substantially concurrently with
the effectiveness of such Replacement Revolving Commitments, all or an
equivalent portion of the Revolving Commitments in effect immediately prior to
such effectiveness shall be terminated, and all or an equivalent portion of the
Revolving Loans then outstanding, together with interest thereon and all other
amounts accrued for the benefit of the Revolving Lenders, shall be repaid or
paid.

(c) The terms of any Credit Agreement Refinancing Facility shall be determined
by the Parent Borrower and the applicable Credit Agreement Refinancing Facility
Lenders and set forth in an Additional Credit Extension Amendment; provided that
(i) the final maturity date of any Refinancing

 

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Term Loans or Replacement Revolving Commitments shall not be earlier than the
maturity or termination date of the applicable Refinanced Term Loans or Replaced
Revolving Commitments, respectively, (ii) (A) there shall be no scheduled
amortization of the Replacement Revolving Commitments and (B) the weighted
average life to maturity of the Refinancing Term Loans shall be no shorter than
the remaining weighted average life to maturity of the Refinanced Term Loans,
(iii) the Credit Agreement Refinancing Facilities will rank pari passu in right
of payment and of security with the Revolving Loans and the Term Loans and
(A) there shall be no additional Collateral with respect thereto not
constituting security for the Obligations and (B) none of the obligors or
guarantors with respect thereto shall be a Person that is not a Loan Party,
(iv) the interest rate margin, rate floors, fees, original issue discount and
premiums applicable to the Credit Agreement Refinancing Facilities shall be
determined by the Parent Borrower and the applicable Credit Agreement
Refinancing Facility Lenders and (v) to the extent the terms of the Credit
Agreement Refinancing Facilities are inconsistent with the terms set forth
herein (except as set forth in clause (i) through (iv) above), such terms shall
be reasonably satisfactory to the Administrative Agent.

(d) In connection with any Credit Agreement Refinancing Facility pursuant to
this Section 2.29, the Borrowers, the Administrative Agent and each applicable
Credit Agreement Refinancing Facility Lender shall execute and deliver to the
Administrative Agent an Additional Credit Extension Amendment and such other
documentation as the Administrative Agent shall reasonably specify to evidence
such Credit Agreement Refinancing Facilities. The Administrative Agent shall
promptly notify each Lender as to the effectiveness of each Additional Credit
Extension Amendment. Any Additional Credit Extension Amendment may, without the
consent of any other Lender, effect such amendments to this Agreement and the
other Loan Documents as may be necessary or appropriate, in the reasonable
opinion of the Administrative Agent and the Parent Borrower, to effect the
provisions of this Section 2.29, including any amendments necessary to establish
the applicable Credit Agreement Refinancing Facility as a new Class or tranche
of Term Loans or Revolving Commitments (as applicable) and such other technical
amendments as may be necessary or appropriate in the reasonable opinion of the
Administrative Agent and the Parent Borrower in connection with the
establishment of such Classes or tranches (including to preserve the pro rata
treatment of the refinanced and non-refinanced tranches and to provide for the
reallocation of participation in outstanding Letters of Credit and Swingline
Loans upon the expiration or termination of the commitments under any Class or
tranche), in each case on terms consistent with this Section 2.29. Upon
effectiveness of any Replacement Revolving Commitments pursuant to this Section
2.29, each Revolving Lender with a Revolving Commitment immediately prior to
such effectiveness will automatically and without further act be deemed to have
assigned to each Replacement Revolving Lender, and each such Replacement
Revolving Lender will automatically and without further act be deemed to have
assumed, a portion of such existing Revolving Lender’s participations hereunder
in outstanding Letters of Credit and Swingline Loans such that, after giving
effect to each such deemed assignment and assumption of participations, the
percentage of the aggregate outstanding participations hereunder in Letters of
Credit and Swingline Loans held by each Revolving Lender (including each such
Replacement Revolving Lender) will equal its Revolving Percentage. If, on the
date of such effectiveness, there are any Revolving Loans outstanding, such
Revolving Loans shall upon the effectiveness of such Replacement Revolving
Commitment be prepaid from the proceeds of additional Revolving Loans made
hereunder so that Revolving Loans are thereafter held by the Revolving Lenders
(including each Replacement Revolving Lender) according to their Revolving
Percentage, which prepayment shall be accompanied by accrued interest on the
Revolving Loans being prepaid and any costs incurred by any Revolving Lender in
accordance with Section 2.21. The Administrative Agent and the Lenders hereby
agree that the minimum borrowing, pro rata borrowing and pro rata payment
requirements contained elsewhere in this Agreement shall not apply to the
transactions effected pursuant to the immediately preceding sentence.

 

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SECTION 3. LETTERS OF CREDIT

3.1 L/C Commitment. (a) Subject to the terms and conditions hereof, each Issuing
Lender, in each case in reliance on the agreements of the other Revolving
Lenders set forth in Section 3.4(a), agrees to issue letters of credit (“Letters
of Credit”) for the account of the Borrowers (or so long as the Parent Borrower
is a co-applicant with respect to any such Letter of Credit any of its
Restricted Subsidiaries (other than an Additional Borrower)) on any Business Day
during the Revolving Commitment Period in such form as may be approved from time
to time by the applicable Issuing Lender; provided that no Issuing Lender shall
have an obligation to issue any Letter of Credit if, after giving effect to such
issuance, (i) the L/C Obligations (including the Dollar Equivalent of any L/C
Obligations outstanding in any currency other than Dollars) would exceed the L/C
Commitments, (ii) the L/C Obligations in respect of all Letters of Credit issued
by such Issuing Lender would exceed such Issuing Lender’s L/C Commitment,
(iii) the aggregate amount of the Available Revolving Commitments would be less
than zero or (iv) with respect to Letters of Credit denominated in an L/C
Foreign Currency, the aggregate Dollar Equivalent of the sum of the aggregate
outstanding principal amounts of Foreign Currency Loans and any outstanding L/C
Obligations denominated in any L/C Foreign Currency would exceed the Foreign
Currency Sublimit. Each Letter of Credit shall (i) be denominated in Dollars or
another L/C Foreign Currency and (ii) expire no later than the earlier of
(x) the first anniversary of its date of issuance and (y) the date that is five
Business Days prior to the Maturity Date, provided that any Letter of Credit
with a one-year term may provide for the renewal thereof for additional one-year
periods (which shall in no event extend beyond the date referred to in clause
(y) above).

(b) No Issuing Lender shall at any time be obligated to issue any Letter of
Credit if such issuance would conflict with, or cause any Issuing Lender or any
L/C Participant to exceed any limits imposed by, any applicable Requirement of
Law.

(c) For the avoidance of doubt, the Letters of Credit outstanding immediately
prior to giving effect to the Closing Date shall continue to be Letters of
Credit outstanding hereunder immediately after giving effect to the Closing
Date.

3.2 Procedure for Issuance of Letter of Credit. Any Borrower may from time to
time request that an Issuing Lender issue a Letter of Credit for its account by
delivering to the Issuing Lender at its address for notices specified herein an
Application therefor, completed to the satisfaction of such Issuing Lender, and
such other certificates, documents and other papers and information as the
Issuing Lender may reasonably request. Upon receipt of any Application, such
Issuing Lender will process such Application and the certificates, documents and
other papers and information delivered to it in connection therewith in
accordance with its customary procedures and shall promptly issue the Letter of
Credit requested thereby (but in no event shall such Issuing Lender be required
to issue any Letter of Credit earlier than three Business Days after its receipt
of the Application therefor and all such other certificates, documents and other
papers and information relating thereto) by issuing the original of such Letter
of Credit to the beneficiary thereof or as otherwise may be agreed to by such
Issuing Lender and the applicable Borrower. Such Issuing Lender shall furnish a
copy of such Letter of Credit to the applicable Borrower promptly following the
issuance thereof. Such Issuing Lender shall promptly furnish to the
Administrative Agent, which shall in turn promptly furnish to the Lenders,
notice of the issuance of each Letter of Credit (including the amount thereof).

3.3 Fees and Other Charges. (a) Each Borrower will pay a fee on all outstanding
Letters of Credit requested by it at a per annum rate equal to the Applicable
Margin then in effect with respect to Eurocurrency Loans under the Revolving
Facility, shared ratably among the Revolving Lenders and payable quarterly in
arrears on each Fee Payment Date after the issuance date. In addition, each
Borrower shall pay to the applicable Issuing Lender for its own account a
fronting fee of 0.125% per annum on the undrawn and unexpired amount of each
Letter of Credit requested by it, payable quarterly in arrears on each Fee
Payment Date after the issuance date.

 

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(b) In addition to the foregoing fees, the Parent Borrower shall pay or
reimburse each Issuing Lender for such normal and customary costs and expenses
as are incurred or charged by the Issuing Lender in issuing, negotiating,
effecting payment under, amending or otherwise administering any Letter of
Credit.

3.4 L/C Participations. (a) Each Issuing Lender irrevocably agrees to grant and
hereby grants to each L/C Participant, and, to induce such Issuing Lender to
issue Letters of Credit, each L/C Participant irrevocably agrees to accept and
purchase and hereby accepts and purchases from the Issuing Lender, on the terms
and conditions set forth below, for such L/C Participant’s own account and risk
an undivided interest equal to such L/C Participant’s Revolving Percentage in
such Issuing Lender’s obligations and rights under and in respect of each Letter
of Credit and the amount of each draft paid by such Issuing Lender thereunder.
Each L/C Participant agrees with each Issuing Lender that, if a draft is paid
under any Letter of Credit for which the Issuing Lender is not reimbursed in
full by the applicable Borrower in accordance with the terms of this Agreement
(or in the event that any reimbursement received by the Issuing Lender shall be
required to be returned by it at any time), such L/C Participant shall pay to
the Issuing Lender upon demand at the Issuing Lender’s address for notices
specified herein an amount equal to such L/C Participant’s Revolving Percentage
of the amount that is not so reimbursed (or is so returned). Each L/C
Participant’s obligation to pay such amount shall be absolute and unconditional
and shall not be affected by any circumstance, including (i) any setoff,
counterclaim, recoupment, defense or other right that such L/C Participant may
have against the Issuing Lender, any Borrower or any other Person for any reason
whatsoever, (ii) the occurrence or continuance of a Default or an Event of
Default or the failure to satisfy any of the other conditions specified in
Section 5, (iii) any adverse change in the condition (financial or otherwise) of
any Borrower, (iv) any breach of this Agreement or any other Loan Document by
any Borrower, any other Loan Party or any other L/C Participant or (v) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing.

(b) If any amount required to be paid by any L/C Participant to an Issuing
Lender pursuant to Section 3.4(a) in respect of any unreimbursed portion of any
payment made by the Issuing Lender under any Letter of Credit is paid to the
Issuing Lender within three Business Days after the date such payment is due,
such L/C Participant shall pay to the applicable Issuing Lender on demand an
amount equal to the product of (i) such amount, times (ii) the greater of
(x) the daily average Federal Funds Effective Rate and (y) a rate determined by
the Administrative Agent in accordance with banking industry rules on interbank
compensation, during the period from and including the date such payment is
required to the date on which such payment is immediately available to the
Issuing Lender, times (iii) a fraction the numerator of which is the number of
days that elapse during such period and the denominator of which is 360. If any
such amount required to be paid by any L/C Participant pursuant to
Section 3.4(a) is not made available to the applicable Issuing Lender by such
L/C Participant within three Business Days after the date such payment is due,
the Issuing Lender shall be entitled to recover from such L/C Participant, on
demand, such amount with interest thereon calculated from such due date at the
rate per annum equal to the greater of (i) the daily average Federal Funds
Effective Rate and (ii) a rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation, for the period
until such L/C Participant Lender makes such amount immediately available to the
Issuing Lender. A certificate of the applicable Issuing Lender submitted to any
L/C Participant with respect to any amounts owing under this Section shall be
conclusive in the absence of manifest error.

(c) Whenever, at any time after an Issuing Lender has made payment under any
Letter of Credit and has received from any L/C Participant its pro rata share of
such payment in accordance with

 

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Section 3.4(a), the Issuing Lender receives any payment related to such Letter
of Credit (whether directly from a Borrower or otherwise, including proceeds of
collateral applied thereto by the Issuing Lender), or any payment of interest on
account thereof, the Issuing Lender will distribute to such L/C Participant its
pro rata share thereof (it being understood that any such distribution shall be
in Dollars and the Issuing Lender shall convert any amounts received by it in a
currency other than Dollars into the Dollar Equivalent thereof for purposes of
such distribution); provided, however, that in the event that any such payment
received by the Issuing Lender shall be required to be returned by the Issuing
Lender, such L/C Participant shall return to the Issuing Lender the portion
thereof previously distributed by the Issuing Lender to it.

3.5 Reimbursement Obligation of the Borrowers. If any draft is paid under any
Letter of Credit requested by a Borrower, such Borrower shall reimburse the
applicable Issuing Lender for the amount of (a) the draft so paid and (b) any
taxes, fees, charges or other costs or expenses incurred by the Issuing Lender
in connection with such payment, not later than 1:00 P.M., Local Time on the
Business Day on which such Borrower receives such notice by 11:00 A.M., Local
Time on such date (or if such Borrower receives such notice thereafter, no later
than 1:00 P.M., Local Time on the subsequent Business Day). Each such payment
shall be made to the Issuing Lender at its address for notices referred to
herein in the same currency as such draft was paid and in immediately available
funds. Interest shall be payable on any such amounts from the date on which the
relevant draft is paid until payment in full at the rate set forth in (x) until
the Business Day next succeeding the date of the relevant notice,
Section 2.15(b) and (y) thereafter, Section 2.15(c).

3.6 Obligations Absolute. Each Borrower’s obligations under this Section 3 shall
be absolute and unconditional under any and all circumstances and irrespective
of any setoff, counterclaim or defense to payment that such Borrower may have or
have had against any Issuing Lender, any beneficiary of a Letter of Credit or
any other Person. Each Borrower also agrees with each Issuing Lender that the
Issuing Lender shall not be responsible for, and such Borrower’s Reimbursement
Obligations under Section 3.5 shall not be affected by, among other things,
(i) the validity, enforceability or genuineness of any draft, demand,
certificate or other document or of any endorsements thereon, even though such
documents shall in fact prove to be invalid, fraudulent or forged, (ii) any loss
or delay in the transmission or otherwise of any document required in order to
make a drawing under a Letter of Credit, (iii) any dispute between or among any
Borrower and any beneficiary of any Letter of Credit or any other party to which
such Letter of Credit may be transferred or any claim, counterclaim, setoff,
defense or other right whatsoever of any Borrower against any beneficiary of
such Letter of Credit or any such transferee or (iv) any other circumstance or
happening whatsoever, whether or not similar to any of the foregoing, including
any circumstance that might otherwise constitute a defense available to, or a
discharge of, any Loan Party. No Issuing Lender shall be liable for any error,
omission, interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with any Letter of Credit,
except for errors or omissions found by a final and nonappealable decision of a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of the Issuing Lender. Each Borrower agrees that any action
taken or omitted by any Issuing Lender under or in connection with any Letter of
Credit or the related drafts or documents, if done in the absence of gross
negligence or willful misconduct, shall be binding on the Borrowers and shall
not result in any liability of any Issuing Lender to any Borrower.

3.7 Letter of Credit Payments. If any draft shall be presented for payment under
any Letter of Credit, the applicable Issuing Lender shall promptly notify the
Borrower that requested such Letter of Credit of the date and amount thereof.
The responsibility of the Issuing Lender to the applicable Borrower in
connection with any draft presented for payment under any Letter of Credit
shall, in addition to any payment obligation expressly provided for in such
Letter of Credit, be limited to determining that the documents (including each
draft) delivered under such Letter of Credit in connection with such presentment
are substantially in conformity with such Letter of Credit.

 

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3.8 Applications. To the extent that any provision of any Application related to
any Letter of Credit is inconsistent with the provisions of this Section 3, the
provisions of this Section 3 shall apply.

3.9 Cash Collateralization. If on any date the L/C Obligations (including the
Dollar Equivalent of any L/C Obligations outstanding in a currency other than
Dollars) exceeds the L/C Commitment, then the Borrowers shall within three
Business Days after notice thereof from the Administrative Agent deposit in a
cash collateral account opened by the Administrative Agent an amount equal to
such excess plus accrued and unpaid interest thereon.

3.10 Currency Adjustments. (a) Notwithstanding anything to the contrary
contained in this Agreement, for purposes of calculating any fee in respect of
any Letter of Credit in respect of any Business Day, the Administrative Agent
shall convert the amount available to be drawn under any Letter of Credit
denominated in a currency other than Dollars into an amount of Dollars based
upon the Exchange Rate.

(b) Notwithstanding anything to the contrary contained in this Section 3, prior
to demanding any reimbursement from the L/C Participants pursuant to subsection
3.4 in respect of any Letter of Credit denominated in a currency other than
Dollars, the applicable Issuing Lender shall convert the Borrowers’ obligations
under subsection 3.4 to reimburse the Issuing Lender in such currency into an
obligation to reimburse the Issuing Lender in Dollars. The Dollar amount of the
reimbursement obligation of the Borrowers and the L/C Participants shall be
computed by the applicable Issuing Lender based upon the Exchange Rate in effect
for the day on which such conversion occurs, as determined by the Administrative
Agent in accordance with the terms hereof.

SECTION 4. REPRESENTATIONS AND WARRANTIES

To induce the Administrative Agent and the Lenders to enter into this Agreement
and to make the Loans and issue or participate in the Letters of Credit, the
Parent Borrower hereby represents and warrants to the Administrative Agent and
each Lender that (i) as of the Closing Date and (ii) as of any other date such
representations and warranties must be made hereunder:

4.1 Financial Condition. (a) [Reserved]

(b) The audited consolidated balance sheets of the Parent Borrower as at
December 31, 2015, and the related consolidated statements of income,
stockholders’ equity and cash flows for the fiscal year ended on such date,
reported on by and accompanied by an unqualified report from Ernst & Young LLP,
present fairly, in all material respects, the consolidated financial condition
of the Parent Borrower and its Subsidiaries as at such date, and the
consolidated results of its operations and its consolidated cash flows for the
fiscal year then ended. The unaudited consolidated balance sheet of the Parent
Borrower and its Subsidiaries as at the last day of any subsequent fiscal
quarter ended at least 45 days prior to the Closing Date and the related
unaudited consolidated statements of income and cash flows for the three-month
periods ended on such dates, present fairly, in all material respects, the
consolidated financial condition of the Parent Borrower and its Subsidiaries as
at such dates, and the consolidated results of its operations and its
consolidated cash flows for the three-month periods then ended (subject to
normal year-end audit adjustments). All such financial statements, including the
related schedules and notes thereto, have been prepared in accordance with GAAP
applied consistently throughout the periods involved (except as approved by the
aforementioned firm of accountants and disclosed therein).

 

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(c) As of the Closing Date, no Group Member has any material Guarantee
Obligations, contingent liabilities and liabilities for taxes, or any long-term
leases or unusual forward or long-term commitments, including any interest rate
or foreign currency swap or exchange transaction or other obligation in respect
of derivatives, that are required to be reflected in financial statements in
accordance with GAAP and are not reflected in the most recent financial
statements referred to in paragraph (b). During the period from December 31,
2015 to and including the Closing Date there has been no Disposition by any
Group Member of any material part of its business or property (other than in the
ordinary course of business).

4.2 No Change. Since December 31, 2015, including after giving effect to the
Transactions, there shall not have been any event or state of facts that has had
or could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.

4.3 Existence; Compliance with Law. Each Group Member (a) is duly organized,
validly existing and in good standing (or, if applicable in a foreign
jurisdiction, enjoys the equivalent status under the laws of any jurisdiction of
organization outside the United States) under the laws of the jurisdiction of
its organization, (b) has all requisite power and authority, and the legal
right, (i) to own and operate its property, to lease the property it operates as
lessee and to conduct the business in which it is currently engaged and
(ii) execute, deliver and perform its obligations under the Loan Documents to
which it is a party, (c) is qualified to do business in, and is in good standing
(or, if applicable in a foreign jurisdiction, enjoys the equivalent status under
the laws of any jurisdiction of organization outside the United States) in,
every jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification, and (d) is in compliance
with all Requirements of Law and its Contractual Obligations except, in each
case (other than with respect to clause (b)(ii) or any Borrower in connection
with clause (a) above) to the extent that the failure to comply therewith could
not, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect.

4.4 Power; Authorization; Enforceable Obligations. The Transactions are within
each Loan Party’s corporate powers and (i) in the case of U.S. Loan Parties,
have been duly authorized by all necessary corporate, stockholder, and
shareholder action and (ii) in the case of Foreign Loan Parties, will have been
duly authorized by all necessary corporate stockholder and shareholder action as
of the date when the first Loan is made to the applicable Additional Borrower
hereunder. As of (i) the Closing Date, each Loan Document dated on the Closing
Date and (ii) any date after the Closing Date on which the representations or
warranties in this Section 4.4 are made, each Loan Document dated on or prior to
such date, has, in each case, been duly executed and delivered by each Loan
Party party thereto and, assuming due execution and delivery by all parties
other than the Loan Parties, constitutes a legal, valid and binding obligation
of each Loan Party party thereto, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors’ rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.

4.5 No Legal Bar. The execution, delivery and performance of this Agreement and
the other Loan Documents, the issuance of Letters of Credit, the borrowings
hereunder and the use of the proceeds thereof (a) will not violate any
Requirement of Law or any Contractual Obligation of any Group Member and
(b) will not result in, or require, the creation or imposition of any Lien on
any of their respective properties or revenues pursuant to any Requirement of
Law or any such Contractual Obligation (other than the Liens created by the
Security Documents), except to the extent such violation or Lien, could not
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect.

 

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4.6 Litigation. There are no actions, suits, investigations, criminal
prosecutions, civil investigative demands, imposition of criminal or civil fines
or penalties, claims, disputes or proceedings by or before any arbitrator or
Governmental Authority pending against or, to the knowledge of the Parent
Borrower, threatened against or affecting the Parent Borrower or any of its
Restricted Subsidiaries (i) that could reasonably be expected, individually or
in the aggregate, to result in a Material Adverse Effect or (ii) as of the
Closing Date, that involve this Agreement.

4.7 No Default. Neither the Parent Borrower nor any Loan Party is in default
under or with respect to any Contractual Obligation that would, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.

4.8 Ownership of Property; Liens. Each of the Parent Borrower and its Restricted
Subsidiaries has good title to, or valid leasehold interests in, all its real
and personal property material to its business, except where such failure to
have good title or valid leasehold interests could not reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect. None
of the assets of the Parent Borrower or any of its Restricted Subsidiaries is
subject to any Lien other than Liens permitted under Section 7.3.

4.9 Intellectual Property. Except as could not reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect, each
Group Member owns, or has license or other valid and enforceable rights to use
all Intellectual Property necessary for the conduct of its business as currently
conducted. Except as could not reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect, no claim has been asserted
and is pending by any Person challenging or questioning the use of any
Intellectual Property or the validity or effectiveness of any Intellectual
Property, nor does the Parent Borrower know of any valid basis for any such
claim. The use of Intellectual Property by each Group Member does not infringe
on the rights of any Person in any material respect.

4.10 Taxes. Each Group Member has filed or caused to be filed all Federal,
material state and other Tax returns that are required to be filed and has paid
all Taxes shown to be due and payable on said returns or on any assessments made
against it or any of its property and all other Taxes imposed on it or any of
its property by any Governmental Authority to the extent such Taxes have become
due and payable (other than any the amount or validity of which are currently
being contested in good faith by appropriate proceedings and with respect to
which reserves in conformity with GAAP have been provided on the books of the
relevant Group Member); no Tax Lien has been filed, and, to the knowledge of the
Parent Borrower, no claim is being asserted, with respect to any such Tax that
could reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.

4.11 Federal Regulations. No part of the proceeds of any Loans, and no other
extensions of credit hereunder, will be used (a) for “buying” or “carrying” any
“margin stock” within the respective meanings of each of the quoted terms under
Regulation U as now and from time to time hereafter in effect for any purpose
that violates the provisions of the Regulations of the Board or (b) for any
purpose that violates the provisions of the Regulations of the Board. No more
than 25% of the assets of the Group Members consist of “margin stock” as so
defined. If requested by any Lender or the Administrative Agent, the Parent
Borrower will furnish to the Administrative Agent and each Lender a statement to
the foregoing effect in conformity with the requirements of FR Form G-3 or FR
Form U-1, as applicable, referred to in Regulation U.

4.12 Labor Matters. Except as, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect: (a) there are no
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any Group Member pending or, to the knowledge of the Parent Borrower,
threatened; (b) hours worked by and payment made to employees of each Group
Member have not been in violation of the Fair Labor Standards Act or any other
applicable Requirement of Law dealing with such matters; and (c) all payments
due from any Group Member on account of employee health and welfare insurance
have been paid or accrued as a liability on the books of the relevant Group
Member to the extent required by GAAP.

4.13 ERISA. (a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Internal Revenue Code and other federal or
state Laws and each Group Member and ERISA Affiliate is in material compliance
with ERISA, the Internal Revenue Code and other United States federal or United
States state Laws with respect to each Multiemployer Plan. Each Plan that is
intended to qualify under Section 401(a) of the Internal Revenue Code has
received a favorable determination letter from the IRS (or an application for
such a letter is currently pending before the IRS with respect thereto) or is
maintained under a prototype document that has received a favorable opinion
letter from the IRS and, to the best knowledge of the Group Members, nothing has
occurred that would prevent, or cause the loss of, such qualification. Each
Group Member and ERISA Affiliate have made all required contributions that are
due and owing to each Plan subject to Section 412 of the Internal Revenue Code
or Section 303 of ERISA and to each Multiemployer Plan under Section 412 of the
Internal Revenue Code or Section 304 of ERISA, and no application for a waiver
of the minimum funding standard pursuant to Section 412 of the Internal Revenue
Code or Section 302 of ERISA has been made with respect to any Plan.

(b) There are no pending or, to the best knowledge of the Group Members or ERISA
Affiliates, threatened claims, actions or lawsuits, or action by any
Governmental Authority, with respect to any Plan that would reasonably be
expected to have a Material Adverse Effect. There has been no prohibited
transaction or violation of the fiduciary responsibility rules with respect to
any Plan that has resulted or would reasonably be expected to result in a
Material Adverse Effect.

(c) (i) No ERISA Event has occurred or is reasonably expected to occur, (ii) no
Pension Plan has any Unfunded Pension Liability, (iii) no Group Member and ERISA
Affiliate has incurred, or reasonably expects to incur, any liability (and no
event has occurred that, with the giving of notice under Section 4219 of ERISA,
would result in such liability) under Sections 4201 or 4243 of ERISA with
respect to a Multiemployer Plan, and (iv) no Group Member and ERISA Affiliate
has engaged in a transaction involving any Pension Plan or Multiemployer Plan
that would reasonably be expected to be subject to Sections 4069 or 4212(c) of
ERISA, in each case, as to clauses (i), (ii), (iii) or (iv), that has resulted
or would reasonably be expected to result in a Material Adverse Effect.

(d) All Foreign Plans are maintained in compliance with applicable law, except
as would not reasonably be expected to have a Material Adverse Effect.

4.14 Investment Company Act; Other Regulations. No Loan Party is an “investment
company”, or a company “controlled” by an “investment company”, within the
meaning of the Investment Company Act of 1940, as amended.

4.15 Subsidiaries. As of the Closing Date, (a) Schedule 4.15(a)(i) sets forth
the name and jurisdiction of organization of each Restricted Subsidiary and, as
to each such Subsidiary, the percentage of each class of Capital Stock owned by
any Loan Party and Schedule 4.15(a)(ii) sets forth the name and jurisdiction of
each Unrestricted Subsidiary and, as to each such Subsidiary, the percentage of
each class of Capital Stock owned by any Loan Party and (b) there are no
outstanding subscriptions, options, warrants, calls, rights or other agreements
or commitments (other than stock options granted to employees or directors and
directors’ qualifying shares) of any nature relating to any Capital Stock of the
Parent Borrower or any Restricted Subsidiary, except as created by the Loan
Documents.

 

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4.16 No Burdensome Restrictions. No Loan Party is a party to any contract or
agreement the performance of which could reasonably be expected to have a
Material Adverse Effect. No Loan Party has agreed or consented to cause or
permit in the future (upon the happening of a contingency or otherwise) any of
its property, whether now owned or hereafter acquired, to be subject to a Lien,
other than Liens permitted by Section 7.3.

4.17 Environmental Matters. Except as, individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect:

(a) the facilities and properties currently and formerly owned, leased or
operated by any Group Member (the “Properties”) do not contain, and have not
previously contained, any Materials of Environmental Concern in amounts or
concentrations or under circumstances that constitute or constituted a violation
of, or could give rise to liability under, any Environmental Law;

(b) no Group Member has received or is aware of any notice of violation, alleged
violation, non-compliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws with regard to any
of the Properties or the business operated by any Group Member (the “Business”),
nor does the Parent Borrower have knowledge or reason to believe that any such
notice will be received or is being threatened;

(c) Materials of Environmental Concern have not been transported from or to or
disposed of from or at the Properties or in connection with the Business in
violation of, or in a manner or to a location that could give rise to liability
under, any Environmental Law, nor have any Materials of Environmental Concern
been generated, treated, stored or disposed of at, in, on or under any of the
Properties in violation of, or in a manner that could give rise to liability
under, any applicable Environmental Law;

(d) no judicial proceeding or governmental or administrative action is pending
or, to the knowledge of the Parent Borrower, threatened, under or related to any
Environmental Law to which any Group Member is or will be named as a party with
respect to the Properties or the Business, nor are there any consent decrees or
other decrees, consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under or related to any
Environmental Law with respect to the Properties or the Business;

(e) there has been no release or threat of release of Materials of Environmental
Concern at, in, on, under or from the Properties, or arising from or related to
the operations of any Group Member in connection with the Properties or
otherwise in connection with the Business, in violation of or in amounts or in a
manner that could give rise to liability under Environmental Laws;

(f) each Group Member, the Properties, the Business and all operations at the
Properties are in compliance, and have in the last five years been in
compliance, with all applicable Environmental Laws, and there is no
contamination at, in, on, under or about the Properties or violation of any
Environmental Law with respect to the Properties or the Business; and

(g) there are no liabilities of any Group Member of any kind whatsoever, whether
accrued, contingent, absolute, determined, determinable or otherwise, arising
under or relating to any Environmental Law, and no Group Member has assumed any
liability of any other Person arising under or relating to Environmental Laws.

4.18 Accuracy of Information, etc. No statement or information, other than
projections, pro forma financial statements, forward-looking statements,
estimates with respect to future performance

 

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and information of a general economic or industry specific nature, contained in
this Agreement, any other Loan Document, the Confidential Information Memorandum
or any other document, certificate or statement furnished by or on behalf of any
Loan Party to the Administrative Agent or the Lenders, or any of them, for use
in connection with the transactions contemplated by this Agreement or the other
Loan Documents, contained as of the date such statement, information, document
or certificate was so furnished (or, in the case of the Confidential Information
Memorandum (as supplemented), as of the date thereof), any untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements contained herein or therein, taken as a whole, not misleading in
light of the circumstances under which such statements were made (giving effect
to all supplements thereto). The projections, pro forma financial information,
forward-looking statements and estimates with respect to future performance
contained in the materials referenced above are based upon good faith estimates
and assumptions believed by management of the Parent Borrower to be reasonable
at the time made, it being recognized by the Lenders that such financial
information as it relates to future events is not to be viewed as fact and that
actual results during the period or periods covered by such financial
information may differ from the projected results set forth therein by a
material amount.

4.19 Security Documents. (a) The Guarantee and Collateral Agreement is effective
to create in favor of the Administrative Agent, for the benefit of the Lenders,
a legal, valid and enforceable security interest in the Collateral described
therein and proceeds thereof. In the case of the Pledged Stock, when stock
certificates representing such Pledged Stock are delivered to the Administrative
Agent (together with a properly completed and signed stock power or
endorsement), in the case of Deposit Accounts, when Deposit Account Control
Agreements are entered into by the Administrative Agent, in the case of
Securities Accounts, when Securities Account Control Agreements are entered into
by the Administrative Agent, and in the case of the other Collateral described
in the Guarantee and Collateral Agreement, when financing statements and other
filings specified on Schedule 4.19(a) in appropriate form are filed in the
offices specified on Schedule 4.19(a), the Administrative Agent shall have a
fully perfected Lien on, and security interest in, all right, title and interest
of the U.S. Loan Parties in such Collateral and the proceeds thereof, as
security for the Obligations (as defined in the Guarantee and Collateral
Agreement), in each case to the extent security interests in such Collateral can
be perfected by delivery of such Pledged Stock, the execution of Deposit Account
Control Agreements, the execution of Securities Account Control Agreements or
the filing of financing statements, as applicable, in each case prior and
superior in right to any other Person (except, in the case of Collateral other
than Pledged Stock, Liens permitted by Section 7.3).

(b) Schedule 1.1B lists, as of the Closing Date, any fee interest in real
property owned by the Parent Borrower, or any of its Restricted Subsidiaries
that is a U.S. Loan Party, located in the United States (x) constituting a
manufacturing facility property or (y) with a fair market value (as determined
by the Parent Borrower in good faith) in excess of $5,000,000.

(c) Each of the Mortgages from and after the execution, delivery and appropriate
filing thereof, will be effective to create in favor of the Administrative
Agent, for the benefit of the Lenders, a legal, valid and enforceable Lien on
the Mortgaged Properties described therein and proceeds thereof, and when the
applicable Mortgage is filed in the applicable office specified on Schedule
4.19(b), each such Mortgage shall constitute (or continue to constitute, as
applicable) a fully perfected Lien on, and security interest in, all right,
title and interest of the U.S. Loan Parties in the Mortgaged Properties and the
proceeds thereof, as security for the Obligations (as defined in the relevant
Mortgage), of first priority, subject only to Liens permitted by Section 7.3.

4.20 Solvency. As of the Closing Date, the Parent Borrower and its Subsidiaries
are, on a consolidated basis, and after giving effect to the Transactions and
the incurrence of all Indebtedness and obligations being incurred in connection
herewith and therewith, Solvent.

 

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4.21 EEA Financial Institutions. Neither the Parent Borrower nor any Subsidiary
Guarantor is an EEA Financial Institution.

4.22 OFAC; Anti-Money Laundering; Patriot Act. (a) Each Group Member is in
compliance, in all material respects, with the Patriot Act.

(b) The Parent Borrower has implemented and maintains in effect policies and
procedures designed to ensure compliance by the Parent Borrower, its
Subsidiaries and their respective directors, officers, employees and agents with
Anti-Corruption Laws and applicable Sanctions, and the Parent Borrower, its
Subsidiaries and their respective officers and employees and to the knowledge of
the Parent Borrower its directors and agents, are in compliance with
Anti-Corruption Laws and applicable Sanctions in all material respects. None of
(a) the Parent Borrower, any Subsidiary or to the knowledge of the Parent
Borrower or such Subsidiary any of their respective directors, officers or
employees, or (b) to the knowledge of the Parent Borrower, any agent of the
Parent Borrower or any Subsidiary that will act in any capacity in connection
with or benefit from the credit facility established hereby, is a Sanctioned
Person. No Loan or Letter of Credit, use of proceeds or other transaction
contemplated by this Agreement will violate Anti-Corruption Laws or applicable
Sanctions.

4.23 Governmental Authorization; Other Consents. No approval, consent,
exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, any Loan Party of this Credit Agreement or any other Loan Document
(other than (a) as have already been obtained and are in full force and effect
and (b) filings to perfect security interests granted pursuant to the Loan
Documents).

4.24 Insurance. The material properties of the Parent Borrower and the
Restricted Subsidiaries that are necessary for the operation of their businesses
are insured with financially sound and reputable insurance companies not
Affiliates of the Parent Borrower, in such amounts, with such deductibles and
covering such risks as are customarily carried by companies engaged in similar
businesses and owning similar properties in localities where the Parent Borrower
or the applicable Loan Party operates; provided that (i) the Parent Borrower and
the Loan Parties may self-insure to the extent customary among companies engaged
in similar businesses and operating in similar localities, and (ii) all real
property constituting Collateral hereunder with improvements located in a
special flood hazard area in a community where flood insurance coverage is
available under the Flood Laws is covered by flood insurance in such amounts and
with such deductibles as are reasonably acceptable to the Administrative Agent.

SECTION 5. CONDITIONS PRECEDENT

5.1 Conditions to the Closing Date. The agreement of each Lender to make the
initial extensions of credit requested to be made by it on the Closing Date is
subject to the satisfaction, prior to or concurrently with the making of such
extension of credit on the Closing Date, of the following conditions precedent:

(a) Agreement. The Administrative Agent shall have received this Agreement,
executed and delivered by the Administrative Agent, each Borrower, each Term
Lender, each Revolving Lender listed on Schedule 1.1A, each Issuing Lender and
the Swingline Lender.

(b) Fees. The Lenders and the Administrative Agent shall have received all fees
required to be paid by the Parent Borrower as of the Closing Date, and
reimbursement for all expenses required to be reimbursed by the Parent Borrower
as of the Closing Date for which invoices have been presented (including the
reasonable fees and expenses of legal counsel), on or before the Closing Date.

 

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(c) Closing Certificate; Certified Certificate of Incorporation; Good Standing
Certificates. The Administrative Agent shall have received (i) a certificate of
each Loan Party, dated the Closing Date, substantially in the form of Exhibit C,
with appropriate insertions and attachments, including the Organization
Documents of each Loan Party certified by the relevant authority of the
jurisdiction of organization of each Loan Party, (ii) (A) with respect to each
Loan Party, such certificates of resolutions or other action, incumbency
certificates and/or other certificates of Responsible Officers of each such Loan
Party as the Administrative Agent may reasonably require evidencing the
identity, authority and capacity of each Responsible Officer thereof authorized
to act as a Responsible Officer in connection with this Agreement and the other
Loan Documents to which such Loan Party is a party and (iii) a long form good
standing certificate as of a recent date for each Loan Party from its
jurisdiction of organization.

(d) Legal Opinion. The Administrative Agent shall have received an executed
legal opinion of each of Morgan, Lewis & Bockius LLP, Fisher Broyles, LLP,
Fredrikson & Byron P.A., Husch Blackwell LLP, McGuire, Wood & Bissette, P.A. and
Vorys, Sater, Seymour and Pease LLP with respect to certain matters relating to
the Loan Parties in form and substance reasonably satisfactory to the
Administrative Agent.

(e) Pledged Stock; Stock Powers; Pledged Notes. The Administrative Agent shall
have received (i) the certificates representing the shares of Capital Stock
pledged pursuant to the Guarantee and Collateral Agreement, together with an
undated stock power for each such certificate executed in blank by a duly
authorized officer of the pledgor thereof and (ii) each promissory note (if any)
pledged to the Administrative Agent pursuant to the Guarantee and Collateral
Agreement endorsed (without recourse) in blank (or accompanied by an executed
transfer form in blank) by the pledgor thereof.

(f) Filings, Registrations and Recordings. Each document (including any Uniform
Commercial Code financing statement) required by the Security Documents or under
law or reasonably requested by the Administrative Agent to be filed, registered
or recorded in order to create in favor of the Administrative Agent, for the
benefit of the Lenders, a perfected Lien on the Collateral described therein
with respect to the Loan Parties, prior and superior in right to any other
Person (other than with respect to Liens expressly permitted by Section 7.3),
shall be in proper form for filing, registration or recordation.

(g) Flood Insurance. With respect to each Mortgaged Property as of the Closing
Date, the Administrative Agent shall have received the Flood Documents.

(h) Financial Statements; Projections. The Parent Borrower shall have delivered
to the Administrative Agent (i) audited consolidated balance sheets and related
consolidated statements of operations, cash flows and shareholders’ equity of
the Parent Borrower for the fiscal years ending December 31, 2014 and
December 31, 2015, accompanied by an unqualified report thereon by their
respective independent registered public accountants, (ii) unaudited
consolidated balance sheets and related statements of operations and cash flows
of the Parent Borrower for any subsequent fiscal quarter of the Parent Borrower,
ended at least 45 days before the Closing Date and (iii) satisfactory annual
projections for the Parent Borrower and its consolidated Subsidiaries through
2020.

(i) Guarantee and Collateral Agreement. The Administrative Agent shall have
received (i) the Guarantee and Collateral Agreement, executed and delivered by
the Parent Borrower and each other Loan Party as of the Closing Date and (ii) a
perfection certificate, executed and delivered by the Parent Borrower and each
other U.S. Loan Party as of the Closing Date (the “Perfection Certificate”).

 

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(j) Patriot Act. The Administrative Agent shall have received, at least five
Business Days prior to the Closing Date, all documentation and other information
about the Loan Parties as has been reasonably requested in writing at least 10
days prior to the Closing Date by the Administrative Agent, in each case as the
Administrative Agent and the Lenders reasonably determine is required by
regulatory authorities under applicable “know your customer” and anti-money
laundering rules and regulations, including the Patriot Act.

(k) Governmental and Third Party Authorizations. Each Loan Party shall have
obtained all approvals or consents of any Governmental Authority and all other
Persons necessary or, in the discretion of the Administrative Agent, advisable
in connection with the financing contemplated hereby, and the continuing
operations of the Borrower and its Subsidiaries, and any such approvals and
consents shall be in full force and effect. All applicable waiting periods shall
have expired without any action being taken or threatened by any competent
authority which would restrain, prevent or otherwise impose adverse conditions
on the transactions contemplated by the Loan Documents or the Security Documents
or the financing thereof and no action, request for stay, petition for review or
rehearing, reconsideration or appeal with respect to any of the foregoing shall
be pending, and the time for any applicable agency to take action to set aside
its consent on its own motion shall have expired.

(l) Closing Date Refinancing. (i) All amounts outstanding under the Existing
Credit Agreement, and in each case all accrued interest thereon and other fees
and amounts outstanding in respect thereof, shall have been paid in full,
(ii) the commitments thereunder shall have been terminated, (iii) all Liens
securing the Existing Credit Agreement shall have been released and (iv) the
Administrative Agent shall have received reasonably satisfactory evidence of the
foregoing (collectively, the “Closing Date Refinancing”).

(m) No Material Adverse Effect. Since December 31, 2015, including after giving
effect to the Transactions, there shall not have been any event or state of
facts that has had or could reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect.

(n) Officer’s Certificate. The Administrative Agent shall have received a
certificate in a form reasonably satisfactory to it dated as of the Closing Date
(i) from the chief financial officer of the Parent Borrower certifying as to the
solvency of the Parent Borrower and its Subsidiaries, on a consolidated basis,
after giving effect to the Transactions and (ii) from a Responsible Officer of
the Loan Parties that (x) since December 31, 2015, including after giving effect
to the Transactions, there shall not have been any event or state of facts that
has had or could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect, and (y) each of the representations and
warranties made by any Loan Party in or pursuant to the Loan Documents is true
and correct in all material respects (except that any representation or warranty
which is already qualified as to materiality or by reference to Material Adverse
Effect shall be true and correct in all respects) on and as of such date as if
made on and as of such date, except to the extent such representations and
warranties expressly relate to an earlier date, in which case such
representations and warranties shall have been true and correct in all material
respects as of such earlier date.

5.2 Conditions to Each Extension of Credit On or After the Closing Date. The
agreement of each Lender to make any extension of credit requested to be made by
it on any date on or after the Closing Date is subject to the satisfaction of
the following conditions precedent:

(a) Representations and Warranties. Each of the representations and warranties
made by any Loan Party in or pursuant to the Loan Documents shall be true and
correct in all material respects (except that any representation or warranty
which is already qualified as to materiality or by reference to Material Adverse
Effect shall be true and correct in all respects) on and as of such date as if
made on and

 

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as of such date, except to the extent such representations and warranties
expressly relate to an earlier date, in which case such representations and
warranties shall have been true and correct in all material respects as of such
earlier date.

(b) No Default. No Default or Event of Default shall have occurred and be
continuing on such date or after giving effect to the extensions of credit
requested to be made on such date.

(c) Additional Borrower. If such extension of credit is the first extension of
credit requested by an Additional Borrower, the conditions contained in
Section 5.1(a) above with respect to such Additional Borrower and Section 5.3
have been satisfied with respect to such Additional Borrower.

(d) Notice. The Administrative Agent, Issuing Lender and/or Swingline Lender
shall have received a notice of borrowing, continuation or conversion, an
Application for the issuance of a Letter of Credit, or extension of the expiry
date thereof, or the increase of the amount thereof, as applicable, in
accordance with the requirements hereof.

Each request for an extension of credit as required by Section 5.2(d) (other
than a notice requesting only a conversion of Loans to other Types of Loans, or
a continuation of Eurocurrency Loans) submitted by a Borrower shall be deemed to
be a representation and warranty by the Borrowers that the conditions specified
in Section 5.2(a) through (c) have been satisfied (to the extent such conditions
are required to be satisfied with respect to such extension of credit) on and as
of the date of the applicable extension of credit.

5.3 Conditions to Initial Extension of Credit to Each Additional Borrower. The
agreement of each Revolving Lender, Swingline Lender or Issuing Lender to make
any Loans or issue any Letters of Credit to any Additional Borrower is subject
to the satisfaction of the following conditions precedent:

(a) Foreign Guarantee Agreement. In respect of any Additional Borrower that is a
Foreign Subsidiary, the Administrative Agent shall have received the Foreign
Guarantee Agreement (or a joinder in respect thereof), executed and delivered by
such Additional Borrower and each of its Subsidiaries that is a Material Foreign
Restricted Subsidiary.

(b) Guarantee and Collateral Agreement. In respect of any Additional Borrower
that is a Domestic Subsidiary, such Additional Borrower shall have become party
to the Guarantee and Collateral Agreement.

(c) Joinder Agreement. The Administrative Agent shall have received an
Additional Borrower Joinder Agreement, substantially in the form of Exhibit J-1
or J-2, as applicable, executed and delivered by such Additional Borrower and
the Parent Borrower.

(d) Legal Opinion. The Administrative Agent shall have received an opinion of
counsel for such Additional Borrower reasonably acceptable to the Administrative
Agent, covering such matters relating to the transactions contemplated hereby as
the Administrative Agent may reasonably request.

(e) Other Documents. The Administrative Agent shall have received such documents
and certificates as the Administrative Agent or its counsel may reasonably
request relating to the organization, existence and good standing of such
Additional Borrower, the authorization of the transactions contemplated hereby
relating to such Additional Borrower and any other legal matters relating to
such Additional Borrower, all in form and substance reasonably satisfactory to
the Administrative Agent, including (i) a certificate of such Additional
Borrower substantially in the form of Exhibit C, with

 

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appropriate insertions and attachments, including the certificate of
incorporation (or equivalent) of such Additional Borrower certified by the
relevant authority of the jurisdiction of incorporation (or equivalent) of such
Additional Borrower (in each case, to the extent applicable in such jurisdiction
of incorporation), and (ii) a long form good standing certificate (or
equivalent) for such Additional Borrower from its jurisdiction of incorporation
(in each case, to the extent applicable in such jurisdiction of incorporation).

(f) Know Your Customer Information. The Administrative Agent shall have
received, at least five Business Days prior to the date on which the conditions
of this Section 5.3 are satisfied, all documentation and other information about
such Additional Borrower as has been reasonably requested in writing at least 10
days prior to the date on which the conditions of this Section 5.3 are satisfied
by the Administrative Agent as the Administrative Agent and the Lenders
reasonably determine is required by regulatory authorities under applicable
“know your customer” and anti-money laundering rules and regulations, including
the Patriot Act.

(g) Additional Representations and Warranties. Unless otherwise agreed by the
Administrative Agent, the following representations and warranties shall be true
and correct on and as of such date:

(i) Pari Passu. Subject to applicable Requirements of Law, the obligations of
such Additional Borrower under this Agreement, when executed and delivered by
such Additional Borrower, will rank at least pari passu on a contractual basis
with all unsecured Indebtedness of such Additional Borrower.

(ii) No Immunities, etc. Such Additional Borrower is subject to civil and
commercial law with respect to its obligations under this Agreement and any
Note, and the execution, delivery and performance by such Additional Borrower of
this Agreement constitute and will constitute private and commercial acts and
not public or governmental acts. Neither such Additional Borrower nor any of its
property, whether or not held for its own account, has any immunity (sovereign
or other similar immunity) from any suit or proceeding, from jurisdiction of any
court or from set-off or any legal process (whether service or notice,
attachment prior to judgment, attachment in aid of execution of judgment,
execution of judgment or other similar immunity) under laws of the jurisdiction
in which such Additional Borrower is organized and existing in respect of its
obligations under this Agreement or any Note. To the extent permitted by
applicable law, such Additional Borrower has waived, and hereby does waive,
every immunity (sovereign or otherwise) to which it or any of its properties
would otherwise be entitled from any legal action, suit or proceeding, from
jurisdiction of any court and from set-off or any legal process (whether service
or notice, attachment prior to judgment, attachment in aid of execution of
judgment, execution of judgment or otherwise) under the laws of the jurisdiction
in which such Additional Borrower is organized and existing in respect of its
obligations under this Agreement and any Note. The waiver by such Additional
Borrower described in the immediately preceding sentence is the legal, valid and
binding obligation of such Additional Borrower, subject to customary
qualifications and limitations.

(iii) No Recordation Necessary. This Agreement and each Note, if any, is in
proper legal form under the law of the jurisdiction in which such Additional
Borrower is organized and existing for the enforcement hereof or thereof against
such Additional Borrower under the law of such jurisdiction, and to ensure the
legality, validity, enforceability or admissibility in evidence of this
Agreement and any such Note, subject to customary qualifications and
limitations. It is not necessary to ensure the legality, validity,
enforceability or admissibility in evidence of this Agreement and any such Note
that this Agreement, any Note or any other document be filed, registered or
recorded with, or executed or notarized before, any court or other authority in
the

 

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jurisdiction in which such Additional Borrower is organized and existing or that
any registration charge or stamp or similar tax be paid on or in respect of this
Agreement, any Note or any other document, except (x) for any such filing,
registration or recording, or execution or notarization or payment of any
registration charge or stamp or similar tax as has been made or is not required
to be made until this Agreement, any Note or any other document is sought to be
enforced or that is required to perfect the grant of any security or is
otherwise required pursuant to the Loan Documents and (y) for any charge or tax
as has been timely paid.

(iv) Exchange Controls. The execution, delivery and performance by such
Additional Borrower of this Agreement, any Note or the other Loan Documents is,
under applicable foreign exchange control regulations of the jurisdiction in
which such Additional Borrower is organized and existing, not subject to any
notification or authorization except (i) such as have been made or obtained or
(ii) such as cannot be made or obtained until a later date (provided any
notification or authorization described in immediately preceding clause
(ii) shall be made or obtained as soon as is reasonably practicable).

5.4 Conditions to the Delayed Draw Funding Date. The agreement of each Lender to
make any extension of credit requested to be made by it in respect of its
Delayed Draw Commitments on or prior to the Delayed Draw Termination Date is
subject to the satisfaction of the following conditions precedent:

(a) Closing Date. The Closing Date shall have occurred.

(b) Other Conditions. The conditions precedent set forth in Section 5.2 in
respect of such Delayed Draw Term Loan are satisfied on and as of the Delayed
Draw Closing Date.

SECTION 6. AFFIRMATIVE COVENANTS

The Parent Borrower hereby agrees that, so long as the Commitments remain in
effect, any Letter of Credit remains outstanding or any Loan or other amount
(other than contingent indemnification obligations) is owing to any Lender or
the Administrative Agent hereunder, the Parent Borrower shall and shall cause
each of its Restricted Subsidiaries to:

6.1 Financial Statements. Furnish to the Administrative Agent (for distribution
to the Lenders):

(a) (x) as soon as available, but in any event within the earlier of (i) 90 days
after the end of each fiscal year of the Parent Borrower and (ii) the date of
required delivery to the SEC after giving effect to any permitted extensions of
time, such consolidated annual reports and information of the Parent Borrower
and its Subsidiaries, documents and other reports as specified in Section 13 and
15(d) of the Exchange Act and applicable to a U.S. corporation subject to those
Sections notwithstanding that the Parent Borrower may not be subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act and (y) if
there are any Unrestricted Subsidiaries as of the last day of any fiscal year,
simultaneously with the delivery of each set of consolidated financial
statements referred to in clause (x), the related consolidating financial
statements reflecting the adjustments necessary to eliminate the accounts of
Unrestricted Subsidiaries from such consolidated financial statements; and

(b) (x) as soon as available, but in any event not later than the later of
(i) 45 days after the end of each of the first three quarterly periods of each
fiscal year of the Parent Borrower and (ii) the date of required delivery to the
SEC after giving effect to any permitted extensions of time, such consolidated
quarterly reports and information of the Parent Borrower and its Subsidiaries,
documents and other

 

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reports as specified in Section 13 and 15(d) of the Exchange Act and applicable
to a U.S. corporation subject to those Sections notwithstanding that the Parent
Borrower may not be subject to the reporting requirements of Section 13 or 15(d)
of the Exchange Act and (y) if there are any Unrestricted Subsidiaries as of the
last day of any fiscal quarter, simultaneously with the delivery of each set of
consolidated financial statements referred to in clause (x), the related
consolidating financial statements reflecting the adjustments necessary to
eliminate the accounts of Unrestricted Subsidiaries from such consolidated
financial statements.

All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied (except as approved by such accountants or officer, as the case may be)
consistently throughout the periods reflected therein and with prior periods.

Information required to be delivered pursuant to this Section 6.1 shall be
deemed to have been delivered if such information, or one or more annual or
quarterly reports containing such information, shall have been posted by the
Administrative Agent on an IntraLinks or similar site to which the Lenders have
been granted access or such reports shall be available on the website of the SEC
at http://www.sec.gov or on the Parent Borrower’s website at
http://www.tempursealy.com. Information required to be delivered pursuant to
this Section may also be delivered by electronic communications pursuant to
procedures approved by the Administrative Agent.

6.2 Certificates; Other Information. Furnish to the Administrative Agent (for
distribution to the Lenders) (or, in the case of clause (g), to the relevant
Lender):

(a) concurrently with the delivery of the financial statements referred to in
Section 6.1(a), a certificate of the independent certified public accountants
reporting on such financial statements without a “going concern” or like
qualification or exception (other than with respect to, or resulting solely
from, an upcoming maturity date under any Facility occurring within one year
from the time such opinion is delivered), or qualification arising out of the
scope of the audit and stating that in making the examination necessary therefor
no knowledge was obtained of any Default or Event of Default pursuant to
Section 7.1, except as specified in such certificate;

(b) concurrently with the delivery of any financial statements pursuant to
Section 6.1, (i) a certificate of a Responsible Officer stating that, to the
best of each such Responsible Officer’s knowledge, each Loan Party during such
period has observed or performed all of its covenants and other agreements, and
satisfied every condition contained in this Agreement and the other Loan
Documents to which it is a party to be observed, performed or satisfied by it,
and that such Responsible Officer has obtained no knowledge of any Default or
Event of Default except as specified in such certificate and (ii) in the case of
quarterly or annual financial statements, (x) a Compliance Certificate
containing all information and calculations necessary for determining compliance
by each Group Member with the provisions of this Agreement referred to therein
as of the last day of the fiscal quarter or fiscal year of the Parent Borrower,
as the case may be, (A) setting forth computations in reasonable detail
satisfactory to the Administrative Agent demonstrating compliance with the
financial covenants contained herein, the calculation of and the amount of the
Available Amount and the usage thereof (for such period and in the aggregate),
and (B) including a summary of all material changes in GAAP and in the
consistent application thereof that impact the calculation of the financial
covenants or other amounts hereunder, the effect on the financial covenants or
other amounts resulting therefrom, and a reconciliation between calculation of
the financial covenants (and determination of the applicable pricing level under
the definition of “Applicable Margin”) or such amounts before and after giving
effect to such changes and (y) to the extent not previously disclosed to the
Administrative Agent, (1) a description of any change in the jurisdiction of
organization of any Loan Party, (2) a list of any registered or applied for
Intellectual Property acquired by any Loan Party and (3) a description of any
Person that has become a Group Member, in each case since the date of the most
recent report delivered pursuant to this clause (y) (or, in the case of the
first such report so delivered, since the Closing Date);

 

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(c) as soon as available, and in any event no later than 60 days after the end
of each fiscal year of the Parent Borrower, a detailed consolidated budget for
the following fiscal year (including a projected consolidated balance sheet of
the Parent Borrower and its Subsidiaries as of the end of the following fiscal
year, the related consolidated statements of projected cash flow and projected
income and a description of the underlying assumptions applicable thereto), and,
as soon as available, significant revisions, if any, of such budget and
projections with respect to such fiscal year (collectively, the “Projections”),
which Projections shall in each case be accompanied by a certificate of a
Responsible Officer stating that such Projections are based on estimates,
information and assumptions determined reasonable at the time;

(d) promptly after any request by the Administrative Agent, copies of any
detailed audit reports, management letters or recommendations submitted to the
board of directors (or the audit committee of the board of directors) of the
Parent Borrower by independent accountants in connection with the accounts or
books of the Parent Borrower or any Subsidiary, or any audit of any of them;

(e) within five days after the same are sent, copies of all financial statements
and reports that the Parent Borrower sends to the holders of any class of its
debt securities or public equity securities and, within five days after the same
are filed, copies of all financial statements and reports that the Parent
Borrower may make to, or file with, the SEC or any national securities exchange;

(f) promptly following receipt thereof, copies of any documents described in
Section 101(k) or 101(l) of ERISA that any Group Member or any ERISA Affiliate
may request with respect to any Multiemployer Plan; provided, that if the
relevant Group Members or ERISA Affiliates have not requested such documents or
notices from the administrator or sponsor of the applicable Multiemployer Plans,
then, upon reasonable request of the Administrative Agent, such Group Member or
the ERISA Affiliate shall promptly make a request for such documents or notices
from such administrator or sponsor and the Parent Borrower shall provide copies
of such documents and notices to the Administrative Agent promptly after receipt
thereof; and

(g) promptly, such additional information regarding the business, financial or
corporate affairs of any Loan Party or any Subsidiary of a Loan Party, or
compliance with the terms of the Loan Documents, as the Administrative Agent
(including at the direction of a Lender) may from time to time reasonably
request.

Information required to be delivered pursuant to this Section 6.2 shall be
deemed to have been delivered if such information, or one or more annual or
quarterly reports containing such information, shall have been posted by the
Administrative Agent on an IntraLinks or similar site to which the Lenders have
been granted access or such reports shall be available on the website of the SEC
at http://www.sec.gov or on the Parent Borrower’s website at
http://www.tempursealy.com. Information required to be delivered pursuant to
this Section may also be delivered by electronic communications pursuant to
procedures approved by the Administrative Agent.

6.3 Payment of Obligations. Pay and discharge, as the same shall become due and
payable (beyond any period of grace or cure, if applicable), all its obligations
and liabilities, including, (a) material Tax liabilities before the same shall
become delinquent or in default, except where (i) the validity or amount thereof
is being contested in good faith by appropriate proceedings and (ii) the Parent
Borrower or such Subsidiary has set aside on its books adequate reserves with
respect thereto in accordance with GAAP, (b) all lawful claims in excess of
$25,000,000 that, if unpaid, would by law

 

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become a Lien (other than a Permitted Lien) upon any material portion of its
property that would not constitute a Permitted Lien; and (c) all Indebtedness in
excess of $25,000,000, as and when due and payable, but subject to any
subordination provisions contained in any instrument or agreement evidencing
such Indebtedness.

6.4 Maintenance of Existence; Compliance. (a)(i) Preserve, renew and keep in
full force and effect its organizational existence and good standing and
(ii) take all reasonable action to maintain all rights, privileges, franchises,
licenses and permits necessary or desirable in the normal conduct of its
business, except, in the case of this clause (ii), as otherwise permitted by
Section 7.4 or, to the extent that failure to do so could not reasonably be
expected to result in a Material Adverse Effect; and (b) comply with all
Requirements of Law except to the extent that failure to comply therewith could
not, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect.

6.5 Maintenance of Property; Insurance. (a) Except, in each case, where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, keep and maintain all property
material to the conduct of its business in good working order and condition
(except for disposition of assets permitted under this Agreement and ordinary
wear and tear, (b) maintain in full force and effect with financially sound and
reputable insurance companies that are not Affiliates of the Parent Borrower,
flood, casualty and liability insurance with respect to its material properties
(that are necessary for the operation of their respective businesses) and
business against loss or damage of the kinds customarily insured against by
Persons engaged in the same or similar business, of such types and in such
amounts as are customarily carried under similar circumstances by such other
Persons (provided that the Parent Borrower and its Restricted Subsidiaries may
self-insure to the extent customary among companies engaged in similar
businesses) and identifying the Administrative Agent as loss payee as its
interests may appear, with respect to flood hazard and casualty insurance, and
as additional insured, with respect to liability insurance and providing for not
less than 30 days’ (or, with respect to a cancellation of any such insurance by
the provider thereof resulting from a failure of the Parent Borrower or such
Restricted Subsidiary to pay the premium thereof, 10 days’) prior notice to the
Administrative Agent of the termination, lapse or cancellation of any such
insurance (or such shorter period as agreed to by the Administrative Agent) and
(c) maintain all Flood Policies and deliver to the Administrative Agent evidence
of annual renewals of such insurance in form and substance reasonably acceptable
to the Administrative Agent.

6.6 Inspection of Property; Books and Records; Discussions. (a) Keep proper
books of records and account in which entries (i) that are full, true and
correct in all material respects and (ii) are in conformity in all material
respects with GAAP and all Requirements of Law shall be made of all dealings and
transactions in relation to its business and activities and (b) permit
representatives of the Administrative Agent, upon reasonable prior notice during
normal business hours, to visit and inspect any of its properties and examine
and make abstracts from any of its books and records (other than, in each case,
any privileged materials) at any reasonable time and to discuss the business,
operations, properties and financial and other condition of the Group Members
with officers and employees of the Group Members and with their independent
certified public accountants (it being understood that, in the case of any such
meetings or advice from such independent accountants, the Parent Borrower shall
be deemed to have satisfied its obligations under this Section 6.6 to the extent
that it has used commercially reasonable efforts to cause its independent
accountants to participate in any such meeting); provided, however, that when an
Event of Default exists, the Administrative Agent (or any of its respective
representatives or independent contractors) may do any of the foregoing at the
expense of the Parent Borrower at any time during normal business hours and
without advance notice (unless otherwise required by any applicable lease of
real property); provided further, that, excluding any such visits and
inspections during the continuance of an Event of Default, the Parent Borrower
will be responsible for the costs and expenses of the Administrative Agent only
for one such visit and inspection in any fiscal year of the Parent Borrower.

 

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6.7 Notices. Promptly give notice to the Administrative Agent (for delivery to
the Lenders) of:

(a) the occurrence of any Default or Event of Default;

(b) any (i) default or event of default under any Contractual Obligation of any
Group Member or (ii) litigation, investigation or proceeding that may exist at
any time between any Group Member and any Governmental Authority, that in either
case could reasonably be expected to result in a Material Adverse Effect;

(c) the occurrence of any ERISA Event or Foreign Plan Event that, alone or
together with any other ERISA Events and/or Foreign Plan Events that have
occurred, has had or could reasonably be expected to result in a Material
Adverse Effect, as soon as possible; and

(d) any development or event that has had or could reasonably be expected to
result in a Material Adverse Effect.

Each notice pursuant to this Section 6.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the relevant Group Member proposes to take with
respect thereto.

6.8 Environmental Laws. (a) Comply in all material respects with, and use
commercially reasonable efforts to ensure compliance in all material respects by
all tenants and subtenants, if any, with, all applicable Environmental Laws, and
obtain and comply in all material respects with and maintain, and use
commercially reasonable efforts to ensure that all tenants and subtenants obtain
and comply in all material respects with and maintain, any and all licenses,
approvals, notifications, registrations or permits required by applicable
Environmental Laws.

(b) Conduct and complete in all material respects all investigations, studies,
sampling and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws, other than such orders and directives as to which an appeal has been
timely and properly taken in good faith.

(c) Any breach of any covenant in this Section 6.8 by the Parent Borrower or any
Subsidiary in the observance or performance of its obligations contained in
Section 6.8(a) or (b) shall not be deemed to be a default or an Event of Default
so long as (i) such breach, individually or in the aggregate with all other
breaches in respect of Section 6.8(a) or (b), could not reasonably be expected
to result in a Material Adverse Effect and (ii) the Parent Borrower undertakes a
prompt response that is diligently pursued, consistent with principles of
prudent environmental management and all applicable Environmental Laws, to
remedy or mitigate any facts, conditions, events or circumstances that what
would otherwise be a breach of any covenant in this Section 6.8.

6.9 [Reserved].

6.10 Additional Collateral, etc. (a) With respect to any property acquired after
the Closing Date by any U.S. Loan Party (other than (x) Excluded Collateral,
(y) any property described in paragraph (b), (c) or (d) below and (z) any
property subject to a Lien expressly permitted by Section 7.3(k)) as to which
the Administrative Agent, for the benefit of the Lenders, does not have a
perfected Lien, within 30 days after the acquisition thereof (subject to
extension by the Administrative Agent in its sole discretion) (i) execute and
deliver to the Administrative Agent such amendments or supplements to

 

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the Guarantee and Collateral Agreement or such other documents as the
Administrative Agent deems necessary or advisable to grant to the Administrative
Agent, for the benefit of the Lenders, a security interest in such property and
(ii) take all actions necessary or advisable to grant to the Administrative
Agent, for the benefit of the Lenders, a perfected first priority security
interest in such property, including (if applicable) the filing of Uniform
Commercial Code financing statements in such jurisdictions as may be required by
the Guarantee and Collateral Agreement or by law or as may be requested by the
Administrative Agent.

(b) Within ninety (90) days (subject to extension by the Administrative Agent in
its sole discretion) of (x) the acquisition by Parent Borrower or a Subsidiary
Guarantor that is a Domestic Subsidiary of any Material Real Property or (y) the
acquisition of any Subsidiary Guarantor that is a Domestic Subsidiary that owns
Material Real Property, the Parent Borrower (i) shall, or shall cause the
respective Subsidiary Guarantor, to comply with the requirements set forth in
the definition of “Real Estate Collateral Requirement” with respect to the
relevant Material Real Property and (ii) shall deliver, or cause to be
delivered, the Flood Documents with respect to the relevant Material Real
Property; provided that if any improvement comprising part of such Material Real
Property is identified by the Federal Emergency Management Agency (or any
successor agency) as being in a special flood hazard area, the Administrative
Agent may, in its sole discretion, waive the requirements of this
Section 6.10(b) with respect to such Material Real Property located in a special
flood hazard area.

(c) With respect to any new Subsidiary (other than a Foreign Subsidiary or an
Immaterial Subsidiary) created or acquired after the Closing Date directly by
any U.S. Loan Party (which, for the purposes of this paragraph (c), shall
include any such existing Subsidiary created or acquired after the Closing Date
directly by any U.S. Loan Party that ceases to be an Excluded Foreign
Subsidiary, an Immaterial Subsidiary or an Unrestricted Subsidiary), within 30
days after the creation or acquisition of such Subsidiary (subject to extension
by the Administrative Agent in its sole discretion) (i) execute and deliver to
the Administrative Agent such supplements or amendments to the Guarantee and
Collateral Agreement as the Administrative Agent deems necessary or advisable to
grant to the Administrative Agent, for the benefit of the Lenders, a perfected
first priority security interest in the Capital Stock of such new Subsidiary
that is owned by any U.S. Loan Party, (ii) deliver to the Administrative Agent
the certificates representing such Capital Stock, together with undated stock
powers, in blank, executed and delivered by a duly authorized officer of the
relevant Loan Party, (iii) cause such new Subsidiary that is a Subsidiary
Guarantor (A) to become a party to the Guarantee and Collateral Agreement,
(B) to take such actions necessary or advisable to grant to the Administrative
Agent for the benefit of the Lenders a perfected first priority (subject to
Liens permitted under Section 7.3) security interest in the Collateral described
in the Guarantee and Collateral Agreement with respect to such new Subsidiary,
including the filing of Uniform Commercial Code financing statements in such
jurisdictions as may be required by the Guarantee and Collateral Agreement or by
law or as may be requested by the Administrative Agent and (C) to deliver to the
Administrative Agent a certificate of such Subsidiary, substantially in the form
of Exhibit C, with appropriate insertions and attachments, and (iv) if
reasonably requested by the Administrative Agent, deliver to the Administrative
Agent legal opinions relating to the matters described above, which opinions
shall be in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.

(d) With respect to any new Foreign Subsidiary (including any Excluded Foreign
Subsidiary) created or acquired after the Closing Date by (1) any U.S. Loan
Party, within 30 days after the creation or acquisition thereof (subject to
extension by the Administrative Agent in its sole discretion) (i) execute and
deliver to the Administrative Agent such amendments to the Guarantee and
Collateral Agreement as the Administrative Agent deems necessary or advisable to
grant to the Administrative Agent, for the benefit of the Lenders, a perfected
first priority security interest in the Capital Stock of such new Subsidiary
that is owned by any such U.S. Loan Party (provided that in no event shall more

 

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than 65% of the total outstanding voting Capital Stock of any such new
Subsidiary be required to be so pledged and, provided further, that, for the
avoidance of doubt, no Capital Stock of any such new Subsidiary that is owned
directly or indirectly by a CFC shall be required to be so pledged (unless such
CFC shall have elected to become a Subsidiary Guarantor pursuant to the proviso
of the definition thereof)), (ii) deliver to the Administrative Agent the
certificates representing such Capital Stock, together with undated stock
powers, in blank, executed and delivered by a duly authorized officer of the
relevant U.S. Loan Party, and take such other action as may be necessary or, in
the opinion of the Administrative Agent, desirable to perfect the Administrative
Agent’s security interest therein, and (iii) if reasonably requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative Agent
and (2) any Additional Borrower that is a Foreign Subsidiary, to the extent such
Foreign Subsidiary is a Material Foreign Restricted Subsidiary (including any
such existing Subsidiary created or acquired after the Closing Date directly by
such Additional Borrower that ceases to be an Immaterial Subsidiary) within 30
days after such creation or acquisition, execute and deliver to the
Administrative Agent a joinder to the Foreign Guarantee Agreement.

(e) Upon (i) any U.S. Loan Party opening any Deposit Account (other than an
Excluded Account) or any Deposit Account of a U.S. Loan Party ceasing to be an
Excluded Account, within 60 days thereof (subject to extension by the
Administrative Agent in its sole discretion) cause the applicable U.S. Loan
Party to enter into a Deposit Account Control Agreement with the Administrative
Agent in order to give the Administrative Agent control (as such term is defined
in Section 9-104 of Article 9 of the UCC) of such Deposit Account and (ii) the
aggregate balance in all Petty Cash Accounts of U.S. Loan Parties that are not
subject to Deposit Account Control Agreements exceeding $200,000, within 60 days
(subject to extension by the Administrative Agent in its sole discretion) cause
the applicable U.S. Loan Parties to enter into Deposit Account Control
Agreements with the Administrative Agent in order to give the Administrative
Agent control (as such term is defined in Section 9-104 of Article 9 of the UCC)
of Petty Cash Accounts such that the aggregate balance in all Petty Cash
Accounts of U.S. Loan Parties that are not subject to Deposit Account Control
Agreements is less than $200,000.

(f) Upon any U.S. Loan Party opening any Securities Account (other than an
Excluded Securities Account) or any Securities Account of a U.S. Loan Party
ceasing to be an Excluded Securities Account, within 60 days thereof (subject to
extension by the Administrative Agent in its sole discretion) cause the
applicable U.S. Loan Party to enter into a Securities Account Control Agreement
with the Administrative Agent in order to give the Administrative Agent control
(as such term is defined in Section 8-106 of Article 8 of the UCC) of such
Securities Account.

6.11 Further Assurances. At any time or from time to time upon the request of
the Administrative Agent, each Loan Party will, at its expense, promptly
execute, acknowledge and deliver such further documents and do such other acts
and things as the Administrative Agent may reasonably request in order to effect
fully the purposes of the Loan Documents.

6.12 Post-Closing Covenants. To the extent not satisfied on the Closing Date:

(a) Mortgages, etc. On or before a date which is ninety (90) days (or such
longer period as the Administrative Agent may agree to in its sole discretion)
after the Closing Date, with respect to each Mortgaged Property as of the
Closing Date, the Parent Borrower shall, or shall cause each Subsidiary
Guarantor to comply with the requirements set forth in the definition of “Real
Estate Collateral Requirement”.

(b) Control Agreements. On or before a date which is 60 days following the
Closing Date (unless a later date is otherwise agreed to by the Administrative
Agent), the Parent Borrower shall have

 

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delivered to the Administrative Agent Deposit Account Control Agreements and
Securities Account Control Agreements, as applicable, with respect to Deposit
Accounts and Securities Accounts to the extent required pursuant to the
Guarantee and Collateral Agreement.

(c) Legal Opinion. On or before a date which is 15 Business Days following the
Closing Date (unless a later date is otherwise agreed to by the Administrative
Agent), the Administrative Agent shall have received an executed legal opinion
of Thompson & Knight LLP with respect to certain matters relating to the Loan
Parties in form and substance reasonably satisfactory to the Administrative
Agent.

(d) Acknowledgement to Guarantee and Collateral Agreement. On or before a date
which is five (5) Business Days following the Closing Date (unless a later date
is otherwise agreed to by the Administrative Agent), the Administrative Agent
shall have received an Acknowledgement and Consent in the form attached to the
Guarantee and Collateral Agreement, executed and delivered by each Issuer (as
defined therein), if any, that is not a Loan Party.

6.13 Designation of Subsidiaries. (a) The Parent Borrower may at any time
designate any Restricted Subsidiary as an Unrestricted Subsidiary or any
Unrestricted Subsidiary as a Restricted Subsidiary; provided that
(i) immediately before and after such designation, no Default or Event of
Default shall have occurred and be continuing, (ii) no Subsidiary may be
designated as an Unrestricted Subsidiary if it has Indebtedness with recourse to
any Group Member (other than usual and customary carve out matters in connection
with a receivables or similar securitization for which the Parent Borrower
provides an unsecured guarantee with respect to fraud, misappropriation,
breaches of representations and warranties and misapplication for which no claim
for payment or performance thereof has been made that would constitute a
liability of the Parent Borrower in accordance with GAAP), (iii) no Restricted
Subsidiary may be designated as an Unrestricted Subsidiary if it was previously
designated an Unrestricted Subsidiary, (iv) no Subsidiary may be designated as
an Unrestricted Subsidiary if such Subsidiary is a Person with respect to which
any Group Member has any direct or indirect obligation to make capital
contributions or to maintain such Subsidiary’s financial condition, (v) after
giving effect to such designation, the Parent Borrower is in compliance with the
financial covenants set forth in Section 7.1 for the most recently ended
Reference Period for which financial statements have been delivered pursuant to
Section 6.1, on a pro forma basis, giving effect to the respective designation
(as well as all other designations of Unrestricted Subsidiaries and Restricted
Subsidiaries consummated during the most recently ended Reference Period for
which financial statements have been delivered pursuant to Section 6.1), (vi) no
Subsidiary may be designated an Unrestricted Subsidiary if, after giving effect
to such designation, Unrestricted Subsidiaries have, in the aggregate, (x) at
the last day of the Reference Period most recently ended, total assets equal to
or greater than 5.0% of the Consolidated Total Assets of the Parent Borrower and
its Subsidiaries at such date or (y) revenues during such Reference Period equal
to or greater than 5.0% of the consolidated revenues of the Parent Borrower and
its Subsidiaries for such period, in each case determined in accordance with
GAAP and (vii) no Borrower may be designated as an Unrestricted Subsidiary.

(b) The designation of any Subsidiary as an Unrestricted Subsidiary shall
constitute an Investment by the Parent Borrower therein, at the date of
designation in an amount equal to the fair market value of the Parent Borrower’s
investment therein as determined in good faith by the board of directors of the
Parent Borrower. The designation of any Unrestricted Subsidiary as a Restricted
Subsidiary shall, at the time of such designation, constitute the incurrence of
any Indebtedness of or Liens on such Subsidiary existing at such time. Upon a
redesignation of any Subsidiary as a Restricted Subsidiary, the Investments of
the Parent Borrower in Unrestricted Subsidiaries shall be reduced by the fair
market value of the Parent Borrower’s Investment in such Subsidiary at the time
of such redesignation (as determined in good faith by the board of directors of
the Parent Borrower) (it being understood that such reduction shall not exceed
the Parent Borrower’s initial Investment in such

 

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Subsidiary, less returns on such Investment received by the Parent Borrower).
Any property transferred to or from an Unrestricted Subsidiary shall be valued
at its fair market value at the time of such transfer, in each case as
determined in good faith by the board of directors of the Parent Borrower.

(c) If, as of the last day of any Reference Period ended after the Closing Date,
Unrestricted Subsidiaries have, in the aggregate, (i) total assets at such day
equal to or greater than 5.0% of the Consolidated Total Assets of the Parent
Borrower and its Subsidiaries at such date or (ii) revenues during such
Reference Period equal to or greater than 5.0% of the consolidated revenues of
the Parent Borrower and its Subsidiaries for such period, in each case
determined in accordance with GAAP, then the Parent Borrower shall, no later
than five Business Days subsequent to the date on which financial statements for
such fiscal period are delivered pursuant to this Agreement, designate in
writing to the Administrative Agent one or more of such Unrestricted
Subsidiaries as Restricted Subsidiaries in accordance with Section 6.13(a) such
that, following such designation(s), Unrestricted Subsidiaries have, in the
aggregate (i) total assets at the last day of such Reference Period of less than
5.0% of the Consolidated Total Assets of the Parent Borrower and its
Subsidiaries at such date and (ii) total revenues during such Reference Period
of less than 5.0% of the consolidated revenues of the Parent Borrower and its
Subsidiaries for such period, in each case determined in accordance with GAAP.

6.14 Use of Proceeds. The proceeds of the Initial Term Loans shall be used for
the Closing Date Refinancing and to pay related fees and expenses. The proceeds
of the Delayed Draw Term Loans shall be used to refinance the Convertible Notes
or any Revolving Loan used to prepay or redeem the Convertible Notes prior to
their maturity and to pay related fees and expenses. The proceeds of the
Revolving Loans, the Swingline Loans and the Letters of Credit shall be used to
finance working capital needs and for general corporate purposes, including, to
the extent permitted hereunder, for Permitted Acquisitions and Restricted
Payments.

6.15 Anti-Corruption Laws; Sanctions. Maintain in effect and enforce policies
and procedures designed to ensure compliance by the Parent Borrower, its
Subsidiaries and their respective directors, officers, employees and agents with
Anti-Corruption Laws and applicable Sanctions.

6.16 Landlord Consents. Use reasonable commercial efforts to promptly obtain
landlord consents, estoppel letters or waivers in respect of Collateral held on
material leased premises of the Loan Parties, as reasonably requested by the
Administrative Agent.

SECTION 7. NEGATIVE COVENANTS

The Parent Borrower hereby agrees that, so long as the Commitments remain in
effect, any Letter of Credit remains outstanding or any Loan or other amount
(other than contingent indemnification obligations) is owing to any Lender or
the Administrative Agent hereunder, the Parent Borrower shall not, and shall not
permit any of its Restricted Subsidiaries to, directly or indirectly:

7.1 Financial Covenants.

(a) Consolidated Interest Coverage Ratio. Permit the Consolidated Interest
Coverage Ratio as of the last day of any period of four consecutive fiscal
quarters of the Parent Borrower to be less than 3.00:1.00.

(b) Consolidated Total Leverage Ratio. Permit the Consolidated Total Leverage
Ratio as of the last day of any fiscal quarter of the Parent Borrower to be
greater than 5.00:1.00.

 

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(c) Consolidated Secured Leverage Ratio. Permit the Consolidated Secured
Leverage Ratio as of the last day of any fiscal quarter of the Parent Borrower
to be greater than 3.50:1.00.

7.2 Indebtedness. Create, issue, incur, assume, become liable in respect of or
suffer to exist any Indebtedness, except:

(a) Indebtedness under the Loan Documents;

(b) Indebtedness outstanding on the Closing Date and listed on Schedule 7.2 and
any Permitted Refinancing Indebtedness in respect thereof;

(c) Permitted Incremental Equivalent Debt and Permitted External Refinancing
Debt and any Permitted Refinancing Indebtedness in respect thereof; provided
that it shall be a condition precedent to the effectiveness of any Permitted
Incremental Equivalent Debt that (i) after giving effect thereto, the Aggregate
Incremental Amount does not exceed the Incremental Cap, (ii) no Default or Event
of Default shall have occurred and be continuing immediately prior to or
immediately after giving effect to such Permitted Incremental Equivalent Debt,
(iii) the Parent Borrower is in compliance with the financial covenants set
forth in Section 7.1, determined as of the fiscal quarter of the Parent Borrower
most recently ended for which financial statements have been delivered pursuant
to Section 6.1 and on a pro forma basis as of such fiscal quarter end and
(iv) the representations and warranties set forth in Section 4 and in each other
Loan Document shall be true and correct in all material respects on and as of
the date of such Permitted Incremental Equivalent Debt, except to the extent
that such representations and warranties specifically refer to an earlier date,
in which case they shall be true and correct in all material respects as of such
earlier date; provided that with respect to any Permitted Incremental Equivalent
Debt being incurred to finance a Permitted Acquisition designated by the Parent
Borrower as a “Limited Conditionality Acquisition”, such compliance with clauses
(ii) and (iv) may be determined as of the date of entry into the applicable
acquisition, merger or similar agreement governing such acquisition;

(d) obligations (contingent or otherwise) of the Parent Borrower or any
Restricted Subsidiary existing or arising under any Swap Agreement, provided
that such obligations are entered into by such Person in the ordinary course of
business and not for purposes of speculation or taking a “market view”;

(e) intercompany Indebtedness among the Parent Borrower and its Restricted
Subsidiaries to the extent permitted by Section 7.7; provided that any such
Indebtedness owed by a Loan Party to a Restricted Subsidiary that is not a Loan
Party shall be subordinated to the Obligations in a manner reasonably
satisfactory to the Administrative Agent;

(f) (i) Indebtedness (including Indebtedness under Capital Leases, Synthetic
Lease Attributed Indebtedness and purchase money obligations but excluding
Indebtedness arising under Capital Leases entered into in connection with a Sale
and Leaseback Transaction permitted under Section 7.5(g)) incurred to provide
all or a portion of the purchase price (or cost of construction or acquisition),
in each case, for capital assets and refinancings, refundings, renewals or
extensions thereof, provided that the aggregate principal amount of all such
Indebtedness shall not at any time exceed $100,000,000; and (ii) Indebtedness
arising under Capital Leases entered into in connection with a Sale and
Leaseback Transaction permitted under Section 7.5(g) and any Permitted
Refinancing Indebtedness in respect thereof;

(g) Indebtedness under the Albuquerque IRB Financing in an aggregate principal
amount not to exceed $100,000 and any Permitted Refinancing Indebtedness in
respect thereof;

 

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(h) other unsecured Indebtedness of the Loan Parties; provided that (i) no
Default or Event of Default shall exist immediately before or immediately after
giving effect thereto on a pro forma basis, (ii) the Consolidated Total Leverage
Ratio as of the last day of the fiscal quarter of the Parent Borrower most
recently ended for which financial statements have been delivered under
Section 6.1, determined on a pro forma basis, is less than 4.75:1.00, (iii) the
final maturity date of any such Indebtedness shall be no earlier than six months
following the Maturity Date and (iv) the terms of such Indebtedness shall not
provide for any scheduled repayment, mandatory redemption, sinking fund
obligations or other payment (other than periodic interest payments) prior to
the date that is six months following the Maturity Date, other than customary
offers to purchase upon a change of control, asset sale or casualty or
condemnation event and customary acceleration rights upon an event of default;
provided, further, that with respect to any such Indebtedness being incurred to
finance a Permitted Acquisition designated by the Parent Borrower as a “Limited
Conditionality Acquisition”, such compliance with clause (i) and (ii) may be
determined as of the date of entry into the applicable acquisition, merger or
similar agreement governing such acquisition;

(i) Support Obligations by the Parent Borrower and its Restricted Subsidiaries
in respect of Indebtedness otherwise permitted hereunder, provided that Support
Obligations by the Loan Parties with respect to Indebtedness of Restricted
Subsidiaries that are not Loan Parties is an Investment permitted by
Section 7.7;

(j) Indebtedness in an aggregate principal amount of up to $5,000,000 consisting
of letters of credit or bank guaranties not arising under the Loan Documents
issued to support the obligations of the Parent Borrower or any Restricted
Subsidiary incurred in the ordinary course of business;

(k) Indebtedness consisting of bankers acceptances, statutory obligations,
surety or appeal bonds, performance bonds or similar arrangements in the
ordinary course of business, consistent with past practices and not in
connection with Indebtedness for borrowed money;

(l) (i) Indebtedness of Restricted Subsidiaries that are not U.S. Loan Parties
provided that the aggregate principal amount of such Indebtedness shall not
exceed $100,000,000 outstanding at any time and (ii) Indebtedness of Foreign
Subsidiaries incurred to satisfy the Danish Tax Assessment;

(m) prior to the Delayed Draw Closing Date, Indebtedness outstanding under the
Convertible Notes and any Permitted Refinancing Indebtedness in respect thereof;

(n) Indebtedness outstanding under the 2020 Senior Notes and the 2023 Senior
Notes in an aggregate principal amount not to exceed $825,000,000 and any
Permitted Refinancing Indebtedness in respect thereof;

(o) Indebtedness of any Person that becomes a Restricted Subsidiary on or after
the Closing Date; provided that (A) such Indebtedness exists at the time such
Person becomes a Restricted Subsidiary and (B) such Indebtedness is not made in
anticipation or contemplation of such Person becoming a Restricted Subsidiary;

(p) other Indebtedness in an aggregate principal amount not to exceed
$50,000,000 at any time;

(q) Receivables Transaction Attributed Indebtedness and Factoring Indebtedness
in an aggregate amount outstanding at any time not to exceed $200,000,000;

 

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(r) Indebtedness of the Parent Borrower or any Restricted Subsidiary incurred in
the ordinary course of business under guarantees of Indebtedness of suppliers,
licensees, franchisees or customers in an aggregate principal amount at any time
outstanding not to exceed $10,000,000;

(s) Indebtedness of the Parent Borrower or any Restricted Subsidiary arising
from guarantees of Indebtedness of joint ventures in an aggregate principal
amount at any time outstanding not to exceed the greater of $25,000,000 or 5% of
Consolidated EBITDA for the four full fiscal quarters, treated as one period,
ending prior to the date of determination for which financial statements have
been delivered under Section 6.1 on a pro forma basis; and

(t) Indebtedness arising under Cash Management Agreements.

7.3 Liens. Create, incur, assume or suffer to exist any Lien upon any of its
property, assets or revenues, whether now owned or hereafter acquired, other
than the following (collectively, “Permitted Liens”):

(a) Liens pursuant to any Loan Document securing the Obligations, including cash
collateral and other assurance pledged to the Issuing Lenders and the Swingline
Lender to secure obligations of Defaulting Lenders, as such Issuing Lender
and/or the Swingline Lender may require in its discretion, which may be in the
form of cash collateral, posting of letters of credit or other arrangements;

(b) Liens securing Indebtedness permitted by Section 7.2(c);

(c) Liens securing obligations pursuant to a Swap Agreement or Cash Management
Agreement permitted hereunder in favor of a Person that was (or was an Affiliate
of) a Lender hereunder on the Closing Date or on the date such transaction was
entered into, but only to the extent that (i) for any Swap Agreement, the
obligations under such Swap Agreement are permitted under Section 7.2(d),
(ii) such Liens are on the same collateral that secures the Obligations and
(iii) the obligations under such Swap Agreement or Cash Management Agreement and
the Obligations share pari passu in the collateral that is subject to such
Liens;

(d) Liens existing on the Closing Date and listed on Schedule 7.3 and any
renewals or extensions thereof, provided that (i) the property covered thereby
is not changed, (ii) the amount secured or benefited thereby is not increased,
(iii) the direct or any contingent obligor with respect thereto is not changed
and (iv) any renewal or extension of the obligations secured or benefited
thereby is permitted by Section 7.2(b);

(e) Liens for taxes not yet due or that are being contested in good faith and by
appropriate proceedings diligently conducted, if adequate reserves with respect
thereto are maintained on the books of the applicable Person in accordance with
GAAP (including, without limitation, security for bonds and/or amounts deposited
to secure the Danish Tax Assessment);

(f) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other
like Liens arising in the ordinary course of business that are not overdue for a
period of more than 60 days or if more than 60 days overdue, are unfiled and no
other action has been taken to enforce such Lien or which are being contested in
good faith and by appropriate proceedings diligently conducted, if adequate
reserves with respect thereto are maintained on the books of the applicable
Person in accordance with GAAP;

 

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(g) pledges or deposits in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other social security
legislation, other than any Lien imposed by ERISA;

(h) deposits to secure the performance of bids, trade contracts and leases
(other than Indebtedness), statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business;

(i) zoning restrictions, easements, rights-of-way, restrictions, reservations,
and other similar encumbrances affecting real property that, in the aggregate,
are not substantial in amount, and that do not in any case materially detract
from the value of the property subject thereto or materially interfere with the
ordinary conduct of the business of the applicable Person;

(j) Liens securing judgments for the payment of money not constituting an Event
of Default under Section 8(h) or securing appeal or other surety bonds related
to such judgments;

(k) Liens securing, or in respect of, obligations under Capital Leases or
Synthetic Lease Attributed Indebtedness and purchase money obligations for fixed
or capital assets permitted pursuant to Section 7.2(f); provided that (i) such
Liens do not at any time encumber any property other than the property financed
by such Indebtedness and (ii) the Indebtedness secured thereby does not exceed
the cost or fair market value, whichever is lower, of the property being
acquired on the date of acquisition;

(l) Liens in favor of customs and revenue authorities arising as a matter of law
to secure payment of customs duties in connection with the importation of goods
in the ordinary course of business;

(m) Liens on property or assets acquired in connection with a Permitted
Acquisition, provided that (i) the indebtedness secured by such Liens is
permitted under Section 7.2 and (ii) the Liens are not incurred in connection
with, or in contemplation or anticipation of, the acquisition, such Liens are
not “blanket liens” (except with respect to the assets of any Person so
acquired) and such Liens do not attach or extend to any other property or
assets;

(n) Liens of landlords or mortgages of landlords on fixtures, equipment and
movable property located on premises leased by the Parent Borrower or any
Restricted Subsidiary in the ordinary course of business;

(o) Liens incurred and financing statements filed or recorded in each case with
respect to property leased by the Parent Borrower and its Restricted
Subsidiaries in the ordinary course of business to the owners of such property
which are operating leases; provided that such Lien does not extend to any other
property of the Parent Borrower and its Restricted Subsidiaries;

(p) Liens such as banker’s liens, rights of set-off or similar rights and
remedies and burdening only deposit accounts or other funds maintained with a
depository institution in the ordinary course of business;

(q) deposits of cash or the issuance of a Letter of Credit made to secure
liability to insurance carriers under insurance or self-insurance arrangements;

(r) Liens on existing and future cash or Cash Equivalents securing or supporting
letters of credit or bank guaranties permitted by Section 7.2(j);

 

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(s) Liens on Intellectual Property arising from non-exclusive Intellectual
Property licenses entered into in the ordinary course of business;

(t) Liens on property or assets of Restricted Subsidiaries that are not U.S.
Loan Parties securing indebtedness of such Foreign Subsidiary permitted by
Section 7.2(l);

(u) prior to the Delayed Draw Closing Date, Liens on the collateral under the
Convertible Notes documents (as in effect on the date hereof) securing
obligations under the Convertible Notes, which may be senior to Liens on such
collateral under any Loan Document in favor of the Administrative Agent;

(v) statutory Liens arising as a result of contributions deducted from members’
pay but not yet due under Canadian pension standards legislation and any
employer contributions accrued but not yet due under Canadian pension standards
legislation;

(w) leases and subleases granted to others in the ordinary course of business
and not interfering in any material respect with the business of the Parent
Borrower and its Restricted Subsidiaries, taken as a whole;

(x) deposits of cash in connection with the defeasance, discharge or redemption
of the Senior Notes;

(y) Liens on the accounts receivables and related assets subject thereto
securing factoring arrangements and Qualified Receivables Transactions permitted
by Section 7.2(q); and

(z) additional Liens so long as the aggregate principal amount of the
obligations so secured do not exceed $50,000,000 at any time outstanding.

7.4 Mergers and Dissolutions.

(a) Enter into a transaction of merger or consolidation; provided that so long
as no Default or Event of Default then exists or would result therefrom:

(i) the Parent Borrower and its Restricted Subsidiaries may merge or consolidate
with any Loan Party; provided that (A) if the Parent Borrower is a party to the
merger or consolidation, it shall be the surviving entity and (B) if the Parent
Borrower is not a party to the merger or consolidation, then the other Loan
Party thereto (and if an Additional Borrower is a party to such merger or
consolidation, such Additional Borrower) shall be the surviving entity;

(ii) a Restricted Subsidiary of the Parent Borrower that is not a Loan Party may
merge or consolidate with any other Restricted Subsidiary that is not a Loan
Party; and

(iii) the Parent Borrower and its Restricted Subsidiaries may merge or
consolidate with Persons that are not Loan Parties, provided that (A) if the
Parent Borrower is a party to the merger or consolidation, it shall be the
surviving entity, (B) if a Restricted Subsidiary of the Parent Borrower that is
a Loan Party is a party to the merger or consolidation, the Restricted
Subsidiary that is a Loan Party will be the surviving entity, and such
transaction shall be an Investment permitted under Section 7.7, and (C) the
transaction shall be a Permitted Acquisition or a Disposition permitted under
Section 7.5 (other than under Section 7.5(f));

 

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(b) Loan Parties (other than the Parent Borrower) may (i) be dissolved or
liquidated into another Loan Party or (ii) otherwise have their existence
terminated to the extent that the assets of such Loan Party are distributed,
upon such termination, to one or more Loan Parties; and

(c) Restricted Subsidiaries that are not Loan Parties may be dissolved,
liquidated or otherwise have their existence terminated.

7.5 Dispositions. Make any Disposition or enter into any agreement to make any
Disposition to or in favor of any Person, except:

(a) (i) Dispositions between and among Loan Parties, (ii) Dispositions between
and among Restricted Subsidiaries that are not Loan Parties and
(iii) Dispositions between Loan Parties, on the one hand, and Restricted
Subsidiaries that are not Loan Parties, on the other hand, provided that in the
case of any disposition by a Loan Party to a Restricted Subsidiary that is not a
Loan Party, such Disposition shall be (x) made at fair market value (as
determined by the Parent Borrower in good faith) and in the ordinary course of
business or (y) an Investment permitted by Section 7.7;

(b) other Dispositions by the Parent Borrower or any Restricted Subsidiary,
provided that (i) at the time of such Disposition, no Default or Event of
Default shall exist or would result from such Disposition, (ii) the
consideration for any such Disposition shall be at least 75% cash or Cash
Equivalents and (iii) such Disposition shall be for at least the fair market
value (as determined by the Parent Borrower in good faith) of the assets or
property subject to such Disposition;

(c) Dispositions of obsolete or worn-out property no longer used or useful in
the business of the Parent Borrower or its Subsidiaries;

(d) Dispositions consisting of the licensing or sublicensing of intellectual
property and licenses, leases or subleases of other property, in each case in
the ordinary course of business;

(e) use of cash and Cash Equivalents for transactions not expressly prohibited
hereunder;

(f) Dispositions permitted by Section 7.3, Section 7.4, Section 7.6 and
Section 7.7;

(g) a Sale and Leaseback Transaction with respect to the Kentucky Headquarters;
provided that (i) at the time of such Disposition, no Default or Event of
Default shall have occurred and be continuing or would result from such
Disposition, (ii) the consideration for any such Disposition shall be at least
75% cash or Cash Equivalents and (iii) such disposition shall be for at least
the fair market value (as determined by the Parent Borrower in good faith) of
the Kentucky Headquarters;

(h) Dispositions to a Receivables Entity of accounts receivable and related
assets in factoring arrangements and Qualified Receivables Transactions
permitted by Section 7.2(q);

(i) Dispositions of Investments (including equity interests) in joint ventures
to the extent required by, or made pursuant to customary buy/sell arrangements
between, the joint venture parties set forth in joint venture arrangements and
similar binding arrangements;

(j) Dispositions of other property in an aggregate amount not to exceed
$25,000,000 per fiscal year; and

(k) Dispositions of inventory in the ordinary course of business.

 

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7.6 Restricted Payments. Declare or make, directly or indirectly, any Restricted
Payment, or incur any obligation (contingent or otherwise) to do so, except
that, so long as no Default or Event of Default shall have occurred and be
continuing at the time of any action described below or would result therefrom:

(a) Restricted Subsidiaries of the Parent Borrower may pay dividends and make
distributions in respect of their Capital Stock ratably to their equity holders;

(b) the Parent Borrower may declare and make dividend payments or other
distributions payable solely in the common stock or other common equity
interests of the Parent Borrower;

(c) the Parent Borrower may purchase, redeem or otherwise acquire shares of its
common stock or other common equity interests or warrants or options to acquire
any such shares with the proceeds received from the substantially concurrent
issue of new shares of its common stock or other common equity interests;

(d) the Parent Borrower may make other Restricted Payments in an aggregate
amount not to exceed (i) $25,000,000 per fiscal year plus (ii) the Available
Amount; provided, that solely with respect to clause (ii) above,
(A) Consolidated Total Leverage Ratio as of the last day of the fiscal quarter
of the Parent Borrower most recently ended for which financial statements have
been delivered under Section 6.1, determined on a pro forma basis, is less than
4.50:1.00, (B) no Default or Event of Default shall exist immediately before or
immediately after giving effect thereto on a pro forma basis and (C) the Parent
Borrower is in compliance with the financial covenants set forth in Section 7.1,
determined as of the fiscal quarter of the Parent Borrower most recently ended
for which financial statements have been delivered pursuant to Section 6.1 and
on a pro forma basis;

(e) the Parent Borrower may make other Restricted Payments so long as (i) the
Consolidated Total Leverage Ratio as of the last day of the fiscal quarter of
the Parent Borrower most recently ended for which financial statements have been
delivered under Section 6.1, determined on a pro forma basis, is less than
3.50:1.00, (ii) no Default or Event of Default shall exist immediately before or
immediately after giving effect thereto on a pro forma basis and (iii) the
Parent Borrower is in compliance with the financial covenants set forth in
Section 7.1, determined as of the fiscal quarter of the Parent Borrower most
recently ended for which financial statements have been delivered pursuant to
Section 6.1 and on a pro forma basis; and

(f) repurchases of Capital Stock deemed to occur upon the exercise of options to
purchase Capital Stock if such shares of Capital Stock represent a portion of
the exercise price of such options.

7.7 Investments. Make or permit to exist any Investments, except:

(a) cash and Cash Equivalents;

(b) Investments (including intercompany Investments) existing on the Closing
Date or committed to be made pursuant to an agreement existing on the Closing
Date, in each case listed on Schedule 7.7;

(c) (i) to the extent not prohibited by applicable Law, advances to officers,
directors and employees of the Parent Borrower and its Restricted Subsidiaries
in an aggregate amount not to exceed $10,000,000 at any time outstanding, for
travel, entertainment, relocation and analogous ordinary business purposes and
(ii) loans and advances to officers, directors and employees of the Parent
Borrower or any of its Restricted Subsidiaries to finance the purchase of
capital stock of the Parent Borrower in an aggregate amount not to exceed
$10,000,000 at any time outstanding;

 

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(d) (i) Investments consisting of extensions of credit in the nature of accounts
receivable or notes receivable arising from (x) the grant of trade credit in the
ordinary course of business or (y) credit extended to customers who are natural
persons to finance the purchase of products of the Parent Borrower and its
Restricted Subsidiaries in an aggregate principal amount not to exceed
$20,000,000 outstanding at any time and (ii) Investments received in
satisfaction or partial satisfaction thereof from financially troubled account
debtors to the extent reasonably necessary in order to prevent or limit loss;

(e) Investments by the Parent Borrower or any Restricted Subsidiary in and to
the Parent Borrower or any other Loan Party;

(f) Investments by any Loan Party, on the one hand, in and to one or more
Subsidiaries that are not Loan Parties, on the other hand, in aggregate
principal amount (net of any return on such Investment, but not to exceed in the
aggregate the initial amount thereof) not to exceed $200,000,000 since the
Closing Date;

(g) Investments made (i) by and between Restricted Subsidiaries that are not
Loan Parties, (ii) by Foreign Restricted Subsidiaries (other than Foreign Loan
Parties) in connection with the acquisition of the equity or assets of
suppliers, distributors and other Persons (other than the Parent Borrower or any
of its Restricted Subsidiaries) engaged in a business related to the business
conducted by the Parent Borrower and its Restricted Subsidiaries following such
acquisition to the extent that such acquisition is funded with foreign generated
cash flow or Indebtedness of such Foreign Subsidiaries or (iii) otherwise by
Restricted Subsidiaries that are not U.S. Loan Parties in an aggregate amount
pursuant to this clause (iii) not to exceed $20,000,000 at any time outstanding;

(h) Investments to the extent that payment for such investments is made solely
with the Capital Stock of the Parent Borrower;

(i) (x) (i) Permitted Acquisitions, provided that (A) the Consolidated Secured
Leverage Ratio as of the last day of the fiscal quarter of the Parent Borrower
most recently ended for which financial statements have been delivered under
Section 6.1, determined on a pro forma basis, is less than 3.25:1.00 and (B) the
Consolidated Total Leverage Ratio as of the last day of the fiscal quarter of
the Parent Borrower most recently ended for which financial statements have been
delivered under Section 6.1, determined on a pro forma basis, is less than
4.75:1.00, and (ii) Investments in Restricted Subsidiaries of Parent Borrower as
a substantially concurrent interim Investment in connection with the
consummation of a Permitted Acquisition and (y) Investments of any Person that
becomes a Restricted Subsidiary on or after the Closing Date; provided that
(A) such Investments exist at the time such Person becomes a Restricted
Subsidiary and (B) such Investments are not made in anticipation or
contemplation of such Person becoming a Restricted Subsidiary;

(j) Investments in joint ventures in an aggregate amount not to exceed
$20,000,000 at any time outstanding;

(k) Investments in respect of Swap Agreements permitted under Section 7.2(d) and
Guarantee Obligations of Parent Borrower or any Restricted Subsidiary made in
respect of Cash Management Agreements;

(l) Investments by the Parent Borrower or any Restricted Subsidiary made in
respect of the Danish Tax Assessment;

 

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(m) Investments so long as (i) the Consolidated Total Leverage Ratio as of the
last day of the fiscal quarter of the Parent Borrower most recently ended for
which financial statements have been delivered under Section 6.1, determined on
a pro forma basis, is less than 3.50:1.00, (ii) no Default or Event of Default
shall exist immediately before or immediately after giving effect thereto on a
pro forma basis and (iii) the Parent Borrower is in compliance with the
financial covenants set forth in Section 7.1, determined as of the last day of
the fiscal quarter of the Parent Borrower most recently ended for which
financial statements have been delivered pursuant to Section 6.1 and on a pro
forma basis;

(n) other Investments in an aggregate outstanding amount not to exceed
$100,000,000 at any time;

(o) other Investments, so long as (x) no Default or Event of Default shall exist
immediately before or immediately after giving effect thereto on a pro forma
basis and (y) the Parent Borrower is in pro forma compliance with the financial
covenants set forth in Section 7.1 as of the last day of the fiscal quarter of
the Parent Borrower most recently ended for which financial statements have been
delivered under Section 6.1, in an aggregate outstanding amount not to exceed
the Available Amount;

(p) Investment consisting of the purchase of up to the remaining 55% of the
equity interests of Comfort Revolution, LLC; and

(q) Investments in or by a Receivables Entity in connection with a Qualified
Receivables Transaction.

7.8 Prepayments, etc. of Indebtedness.

(a) Prepay, redeem, purchase, defease or otherwise satisfy prior to the
scheduled maturity thereof in any manner the Senior Notes, any Permitted
Incremental Equivalent Debt, any Permitted External Refinancing Debt, any
Indebtedness permitted by Section 7.2(h) or any other unsecured Indebtedness or
any Indebtedness that is subordinated in right of payment or lien priority to
the Obligations expressly by its terms (other than Indebtedness among the Parent
Borrower and its Restricted Subsidiaries) to the extent permitted by any
applicable subordination provisions (collectively, the “Junior Financing”),
except (i) any Permitted Refinancing Indebtedness in respect thereof, (ii) the
conversion or exchange of any such Junior Financing to Capital Stock (other than
Disqualified Capital Stock) of the Parent Borrower from the substantially
concurrent issuance of new shares of its common stock or other common equity
interests, (iii) any prepayment, redemption, purchase, defeasance or other
satisfaction of the Senior Notes or any Indebtedness permitted by Section 7.2(h)
with the proceeds of Permitted Incremental Equivalent Debt, Incremental Facility
or additional Indebtedness permitted by Section 7.2(h), so long as (x) the
Consolidated Secured Leverage Ratio as of the last day of the fiscal quarter of
the Parent Borrower most recently ended for which financial statements have been
delivered under Section 6.1, determined on a pro forma basis, is less than
3.25:1.00, (y) no Default or Event of Default shall exist immediately before or
immediately after giving effect thereto on a pro forma basis and (z) the Parent
Borrower is in compliance with the financial covenants set forth in Section 7.1,
determined as of the last day of the fiscal quarter of the Parent Borrower most
recently ended for which financial statements have been delivered pursuant to
Section 6.1 and on a pro forma basis, (iv) any prepayment, redemption, purchase,
defeasance or other satisfaction of the Convertible Notes with the proceeds of
the Delayed Draw Term Loan or a Revolving Loan to the extent the Convertible
Notes are required to be prepaid or redeemed by the holders thereof prior to
their maturity in accordance with their terms, and (v) prepayments, redemptions,
purchases, defeasances and other repayments in respect to Junior Financings in
an aggregate amount not to exceed the Available Amount; provided (x) no Default
or Event of Default shall exist immediately before or immediately after giving
effect thereto on a pro forma basis and (y)

 

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solely with respect to clause (B) above, the Consolidated Total Leverage Ratio
as of the last day of the fiscal quarter of the Parent Borrower most recently
ended for which financial statements have been delivered under Section 6.1,
determined on a pro forma basis, is less than 4.50:1.00 and the Parent Borrower
is in compliance with the financial covenants set forth in Section 7.1,
determined as of the last day of the fiscal quarter of the Parent Borrower most
recently ended for which financial statements have been delivered pursuant to
Section 6.1 and on a pro forma basis.

(b) Amend, modify or change any term or condition of any documentation governing
any Junior Financing in a manner that would permit a payment not otherwise
permitted by Section 7.8(a), would contravene any subordination or intercreditor
provisions then in effect or would otherwise be materially adverse to the
interest of the Lenders.

7.9 Transactions with Affiliates. Enter into any transaction of any kind with
any Affiliate of the Parent Borrower, whether or not in the ordinary course of
business, other than (a) transactions on fair and reasonable terms substantially
as favorable to the Parent Borrower or such Restricted Subsidiary as would be
obtainable by the Parent Borrower or such Restricted Subsidiary at the time in a
comparable arm’s length transaction with a Person other than an Affiliate,
(b) payment of reasonable compensation (including reasonable bonus and other
reasonable incentive arrangements) to officers and employees, (c) reasonable
directors’ fees, (d) Restricted Payments permitted pursuant to Section 7.6,
(e) reimbursement of employee travel and lodging costs and other business
expenses incurred in the ordinary course of business, (f) Investments permitted
by Sections 7.7(b), 7.7(c), 7.7(e), 7.7(f), 7.7(g), 7.7(j), 7.7(l) and 7.7(q),
(g) Indebtedness permitted by Sections 7.2(b), 7.2(e), 7.2(i) and 7.2(q), and
(h) Dispositions permitted by Sections 7.5(a) and Section 7.5(i).

7.10 Change in Fiscal Year. Change its fiscal year without the prior consent of
the Administrative Agent (except to align the fiscal year of the Restricted
Subsidiaries with the fiscal year of the Parent Borrower).

7.11 Burdensome Agreements. Enter into, incur or permit to exist any agreement
or other arrangement that prohibits, restricts or imposes any condition upon
(i) the ability of the Parent Borrower or any Loan Party to create, incur or
permit to exist any Lien upon any of its property or assets to secure the
Obligations or (ii) the ability of any Restricted Subsidiary to pay dividends or
other distributions with respect to any of its Capital Stock or to make or repay
loans or advances to the Parent Borrower or any other Restricted Subsidiary or
to guarantee Indebtedness of the Parent Borrower or any other Restricted
Subsidiary; provided that (A) the foregoing shall not apply to restrictions and
conditions imposed by law, or by any Loan Document or any document evidencing
the Senior Notes (if any), any Permitted Incremental Equivalent Debt or any
Permitted External Refinancing Debt, (B) the foregoing shall not apply to
customary restrictions and conditions contained in agreements relating to the
permitted sale of a Restricted Subsidiary pending such sale, provided that such
restrictions and conditions apply only to the Restricted Subsidiary that is to
be sold and such sale is permitted hereunder, (C) the foregoing shall not apply
to restrictions and conditions imposed on any Foreign Restricted Subsidiary by
the terms of any Indebtedness of such Foreign Subsidiary permitted to exist or
be incurred hereunder, (D) clause (i) of the foregoing shall not apply to
restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted hereunder if such restrictions or conditions apply only
to the property or assets securing such Indebtedness, (E) clause (i) of the
foregoing shall not apply to customary provisions in leases and other contracts
(including joint venture agreements) restricting the assignment thereof, (F) the
foregoing shall not apply to restrictions and conditions in effect on the
Closing Date and set forth on Schedule 7.11, (G) the foregoing shall not apply
to restrictions and conditions imposed on any Restricted Subsidiary by the terms
of any Indebtedness of such Subsidiary existing at the time it became a
Restricted Subsidiary, if such restriction or condition was not created in
connection with or in anticipation of the transaction or series of transactions
pursuant to which that Restricted Subsidiary became a Restricted

 

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Subsidiary of the Company, (H) the foregoing shall not apply to restrictions and
conditions relating to property of Parent Borrower or any Restricted Subsidiary
existing at the time such property was acquired, so long as the restriction
relates solely to the property so acquired and was not created in connection
with or in anticipation of the acquisition, (I) the foregoing shall not apply to
restrictions and conditions relating to the incurrence of any Indebtedness
permitted under Section 7.2, so long as the restrictions, taken as a whole, are
no less favorable to the Lenders in any material respect (as determined by the
Parent Borrower in good faith) than the restrictions of the same type contained
in this Agreement, (J) the foregoing shall not apply to customary restrictions
and conditions contained in agreements relating to a Qualified Receivables
Transaction, and (K) the foregoing shall not apply to restrictions and
conditions relating to any refinancing of any Indebtedness incurred in
connection with any agreement referred to in clauses (G), (H), (I) and (J) so
long as the restrictions, taken as a whole, are no less favorable to the Lenders
in any material respect (as determined by the Parent Borrower in good faith)
than the restrictions of the same type contained in the agreement evidencing the
Indebtedness so refinanced.

7.12 Change in Nature of Business. Engage in any material line of business
substantially different from those lines of business conducted by the Parent
Borrower and its Restricted Subsidiaries on the Closing Date (or that would be
conducted after giving effect to the Transactions) or any business substantially
related or incidental thereto.

7.13 Use of Proceeds. Use the proceeds of any Loans or Letters of Credit for any
purpose except as contemplated by Section 6.16. Any proceeds of Loans or Letters
of Credit used for the purposes contemplated by Section 6.16 shall not be used,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, to purchase or carry margin stock (within the meaning of Regulation
U of the Board) or to extend credit to others for the purpose of purchasing or
carrying margin stock or to refund indebtedness originally incurred for such
purpose.

7.14 Organization Documents. Amend, modify or change in any manner materially
adverse to the interests of the Lenders its Organization Documents.

7.15 Anti-Corruption Laws; Sanctions. Request any Loan or Letter of Credit, and
shall not use, and shall procure that its Subsidiaries and its or their
respective directors, officers, employees and agents shall not use, the proceeds
of any Loan or Letter of Credit (A) in furtherance of an offer, payment, promise
to pay, or authorization of the payment or giving of money, or anything else of
value, to any Person in violation of any Anti-Corruption Laws, (B) for the
purpose of funding, financing or facilitating any activities, business or
transaction of or with any Sanctioned Person, or in any Sanctioned Country, in
violation of applicable Sanctions or (C) in any other manner that would result
in the violation of any Sanctions applicable to any party hereto.

SECTION 8. EVENTS OF DEFAULT

If any of the following events shall occur and be continuing:

(a) any Borrower shall fail to pay any principal of any Loan or Reimbursement
Obligation when due in accordance with the terms hereof; or any Borrower shall
fail to pay any interest on any Loan or Reimbursement Obligation, or any other
amount payable hereunder or under any other Loan Document, within five Business
Days after any such interest or other amount becomes due in accordance with the
terms hereof; or

(b) any representation or warranty made or deemed made by any Loan Party herein
or in any other Loan Document or that is contained in any certificate, document
or financial or other statement

 

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furnished by it at any time pursuant to this Agreement or any such other Loan
Document shall prove to have been inaccurate in any material respect on or as of
the date made or deemed made; or

(c) any Loan Party shall default in the observance or performance of any
agreement contained in clause (i) or (ii) of Section 6.4(a) (with respect to any
Borrower only), Section 6.1, Section 6.2, Section 6.6, Section 6.7(a),
Section 6.10, Section 6.12, Section 6.13(c) or Section 7 of this Agreement or
Sections 5.5 and 5.6(b) of the Guarantee and Collateral Agreement; or

(d) any Loan Party shall default in the observance or performance of any other
covenant or agreement contained in this Agreement or any other Loan Document
(other than as provided in paragraphs (a) through (c) of this Section), and such
default shall continue unremedied for a period of 30 days after notice to the
Parent Borrower from the Administrative Agent or the Required Lenders; or

(e) any Group Member shall (i) default in making any payment of any principal of
any Indebtedness (including any Guarantee Obligation, but excluding the Loans)
on the scheduled or original due date with respect thereto; or (ii) default in
making any payment of any interest on any such Indebtedness beyond the period of
grace, if any, provided in the instrument or agreement under which such
Indebtedness was created; (iii) default in the observance or performance of any
other agreement or condition relating to any such Indebtedness or contained in
any instrument or agreement evidencing, securing or relating thereto, or any
other event shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or beneficiary of such
Indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to
cause, with the giving of notice if required, such Indebtedness to become due
prior to its stated maturity or (in the case of any such Indebtedness
constituting a Guarantee Obligation) to become payable; or (iv) there occurs
under any Swap Agreement an Early Termination Date (as defined in such Swap
Agreement) resulting from (A) any Event of Default (as so defined) under such
Swap Agreement as to which the Parent Borrower or any Restricted Subsidiary is
the Defaulting Party (as defined in such Swap Agreement) or (B) any Termination
Event (as so defined) under such Swap Agreement as to which the Parent Borrower
or any Restricted Subsidiary is an Affected Party (as so defined) and, in either
event, the Swap Termination Value owed by the Parent Borrower or such Restricted
Subsidiary as a result thereof is greater than $50,000,000; provided, that a
default, event or condition described in clause (i), (ii) or (iii) of this
paragraph (e) shall not at any time constitute an Event of Default unless, at
such time, one or more defaults, events or conditions of the type described in
clauses (i), (ii) and (iii) of this paragraph (e) shall have occurred and be
continuing with respect to Indebtedness the aggregate outstanding principal
amount of which is $50,000,000 or more; or

(f) (i) any Group Member shall commence any case, proceeding or other action
(A) under any existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking
to have an order for relief entered with respect to it, or seeking to adjudicate
it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution (other than, for the avoidance of doubt,
any liquidation or dissolution permitted by Sections 7.4(b) or 7.4(c)),
composition or other relief with respect to it or its debts, or (B) seeking
appointment of a receiver, trustee, custodian, conservator or other similar
official for it or for all or any substantial part of its assets; or (ii) there
shall be commenced against any Group Member any case, proceeding or other action
of a nature referred to in clause (i) above that (A) results in the entry of an
order for relief or any such adjudication or appointment or (B) remains
undismissed or undischarged for a period of 60 days; or (iii) there shall be
commenced against any Group Member any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar process
against all or any substantial part of its assets that results in the entry of
an order for any such relief that shall not have been vacated, discharged, or
stayed or bonded pending appeal within 60 days from the entry thereof; or
(iv) any Group Member shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth in clause
(i), (ii), or (iii) above; or (v) any Group Member

 

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shall generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due; or (vi) or any Group Member
shall make a general assignment for the benefit of its creditors; or

(g) (i) An ERISA Event occurs with respect to a Pension Plan or Multiemployer
Plan (other than with respect to a Withdrawal Liability) that has resulted or
would reasonably be expected to result in liability of a Group Member or any
ERISA Affiliate under Title IV of ERISA to the Pension Plan, Multiemployer Plan
or the PBGC that has had or could reasonably be expected to result in a Material
Adverse Effect; or (ii) a Group Member or any ERISA Affiliate fails to pay when
due, after the expiration of any applicable grace period, any installment
payment with respect to its Withdrawal Liability which could reasonably be
expected to result in a Material Adverse Effect; or (iii) a Foreign Plan Event
shall have occurred which could reasonably be expected to result in a Material
Adverse Effect; or

(h) one or more judgments or decrees shall be entered against any Group Member
involving in the aggregate a liability (not paid or fully covered by insurance
as to which the relevant insurance company has not disputed coverage) of
$50,000,000 or more, and all such judgments or decrees shall not have been
vacated, discharged, stayed or bonded pending appeal within 30 days from the
entry thereof; provided that the existence of the Danish Tax Assessment shall
not, in itself, constitute a Default or Event of Default under this
Section 8(h); or

(i) other than in each case in compliance with the terms of the Loan Documents,
any of the Security Documents shall cease, for any reason, to be in full force
and effect in any material respect, or any Loan Party or any Affiliate of any
Loan Party shall so assert in writing, or any Lien created by any of the
Security Documents on any property with a fair market value (individually or in
the aggregate for all affected properties) of more than $25,000,000 shall cease
to be enforceable and of the same effect and priority purported to be created
thereby; or

(j) other than in each case in compliance with the terms of the Loan Documents,
(i) the guarantee contained in Section 2 of the Guarantee and Collateral
Agreement shall cease, for any reason, to be in full force and effect or any
Loan Party or any Affiliate of any Loan Party shall so assert in writing,
(ii) after effectiveness of the Foreign Guarantee Agreement, the guarantee
contained in Section 2 thereof shall cease, for any reason, to be in full force
and effect or any Foreign Loan Party or any Affiliate of any Foreign Loan Party
shall so assert in writing, or (iii) this Agreement shall cease, for any reason,
to be in full force and effect or any Loan Party or any Affiliate of any Loan
Party shall so assert in writing;

(k) the occurrence of a Change of Control; or

(l) the subordination provisions contained in any Indebtedness required by the
terms hereof to be subordinated to the Obligations shall cease, for any reason,
to be in full force and effect in any material respect or any Loan Party or any
Affiliate of any Loan Party shall so assert in writing;

then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to any Borrower,
automatically the Commitments shall immediately terminate and the Loans (with
accrued interest thereon) and all other amounts owing under this Agreement and
the other Loan Documents (including all amounts of L/C Obligations, whether or
not the beneficiaries of the then outstanding Letters of Credit shall have
presented the documents required thereunder) shall immediately become due and
payable, and (B) if such event is any other Event of Default, either or both of
the following actions may be taken: (i) with the consent of the Required
Lenders, the Administrative Agent may, or upon the request of the Required
Lenders, the Administrative Agent shall, by notice to the Parent Borrower
declare the Revolving Commitments and the Delayed Draw Commitments to be
terminated forthwith, whereupon the Revolving Commitments and the Delayed Draw

 

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Commitments shall immediately terminate; and (ii) with the consent of the
Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Parent
Borrower, declare the Loans (with accrued interest thereon) and all other
amounts owing under this Agreement and the other Loan Documents (including all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) to be due and payable forthwith, whereupon the same shall
immediately become due and payable. With respect to all Letters of Credit with
respect to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to this paragraph, the Borrowers shall at such time
deposit in a cash collateral account opened by the Administrative Agent an
amount equal to the aggregate then undrawn and unexpired amount of such Letters
of Credit. Amounts held in such cash collateral account shall be applied by the
Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other
obligations of the Borrowers hereunder and under the other Loan Documents. After
all such Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other obligations of
the Borrowers hereunder and under the other Loan Documents shall have been paid
in full, the balance, if any, in such cash collateral account shall be returned
to the Borrowers (or such other Person as may be lawfully entitled thereto).
Except as expressly provided above in this Section, presentment, demand, protest
and all other notices of any kind are hereby expressly waived by the Borrowers.

SECTION 9. THE ADMINISTRATIVE AGENT

9.1 Appointment. Each Lender hereby irrevocably designates and appoints the
Administrative Agent as the agent of such Lender under this Agreement and the
other Loan Documents, and each such Lender irrevocably authorizes the
Administrative Agent to take such action on its behalf under the provisions of
this Agreement and the other Loan Documents and to exercise such powers and
perform such duties as are expressly delegated to the Administrative Agent by
the terms of this Agreement and the other Loan Documents, together with such
other powers as are reasonably incidental thereto. Notwithstanding any provision
to the contrary elsewhere in this Agreement, the Administrative Agent shall not
have any duties or responsibilities, except those expressly set forth herein, or
any fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.

9.2 Delegation of Duties. The Administrative Agent may execute any of its duties
under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Administrative Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys in-fact
selected by it with reasonable care.

9.3 Exculpatory Provisions. Neither the Administrative Agent nor any of its
partners, officers, directors, employees, agents, trustees, advisors,
attorneys-in-fact or affiliates shall be (i) liable for any action lawfully
taken or omitted to be taken by it or such Person under or in connection with
this Agreement or any other Loan Document (except to the extent that any of the
foregoing are found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted from its or such Person’s own gross
negligence or willful misconduct) or (ii) responsible in any manner to any of
the Lenders for any recitals, statements, representations or warranties made by
any Loan Party or any officer thereof contained in this Agreement or any other
Loan Document or in any certificate, report, statement or other document
referred to or provided for in, or received by the Administrative Agent under or
in connection with, this Agreement or any other Loan Document or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document or for any

 

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failure of any Loan Party a party thereto to perform its obligations hereunder
or thereunder. The Administrative Agent shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Loan Party.

9.4 Reliance by the Administrative Agent. The Administrative Agent shall be
entitled to rely, and shall be fully protected in relying, upon any instrument,
writing, resolution, notice, consent, certificate, affidavit, letter, telecopy
or email message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including
counsel to the Borrowers), independent accountants and other experts selected by
the Administrative Agent. The Administrative Agent may deem and treat the payee
of any Note as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Required Lenders (or, if so specified by this Agreement, all Lenders) as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense that may be incurred by it by
reason of taking or continuing to take any such action. The Administrative Agent
shall in all cases be fully protected in acting, or in refraining from acting,
under this Agreement and the other Loan Documents in accordance with a request
of the Required Lenders (or, if so specified by this Agreement, all Lenders),
and such request and any action taken or failure to act pursuant thereto shall
be binding upon all the Lenders and all future holders of the Loans.

9.5 Notice of Default. The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default unless
the Administrative Agent has received notice from a Lender or the Parent
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a “notice of default”. In the event that
the Administrative Agent receives such a notice, the Administrative Agent shall
give notice thereof to the Lenders. The Administrative Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders (or, if so specified by this Agreement, all
Lenders); provided that unless and until the Administrative Agent shall have
received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.

9.6 Non-Reliance on the Administrative Agent and Other Lenders. Each Lender
expressly acknowledges that neither the Administrative Agent nor any of its
respective officers, directors, employees, agents, advisors, attorneys-in-fact
or affiliates have made any representations or warranties to it and that no act
by the Administrative Agent hereafter taken, including any review of the affairs
of a Loan Party or any affiliate of a Loan Party, shall be deemed to constitute
any representation or warranty by the Administrative Agent to any Lender. Each
Lender represents to the Administrative Agent that it has, independently and
without reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and their
affiliates and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Lender also represents that it will, independently and
without reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Loan Parties and their affiliates. Except for notices, reports and other
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expressly required to be furnished to the Lenders by the Administrative Agent
hereunder, the Administrative Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the business,
operations, property, condition (financial or otherwise), prospects or
creditworthiness of any Loan Party or any affiliate of a Loan Party that may
come into the possession of the Administrative Agent or any of its officers,
directors, employees, agents, advisors, attorneys-in-fact or affiliates.

9.7 Indemnification. The Lenders agree to indemnify the Administrative Agent and
its partners, officers, directors, employees, trustees, affiliates, agents,
advisors and controlling persons (each, an “Agent Indemnitee”) (to the extent
not reimbursed by the Borrowers and without limiting the obligation of the
Borrowers to do so), ratably according to their respective Aggregate Exposure
Percentages in effect on the date on which indemnification is sought under this
Section (or, if indemnification is sought after the date upon which the
Commitments shall have terminated and the Loans shall have been paid in full,
ratably in accordance with such Aggregate Exposure Percentages immediately prior
to such date), any amount required to be indemnified by the Parent Borrower
under Section 10.5. The agreements in this Section shall survive the termination
of this Agreement and the payment of the Loans and all other amounts payable
hereunder.

9.8 Administrative Agent in Its Individual Capacity. The Administrative Agent
and its affiliates may make loans to, accept deposits from and generally engage
in any kind of business with any Loan Party as though the Administrative Agent
were not the Administrative Agent. With respect to its Loans made or renewed by
it and with respect to any Letter of Credit issued or participated in by it, the
Administrative Agent shall have the same rights and powers under this Agreement
and the other Loan Documents as any Lender and may exercise the same as though
it were not the Administrative Agent, and the terms “Lender” and “Lenders” shall
include the Administrative Agent in its individual capacity.

9.9 Successor Administrative Agent. (a) The Administrative Agent may resign as
Administrative Agent upon 30 days’ notice to the Lenders and the Parent
Borrower. If the Administrative Agent shall resign as Administrative Agent under
this Agreement and the other Loan Documents, then the Required Lenders shall
appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall (unless an Event of Default under Section 8(a) or
Section 8(f) with respect to any Borrower shall have occurred and be continuing)
be subject to approval by the Parent Borrower (which approval shall not be
unreasonably withheld or delayed), whereupon such successor agent shall succeed
to the rights, powers and duties of the Administrative Agent, and the term
“Administrative Agent” shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent’s rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Loans. If no successor agent
has accepted appointment as Administrative Agent by the date that is 30 days
following a retiring Administrative Agent’s notice of resignation, the retiring
Administrative Agent’s resignation shall nevertheless thereupon become
effective, and the Lenders shall assume and perform all of the duties of the
Administrative Agent hereunder until such time, if any, as the Required Lenders
appoint a successor agent as provided for above. After any retiring
Administrative Agent’s resignation as Administrative Agent, the provisions of
this Section 9 and of Section 10.5 shall continue to inure to its benefit.

(b) Any resignation by JPMorgan Chase Bank, N.A. as Administrative Agent
pursuant to this Section 9.9 shall also constitute its resignation as an Issuing
Lender and the Swingline Lender. Upon the acceptance of a successor’s
appointment as Administrative Agent hereunder, (i) such successor shall succeed
to and become vested with all of the rights, powers, privileges and duties of a
retiring Issuing Lender and Swingline Lender, (ii) a retiring Issuing Lender and
Swingline Lender shall be discharged from all of their respective duties and
obligations hereunder or under the other Loan Documents, and (iii)

 

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the successor Issuing Lender shall issue letters of credit in substitution for
the Letters of Credit, if any, outstanding at the time of such succession or
make other arrangements satisfactory to the retiring Issuing Lender or other
existing Issuing Lender to effectively assume the obligations of the retiring
Issuing Lender with respect to such Letters of Credit.

9.10 Arrangers and Syndication Agents. Neither the Arrangers nor the Syndication
Agents shall have any duties or responsibilities hereunder in their respective
capacities as such.

9.11 Swap Agreements and Cash Management Agreements. No Lender or any Affiliate
of a Lender that is party to any Swap Agreement or any Cash Management Agreement
permitted hereunder or any Collateral by virtue of the provisions hereof or of
any other Loan Document shall have any right to notice of any action or to
consent to, direct or object to any action hereunder or under any other Loan
Document or otherwise in respect of the Collateral (including the release or
impairment of any Collateral) other than in its capacity as a Lender and, in
such case, only to the extent expressly provided in the Loan Documents.
Notwithstanding any other provision of this Section 9 to the contrary, the
Administrative Agent shall not be required to verify the payment of, or that
other satisfactory arrangements have been made with respect to, Obligations
arising under Swap Agreements and Cash Management Agreements unless the
Administrative Agent has received written notice of such Obligations, together
with such supporting documentation as the Administrative Agent may request, from
the applicable Lender or Affiliate of a Lender that is party to such Swap
Agreement or such Cash Management Agreement, as the case may be.

SECTION 10. MISCELLANEOUS

10.1 Amendments and Waivers. Neither this Agreement, any other Loan Document,
nor any terms hereof or thereof may be amended, supplemented or modified except
in accordance with the provisions of this Section 10.1. Subject to
Section 2.24(b), the Required Lenders and each Loan Party party to the relevant
Loan Document may, or, with the written consent of the Required Lenders, the
Administrative Agent and each Loan Party party to the relevant Loan Document
may, from time to time, (a) enter into written amendments, supplements or
modifications hereto and to the other Loan Documents for the purpose of adding
any provisions to this Agreement or the other Loan Documents or changing in any
manner the rights of the Lenders or of the Loan Parties hereunder or thereunder
or (b) waive, on such terms and conditions as the Required Lenders or the
Administrative Agent, as the case may be, may specify in such instrument, any of
the requirements of this Agreement or the other Loan Documents or any Default or
Event of Default and its consequences; provided, however, that no such waiver
and no such amendment, supplement or modification shall (i) forgive the
principal amount or extend the final scheduled date of maturity of any Loan,
extend the scheduled date of any amortization payment in respect of any Term
Loan, reduce the stated rate of any interest or fee payable hereunder (except
that any amendment or modification of the financial covenants in this agreement
(or defined terms used in the financial covenants in this Agreement) or waiver
of the application of Default Rate shall not constitute a reduction in the rate
of interest or fees for purposes of this clause (i)) or extend the scheduled
date of any payment thereof, or increase the amount or extend the expiration
date of any Lender’s Revolving Commitment or Delayed Draw Commitment, or reduce
any reimbursement obligation in respect of any Letter of Credit, in each case
without the written consent of each Lender directly and adversely affected
thereby; (ii) eliminate or reduce the voting rights of any Lender under this
Section 10.1 or reduce any percentage specified in the definition of Required
Lenders, without the written consent of all Lenders; (iii) consent to the
assignment or transfer by any Borrower of any of its rights and obligations
under this Agreement and the other Loan Documents, release all or substantially
all of the Collateral, release all or substantially all of the Subsidiary
Guarantors from their obligations under the Guarantee and Collateral Agreement
or release all or substantially all of the Foreign Loan Parties from their
obligations under the Foreign Guarantee Agreement, in each case without the
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adversely affected thereby; (iv) amend, modify or waive any provision of
Section 2.18 or the pro-rata sharing provisions of Section 10.7 without the
written consent of each Lender directly and adversely affected thereby;
(v) reduce the percentage specified in the definition of Majority Facility
Lenders with respect to any Facility without the written consent of all Lenders
under such Facility; (vi) amend, modify or waive any provision of Section 6.5 of
the Guarantee and Collateral Agreement with respect to the order in which the
proceeds of Collateral or of the guarantee set forth in Section 2 thereof are
applied or the pro rata sharing provisions set forth therein without the written
consent of each Lender directly and adversely affected thereby; (vii) amend,
modify or waive any provision of Section 6.5 of the Foreign Guarantee Agreement
with respect to the order in which the proceeds of the guarantee set forth in
Section 2 thereof or the pro rata sharing provisions set forth therein without
the written consent of each Lender directly and adversely affected thereby;
(viii) amend, modify or waive any provision of Section 9 or any other provision
of any Loan Document that affects the Administrative Agent without the written
consent of the Administrative Agent; (ix) amend, modify or waive any provision
of Section 2.6 or 2.7 without the written consent of the Swingline Lender;
(x) amend, modify or waive any provision of Section 3 without the written
consent of the Issuing Lenders; or (xi) amend, modify or waive any provision of
this Section 10.1 without the consent of all Lenders. Any such waiver and any
such amendment, supplement or modification shall apply equally to each of the
Lenders and shall be binding upon the Loan Parties, the Lenders, the
Administrative Agent and all future holders of the Loans. In the case of any
waiver, the Loan Parties, the Lenders and the Administrative Agent shall be
restored to their former position and rights hereunder and under the other Loan
Documents, and any Default or Event of Default waived shall be deemed to be
cured and not continuing; but no such waiver shall extend to any subsequent or
other Default or Event of Default, or impair any right consequent thereon.

Furthermore, notwithstanding anything in this Agreement (including, without
limitation, this Section 10.1) or any other Loan Document to the contrary,
(i) this Agreement and the other Loan Documents may be amended to effect an
incremental facility, extension facility or refinancing facility pursuant to
Section 2.25, 2.28 or 2.29 (and the Administrative Agent and the Borrowers may
effect such amendments to this Agreement and the other Loan Documents without
the consent of any other party as may be necessary or appropriate, in the
reasonable opinion of the Administrative Agent and the Parent Borrower, to
effect the terms of any such incremental facility or refinancing facility),
(ii) this Agreement and the other Loan Documents may be amended to effect any
Foreign Currency and/or L/C Foreign Currency with the consent of the parties set
forth in the definitions of such terms, without the consent of any other party,
as may be necessary or appropriate, in the reasonable opinion of the
Administrative Agent and the Parent Borrower, to effect the terms of any such
Foreign Currency and/or L/C Foreign Currency and (ii) guarantees, collateral
documents and related documents executed by the Loan Parties in connection with
this Agreement may be in a form reasonably determined by the Administrative
Agent and may be, together with any other Loan Document, entered into, amended,
supplemented or waived, without the consent of any other person, by the
applicable Loan Party or Loan Parties and the Administrative Agent in its sole
discretion, to (A) effect the granting, perfection, protection, expansion or
enhancement of any security interest in any Collateral or additional property to
become Collateral for the benefit of the Secured Parties, (B) as required by
local law to give effect to, or protect any security interest for the benefit of
the Secured Parties, in any property or so that the security interests therein
comply with applicable Requirements of Law, or (C) to cure ambiguities,
omissions, mistakes or defects or to cause such guarantee, collateral document
or other document to be consistent with this Agreement and the other Loan
Documents.

10.2 Notices. All notices, requests and demands to or upon the respective
parties hereto to be effective shall be in writing (including by telecopy or
email), and, unless otherwise expressly provided herein, shall be deemed to have
been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice or
email, when received, addressed as follows in the case of the Borrowers and the
Administrative Agent, and as set forth

 

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in an administrative questionnaire delivered to the Administrative Agent in the
case of the Lenders, or to such other address as may be hereafter notified by
the respective parties hereto:

 

Parent Borrower:    Tempur Sealy International, Inc.    1000 Tempur Way   
Lexington, Kentucky 40511    Attention: James Schockett, Vice President &
Treasurer    Telecopy: (859) 687-6922    Telephone: (859) 455-2026    Email:
james.schockett@tempursealy.com with a copy (which shall not constitute notice)
to:    Morgan, Lewis & Bockius LLP   

1701 Market Street

Philadelphia, PA 19103

   Attention: Michael J. Pedrick    Telecopy: 215.963.5001    Telephone:
215.963.4808 Additional Borrowers:    C/O Tempur Sealy International, Inc.   
1000 Tempur Way    Lexington, Kentucky 40511    Attention: James Schockett, Vice
President & Treasurer    Telecopy: (859) 687-6922    Telephone: (859) 455-2026
   Email: james.schockett@tempursealy.com with a copy (which shall not
constitute notice) to:    Morgan, Lewis & Bockius LLP   

1701 Market Street

Philadelphia, PA 19103

   Attention: Michael J. Pedrick    Telecopy: 215.963.5001    Telephone:
215.963.4808 Administrative Agent (and with respect to any notices to JPMorgan
Chase Bank, N.A., as Issuing Lender):   

JPMorgan Chase Bank, N.A.

10 South Dearborn Street LS2 Chicago, Illinois 60603

   Telecopy: (844) 490-5663    Email: jpm.agency.cri@jpmorgan.com

provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders shall not be effective until received.

 

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Notices and other communications to the Lenders hereunder may be delivered or
furnished by electronic communications pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply to notices
pursuant to Section 2 unless otherwise agreed by the Administrative Agent and
the applicable Lender. The Administrative Agent or the Parent Borrower (on
behalf of itself and the other Borrowers) may, in its discretion, agree to
accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it; provided that approval of
such procedures may be limited to particular notices or communications.

10.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of the Administrative Agent or any Lender, any right,
remedy, power or privilege hereunder or under the other Loan Documents shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.

10.4 Survival of Representations and Warranties. All representations and
warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans and other extensions of credit hereunder.

10.5 Payment of Expenses and Taxes. The Parent Borrower agrees (a) to pay or
reimburse each of the Administrative Agent and the Arrangers for all its
reasonable and invoiced costs and expenses incurred in connection with the
development, preparation and execution of, and any amendment, supplement or
modification to, this Agreement and the other Loan Documents and any other
documents prepared in connection herewith or therewith, and the consummation and
administration of the transactions contemplated hereby and thereby, including
the reasonable fees and disbursements of one counsel to the Administrative Agent
and the Arrangers and one firm of local counsel in each appropriate jurisdiction
and other counsel retained with the Parent Borrower’s consent (such consent not
to be unreasonably withheld or delayed) and filing and recording fees and
expenses, with statements with respect to the foregoing to be submitted to the
Parent Borrower prior to the Closing Date (in the case of amounts to be paid on
the Closing Date) and from time to time thereafter on a quarterly basis or such
other periodic basis as the Administrative Agent shall deem appropriate, (b) to
pay or reimburse each Lender, the Issuing Lender, the Swingline Lender and the
Administrative Agent for all its reasonable and invoiced costs and expenses
incurred in connection with the enforcement or preservation of any rights under
this Agreement, the other Loan Documents and any such other documents, including
the reasonable and documented fees, actual disbursements and out-of-pocket
expenses of one counsel to the Lenders and the Administrative Agent, one firm of
local counsel in each appropriate jurisdiction (and to the extent that the
Administrative Agent or any Lender reasonably determines that separate counsel
is necessary to avoid a conflict of interest, one additional outside counsel and
one additional appropriate local counsel in each appropriate jurisdiction) and
other counsel retained with the Parent Borrower’s consent (not to be
unreasonably withheld or delayed) (provided that in the case of an actual (or
perceived, if set forth in a writing by the affected party to the Parent
Borrower) conflict of interest, where the affected party informs the Parent
Borrower of such conflict and thereafter retains its own counsel, of another
firm of counsel for such affected party), (c) to pay, indemnify, and hold each
Lender, the Issuing Lender, the Swingline Lender and the Administrative Agent
harmless from, any and all recording and filing fees and any and all liabilities
with respect to, or resulting from the Parent Borrower’s delay in paying, stamp,
excise and other similar Taxes, if any, that may be payable or determined to be
payable in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the other Loan Documents and any such other documents, (d) to
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Issuing Lender for all of its reasonable and invoiced losses, costs or expenses
sustained in connection with any conversion of Obligations, fees, payments or
any other amounts payable to the Issuing Lender from any currency other than
Dollars to its Dollar Equivalent; provided that such conversion shall have
resulted from the Parent Borrower’s failure to comply with its obligations
hereunder and (e) to pay, indemnify, and hold each Lender, the Issuing Lender,
the Swingline Lender and the Administrative Agent, their respective affiliates,
and the respective partners, officers, directors, employees, agents, trustees,
advisors and controlling persons of each of the foregoing (each, an
“Indemnitee”) harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement, the other Loan Documents and any such other documents, including any
claim, litigation, investigation or proceeding regardless of whether any
Indemnitee is a party thereto and whether or not the same are brought by any
Borrower, the equity holders, affiliates or creditors of the Parent Borrower or
any other Person, including any of the foregoing relating to the use of proceeds
of the Loans or the violation of, noncompliance with or liability under or
related to, any Environmental Law or Materials of Environmental Concern
applicable to the operations of any Group Member or any of the Properties and
the reasonable and documented fees, actual disbursements and out-of-pocket
expenses of one firm of counsel for all Indemnitees and one environmental
consultant and, if necessary, one firm of regulatory counsel and one firm of
local counsel in each appropriate jurisdiction for all Indemnitees (provided
that in the case of a conflict of interest, where the Indemnitee informs the
Parent Borrower of such conflict and thereafter retains its own counsel, the
reasonable and invoiced costs and expenses of another firm of counsel for such
affected Indemnitee), in connection with claims, actions or proceedings by any
Indemnitee against any Loan Party under any Loan Document (all the foregoing in
this clause (e), collectively, the “Indemnified Liabilities”), provided, that
the Parent Borrower shall have no obligation hereunder to any Indemnitee with
respect to Indemnified Liabilities to the extent such Indemnified Liabilities
are found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct
of, or material breach of any Loan Document by, such Indemnitee, provided,
further, that this Section 10.5 shall not apply with respect to Taxes other than
any Taxes that represent losses or damages arising from any non-Tax claim, and
provided further that this Section 10.5 shall not require the reimbursement of
costs, expenses and disbursements of any Indemnitee incurred in connection with
the development, preparation and execution of, and any amendment, supplement or
modification to, this Agreement and the other Loan Documents (it being
understood that any reimbursement in connection with such costs, expenses and
disbursements shall be governed by Section 10.5). Without limiting the
foregoing, and to the extent permitted by applicable law, each Borrower agrees
not to assert and to cause its Subsidiaries not to assert, and hereby waives and
agrees to cause its Subsidiaries to waive, all rights for contribution or any
other rights of recovery with respect to all claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or
nature, under or related to Environmental Laws, that any of them might have by
statute or otherwise against any Indemnitee. No Indemnitee shall be liable for
any damages arising from the use by others of information or other materials
obtained through electronic, telecommunications or other information
transmission systems, except to the extent any such damages are found by a final
and nonappealable decision of a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of such Indemnitee or a material
breach of any Loan Document by such Indemnitee. No Indemnitee shall be liable
for any indirect, special, exemplary, punitive or consequential damages in
connection with this Agreement or the other Loan Documents or the transactions
contemplated hereby or thereby. All amounts due under this Section 10.5 shall be
payable not later than 10 days after written demand therefor. Statements payable
by the Parent Borrower pursuant to this Section 10.5 shall be submitted at the
address of the Parent Borrower set forth in Section 10.2, or to such other
Person or address as may be hereafter designated by the Parent Borrower in a
written notice to the Administrative Agent. The agreements in this Section 10.5
shall survive the termination of this Agreement and the repayment of the Loans
and all other amounts payable hereunder.

 

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10.6 Successors and Assigns; Participations and Assignments. (a) The provisions
of this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns permitted hereby (including
any affiliate of any Issuing Lender that issues any Letter of Credit), except
that (i) other than as contemplated by Section 2.19(h), no Borrower may assign
or otherwise transfer any of its rights or obligations hereunder without the
prior written consent of each Lender (and any attempted assignment or transfer
by any Borrower without such consent shall be null and void) and (ii) no Lender
may assign or otherwise transfer its rights or obligations hereunder except in
accordance with this Section.

(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any
Lender may assign to one or more assignees (each, an “Assignee”), other than a
natural person, the Parent Borrower or any Affiliate of the Parent Borrower, all
or a portion of its rights and obligations under this Agreement (including all
or a portion of its Commitments and the Loans at the time owing to it) with the
prior written consent (such consent not to be unreasonably withheld, conditioned
or delayed) of:

(A) the Parent Borrower, provided that no consent of the Parent Borrower shall
be required for an assignment to a Lender, an affiliate of a Lender, an Approved
Fund (as defined below) or, if an Event of Default has occurred and is
continuing, any other Person; and provided, further, that the Parent Borrower
shall be deemed to have consented to any such assignment unless the Parent
Borrower shall object thereto by written notice to the Administrative Agent
within five Business Days after having received notice thereof;

(B) the Administrative Agent, provided that no consent of the Administrative
Agent shall be required for an assignment of all or any portion of any
Commitments or any Loan to a Lender, an affiliate of a Lender or an Approved
Fund; and

(C) each Issuing Lender and Swingline Lender; provided that no consent of an
Issuing Lender or a Swingline Lender shall be required for an assignment of all
or any portion of a Term Loan.

(ii) Assignments shall be subject to the following additional conditions:

(A) except in the case of an assignment to a Lender, an affiliate of a Lender or
an Approved Fund or an assignment of the entire remaining amount of the
assigning Lender’s Commitments or Loans under any Facility, the amount of the
Commitments or Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Assumption with respect to such
assignment is delivered to the Administrative Agent) shall not be less than
$5,000,000 unless each of the Parent Borrower and the Administrative Agent
otherwise consent, provided that (1) no such consent of the Parent Borrower
shall be required if an Event of Default has occurred and is continuing and
(2) such amounts shall be aggregated in respect of each Lender and its
affiliates or Approved Funds, if any;

(B) (1) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee of $3,500 and (2) the assigning Lender shall have paid in
full any amounts owing by it to the Administrative Agent; and

(C) the Assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an administrative questionnaire in which the Assignee
designates one or more credit contacts to whom all syndicate-level information
(which may contain material non-public information about the Parent Borrower and
its Affiliates and their related parties or their respective securities) will be
made available and who may receive such information in accordance with the
assignee’s compliance procedures and applicable laws, including Federal and
state securities laws.

 

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For the purposes of this Section 10.6, “Approved Fund” means any Person (other
than a natural person) that is engaged in making, purchasing, holding or
investing in bank loans and similar extensions of credit in the ordinary course
of its business and that is administered or managed by (a) a Lender, (b) an
affiliate of a Lender or (c) an entity or an affiliate of an entity that
administers or manages a Lender.

(iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv)
below, from and after the effective date specified in each Assignment and
Assumption the Assignee thereunder shall be a party hereto and, to the extent of
the interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections 2.19,
2.20, 2.21 and 10.5 with respect to the facts and circumstances occurring prior
to the effective date of the assignment). Any assignment or transfer by a Lender
of rights or obligations under this Agreement that does not comply with this
Section 10.6 shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (c) of this Section.

(iv) The Administrative Agent, acting for this purpose as a non-fiduciary agent
of the Borrowers, shall maintain at one of its offices a copy of each Assignment
and Assumption delivered to it and a register for the recordation of the names
and addresses of the Lenders, and the Commitments of, and principal amount (and
stated interest) of the Loans and L/C Obligations owing to, each Lender pursuant
to the terms hereof from time to time (the “Register”). The entries in the
Register shall be conclusive absent manifest error, and the Borrowers, the
Administrative Agent, the Issuing Lenders and the Lenders shall treat each
Person whose name is recorded in the Register pursuant to the terms hereof as a
Lender hereunder for all purposes of this Agreement, notwithstanding notice to
the contrary. The Register shall be available for inspection by the Borrowers,
any Issuing Lender and any Lender, at any reasonable time and from time to time
upon reasonable prior notice.

(v) Upon its receipt of a duly completed Assignment and Assumption executed by
an assigning Lender and an Assignee, the Assignee’s completed administrative
questionnaire (unless the Assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) of this Section and
any written consent to such assignment required by paragraph (b) of this
Section, the Administrative Agent shall accept such Assignment and Assumption
and record the information contained therein in the Register. No assignment
shall be effective for purposes of this Agreement unless it has been recorded in
the Register as provided in this paragraph.

(c) Any Lender may, without the consent of the Parent Borrower, the Issuing
Lenders, the Swingline Lender or the Administrative Agent, sell participations
to one or more banks or other entities (a “Participant”) in all or a portion of
such Lender’s rights and obligations under this Agreement (including all or a
portion of its Commitments and the Loans owing to it); provided that (i) such
Lender’s obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, and (iii) the Parent Borrower, the

 

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Administrative Agent, the Issuing Lenders and the other Lenders shall continue
to deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under this Agreement. Any agreement pursuant to which a
Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
agreement may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver that (i) requires
the consent of each Lender directly affected thereby pursuant to the proviso to
the second sentence of Section 10.1 and (ii) directly affects such Participant.
Each Lender that sells a participation agrees, at the Parent Borrower’s request
and expense, to use reasonable efforts to cooperate with the Parent Borrower to
effectuate the provisions of Section 2.23 with respect to any Participant. The
Parent Borrower agrees that each Participant shall be entitled to the benefits
of Sections 2.19, 2.20 and 2.21 (subject to the requirements and limitations
therein, including the requirements under Section 2.20(f) (it being understood
that the documentation required under Section 2.20(f) shall be delivered to the
participating Lender)) to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section;
provided that such Participant (i) agrees to be subject to the provisions of
Sections 2.19 and 2.20 as if it were an assignee under paragraph (b) of this
Section and (ii) shall not be entitled to receive any greater payment under
Sections 2.19 or 2.20, with respect to any participation, than its participating
Lender would have been entitled to receive, except to the extent such
entitlement to receive a greater payment results from an adoption of or any
change in any Requirement of Law or in the interpretation or application thereof
or compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the Closing Date that occurs after the Participant acquired the
applicable participation. To the extent permitted by law, each Participant also
shall be entitled to the benefits of Section 10.7(b) as though it were a Lender,
provided such Participant shall be subject to Section 10.7(a) as though it were
a Lender. Each Lender that sells a participation shall, acting solely for this
purpose as a non-fiduciary agent of the Borrowers, maintain a register on which
it enters the name and address of each Participant and the principal amounts
(and stated interest) of each Participant’s interest in the Loans or other
obligations under the Loan Documents (the “Participant Register”); provided that
no Lender shall have any obligation to disclose all or any portion of the
Participant Register to any Person (including the identity of any Participant or
any information relating to a Participant’s interest in any Commitments, Loans,
Letters of Credit or its other obligations under any Loan Document) except to
the Borrowers (upon request) or otherwise to the extent that such disclosure is
necessary to establish that such Commitment, Loan, Letter of Credit or other
obligation is in registered form under Section 5f.103-1(c) of the United States
Treasury Regulations. The entries in the Participant Register shall be
conclusive absent manifest error, and such Lender shall treat each Person whose
name is recorded in the Participant Register as the owner of such participation
for all purposes of this Agreement notwithstanding any notice to the contrary.
For the avoidance of doubt, the Administrative Agent (in its capacity as
Administrative Agent) shall have no responsibility for maintaining a Participant
Register.

(d) Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank or other central banking authority, and this Section shall not
apply to any such pledge or assignment of a security interest; provided that no
such pledge or assignment of a security interest shall release a Lender from any
of its obligations hereunder or substitute any such pledgee or Assignee for such
Lender as a party hereto. The Parent Borrower, upon receipt of written notice
from the relevant Lender, agrees to issue Notes to any Lender requiring Notes.

10.7 Adjustments; Set-off. (a) Except to the extent that this Agreement or a
court order expressly provides for payments to be allocated to a particular
Lender or to the Lenders under a particular Facility, if any Lender (a
“Benefitted Lender”) shall receive any payment of all or part of the Obligations
owing to it by a U.S. Loan Party (other than in connection with an assignment
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to Section 10.6), or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, pursuant to events or proceedings of
the nature referred to in Section 8(f), or otherwise), in a greater proportion
than any such payment to or collateral received by any other Lender, if any, in
respect of the Obligations owing to such other Lender by such U.S. Loan Party,
such Benefitted Lender shall purchase for cash from the other Lenders a
participating interest in such portion of the Obligations owing to each such
other Lender by such U.S. Loan Party, or shall provide such other Lenders with
the benefits of any such collateral, as shall be necessary to cause such
Benefitted Lender to share the excess payment or benefits of such collateral
ratably with each of the Lenders; provided, however, that if all or any portion
of such excess payment or benefits is thereafter recovered from such Benefitted
Lender, such purchase shall be rescinded, and the purchase price and benefits
returned, to the extent of such recovery, but without interest; provided
further, that to the extent prohibited by applicable law as described in the
definition of “Excluded Swap Obligation,” no amounts received from, or set off
with respect to, any Subsidiary Guarantor shall be applied to any Excluded Swap
Obligations of such Subsidiary Guarantor.

(b) In addition to any rights and remedies of the Lenders provided by law, each
Lender shall have the right, without notice to any Borrower, any such notice
being expressly waived by each Borrower to the extent permitted by applicable
law, with the prior written consent of the Administrative Agent, upon any
Obligations becoming due and payable by Parent Borrower (whether at the stated
maturity, by acceleration or otherwise), to apply to the payment of such
Obligations, by setoff or otherwise, any and all deposits (general or special,
time or demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Lender, any affiliate thereof or any of their respective branches
or agencies to or for the credit or the account of the Parent Borrower; provided
that if any Defaulting Lender shall exercise any such right of setoff, (i) all
amounts so set off shall be paid over immediately to the Administrative Agent
for further application in accordance with the provisions of this Agreement and,
pending such payment, shall be segregated by such Defaulting Lender from its
other funds and deemed held in trust for the benefit of the Administrative
Agent, the Issuing Lender, the Swingline Lender and the Lenders and (ii) the
Defaulting Lender shall provide promptly to the Administrative Agent a statement
describing in reasonable detail the obligations owing to such Defaulting Lender
as to which it exercised such right of set-off. Each Lender agrees promptly to
notify the Parent Borrower and the Administrative Agent after any such
application made by such Lender, provided that the failure to give such notice
shall not affect the validity of such application.

10.8 Counterparts. This Agreement may be executed by one or more of the parties
to this Agreement on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed signature page of this Agreement by email or
facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Parent Borrower and the Administrative Agent.

10.9 Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

10.10 Integration. This Agreement and the other Loan Documents represent the
entire agreement of the Borrowers, the Administrative Agent and the Lenders with
respect to the subject matter hereof and thereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent or any
Lender relative to the subject matter hereof not expressly set forth or referred
to herein or in the other Loan Documents.

 

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10.11 Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

10.12 Submission To Jurisdiction; Waivers. (a) Each Borrower hereby irrevocably
and unconditionally:

(i) submits for itself and its property in any legal action or proceeding
relating to this Agreement and the other Loan Documents to which it is a party,
or for recognition and enforcement of any judgment in respect thereof, to the
exclusive jurisdiction of the courts of the State of New York in the Borough of
Manhattan, the courts of the United States for the Southern District of New
York, and appellate courts from any thereof; provided, that nothing contained
herein or in any other Loan Document will prevent any Lender or the
Administrative Agent from bringing any action to enforce any award or judgment
or exercise any right under the Security Documents or against any Collateral or
any other property of any Loan Party in any other forum in which jurisdiction
can be established;

(ii) consents that any such action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;

(iii) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such Borrower at its
address set forth in Section 10.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;

(iv) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law; and

(v) waives, to the maximum extent not prohibited by law, any right it may have
to claim or recover in any legal action or proceeding referred to in this
Section any indirect, special, exemplary, punitive or consequential damages.

(b) Without limiting Section 10.12(a), each Loan Party hereby irrevocably
designates, appoints, authorizes and empowers the Parent Borrower, with offices
currently located at 91000 Tempur Way, Lexington, Kentucky 40511, United States
(the “Process Agent”), as its agent to receive on behalf of itself and its
property, service of copies of the summons and complaint and any other process
which may be served in any suit, action or proceeding brought in the United
States District Court for the Southern District of New York or the courts of the
State of New York in the Borough of Manhattan, and any appellate court thereof.
Such service may be made by delivering a copy of such process to such Loan Party
in care of the Process Agent at its address specified above, with a copy
delivered to such Loan Party in accordance with Section 10.2, and each Loan
Party hereby authorizes and directs the Process Agent to accept such service on
its behalf. The appointment of the Process Agent shall be irrevocable until the
appointment of a successor Process Agent. Each Loan Party further agrees to
promptly appoint a successor Process Agent in the United States (which shall
accept such appointment in form and substance satisfactory to the Administrative
Agent) prior to the termination for any reason of the appointment of the initial
Process Agent. Nothing contained herein shall affect the right of any party
hereto to serve process in any manner permitted by law, or limit any right that
any party hereto may have to bring proceedings against any other party hereto in
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judgment obtained in one jurisdiction in any other jurisdiction. So long as the
Parent Borrower is the agent of the Loan Parties for services of process, the
Parent Borrower must maintain a place of business in the United States for
service of process and shall promptly notify the Administrative Agent of any
change in the address of such location.

(c) To the extent any Additional Borrower has or hereafter may acquire any
immunity from any legal action, suit or proceeding, from jurisdiction of any
court or from set-off or any legal process (whether service or notice,
attachment prior to judgment, attachment in aid of execution of judgment,
execution of judgment or otherwise) with respect to itself or any of its assets
or property, such Additional Borrower, to the extent permitted by law, hereby
irrevocably waives and agrees not to plead or claim such immunity in respect of
its obligations under this Agreement and the other Loan Documents.

10.13 Acknowledgements. Each Borrower hereby acknowledges and agrees that (a) no
fiduciary, advisory or agency relationship between the Loan Parties and the
Credit Parties is intended to be or has been created in respect of any of the
transactions contemplated by this Agreement or the other Loan Documents,
irrespective of whether the Credit Parties have advised or are advising the Loan
Parties on other matters, and the relationship between the Credit Parties, on
the one hand, and the Loan Parties, on the other hand, in connection herewith
and therewith is solely that of creditor and debtor, (b) the Credit Parties, on
the one hand, and the Loan Parties, on the other hand, have an arm’s length
business relationship that does not directly or indirectly give rise to, nor do
the Loan Parties rely on, any fiduciary duty to the Loan Parties or their
affiliates on the part of the Credit Parties, (c) the Loan Parties are capable
of evaluating and understanding, and the Loan Parties understand and accept, the
terms, risks and conditions of the transactions contemplated by this Agreement
and the other Loan Documents, (d) the Loan Parties have been advised that the
Credit Parties are engaged in a broad range of transactions that may involve
interests that differ from the Loan Parties’ interests and that the Credit
Parties have no obligation to disclose such interests and transactions to the
Loan Parties, (e) the Loan Parties have consulted their own legal, accounting,
regulatory and tax advisors to the extent the Loan Parties have deemed
appropriate in the negotiation, execution and delivery of this Agreement and the
other Loan Documents, (f) each Credit Party has been, is, and will be acting
solely as a principal and, except as otherwise expressly agreed in writing by it
and the relevant parties, has not been, is not, and will not be acting as an
advisor, agent or fiduciary for the Loan Parties, any of their affiliates or any
other Person, (g) none of the Credit Parties has any obligation to the Loan
Parties or their affiliates with respect to the transactions contemplated by
this Agreement or the other Loan Documents except those obligations expressly
set forth herein or therein or in any other express writing executed and
delivered by such Credit Party and the Loan Parties or any such affiliate and
(h) no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Credit Parties or among the Loan Parties and the Credit Parties.

10.14 Releases of Guarantees and Liens. (a) Notwithstanding anything to the
contrary contained herein or in any other Loan Document, the Administrative
Agent is hereby irrevocably authorized by each Lender (without requirement of
notice to or consent of any Lender except as expressly required by Section 10.1)
to take any action requested by the Parent Borrower (1) having the effect of
releasing any Collateral or guarantee obligations (i) to the extent necessary to
permit consummation of any transaction not prohibited by any Loan Document or
that has been consented to in accordance with Section 10.1 or (ii) under the
circumstances described in paragraph (b) below; provided, that the
Administrative Agent shall have received a certificate of a Responsible Officer
of the Parent Borrower containing such certifications as the Administrative
Agent shall reasonably request or (2) acknowledging the subordination of any
Liens in favor of the Administrative Agent under any Loan Document to Liens that
are expressly permitted by Section 7.3 to be senior to the liens in favor of the
Administrative Agent.

 

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(b) Notwithstanding anything to the contrary contained herein or in any other
Loan Document, the Administrative Agent is hereby irrevocably authorized by each
Lender (without requirement of notice to or consent of any Lender except as
expressly required by Section 10.1) to take any action requested by the Parent
Borrower having the effect of releasing any guarantee obligations with respect
to any Subsidiary Guarantor that has become an Immaterial Subsidiary or an
Excluded Foreign Subsidiary; provided that if such Subsidiary Guarantor is an
Additional Borrower, then prior to or simultaneously with the release of the
guarantee obligations of such Subsidiary, such Subsidiary’s status as a
“Additional Borrower” shall be terminated in accordance with Section 10.21(b).

(c) At such time as the Loans, the Reimbursement Obligations and the other
obligations under the Loan Documents (other than obligations under or in respect
of Specified Swap Agreements, Specified Cash Management Agreements and/or
contingent indemnification obligations) shall have been paid in full, the
Commitments have been terminated and no Letters of Credit shall be outstanding
(the date of the occurrence of the foregoing, the “Termination Date”), the
Collateral shall be released from the Liens created by the Security Documents,
and the Security Documents and all obligations (other than those expressly
stated to survive such termination) of the Administrative Agent and each Loan
Party under the Security Documents shall terminate, all without delivery of any
instrument or performance of any act by any Person.

10.15 Judgment Currency.

(a) The Loan Parties’ obligations hereunder and under the other Loan Documents
to make payments in Dollars shall not be discharged or satisfied by any tender
or recovery pursuant to any judgment expressed in or converted into any currency
other than Dollars, except to the extent that such tender or recovery results in
the effective receipt by the Administrative Agent, the respective Lender or
Issuing Bank of the full amount of Dollars expressed to be payable to the
Administrative Agent or such Lender or Issuing Bank under this Agreement or the
other Loan Documents. If, for the purpose of obtaining or enforcing judgment
against any Loan Party in any court or in any jurisdiction, it becomes necessary
to convert into or from any currency other than Dollars (such other currency
being hereinafter referred to as the “Judgment Currency”) an amount due in
Dollars, the conversion shall be made at the Dollar Equivalent determined as of
the Business Day immediately preceding the day on which the judgment is given
(such Business Day being hereinafter referred to as the “Judgment Currency
Conversion Date”).

(b) If there is a change in the rate of exchange prevailing between the Judgment
Currency Conversion Date and the date of actual payment of the amount due, the
Loan Parties shall pay, or cause to be paid, such additional amounts, if any
(but in any event not a lesser amount) as may be necessary to ensure that the
amount paid in the Judgment Currency, when converted at the rate of exchange
prevailing on the date of payment, will produce the amount of Dollars which
could have been purchased with the amount of Judgment Currency stipulated in the
judgment or judicial award at the rate of exchange prevailing on the Judgment
Currency Conversion Date.

(c) For purposes of determining the Dollar Equivalent or any other rate of
exchange for this Section 10.15, such amounts shall include any premium and
costs payable in connection with the purchase of Dollars.

10.16 Confidentiality. Each of the Administrative Agent and each Lender agrees
to keep confidential all non-public information provided to it by any Loan
Party, the Administrative Agent or any Lender pursuant to or in connection with
this Agreement that is designated by the provider thereof as confidential;
provided that nothing herein shall prevent the Administrative Agent or any
Lender from disclosing any such information (a) to the Administrative Agent, any
other Lender or any affiliate thereof,

 

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(b) subject to an agreement to comply with confidentiality obligations at least
as restrictive as those contained in this Section, to any actual or prospective
Transferee or any direct or indirect counterparty to any Swap Agreement (or any
professional advisor to such counterparty), (c) to its employees, directors,
agents, independent auditors, ratings agencies attorneys, accountants and other
professional advisors or those of any of its affiliates, in each case, who are
instructed to comply with the confidentiality provisions herein, (d) upon the
request or demand of any Governmental Authority, (e) in response to any order of
any court or other Governmental Authority or as may otherwise be required
pursuant to any Requirement of Law, (f) if requested or required to do so in
connection with any litigation or similar proceeding, (g) that has been
(i) publicly disclosed, (ii) received by the Administrative Agent or any Lender
from a third party that is not, to the knowledge of the Administrative Agent or
such Lender, subject to contractual or fiduciary confidentiality obligations
owing to any Loan Party with respect to such information or (iii) independently
developed by the Administrative Agent or any Lender, (h) to the National
Association of Insurance Commissioners or any similar organization or any
nationally recognized rating agency that requires access to information about a
Lender’s investment portfolio in connection with ratings issued with respect to
such Lender, (i) in connection with the exercise of any remedy hereunder or
under any other Loan Document, (j) if agreed in writing by the Parent Borrower
in its sole discretion, to any other Person, (k) to establish a “due diligence”
defense, (l) pursuant to customary disclosure about the terms of the financing
contemplated hereby in the ordinary course of business to market data collectors
and similar service providers to the loan industry for league table purposes or
(m) to its permitted pledgees and secured parties (including the Federal Reserve
Bank of New York or any other central bank).

Each Lender acknowledges that information furnished to it pursuant to this
Agreement or the other Loan Documents may include material non-public
information concerning the Parent Borrower and its Affiliates and their related
parties or their respective securities, and confirms that it has developed
compliance procedures regarding the use of material non-public information and
that it will handle such material non-public information in accordance with
those procedures and applicable law, including Federal and state securities
laws.

All information, including requests for waivers and amendments, furnished by the
Parent Borrower or the Administrative Agent pursuant to, or in the course of
administering, this Agreement or the other Loan Documents will be
syndicate-level information, which may contain material non-public information
about the Parent Borrower and its Affiliates and their related parties or their
respective securities. Accordingly, each Lender represents to the Parent
Borrower and the Administrative Agent that it has identified in its
administrative questionnaire a credit contact who may receive information that
may contain material non-public information in accordance with its compliance
procedures and applicable law, including Federal and state securities laws.

10.17 [Reserved].

10.18 WAIVERS OF JURY TRIAL. EACH BORROWER, THE ADMINISTRATIVE AGENT AND THE
LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND
FOR ANY COUNTERCLAIM THEREIN.

10.19 USA Patriot Act. Each Lender hereby notifies the Borrowers that pursuant
to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)) (the “Patriot Act”), it is required to obtain,
verify and record information that identifies the Borrowers, which information
includes the name and address of the Borrowers and other information that will
allow such Lender to identify the Borrowers in accordance with the Patriot Act.

 

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10.20 Acknowledgement and Consent to Bail-In of EEA Financial Institutions.
Notwithstanding anything to the contrary in any Loan Document or in any other
agreement, arrangement or understanding among any such parties, each party
hereto acknowledges that any liability of any EEA Financial Institution arising
under any Loan Document may be subject to the write-down and conversion powers
of an EEA Resolution Authority and agrees and consents to, and acknowledges and
agrees to be bound by:

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

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

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

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

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

10.21 Additional Borrowers. (a) The Parent Borrower may at any time, with the
prior consent of the Administrative Agent (such consent not to be unreasonably
withheld or delayed), add as a party to this Agreement any Wholly Owned
Subsidiary to be an Additional Borrower. Upon satisfaction of the conditions
specified in Section 5.3, such Subsidiary shall for all purposes be a party
hereto as an Additional Borrower as fully as if it had executed and delivered
this Agreement, and the Borrowers shall be jointly and severally liable for the
Obligations (limited to, with respect to any Borrower that is a Foreign
Subsidiary, the Obligations of Foreign Loan Parties). The Administrative Agent
shall notify the Revolving Lenders at least five Business Days prior to granting
such consent and, if any Revolving Lender notifies the Administrative Agent
within five Business Days that it is not permitted by applicable Requirements of
Law or any of its organizational policies to make Revolving Loans to, or
participate in Letters of Credit or Swingline Loans for the account of, the
relevant Subsidiary, shall withhold such consent (which shall not be deemed to
have been unreasonably withheld) or shall give such consent only upon effecting
changes to the provisions of this Agreement as are contemplated by paragraph
(c) of this Section 10.21 that will assure that such Revolving Lender is not
required to make Revolving Loans to, or participate in Letters of Credit or
Swingline Loans for the account of, such Subsidiary.

(b) So long as the principal of and interest on any Loans made to any Additional
Borrower under this Agreement shall have been paid in full and all other
obligations of such Additional Borrower under this Agreement (other than
contingent indemnification obligations) shall have been fully performed, the
Parent Borrower may, by not less than five Business Days’ prior notice to the
Administrative Agent (which shall promptly notify the relevant Lenders thereof),
terminate such Subsidiary’s status as an “Additional Borrower”.

(c) In order to accommodate (i) the addition of a Subsidiary as an Additional
Borrower or (ii) extensions of credit to an Additional Borrower, in each case,
where one or more Revolving Lenders are legally able and willing to lend
Revolving Loans to, and participate in Letters of Credit issued for the account
of, such Subsidiary, but other Revolving Lenders are not so able and willing,
the Administrative

 

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Agent shall be permitted, with the consent of the Parent Borrower and the
Required Lenders, to effect such changes to the provisions of this Agreement as
it reasonably believes are appropriate in order for such provisions to operate
in a customary and usual manner for “multiple-currency” syndicated lending
agreements to a corporation and certain of its foreign subsidiaries, all with
the intention of providing procedures for the Revolving Lenders who are so able
and willing to extend credit to such Subsidiaries and for the other Revolving
Lenders not to be required to do so. Prior to effecting any such changes, the
Administrative Agent shall give all Revolving Lenders at least five Business
Days’ notice thereof and an opportunity to comment thereon.

[Signature Pages Follow.]

 

126

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

 

TEMPUR SEALY INTERNATIONAL, INC.,   as Parent Borrower By:   /s/ Barry Hytinen
Name:   Barry Hytinen Title:   Executive Vice President and Chief Financial
Officer

[Signature page to Credit Agreement]

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TEMPUR-PEDIC MANAGEMENT, LLC,   as Additional Borrower By:   /s/ James Schockett
Name:   James Schockett Title:   Vice President, Treasurer and   Assistant
Secretary

[Signature page to Credit Agreement]

 

2

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JPMORGAN CHASE BANK, N.A., as   Administrative Agent, Lender, Swingline Lender
and Issuing Lender By:   /s/ Robert Barritt Name:   Robert Barritt Title:   Vice
President

[Signature page to Credit Agreement]

 

3

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BANK OF AMERICA, N.A., as Lender and   Issuing Lender By:   /s/ Thomas C.
Kilcrease Jr. Name:   Thomas C. Kilcrease Jr. Title:   Senior Vice President

[Signature page to Credit Agreement]

 

 

4

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WELLS FARGO BANK, NATIONAL   ASSOCIATION, as Lender and Issuing Lender By:   /s/
Bryan Hulker Name:   Bryan Hulker Title:   Senior Vice President

[Signature page to Credit Agreement]

 

5

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FIFTH THIRD BANK, as Lender and Issuing   Lender By:   /s/ Mary-Alicha Weldon
Name:   Mary-Alicha Weldon Title:   Vice President

[Signature page to Credit Agreement]

 

6

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SUMITOMO MITSUI BANKING   CORPORATION By:   /s/ James D. Weinstein Name:   James
D. Weinstein Title:   Managing Director

[Signature page to Credit Agreement]

 

7

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THE BANK OF NOVA SCOTIA By:   /s/ Kim Snyder Name:   Kim Snyder Title:  
Director

[Signature page to Credit Agreement]

 

8

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Mizuho Bank, Ltd. By:   /s/ James R. Fayen Name:   James R. Fayen Title:  
Managing Director

[Signature page to Credit Agreement]

 

9

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TD BANK, N.A. By:   /s/ Craig Welch Name:   Craig Welch Title:   Senior Vice
President

[Signature page to Credit Agreement]

 

10

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ING Bank N.V., Dublin Branch By:   /s/ Sean Hassett Name:   Sean Hassett Title:
  Director By:   /s/ Stephen Farrelly Name:   Stephen Farrelly Title:   Vice
President

[Signature page to Credit Agreement]

 

11

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GOLDMAN SACHS BANK USA By:   /s/ Rebecca Kratz Name:   Rebecca Kratz Title:  
Authorized Signatory

[Signature page to Credit Agreement]

 

12

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Branch Banking & Trust Company, a North   Carolina Banking Corporation By:   /s/
Greg R. Branstetter Name:   Greg R. Branstetter Title:   Senior Vice President

[Signature page to Credit Agreement]

 

13

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DEUTSCHE BANK AG NEW YORK   BRANCH, as a Lender By:   /s/ Peter Cucchiara Name:
  Peter Cucchiara Title:   Vice President By:   /s/ Anca Trifan Name:   Anca
Trifan Title:   Managing Director

[Signature page to Credit Agreement]

 

 

14

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NORTHERN TRUST COMPANY By:   /s/ John C. Canty Name:   John C. Canty Title:  
Senior Vice President

[Signature page to Credit Agreement]

 

15

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HSBC Bank USA, N.A. By:   /s/ Chris Burns Name:   Chris Burns Title:   Vice
President

[Signature page to Credit Agreement]

 

16

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EXHIBIT A

[FORM OF] GUARANTEE AND COLLATERAL AGREEMENT

See attached.

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EXECUTION VERSION

 

 

 

GUARANTEE AND COLLATERAL AGREEMENT

made by

TEMPUR SEALY INTERNATIONAL, INC.

and certain of its Subsidiaries

in favor of

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

Dated as of April 6, 2016

 

 

 

 

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TABLE OF CONTENTS

 

         Page   SECTION 1  

DEFINED TERMS

     1    1.1    

Definitions

     1    1.2    

Other Definitional Provisions

     5    SECTION 2  

GUARANTEE

     5    2.1    

Guarantee

     5    2.2    

Right of Contribution.

     6    2.3    

No Subrogation

     6    2.4    

Amendments, etc. with Respect to the Obligations

     6    2.5    

Guarantee Absolute and Unconditional

     6    2.6    

Reinstatement

     7    2.7    

Payments

     7    2.8    

Keepwell

     7    2.9    

Stay of Acceleration

     8    2.10  

Continuing Guarantee

     8    SECTION 3  

GRANT OF SECURITY INTEREST

     8    SECTION 4  

REPRESENTATIONS AND WARRANTIES

     9    4.1    

Title; No Other Liens.

     9    4.2    

Security Interest/Priority

     10    4.3    

Jurisdiction of Organization; Chief Executive Office

     10    4.4    

Inventory and Equipment

     10    4.5    

Investment Property.

     10    4.6    

No Other Interests.

     11    4.7    

Intellectual Property.

     11    4.8    

Commercial Tort Claims

     11    4.9    

Accounts.

     11    SECTION 5  

COVENANTS

     12    5.1    

Delivery of Instruments, Certificated Securities and Chattel Paper

     12    5.2    

Certification of Limited Liability Company and Partnership Interests.

     12    5.3    

Collateral held by Warehouseman, Bailee, Agent, etc.

     12    5.4    

Maintenance of Perfected Security Interest; Further Documentation

     12    5.5    

Changes in Name, etc.

     13    5.6    

Investment Property

     13    5.7    

Intellectual Property

     14    5.8    

Commercial Tort Claims

     15    5.9    

Deposit Accounts; Securities Accounts

     15    5.10  

Authorization

     16    SECTION 6  

REMEDIAL PROVISIONS

     16    6.1    

Certain Matters Relating to Receivables

     16    6.2    

Communications with Obligors; Grantors Remain Liable

     16    6.3    

Pledged Stock.

     17   

 

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6.4    

Proceeds to be Turned Over to Administrative Agent

     18    6.5    

Application of Proceeds

     18    6.6    

Code and Other Remedies

     18    6.7    

Registration Rights

     19    6.8    

Subordination

     20    6.9    

Deficiency

     20    6.10  

Access

     20    SECTION 7  

THE ADMINISTRATIVE AGENT

     20    7.1    

Administrative Agent’s Appointment as Attorney-in-Fact, etc.

     20    7.2    

Duty of Administrative Agent

     22    7.3    

Execution of Financing Statements

     23    7.4    

Authority of Administrative Agent

     23    7.5    

Exercise of Rights by Required Lenders

     23    SECTION 8  

MISCELLANEOUS

     23    8.1    

Amendments in Writing

     23    8.2    

Notices

     23    8.3    

No Waiver by Course of Conduct; Cumulative Remedies

     23    8.4    

Enforcement Expenses; Indemnification

     24    8.5    

Successors and Assigns

     24    8.6    

Set-Off

     24    8.7    

Counterparts

     24    8.8    

Severability

     24    8.9    

Section Headings

     25    8.10  

Integration

     25    8.11  

GOVERNING LAW

     25    8.12  

Submission To Jurisdiction; Waivers

     25    8.13  

Acknowledgements

     25    8.14  

Additional Grantors and Guarantors

     26    8.15  

Releases

     26    8.16  

WAIVER OF JURY TRIAL

     26   

SCHEDULES

 

Schedule 1  

Notice Addresses

   Schedule 2  

Investment Property

   Schedule 3  

Commercial Tort Claims

   Schedule 4  

Jurisdictions of Organization and Chief Executive Offices

   Schedule 5  

Inventory and Equipment Locations

   Schedule 6  

Intellectual Property

  

 

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GUARANTEE AND COLLATERAL AGREEMENT

GUARANTEE AND COLLATERAL AGREEMENT, dated as of April 6, 2016, made by each of
the signatories hereto (together with any other entity that may become a party
hereto as a Grantor and/or Guarantor, as provided herein), in favor of JPMorgan
Chase Bank, N.A., as Administrative Agent (in such capacity, the “Administrative
Agent”) for the banks and other financial institutions or entities (the
“Lenders”) from time to time parties to the Credit Agreement, dated as of
April 6, 2016 (as amended, supplemented or otherwise modified from time to time,
the “Credit Agreement”), among Tempur Sealy International, Inc. (the “Parent
Borrower” and, together with any Additional Borrower from time to time party to
the Credit Agreement, as defined therein, the “Borrowers”), the Lenders and the
Administrative Agent.

W I T N E S S E T H:

WHEREAS, pursuant to the Credit Agreement, the Lenders have severally agreed to
make extensions of credit to the Parent Borrower upon the terms and subject to
the conditions set forth therein;

WHEREAS, the Parent Borrower is a member of an affiliated group of companies
that includes each other Grantor;

WHEREAS, the proceeds of the extensions of credit under the Credit Agreement
will be used in part to enable the Parent Borrower to make valuable transfers to
one or more of the other Grantors in connection with the operation of their
respective businesses;

WHEREAS, the Parent Borrower and the other Grantors are engaged in related
businesses, and each Grantor will derive substantial direct and indirect benefit
from the making of the extensions of credit under the Credit Agreement; and

WHEREAS, it is a condition precedent to the obligation of the Lenders to make
their respective extensions of credit to the Borrowers under the Credit
Agreement that the Grantors shall have executed and delivered this Agreement to
the Administrative Agent for the ratable benefit of the Secured Parties;

NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective extensions of credit to the
Borrowers thereunder, each Grantor hereby agrees with the Administrative Agent,
for the ratable benefit of the Secured Parties, as follows:

SECTION 1 DEFINED TERMS

1.1 Definitions. (a) Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement, and the following terms are used herein as defined in the UCC:
Accounts, Certificated Security, Chattel Paper, Commercial Tort Claims,
Documents, Equipment, Farm Products, Financial Assets, Fixtures, General
Intangibles, Instruments, Inventory, Letter-of-Credit Rights, Security, Security
Entitlements, Supporting Obligations and Uncertificated Security.

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(b) The following terms shall have the following meanings:

“Agreement”: this Guarantee and Collateral Agreement, as the same may be
amended, supplemented or otherwise modified from time to time.

“Additional Grantor”: as defined in Section 8.14.

“Assumption Agreement”: an Assumption Agreement , substantially in the form of
Annex I, signed and delivered to the Administrative Agent for the purpose of
adding an Additional Grantor as a Grantor and Guarantor hereunder.

“Collateral”: as defined in Section 3.

“Collateral Account”: any collateral account established by the Administrative
Agent as provided in Section 6.1 or 6.4.

“Copyrights”: (i) all copyrights arising under the laws of the United States,
any other country or any political subdivision thereof, whether registered or
unregistered and whether published or unpublished (including, without
limitation, those listed in Schedule 6), all registrations and recordings
thereof, and all applications in connection therewith, including, without
limitation, all registrations, recordings and applications in the United States
Copyright Office, and (ii) the right to obtain all renewals thereof.

“Copyright Licenses”: any written agreement naming any Grantor as licensor or
licensee (including, without limitation, those listed in Schedule 6), granting
any right under any Copyright, including, without limitation, the grant of
rights to manufacture, distribute, exploit and sell materials derived from any
Copyright.

“Debtor Relief Laws”: the Bankruptcy Code of the United States, and all other
liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief laws of the United States or other applicable
jurisdictions from time to time in effect and affecting the rights of creditors
generally.

“Excluded Capital Stock”: (i) any Capital Stock (other than Capital Stock of a
Wholly Owned Subsidiary), if the granting of a security interest in such Capital
Stock is prohibited by the applicable organizational, joint venture,
shareholder, stock purchase or similar agreements (after giving effect to the
applicable anti-assignment provisions of the Uniform Commercial Code of any
applicable jurisdiction or any other applicable law or principles of equity),
(ii) any “margin stock” within the meaning of such term under Regulation U as
now and from time to time hereafter in effect and (iii) any Capital Stock
constituting more than 65% of the total outstanding Foreign Subsidiary Voting
Stock of any Foreign Subsidiary.

“Excluded Collateral”: (i) any real property other than any Mortgaged Property,
(ii) (A) any property that is subject to a Lien securing purchase money, capital
leases or sale/leaseback Indebtedness permitted under the Credit Agreement
pursuant to documents that prohibit such Grantor from granting any other Liens
in such property or (B) any permit, lease, license, contract or instrument now
or hereafter in effect of a Loan Party if the grant of a security interest in
such permit, lease, license, contract or instrument in the manner contemplated
by this Agreement, under the terms thereof and under applicable law, is
prohibited and would result in the termination thereof or give the other parties
thereto the right to terminate, accelerate or otherwise materially and adversely
alter such Loan Party’s rights, titles and interests thereunder (including upon
the giving of notice or the lapse of time or both), in each case, after giving
effect to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor
provision

 

2

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or provisions) of any relevant jurisdiction or any other applicable law
(including the Bankruptcy Code of the United States) or principles of equity;
provided in each case that any such limitation on the security interests granted
hereunder shall only apply to the extent that any such prohibition could not be
rendered ineffective pursuant to the UCC or any other applicable law (including
Debtor Relief Laws) or principles of equity, (iii) any Excluded Capital Stock,
(iv) any “intent to use” Trademark applications for which a “Statement of Use”
or “Amendment to Allege Use” has not been filed (but only until such statement
is filed), (v) Excluded Accounts and Excluded Securities Accounts, (vi) (A)
solely with respect to the Obligations or Guarantee Obligations of any U.S.
Person (including any Guarantee Obligations with respect thereto), any property
or assets of any Foreign Subsidiary (including any Capital Stock owned by a
Foreign Subsidiary) and (B) any property or assets of any Captive Insurance
Subsidiary or Capital Stock thereof, (vii) motor vehicles and other assets
subject to certificates of title and (viii) any property that the Administrative
Agent reasonably determines in consultation with the Parent Borrower that the
cost of obtaining a security interest in such property is excessive in relation
to the value afforded thereby.

“Foreign Subsidiary Voting Stock”: the voting Capital Stock of any
(i) Disregarded Entity the assets of which include stock in any Foreign
Subsidiary, (ii) Foreign Holding Company and (iii) Foreign Subsidiary.

“Grantor”: each U.S. Loan Party, including, for the avoidance of doubt, any
Additional Grantor.

“Guarantors”: the collective reference to each Grantor.

“Intellectual Property”: the collective reference to all rights, priorities and
privileges relating to intellectual property, whether arising under United
States, multinational or foreign laws or otherwise, including, without
limitation, (i) the Copyrights and the Copyright Licenses, (ii) the Patents and
the Patent Licenses, (iii) the Trademarks and the Trademark Licenses,
(iv) technology, trade secrets, proprietary information, know-how and processes
and (v) and all rights to sue at law or in equity for any infringement or other
impairment thereof, including the right to receive all proceeds and damages
therefrom.

“Intercompany Note”: any promissory note evidencing loans made by any Grantor to
the Parent Borrower or any of its Subsidiaries.

“Investment Property”: the collective reference to (i) all “investment property”
as such term is defined in Section 9-102(a)(49) of the UCC (other than any
Foreign Subsidiary Voting Stock excluded from the definition of “Pledged Stock”)
and (ii) whether or not constituting “investment property” as so defined, all
Pledged Notes and all Pledged Stock.

“Issuers”: the collective reference to each issuer of any Investment Property.

“Patents”: (i) all letters patent of the United States, any other country or any
political subdivision thereof, all reissues and extensions thereof and all
goodwill associated therewith, including, without limitation, any of the
foregoing referred to in Schedule 6, (ii) all applications for letters patent of
the United States or any other country and all divisions, continuations and
continuations-in-part thereof, including, without limitation, any of the
foregoing referred to in Schedule 6, and (iii) all rights to obtain any reissues
or extensions of the foregoing.

 

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“Patent License”: all agreements, whether written or oral, providing for the
grant by or to any Grantor of any right to manufacture, use or sell any
invention covered in whole or in part by a Patent, including, without
limitation, any of the foregoing referred to in Schedule 6.

“Pledged Collateral”: the Pledged Notes and the Pledged Stock.

“Pledged Notes”: all promissory notes listed on Schedule 2, all Intercompany
Notes at any time issued to any Grantor and all other promissory notes issued to
or held by any Grantor (other than promissory notes issued in connection with
extensions of trade credit by any Grantor in the ordinary course of business and
Excluded Collateral).

“Pledged Stock”: the shares of Capital Stock listed on Schedule 2, together with
any other shares, stock certificates, options, interests or rights of any nature
whatsoever in respect of the Capital Stock of any Person that may be issued or
granted to, or held by, any Grantor while this Agreement is in effect; provided
that in no event shall any Excluded Capital Stock be pledged hereunder. For the
avoidance of doubt, no Capital Stock of any Subsidiary that is owned directly or
indirectly by a CFC shall be required to be pledged hereunder (unless such CFC
shall have elected to become a Subsidiary Guarantor pursuant to the proviso of
the definition thereof).

“Proceeds”: all “proceeds” as such term is defined in Section 9-102(a)(64) of
the UCC and, in any event, shall include, without limitation, all dividends or
other income from the Investment Property, collections thereon or distributions
or payments with respect thereto.

“Qualified Keepwell Provider”: in respect of any Swap Obligation, each Loan
Party that, at the time the relevant guarantee (or grant of the relevant
security interest, as applicable), becomes effective with respect to such Swap
Obligation, has total assets exceeding $10,000,000 or otherwise constitutes an
“eligible contract participant” under the Commodity Exchange Act or any
regulations promulgated thereunder and can cause another person to qualify as an
“eligible contract participant” with respect to such Swap Obligation at such
time by entering into a keepwell or guarantee pursuant to
Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

“Receivable”: any right to payment for goods sold or leased or for services
rendered, whether or not such right is evidenced by an Instrument or Chattel
Paper and whether or not it has been earned by performance (including, without
limitation, any Account).

“Secured Agreement”: with respect to any Obligation, the collective reference to
each instrument, agreement or other document that sets forth obligations of any
Borrower, obligations of a guarantor and/or rights of the holder with respect to
such Obligation.

“Secured Parties”: the collective reference to the Administrative Agent, the
Swingline Lender, the Issuing Lenders, the Lenders and any affiliate of the
Administrative Agent or any Lender to which Obligations are owed.

“Securities Act”: the Securities Act of 1933, as amended.

“Trademarks”: (i) all trademarks, trade names, domain names, corporate names,
company names, business names, fictitious business names, trade styles, service
marks, logos and other source or business identifiers, and all goodwill
associated therewith, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all applications in connection
therewith, whether in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof or any other
country or any political subdivision thereof, or otherwise, and all common-law
rights related thereto, including, without limitation, any of the foregoing
referred to in Schedule 6, and (ii) the right to obtain all renewals thereof.

 

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“Trademark License”: any agreement, whether written or oral, providing for the
grant by or to any Grantor of any right to use any Trademark, including, without
limitation, any of the foregoing referred to in Schedule 6.

“Transaction Liens” the Liens granted by the Grantors under the Security
Documents.

“UCC”: the Uniform Commercial Code as in effect from time to time in the State
of New York unless application of the choice of law provisions of the New York
Uniform Commercial Code would require application of the laws of another
jurisdiction.

1.2 Other Definitional Provisions. (a) The words “hereof,” “herein”, “hereto”
and “hereunder” and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement, and Section and Schedule references are to this Agreement unless
otherwise specified.

(b) The meanings given to terms defined herein shall be equally applicable to
both the singular and plural forms of such terms.

(c) Where the context requires, terms relating to the Collateral or any part
thereof, when used in relation to a Grantor, shall refer to such Grantor’s
Collateral or the relevant part thereof.

SECTION 2 GUARANTEE

2.1 Guarantee. (a) Each of the Guarantors hereby, jointly and severally,
unconditionally and irrevocably, guarantees to the Administrative Agent, for the
ratable benefit of the Secured Parties and their respective successors,
indorsees, transferees and assigns, the prompt and complete payment and
performance by the Loan Parties when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations.

(b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Loan Documents shall in no event exceed the amount which can be guaranteed
by such Guarantor under applicable federal and state laws relating to the
insolvency of debtors (after giving effect to the right of contribution
established in Section 2.2).

(c) Each Guarantor agrees that the Obligations may at any time and from time to
time exceed the amount of the liability of such Guarantor hereunder without
impairing the guarantee contained in this Section 2 or affecting the rights and
remedies of the Administrative Agent or any Lender hereunder.

(d) The guarantee contained in this Section 2 shall remain in full force and
effect until the Termination Date.

(e) No payment made by any Borrower, any of the Guarantors, any other guarantor
or any other Person or received or collected by the Administrative Agent or any
Lender from any Borrower, any of the other Guarantors, any other guarantor or
any other Person by virtue of any action or proceeding or any set-off or
appropriation or application at any time or from time to time in reduction of or
in payment

 

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of the Obligations shall be deemed to modify, reduce, release or otherwise
affect the liability of any Guarantor hereunder which shall, notwithstanding any
such payment (other than any payment made by such Guarantor in respect of the
Obligations or any payment received or collected from such Guarantor in respect
of the Obligations), remain liable for the Obligations up to the maximum
liability of such Guarantor hereunder until the Termination Date.

2.2 Right of Contribution. Each Guarantor hereby agrees that to the extent that
a Guarantor shall have paid more than its proportionate share of any payment
made hereunder, such Guarantor shall be entitled to seek and receive
contribution from and against any other Guarantor hereunder which has not paid
its proportionate share of such payment. Each Guarantor’s right of contribution
shall be subject to the terms and conditions of Section 2.3. The provisions of
this Section 2.2 shall in no respect limit the obligations and liabilities of
any Guarantor to the Secured Parties, and each Guarantor shall remain liable to
the Secured Parties for the full amount guaranteed by such Guarantor hereunder.

2.3 No Subrogation. Notwithstanding any payment made by any Guarantor hereunder
or any set-off or application of funds of any Guarantor by any Secured Party, no
Guarantor shall be entitled to be subrogated to any of the rights of any Secured
Party against any Borrower or any other Guarantor or any collateral security or
guarantee or right of offset held by the Administrative Agent or any Lender for
the payment of the Obligations, nor shall any Guarantor seek or be entitled to
seek any contribution or reimbursement from any Borrower or any other Guarantor
in respect of payments made by such Guarantor hereunder, until the Termination
Date. If any amount shall be paid to any Guarantor on account of such
subrogation rights at any time when all of the Obligations shall not have been
paid in full, such amount shall be held by such Guarantor in trust for the
Secured Parties, segregated from other funds of such Guarantor, and shall,
forthwith upon receipt by such Guarantor, be turned over to the Administrative
Agent in the exact form received by such Guarantor (duly indorsed by such
Guarantor to the Administrative Agent, if required), to be applied against the
Obligations, whether matured or unmatured, in such order as the Administrative
Agent may determine.

2.4 Amendments, etc. with Respect to the Obligations. Each Guarantor shall
remain obligated hereunder notwithstanding that, without any reservation of
rights against any Guarantor and without notice to or further assent by any
Guarantor, any demand for payment of any of the Obligations made by any Secured
Party may be rescinded by such Secured Party and any of the Obligations
continued, and the Obligations, or the liability of any other Person upon or for
any part thereof, or any collateral security or guarantee therefor or right of
offset with respect thereto, may, from time to time, in whole or in part, be
renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Administrative Agent or any Lender, and the
Credit Agreement and the other Loan Documents and any other documents executed
and delivered in connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Administrative Agent (or the Required
Lenders or all Lenders, as the case may be) may deem advisable from time to
time, and any collateral security, guarantee or right of offset at any time held
by any Secured Party for the payment of the Obligations may be sold, exchanged,
waived, surrendered or released. No Secured Party shall have any obligation to
protect, secure, perfect or insure any Lien at any time held by it as security
for the Obligations or for the guarantee contained in this Section 2 or any
property subject thereto.

2.5 Guarantee Absolute and Unconditional. Each Guarantor waives any and all
notice of the creation, renewal, extension or accrual of any of the Obligations
and notice of or proof of reliance by any Secured Party upon the guarantee
contained in this Section 2 or acceptance of the guarantee contained in this
Section 2. The Obligations, and any of them, shall conclusively be deemed to
have been created, contracted or incurred, or renewed, extended, amended or
waived, in reliance upon the guarantee contained in this Section 2, and all
dealings between any Borrower and any of the other Guarantors, on

 

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the one hand, and any Secured Party, on the other hand, likewise shall be
conclusively presumed to have been had or consummated in reliance upon the
guarantee contained in this Section 2. Each Guarantor waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment to
or upon any Borrower or any of the other Guarantors with respect to the
Obligations. Each Guarantor understands and agrees that the guarantee contained
in this Section 2 shall be construed as a continuing, absolute and unconditional
guarantee of payment without regard to (a) any extension, renewal, settlement,
compromise, waiver or release in respect of any obligation of any Borrower, any
other Guarantor or any other Person under any Secured Agreement, by operation of
law or otherwise, (b) any modification or amendment of or supplement to any
Secured Agreement, (c) any change in the corporate existence, structure or
ownership of any Borrower, any other Guarantor or any other Person or any of
their respective subsidiaries, or any insolvency, bankruptcy, reorganization or
other similar proceeding affecting any Borrower, any other Guarantor or any
other Person or any of their assets or any resulting release or discharge of any
obligation of any Borrower, any other Guarantor or any other Person under any
Secured Agreement, (d) the existence of any defense, claim, set-off or other
right that such Guarantor may have at any time against any Borrower, any other
Guarantor, any Secured Party or any other Person, whether in connection with the
Loan Documents or any unrelated transactions, provided that nothing herein shall
prevent the assertion of any such claim by separate suit or compulsory
counterclaim, (e) the validity or enforceability of the Credit Agreement or any
other Loan Document, any of the Obligations or any other collateral security
therefor or guarantee or right of offset with respect thereto at any time or
from time to time held by any Secured Party, or (f) any other circumstance
whatsoever (with or without notice to or knowledge of such Borrower or such
other Guarantor) which constitutes, or might be construed to constitute, an
equitable or legal discharge of such Borrower or other Guarantor for the
Obligations, in bankruptcy or in any other instance. When making any demand
hereunder or otherwise pursuing its rights and remedies hereunder against any
Guarantor, any Secured Party may, but shall be under no obligation to, make a
similar demand on or otherwise pursue such rights and remedies as it may have
against any Borrower, any other Guarantor or any other Person or against any
collateral security or guarantee for the Obligations or any right of offset with
respect thereto, and any failure by the Administrative Agent or any Lender to
make any such demand, to pursue such other rights or remedies or to collect any
payments from any Borrower, any other Guarantor or any other Person or to
realize upon any such collateral security or guarantee or to exercise any such
right of offset, or any release of any Borrower, any other Guarantor or any
other Person or any such collateral security, guarantee or right of offset,
shall not relieve any Guarantor of any obligation or liability hereunder, and
shall not impair or affect the rights and remedies, whether express, implied or
available as a matter of law, of any Secured Party against any Guarantor. For
the purposes hereof “demand” shall include the commencement and continuance of
any legal proceedings.

2.6 Reinstatement. The guarantee contained in this Section 2 shall continue to
be effective, or be reinstated, as the case may be, if at any time payment, or
any part thereof, of any of the Obligations is rescinded or must otherwise be
restored or returned by any Secured Party upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of any Borrower or any other
Guarantor, or upon or as a result of the appointment of a receiver, intervenor
or conservator of, or trustee or similar officer for, any Borrower or any other
Guarantor or any substantial part of its property, or otherwise, all as though
such payments had not been made.

2.7 Payments. Each Guarantor hereby guarantees that payments hereunder will be
paid to the Administrative Agent without set-off or counterclaim in Dollars at
the Funding Office.

2.8 Keepwell. Each Qualified Keepwell Provider hereby jointly and severally
absolutely, unconditionally, and irrevocably undertakes to provide such funds or
other support as may be needed from time to time by each other Loan Party to
honor all of its obligations under this guarantee in respect

 

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of any Swap Obligation (provided, however, that each Qualified Keepwell Provider
shall only be liable under this Section 2.8 for the maximum amount of such
liability that can be hereby incurred without rendering its obligations under
this Section 2.8, or otherwise under this guarantee, voidable under applicable
law relating to fraudulent conveyance or fraudulent transfer, and not for any
greater amount). The obligations of each Qualified Keepwell Provider under this
Section 2.8 shall remain in full force and effect until the Termination Date.
Each Qualified Keepwell Provider intends that this Section 2.8 constitute, and
this Section 2.8 shall be deemed to constitute, a “keepwell, support, or other
agreement” for the benefit of each other Loan Party for all purposes of
section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

2.9 Stay of Acceleration. If acceleration of the time for payment of any
Obligation by any Borrower or any other Guarantor is stayed by reason of the
insolvency or receivership of such Borrower or such other Guarantor or
otherwise, all Obligations otherwise subject to acceleration under the terms of
any Secured Agreement shall nonetheless be payable by the Guarantors hereunder
forthwith on demand by the Administrative Agent.

2.10 Continuing Guarantee. Each Guarantee is a continuing guarantee, shall be
binding on the relevant Guarantor and its successors and assigns, and shall be
enforceable by the Administrative Agent or the Secured Parties. If all or part
of any Secured Party’s interest in any Obligation is assigned or otherwise
transferred, the transferor’s rights under each Guarantee, to the extent
applicable to the obligation so transferred, shall automatically be transferred
with such obligation.

SECTION 3 GRANT OF SECURITY INTEREST

Each Grantor hereby assigns and transfers to the Administrative Agent, and
hereby grants to the Administrative Agent, for the ratable benefit of the
Secured Parties, a security interest in, all of the following property now owned
or at any time hereafter acquired by such Grantor or in which such Grantor now
has or at any time in the future may acquire any right, title or interest
(collectively, the “Collateral”), as collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations:

(a) all Accounts;

(b) all Chattel Paper;

(c) those Commercial Tort Claims identified on Schedule 3 attached hereto (as
supplemented from time to time);

(d) all cash and Deposit Accounts;

(e) all Documents;

(f) all Equipment;

(g) all Fixtures;

(h) all General Intangibles;

 

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(i) all Instruments;

(j) all Intellectual Property;

(k) all Inventory;

(l) all Investment Property;

(m) all Letter-of-Credit Rights;

(n) all Securities Accounts;

(o) such Grantor’s ownership interest in (1) its Collateral Accounts, (2) all
Financial Assets credited to its Collateral Accounts from time to time and all
Security Entitlements in respect thereof, (3) all cash held in its Collateral
Accounts from time to time and (4) all other money in the possession of the
Administrative Agent;

(p) all other property not otherwise described above (except for any property
specifically excluded from any clause in this section above, and any property
specifically excluded from any defined term used in any clause of this section
above);

(q) all books and records (including customer lists, credit files, computer
programs, printouts and other computer materials and records) pertaining to the
Collateral; and

(r) to the extent not otherwise included, all Proceeds, Supporting Obligations
and products of any and all of the foregoing and all collateral security and
guarantees given by any Person with respect to any of the foregoing;

provided, however, that notwithstanding any of the other provisions set forth in
this Section 3, this Agreement shall not constitute a grant of a security
interest in any Excluded Collateral and the term “Collateral” (including all of
the individual items comprising Collateral) shall not include, any Excluded
Collateral.

SECTION 4 REPRESENTATIONS AND WARRANTIES

Each Grantor hereby represents and warrants that:

4.1 Title; No Other Liens. Each Grantor is the legal and beneficial owner of its
Collateral and has the right to pledge, sell, assign or transfer the same.
Except for the security interest granted to the Administrative Agent for the
ratable benefit of the Secured Parties pursuant to this Agreement and the other
Liens permitted to exist on the Collateral by the Credit Agreement, such Grantor
owns each item of the Collateral free and clear of any and all Liens or claims
of others. No financing statement or other public notice with respect to all or
any part of the Collateral is on file or of record in any public office, except
such as have been filed in favor of the Administrative Agent, for the ratable
benefit of the Secured Parties, pursuant to this Agreement or as are permitted
by the Credit Agreement. For the avoidance of doubt, it is understood and agreed
that any Grantor may, as part of its business, grant licenses to third parties
to use Intellectual Property owned or developed by a Grantor. For purposes of
this Agreement and the other Loan Documents, such licensing activity shall not
constitute a “Lien” on such Intellectual Property. Each of the Administrative
Agent and each Lender understands that any such licenses may be exclusive to the
applicable licensees, and such exclusivity provisions may limit the ability of
the Administrative Agent to utilize, sell, lease or transfer the related
Intellectual Property or otherwise realize value from such Intellectual Property
pursuant hereto.

 

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4.2 Security Interest/Priority. (a) This Agreement creates a valid security
interest in favor of the Administrative Agent, for the benefit of the Secured
Parties, in the Collateral of such Grantor and, (x) with respect to Collateral
other than Deposit Accounts, upon the filing of UCC financing statements in the
appropriate filing offices in the jurisdiction of organization of the applicable
Grantor set forth on Schedule 4.19(a) of the Credit Agreement, shall constitute
a valid perfected security interest in such Collateral, to the extent such
security interest can be perfected by (i) filing under the UCC or (ii) filing
with the United States Patent and Trademark Office or United States Copyright
Office, in each case free and clear of all Liens except for Permitted Liens and
(y) with respect to Deposit Accounts that constitute Collateral, upon execution
and delivery of Deposit Account Control Agreements with respect thereto, shall
constitute a valid perfected security interest in such Deposit Accounts, free
and clear of all Liens except for Liens arising by operation of law or permitted
under Section 7.3(p) of the Credit Agreement.

(b) This Agreement creates a valid security interest in favor of the
Administrative Agent for the benefit of the Secured Parties, in the Pledged
Collateral of such Grantor. The delivery to the Administrative Agent of
certificates evidencing the Pledged Collateral, together with duly executed
stock powers in respect thereof, will perfect and establish the first priority
of the Administrative Agent’s security interest in any certificated Pledged
Collateral that constitutes a Security (subject to Liens arising by operation of
law and Liens permitted by Section 7.3(u) of the Credit Agreement). The filing
of appropriate UCC financing statements in the appropriate filing offices in the
jurisdiction of organization of the applicable Grantor set forth on Schedule
4.19(a) of the Credit Agreement or obtaining “control” over such interests in
accordance with the provisions of Section 8-106 of the UCC will perfect the
Administrative Agent’s security interest in any uncertificated Pledged
Collateral that constitutes a Security. The filing of appropriate UCC financing
statements in the appropriate filing offices in the jurisdiction of organization
of the applicable Grantor will perfect the Administrative Agent’s security
interest in any Pledged Collateral that does not constitute a Security. Except
as set forth in this subsection (a) and (b), no action is necessary to perfect
the security interests granted by the Grantors under this Agreement.

4.3 Jurisdiction of Organization; Chief Executive Office. On the date hereof,
such Grantor’s jurisdiction of organization, identification number from the
jurisdiction of organization (if any), and the location of such Grantor’s chief
executive office or sole place of business or principal residence, as the case
may be, are specified on Schedule 4. Such Grantor has furnished to the
Administrative Agent a certified charter, certificate of incorporation or other
organization document and long-form good standing certificate as of a date which
is recent to the date hereof.

4.4 Inventory and Equipment. As of the date hereof, the location in the United
States of all tangible Collateral consisting of Inventory and Equipment with a
fair market value in excess of $1,000,000 (other than Collateral in transit)
owned by each Grantor is as shown on Schedule 5 hereto (as such Schedule 5 may
be updated from time to time by written notice to the Administrative Agent).

4.5 Investment Property. (a) The shares of Pledged Stock pledged by such Grantor
hereunder constitute all the issued and outstanding shares of all classes of the
Capital Stock of each Issuer owned by such Grantor or, in the case of Foreign
Subsidiary Voting Stock, if less, 65% of the outstanding Foreign Subsidiary
Voting Stock of each relevant Issuer.

(b) All the shares of the Pledged Stock have been duly and validly issued and
are fully paid and (except in the case of limited liability companies and
limited partnerships) nonassessable. There exists no “adverse claim” within the
meaning of Section 8102 of the UCC with respect to the Pledged Stock of such
Grantor.

 

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(c) Each of the Pledged Notes constitutes the legal, valid and binding
obligation of the obligor with respect thereto, enforceable in accordance with
its terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors’ rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.

(d) Such Grantor is the record and beneficial owner of, and has good and
marketable title to, the Investment Property pledged by it hereunder, free of
any and all Liens or options in favor of, or claims of, any other Person, except
for the security interest created by this Agreement or as otherwise permitted by
the Credit Agreement.

4.6 No Other Interests. Other than as set forth on Schedule 2, as of the Closing
Date, no Grantor owns any Capital Stock or promissory notes required to be
pledged hereunder.

4.7 Intellectual Property. (a) Schedule 6 lists all Intellectual Property owned
by such Grantor in its own name and registered with the United States Patent and
Trademark Office or the United States Copyright Office, and all material
Intellectual Property owned by such Grantor in its own name and registered in
any similar office or agency in any other country or any political subdivision
thereof as applicable, on the date hereof.

(b) Except as could not reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect, (i) such Grantor owns or
licenses or has other valid and enforceable rights to use all Intellectual
Property necessary for the conduct of its business as currently conducted;
(ii) no claim has been asserted or is pending by any Person challenging or
questioning the use of any Intellectual Property or the validity or
effectiveness of any Intellectual Property, nor does the Grantor know of any
valid basis for any such claim; and (iii) the use of Intellectual Property by
each Grantor does not infringe on the rights of any Person.

4.8 Commercial Tort Claims.

(a) On the date hereof, no Grantor has rights in any Commercial Tort Claim
asserted in writing in an amount reasonably to be expected to exceed $1,500,000.

(b) Upon the filing of a financing statement covering any Commercial Tort Claim
referred to in Section 5.8 hereof against such Grantor in the jurisdiction of
organization of such Grantor, the security interest granted in such Commercial
Tort Claim will constitute a valid perfected security interest in favor of the
Administrative Agent, for the ratable benefit of the Secured Parties, as
collateral security for such Grantor’s Obligations, enforceable in accordance
with the terms hereof against all creditors of such Grantor and any Persons
purporting to purchase such Collateral from Grantor, which security interest
shall be prior to all other Liens on such Collateral except for unrecorded liens
permitted by the Credit Agreement which have priority over the Liens on such
Collateral by operation of law.

4.9 Accounts. (i) Each Account of the Grantors and the papers and documents
relating thereto are in all material respects what they purport to be, (ii) each
Account arises out of (A) a bona fide sale of goods sold and delivered by such
Grantor (or is in the process of being delivered) or (B) services theretofore
actually rendered by such Grantor to the account debtor named therein and
(iii) no Account with a face value in excess of $1,000,000 of a Grantor is
evidenced by any Instrument or Chattel Paper unless such Instrument or Chattel
Paper is marked with a legend reasonably satisfactory to the Administrative
Agent indicating the Administrative Agent’s security interest in such Instrument
or Chattel Paper.

 

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SECTION 5 COVENANTS

Each Grantor covenants and agrees that:

5.1 Delivery of Instruments, Certificated Securities and Chattel Paper. (a) If
any amount payable in excess of $1,000,000 under or in connection with any of
the Collateral shall be or become evidenced by any Instrument, Certificated
Security or Chattel Paper, such Instrument, Certificated Security or Chattel
Paper shall be delivered to the Administrative Agent, duly indorsed in a manner
satisfactory to the Administrative Agent concurrently with the delivery of the
Compliance Certificate in respect of the relevant fiscal quarter as required by
Section 6.2(b) of the Credit Agreement, to be held as Collateral pursuant to
this Agreement.

(b) On the Closing Date or, in the case of any Grantor that becomes a party
hereto after the Closing Date, the date on which it signs and delivers its
Assumption Agreement, such Grantor will deliver to the Administrative Agent as
Collateral hereunder all certificates and instruments representing Pledged
Collateral then owned by such Grantor that are not Excluded Collateral.
Thereafter, whenever such Grantor acquires any other certificate or instrument
representing Pledged Collateral that is not Excluded Collateral, such Grantor
will promptly deliver such certificate within seven (7) calendar days to the
Administrative Agent as Collateral hereunder. Prior to the discharge of the
Convertible Notes, such Grantor shall not be required to deliver any such
certificate or instrument with respect to Sealy Corporation or its Subsidiaries
to the Administrative Agent to the extent such certificate or instrument is in
the possession of the collateral agent under the Convertible Notes; provided
that on such discharge, all such certificates or instruments shall be promptly
delivered within three (3) Business Days to the Administrative Agent. All
certificates representing Pledged Collateral, when delivered to the
Administrative Agent, will be in suitable form for transfer by delivery, or
accompanied by duly executed instruments of transfer or assignment in blank,
with signatures appropriately guaranteed, all in form and substance satisfactory
to the Administrative Agent.

5.2 Certification of Limited Liability Company and Partnership Interests. Any
limited liability company and any partnership controlled by any Grantor shall
either (a) not include in its operative documents any provision that any Capital
Stock in such limited liability company or such partnership be a Security, or
(b) certificate any Capital Stock in any such limited liability company or such
partnership. To the extent an interest in any limited liability company or
partnership controlled by any Grantor and pledged hereunder is certificated or
becomes certificated, each such certificate shall be delivered to the
Administrative Agent pursuant to Section 5.1 and such Grantor shall fulfill all
other requirements under Section 5 applicable in respect thereof.

5.3 Collateral held by Warehouseman, Bailee, Agent, etc. If any Collateral with
a value in excess of $1,000,000 is at any time in the possession or control of a
warehouseman, bailee, agent or processor of such Grantor, (i) notify the
Administrative Agent of such possession or control, (ii) notify such Person of
the Administrative Agent’s security interest in such Collateral, (iii) instruct
such Person to hold all such Collateral for the Administrative Agent’s account
and subject to the Administrative Agent’s instructions and (iv) use its
reasonable commercial efforts to obtain an acknowledgment from such Person that
it is holding such Collateral for the benefit of the Administrative Agent, on
behalf of the holders of the Obligations.

5.4 Maintenance of Perfected Security Interest; Further Documentation. (a) Such
Grantor shall maintain the security interest created by this Agreement as a
perfected security interest having at least the priority described in
Section 4.2 and shall defend such security interest against the claims and
demands of all Persons whomsoever, subject to the rights of such Grantor under
the Loan Documents to dispose of the Collateral.

 

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(b) Such Grantor will furnish to the Administrative Agent and the Lenders from
time to time statements and schedules further identifying and describing the
assets and property of such Grantor and such other reports in connection
therewith as the Administrative Agent may reasonably request, all in reasonable
detail.

(c) At any time and from time to time, upon the written request of the
Administrative Agent, and at the sole expense of such Grantor, such Grantor will
promptly and duly execute and deliver, and have recorded, such further
instruments and documents and take such further actions as the Administrative
Agent may reasonably request for the purpose of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted,
including, without limitation, (i) filing any financing or continuation
statements under the Uniform Commercial Code (or other similar laws) in effect
in any jurisdiction with respect to the security interests created hereby and
(ii) in the case of Investment Property, Deposit Accounts, Letter-of-Credit
Rights (in each case to the extent constituting Collateral in which a lien is
required to be perfected by control hereunder) and any other relevant
Collateral, taking any actions necessary to enable the Administrative Agent to
obtain “control” (within the meaning of the applicable Uniform Commercial Code)
with respect thereto.

5.5 Changes in Name, etc. Such Grantor will not, except upon (a) prior written
notice to the Administrative Agent on the earlier of (x) ten Business Days
following any change in its name or state of formation or that it was or is to
be part to merger, consolidation or other change in structure or use any
tradename or (y) ten Business Days prior to the date on which the perfection of
the Liens in the jurisdiction of organization of such Grantor under this
Agreement would (absent additional filings or amendments as provided below)
lapse, in whole or in part, by reason of such change; whether or not in a
transaction permitted by the Credit Agreement, in order that the Administrative
Agent may file new UCC financing statements or amend existing UCC financing
statements to maintain a perfected security interest in the Collateral and
(b) delivery to the Administrative Agent of all additional executed financing
statements and other documents reasonably requested by the Administrative Agent
to maintain the validity, perfection and priority of the security interests
provided for herein, (i) change its jurisdiction of organization or the location
of its chief executive office or sole place of business or principal residence
from that referred to in Section 4.3 or (ii) change its name, organizational
form or structure.

5.6 Investment Property. (a) If such Grantor shall become entitled to receive or
shall receive any certificate (including, without limitation, any certificate
representing a dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any certificate issued in
connection with any reorganization), option or rights in respect of the Capital
Stock of any Issuer, whether in addition to, in substitution of, as a conversion
of, or in exchange for, any shares of the Pledged Stock, or otherwise in respect
thereof, such Grantor shall accept the same as the agent of the Administrative
Agent and the Secured Parties, hold the same in trust for the Administrative
Agent and the Secured Parties and deliver the same forthwith to the
Administrative Agent in the exact form received, duly indorsed by such Grantor
to the Administrative Agent, if required, together with an undated stock power
covering such certificate duly executed in blank by such Grantor, to be held by
the Administrative Agent, subject to the terms hereof, as additional collateral
security for the Obligations; provided, that in no event shall this
Section 5.6(a) apply to any Excluded Collateral. In case any distribution of
capital shall be made on or in respect of the Investment Property or any
property shall be distributed upon or with respect to the Investment Property
pursuant to the recapitalization or reclassification of the capital of any
Issuer or pursuant to the reorganization thereof, the property so distributed
shall, unless otherwise subject to a perfected security interest in favor of the
Administrative Agent, be delivered to the Administrative

 

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Agent to be held by it hereunder as additional collateral security for the
Obligations. If any sums of money or property so paid or distributed in respect
of the Investment Property shall be received by such Grantor, such Grantor
shall, until such money or property is paid or delivered to the Administrative
Agent, hold such money or property in trust for the Administrative Agent and the
Secured Parties, segregated from other funds of such Grantor, as additional
collateral security for the Obligations.

(b) Without the prior written consent of the Administrative Agent, such Grantor
will not (i) vote to enable, or take any other action to permit, any Issuer to
issue any Capital Stock of any nature (unless such Grantor shall comply with the
provisions of the Loan Documents with respect to such newly issued Capital
Stock) or to issue any other securities convertible into or granting the right
to purchase or exchange for any Capital Stock of any nature of any Issuer,
(ii) sell, assign, transfer, exchange, or otherwise dispose of, or grant any
option with respect to, the Investment Property or Proceeds thereof (except
pursuant to a transaction expressly permitted by the Credit Agreement),
(iii) create, incur or permit to exist any Lien or option in favor of, or any
claim of any Person with respect to, any of the Investment Property or Proceeds
thereof, or any interest therein, except for the security interests created by
this Agreement or as permitted under the Credit Agreement or (iv) enter into any
agreement or undertaking restricting the right or ability of such Grantor or the
Administrative Agent to sell, assign or transfer any of the Investment Property
or Proceeds thereof (other than any restriction permitted by the Credit
Agreement).

(c) In the case of each Grantor which is an Issuer, such Issuer agrees that
(i) it will be bound by the terms of this Agreement relating to the Investment
Property issued by it and will comply with such terms insofar as such terms are
applicable to it, (ii) it will notify the Administrative Agent promptly in
writing of the occurrence of any of the events described in Section 5.6(a) with
respect to the Investment Property issued by it and (iii) the terms of
Sections 6.3(c) and 6.7 shall apply to it, mutatis mutandis, with respect to all
actions that may be required of it pursuant to Section 6.3(c) or 6.7 with
respect to the Investment Property issued by it.

5.7 Intellectual Property. (a) Except, in each case, where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, such Grantor (either itself or through licensees)
will take all reasonable and necessary action to preserve, maintain, and enforce
all of such Grantor’s Intellectual Property that is necessary to the conduct of
its business.

(b) Except, in each case, where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, such Grantor (either itself or through licensees) will not do any act
that knowingly uses any material Intellectual Property to infringe the
intellectual property rights of any other Person.

(c) Such Grantor will notify the Administrative Agent and the Secured Parties
promptly, but in any event within seven (7) calendar days, if it knows, or has
reason to know, that any application or registration relating to any material
Intellectual Property may become forfeited, abandoned or dedicated to the
public, or of any adverse determination or development (including, without
limitation, the institution of, or any such determination or development in, any
proceeding in the United States Patent and Trademark Office, the United States
Copyright Office or any court or tribunal in any country) regarding such
Grantor’s ownership of, or the validity of, any material Intellectual Property
or such Grantor’s right to register the same or to own and maintain the same,
unless the forfeiture, abandonment, dedication to the public or adverse
determination could not reasonably be expected to result in a Material Adverse
Effect.

 

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(d) Whenever such Grantor, either by itself or through any agent, employee,
licensee or designee, shall file an application for the registration of any
Intellectual Property with the United States Patent and Trademark Office, the
United States Copyright Office, or any similar office or agency in any other
country or any political subdivision thereof, such Grantor shall report such
filing to the Administrative Agent concurrently with the delivery of the
Compliance Certificate in respect of the relevant fiscal quarter as required by
Section 6.2(b) of the Credit Agreement. Upon request of the Administrative
Agent, such Grantor shall execute and deliver, and have recorded, any and all
agreements, instruments, documents, and papers as the Administrative Agent may
reasonably request to evidence the Administrative Agent’s and the Secured
Parties’ security interest in any Copyright, Patent or Trademark and the
goodwill and general intangibles of such Grantor relating thereto or represented
thereby.

(e) Such Grantor will take all reasonable and necessary steps, including,
without limitation, in any proceeding before the United States Patent and
Trademark Office, the United States Copyright Office or any similar office or
agency in any other country or any political subdivision thereof, to maintain
and pursue each application (and to obtain the relevant registration) and to
maintain each registration of the material Intellectual Property, including,
without limitation, filing of applications for renewal, affidavits of use and
affidavits of incontestability in respect of Intellectual Property necessary to
the conduct of its business unless failure to do so could not reasonably be
expected to have a Material Adverse Effect.

(f) In the event that any material Intellectual Property is infringed,
misappropriated or diluted by a third party, such Grantor shall take such
actions as such Grantor shall reasonably deem appropriate under the
circumstances to protect such Intellectual Property.

(g) On the Closing Date, such Grantor shall execute and deliver, in a form
reasonably satisfactory to the Administrative Agent, such documents to be filed
with the United States Patent and Trademark Office or the United States
Copyright Office and any and all agreements, instruments, documents, and papers
as the Administrative Agent may reasonably request to evidence the
Administrative Agent’s and the Secured Parties’ security interest in any
Copyright, Patent or Trademark and the goodwill and general intangibles of such
Grantor relating thereto or represented thereby.

5.8 Commercial Tort Claims. If such Grantor shall obtain an interest in any
Commercial Tort Claim asserted in writing in an amount reasonably to be expected
to exceed $1,500,000, such Grantor shall concurrently with the delivery of the
Compliance Certificate in respect of the relevant fiscal quarter as required by
Section 6.2(b) of the Credit Agreement notify the Administrative Agent thereof
and, promptly upon the written request therefor, sign and deliver documentation
reasonably acceptable to the Administrative Agent granting a security interest
under the terms and provisions of this Agreement in and to such Commercial Tort
Claim.

5.9 Deposit Accounts; Securities Accounts. Within 60 days of the Closing Date
(or such later date as the Administrative Agent may agree in its reasonable
discretion), such Grantor shall (i) enter into Deposit Account Control
Agreements in respect of Deposit Accounts (other than Excluded Accounts)
maintained by such Grantor pursuant to which the Administrative Agent shall
obtain control (as such term is defined in Section 9-104 of Article 9 of the
UCC) of such Deposit Accounts and (ii) enter into Securities Account Control
Agreement in respect of Securities Accounts (other than Excluded Securities
Accounts) maintained by such Grantor pursuant to which the Administrative Agent
shall obtain control (as such term is defined in Section 8-106 of Article 8 of
the UCC) of such Securities Account.

(a) Upon (i) such Grantor opening any Deposit Account (other than an Excluded
Account) or any Deposit Account of such Grantor ceasing to be an Excluded
Account, within 60 days thereof (subject

 

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to extension by the Administrative Agent in its sole discretion) enter into a
Deposit Account Control Agreement with the Administrative Agent in order to give
the Administrative Agent control (as such term is defined in Section 9-104 of
Article 9 of the UCC) of such Deposit Account and (ii) the aggregate balance in
all Petty Cash Accounts of the Grantors that are not subject to Deposit Account
Control Agreements exceeding $200,000, within 60 days (subject to extension by
the Administrative Agent in its sole discretion) enter into Deposit Account
Control Agreements with the Administrative Agent in order to give the
Administrative Agent control (as such term is defined in Section 9-104 of
Article 9 of the UCC) of Petty Cash Accounts such that the aggregate balance in
all Petty Cash Accounts of the Grantors that are not subject to Deposit Account
Control Agreements is less than $200,000.

(b) Upon such Grantor opening any Securities Account (other than an Excluded
Securities Account) or any Securities Account of such Grantor ceasing to be an
Excluded Securities Account, within 60 days thereof (subject to extension by the
Administrative Agent in its sole discretion) enter into a Securities Account
Control Agreement with the Administrative Agent in order to give the
Administrative Agent control (as such term is defined in Section 8-106 of
Article 8 of the UCC) of such Securities Account.

5.10 Authorization. Authorize the Administrative Agent to prepare and file such
financing statements (including renewal statements), amendments and supplements
or such other instruments as the Administrative Agent may from time to time
reasonably deem necessary in order to perfect and maintain the security
interests granted hereunder in accordance with the UCC.

SECTION 6 REMEDIAL PROVISIONS

6.1 Certain Matters Relating to Receivables. (a) At any time after the
occurrence and during the continuance of an Event of Default (i) the
Administrative Agent shall have the right to make test verifications of the
Receivables in any manner and through any medium that it reasonably considers
advisable, and each Grantor shall furnish all such assistance and information as
the Administrative Agent may require in connection with such test verifications
and (ii) upon the Administrative Agent’s request and at the expense of the
relevant Grantor, such Grantor shall cause independent public accountants or
others satisfactory to the Administrative Agent to furnish to the Administrative
Agent reports showing reconciliations, aging and test verifications of, and
trial balances for, the Receivables.

(b) At any time after the occurrence and during the continuance of an Event of
Default, the Administrative Agent hereby authorizes each Grantor to collect such
Grantor’s Receivables, subject to the Administrative Agent’s direction and
control, and the Administrative Agent may curtail or terminate said authority at
any time after the occurrence and during the continuance of such Event of
Default. If required by the Administrative Agent at any time after the
occurrence and during the continuance of such Event of Default, any payments of
Receivables, when collected by any Grantor, (i) shall be forthwith (and, in any
event, within two Business Days) deposited by such Grantor in the exact form
received, duly indorsed by such Grantor to the Administrative Agent if required,
in a Collateral Account maintained under the sole dominion and control of the
Administrative Agent, subject to withdrawal by the Administrative Agent for the
account of the Secured Parties only as provided in Section 6.5, and (ii) until
so turned over, shall be held by such Grantor in trust for the Secured Parties,
segregated from other funds of such Grantor. Each such deposit of Proceeds of
Receivables shall be accompanied by a report identifying in reasonable detail
the nature and source of the payments included in the deposit.

6.2 Communications with Obligors; Grantors Remain Liable. (a) At any time after
the occurrence and during the continuance of an Event of Default, the
Administrative Agent in its own name or in the name of others may at any time
communicate with obligors under the Receivables and parties to the Contracts to
verify with them to the Administrative Agent’s satisfaction the existence,
amount and terms of any Receivables or Contracts.

 

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(b) Upon the request of the Administrative Agent at any time after the
occurrence and during the continuance of an Event of Default, each Grantor shall
notify obligors on the Receivables and parties to the Contracts that the
Receivables and the Contracts have been assigned to the Administrative Agent for
the ratable benefit of the Secured Parties and that payments in respect thereof
shall be made directly to the Administrative Agent.

(c) Anything herein to the contrary notwithstanding, each Grantor shall remain
liable under each of the Receivables and Contracts to observe and perform all
the conditions and obligations to be observed and performed by it thereunder,
all in accordance with the terms of any agreement giving rise thereto. Neither
the Administrative Agent nor any Secured Party shall have any obligation or
liability under any Receivable (or any agreement giving rise thereto) or
Contract by reason of or arising out of this Agreement or the receipt by the
Administrative Agent or any Secured Party of any payment relating thereto, nor
shall the Administrative Agent or any Secured Party be obligated in any manner
to perform any of the obligations of any Grantor under or pursuant to any
Receivable (or any agreement giving rise thereto) or Contract, to make any
payment, to make any inquiry as to the nature or the sufficiency of any payment
received by it or as to the sufficiency of any performance by any party
thereunder, to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.

6.3 Pledged Stock. (a) Unless an Event of Default shall have occurred and be
continuing, each Grantor shall be permitted to receive all cash dividends paid
in respect of the Pledged Stock and all payments made in respect of the Pledged
Notes, in each case paid in the normal course of business of the relevant Issuer
and consistent with past practice, to the extent permitted in the Credit
Agreement, and to exercise all voting and corporate or other organizational
rights with respect to the Investment Property; provided, however, that no vote
shall be cast or corporate or other organizational right exercised or other
action taken which, in the Administrative Agent’s reasonable judgment, would
materially impair the Collateral or result in any Default or Event of Default
under the Credit Agreement.

(b) If an Event of Default shall occur and be continuing, (i) the Administrative
Agent shall have the right to receive any and all cash dividends, payments or
other Proceeds paid in respect of the Investment Property and make application
thereof to the Obligations in such order as the Administrative Agent may
determine, and (ii) upon the Administrative Agent’s request (except in the case
of an Event of Default under Section 8(f), wherein the Administrative Agent
shall be deemed to have made such request), any or all of the Investment
Property shall be registered in the name of the Administrative Agent or its
nominee, and the Administrative Agent or its nominee may thereafter exercise
(x) all voting, corporate and other rights pertaining to such Investment
Property at any meeting of shareholders of the relevant Issuer or Issuers or
otherwise and (y) any and all rights of conversion, exchange and subscription
and any other rights, privileges or options pertaining to such Investment
Property as if it were the absolute owner thereof (including, without
limitation, the right to exchange at its discretion any and all of the
Investment Property upon the merger, consolidation, reorganization,
recapitalization or other fundamental change in the corporate or other
organizational structure of any Issuer, or upon the exercise by any Grantor or
the Administrative Agent of any right, privilege or option pertaining to such
Investment Property, and in connection therewith, the right to deposit and
deliver any and all of the Investment Property with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and
conditions as the Administrative Agent may determine), all without liability
except to account for property actually received by it, but the Administrative
Agent shall have no duty to any Grantor to exercise any such right, privilege or
option and shall not be responsible for any failure to do so or delay in so
doing.

 

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(c) Each Grantor hereby authorizes and instructs each Issuer of any Investment
Property pledged by such Grantor hereunder to (i) comply with any instruction
received by it from the Administrative Agent in writing that (x) states that an
Event of Default has occurred and is continuing and (y) is otherwise in
accordance with the terms of this Agreement, without any other or further
instructions from such Grantor, and each Grantor agrees that each Issuer shall
be fully protected in so complying, and (ii) unless otherwise expressly
permitted hereby, pay any dividends or other payments with respect to the
Investment Property directly to the Administrative Agent.

6.4 Proceeds to be Turned Over to Administrative Agent. In addition to the
rights of the Administrative Agent and the Secured Parties specified in
Section 6.1 with respect to payments of Receivables, if an Event of Default
shall occur and be continuing, all Proceeds received by any Grantor consisting
of cash, checks and other near-cash items shall be held by such Grantor in trust
for the Administrative Agent and the Secured Parties, segregated from other
funds of such Grantor, and shall, forthwith upon receipt by such Grantor, be
turned over to the Administrative Agent in the exact form received by such
Grantor (duly indorsed by such Grantor to the Administrative Agent, if
required). All Proceeds received by the Administrative Agent hereunder shall be
held by the Administrative Agent in a Collateral Account maintained under its
sole dominion and control. All Proceeds while held by the Administrative Agent
in a Collateral Account (or by such Grantor in trust for the Administrative
Agent and the Secured Parties) shall continue to be held as collateral security
for all the Obligations and shall not constitute payment thereof until applied
as provided in Section 6.5.

6.5 Application of Proceeds. At such intervals as may be agreed upon by the
Parent Borrower and the Administrative Agent, or, if an Event of Default shall
have occurred and be continuing, at any time at the Administrative Agent’s
election, the Administrative Agent may apply all or any part of Proceeds
constituting Collateral, whether or not held in any Collateral Account, and any
proceeds of the guarantee set forth in Section 2, in payment of the Obligations
in the following order:

First, to pay incurred and unpaid fees and expenses of the Administrative Agent
under the Loan Documents;

Second, to the Administrative Agent, for application by it towards payment of
amounts then due and owing and remaining unpaid in respect of the Obligations,
pro rata among the Secured Parties according to the amounts of the Obligations
then due and owing and remaining unpaid to the Secured Parties;

Third, to the Administrative Agent, for application by it towards prepayment of
the Obligations, pro rata among the Secured Parties according to the amounts of
the Obligations then held by the Secured Parties; and

Fourth, any balance remaining after the Obligations shall have been paid in
full, no Letters of Credit shall be outstanding and the Commitments shall have
terminated shall be paid over to the Parent Borrower or to whomsoever may be
lawfully entitled to receive the same.

6.6 Code and Other Remedies. If an Event of Default shall occur and be
continuing, the Administrative Agent, on behalf of the Secured Parties, may
exercise, in addition to all other rights and remedies granted to them in this
Agreement and in any other instrument or agreement securing, evidencing or
relating to the Obligations, all rights and remedies of a secured party under
the UCC or any

 

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other applicable law. Without limiting the generality of the foregoing, the
Administrative Agent, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon any Grantor or any other Person
(all and each of which demands, defenses, advertisements and notices are hereby
waived), may in such circumstances forthwith collect, receive, appropriate and
realize upon the Collateral, or any part thereof, and/or may forthwith sell,
lease, assign, give option or options to purchase, or otherwise dispose of and
deliver the Collateral or any part thereof (or contract to do any of the
foregoing), in one or more parcels at public or private sale or sales, at any
exchange, broker’s board or office of the Administrative Agent or any Secured
Party or elsewhere upon such terms and conditions as it may deem advisable and
at such prices as it may deem best, for cash or on credit or for future delivery
without assumption of any credit risk. The Administrative Agent or any Secured
Party shall have the right upon any such public sale or sales, and, to the
extent permitted by law, upon any such private sale or sales, to purchase the
whole or any part of the Collateral so sold, free of any right or equity of
redemption in any Grantor, which right or equity is hereby waived and released.
Each Grantor further agrees, at the Administrative Agent’s request, to assemble
the Collateral and make it available to the Administrative Agent at places which
the Administrative Agent shall reasonably select, whether at such Grantor’s
premises or elsewhere. The Administrative Agent shall apply the net proceeds of
any action taken by it pursuant to this Section 6.6, after deducting all
reasonable costs and expenses of every kind incurred in connection therewith or
incidental to the care or safekeeping of any of the Collateral or in any way
relating to the Collateral or the rights of the Administrative Agent and the
Secured Parties hereunder, including, without limitation, reasonable attorneys’
fees and disbursements, to the payment in whole or in part of the Obligations,
in such order as the Administrative Agent may elect, and only after such
application and after the payment by the Administrative Agent of any other
amount required by any provision of law, including, without limitation,
Section 9-615(a)(3) of the UCC, need the Administrative Agent account for the
surplus, if any, to any Grantor. To the extent permitted by applicable law, each
Grantor waives all claims, damages and demands it may acquire against the
Administrative Agent or any Lender arising out of the exercise by them of any
rights hereunder. If any notice of a proposed sale or other disposition of
Collateral shall be required by law, such notice shall be deemed reasonable and
proper if given at least 10 days before such sale or other disposition.

6.7 Registration Rights. (a) If the Administrative Agent shall determine to
exercise its right to sell any or all of the Pledged Stock pursuant to
Section 6.6, and if in the opinion of the Administrative Agent it is necessary
or advisable to have the Pledged Stock, or that portion thereof to be sold,
registered under the provisions of the Securities Act, the relevant Grantor will
cause the Issuer thereof to (i) execute and deliver, and cause the directors and
officers of such Issuer to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts as may be, in the
opinion of the Administrative Agent, necessary or advisable to register the
Pledged Stock, or that portion thereof to be sold, under the provisions of the
Securities Act, (ii) use its best efforts to cause the registration statement
relating thereto to become effective and to remain effective for a period of one
year from the date of the first public offering of the Pledged Stock, or that
portion thereof to be sold, and (iii) make all amendments thereto and/or to the
related prospectus which, in the opinion of the Administrative Agent, are
necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto. Each Grantor agrees to cause such Issuer to
comply with the provisions of the securities or “Blue Sky” laws of any and all
jurisdictions which the Administrative Agent shall designate and to make
available to its security holders, as soon as practicable, an earnings statement
(which need not be audited) which will satisfy the provisions of Section 11(a)
of the Securities Act.

(b) Each Grantor recognizes that the Administrative Agent may be unable to
effect a public sale of any or all the Pledged Stock, by reason of certain
prohibitions contained in the Securities Act and

 

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applicable state securities laws or otherwise, and may be compelled to resort to
one or more private sales thereof to a restricted group of purchasers which will
be obliged to agree, among other things, to acquire such securities for their
own account for investment and not with a view to the distribution or resale
thereof. Each Grantor acknowledges and agrees that any such private sale may
result in prices and other terms less favorable than if such sale were a public
sale and, notwithstanding such circumstances, agrees that any such private sale
shall be deemed to have been made in a commercially reasonable manner. The
Administrative Agent shall be under no obligation to delay a sale of any of the
Pledged Stock for the period of time necessary to permit the Issuer thereof to
register such securities for public sale under the Securities Act, or under
applicable state securities laws, even if such Issuer would agree to do so.

(c) Each Grantor agrees to use its best efforts to do or cause to be done all
such other acts as may be necessary to make such sale or sales of all or any
portion of the Pledged Stock pursuant to this Section 6.7 valid and binding and
in compliance with any and all other applicable Requirements of Law. Each
Grantor further agrees that a breach of any of the covenants contained in this
Section 6.7 will cause irreparable injury to the Administrative Agent and the
Secured Parties, that the Administrative Agent and the Secured Parties have no
adequate remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained in this Section 6.7 shall be specifically
enforceable against such Grantor, and such Grantor hereby waives and agrees not
to assert any defenses against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred under the
Credit Agreement and is continuing.

6.8 Subordination. Each Grantor hereby agrees that (i) any Indebtedness owed by
it to another Subsidiary of Parent Borrower shall be subordinated to the
Obligations of such Grantor, upon the occurrence and during the continuance of
an Event of Default, unless otherwise agreed by the Administrative Agent and
(ii) any Indebtedness owed to it by another Loan Party shall be subordinated to
the Obligations of such other Loan Party, it being understood that such other
Loan Party, as the case may be may make payments on such intercompany
Indebtedness unless an Event of Default is has occurred and continuing.

6.9 Deficiency. Each Grantor shall remain liable for any deficiency if the
proceeds of any sale or other disposition of the Collateral are insufficient to
pay its Obligations and the fees and disbursements of any attorneys employed by
the Administrative Agent or any Lender to collect such deficiency.

6.10 Access. In addition to the rights and remedies hereunder, after the
occurrence and during the continuation of an Event of Default, the
Administrative Agent shall have the right to enter and remain upon the various
premises of the Grantors to the extent that the applicable Grantor may grant
such rights without cost or charge to the Administrative Agent, and use the
same, together with materials, supplies, books and records of the Grantors for
the purpose of collecting and liquidating the Collateral, or for preparing for
sale and conducting the sale of the Collateral, whether by foreclosure, auction
or otherwise. In addition, after the occurrence and during the continuation of
an Event of Default, the Administrative Agent may remove Collateral, or any part
thereof, from such premises and/or any records with respect thereto, in order to
effectively collect or liquidate such Collateral.

SECTION 7 THE ADMINISTRATIVE AGENT

7.1 Administrative Agent’s Appointment as Attorney-in-Fact, etc. (a) Each
Grantor hereby irrevocably constitutes and appoints the Administrative Agent and
any officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of such Grantor and in the name of such Grantor or in its own name,
for the purpose

 

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of carrying out the terms of this Agreement, to take any and all appropriate
action and to execute any and all documents and instruments which may be
necessary or desirable to accomplish the purposes of this Agreement, and,
without limiting the generality of the foregoing, each Grantor hereby gives the
Administrative Agent the power and right, on behalf of such Grantor, without
notice to or assent by such Grantor, to do any or all of the following:

(i) in the name of such Grantor or its own name, or otherwise, take possession
of and indorse and collect any checks, drafts, notes, acceptances, money orders
or other instruments for the payment of moneys due under any Receivable or
Contract or with respect to any other Collateral and file any claim or take any
other action or proceeding in any court of law or equity or otherwise deemed
appropriate by the Administrative Agent for the purpose of collecting any and
all such moneys due under any Receivable or Contract or with respect to any
other Collateral whenever payable;

(ii) in the case of any Intellectual Property, execute and deliver, and have
recorded, any and all agreements, instruments, documents and papers as the
Administrative Agent may request to evidence the Administrative Agent’s and the
Secured Parties’ security interest in such Intellectual Property and the
goodwill and general intangibles of such Grantor relating thereto or represented
thereby;

(iii) pay or discharge taxes, Liens, security interests or other encumbrances
levied or placed on or threatened against the Collateral, effect any repairs or
any insurance called for by the terms of this Agreement and pay all or any part
of the premiums therefor and the costs thereof;

(iv) execute, in connection with any sale provided for in Section 6.6 or 6.7,
any indorsements, assignments or other instruments of conveyance or transfer
with respect to the Collateral; and

(v)(1) direct any party liable for any payment under any of the Collateral to
make payment of any and all moneys due or to become due thereunder directly to
the Administrative Agent or as the Administrative Agent shall direct; (2) ask or
demand for, collect, and receive payment of and receipt for, any and all moneys,
claims and other amounts due or to become due at any time in respect of or
arising out of any Collateral; (3) receive, open and dispose of mail addressed
to a Grantor and sign and indorse any invoices, freight or express bills, bills
of lading, storage or warehouse receipts, drafts against debtors, assignments,
verifications, notices and other documents in connection with any of the
Collateral; (4) commence and prosecute any suits, actions or proceedings at law
or in equity in any court of competent jurisdiction to collect the Collateral or
any portion thereof and to enforce any other right in respect of any Collateral;
(5) defend any suit, action or proceeding brought against such Grantor with
respect to any Collateral; (6) settle, compromise or adjust any such suit,
action or proceeding and, in connection therewith, give such discharges or
releases as the Administrative Agent may deem appropriate; (7) adjust and settle
claims under any insurance policy relating thereto; (8) assign any Copyright,
Patent or Trademark (along with the goodwill of the business to which any such
Copyright, Patent or Trademark pertains), throughout the world for such term or
terms, on such conditions, and in such manner, as the Administrative Agent shall
in its sole discretion determine; (9) institute any foreclosure proceedings that
the Administrative Agent may reasonably deem necessary; and (10) generally,
sell, assign, transfer, pledge and make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as though the
Administrative Agent were the absolute owner thereof for all purposes, and do,
at

 

21

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the Administrative Agent’s option and such Grantor’s expense, at any time, or
from time to time, all acts and things which the Administrative Agent deems
necessary to protect, preserve or realize upon the Collateral and the
Administrative Agent’s and the Secured Parties’ security interests therein and
to effect the intent of this Agreement, all as fully and effectively as such
Grantor might do.

Anything in this Section 7.1(a) to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any rights under the power
of attorney provided for in this Section 7.1(a) (other than pursuant to
clause (ii) thereof) unless an Event of Default shall have occurred and be
continuing. This power of attorney is a power coupled with an interest and shall
be irrevocable. The Administrative Agent shall be under no duty to exercise or
withhold the exercise of any of the rights, powers, privileges and options
expressly or implicitly granted to the Administrative Agent in this Agreement,
and shall not be liable for any failure to do so or any delay in doing so. The
Administrative Agent shall not be liable for any act or omission or for any
error of judgment or any mistake of fact or law in its individual capacity or
its capacity as attorney-in-fact except acts or omissions resulting from its
gross negligence or willful misconduct. This power of attorney is conferred on
the Administrative Agent solely to protect, preserve and realize upon its
security interest in the Collateral.

(b) If any Grantor fails to perform or comply with any of its agreements
contained herein, the Administrative Agent, at its option, but without any
obligation so to do, may perform or comply, or otherwise cause performance or
compliance, with such agreement.

(c) The expenses of the Administrative Agent incurred in connection with actions
undertaken as provided in this Section 7.1, together with interest thereon at a
rate per annum equal to the highest rate per annum at which interest would then
be payable on any category of past due ABR Loans under the Credit Agreement,
from the date of payment by the Administrative Agent to the date reimbursed by
the relevant Grantor, shall be payable by such Grantor to the Administrative
Agent on demand.

(d) Each Grantor hereby ratifies all that said attorneys shall lawfully do or
cause to be done by virtue hereof. All powers, authorizations and agencies
contained in this Agreement are coupled with an interest and are irrevocable
until this Agreement is terminated and the security interests created hereby are
released.

7.2 Duty of Administrative Agent. The Administrative Agent’s sole duty with
respect to the custody, safekeeping and physical preservation of the Collateral
in its possession, under Section 9-207 of the UCC or otherwise, shall be to deal
with it in the same manner as the Administrative Agent deals with similar
property for its own account. The Administrative Agent shall be deemed to have
exercised reasonable care in the custody and preservation of the Collateral in
its possession if such Collateral is accorded treatment substantially equal to
that which the Administrative Agent accords similar property for its own
account. Neither the Administrative Agent, any Lender nor any of their
respective officers, directors, employees or agents shall be liable for failure
to demand, collect or realize upon any of the Collateral or for any delay in
doing so or shall be under any obligation to sell or otherwise dispose of any
Collateral upon the request of any Grantor or any other Person or to take any
other action whatsoever with regard to the Collateral or any part thereof. The
powers conferred on the Administrative Agent and the Secured Parties hereunder
are solely to protect the Administrative Agent’s and the Secured Parties’
interests in the Collateral and shall not impose any duty upon the
Administrative Agent or any Lender to exercise any such powers. The
Administrative Agent and the Secured Parties shall be accountable only for
amounts that they actually receive as a result of the exercise of such powers,
and neither they nor any of their officers, directors, employees or agents shall
be responsible to any Grantor for any act or failure to act hereunder, except
for their own gross negligence or willful misconduct. In the event of a public
or private sale of Collateral pursuant to Section 6 hereof, the Administrative
Agent shall have no obligation to clean, repair or otherwise prepare the
Collateral for sale.

 

22

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7.3 Execution of Financing Statements. Pursuant to any applicable law, each
Grantor authorizes the Administrative Agent to file or record financing
statements and other filing or recording documents or instruments with respect
to the Collateral without the signature of such Grantor in such form and in such
offices as the Administrative Agent determines appropriate to perfect the
security interests of the Administrative Agent under this Agreement. Each
Grantor authorizes the Administrative Agent to use the collateral description
“all personal property except Excluded Collateral as further described in
Exhibit A” in any such financing statements. Each Grantor hereby ratifies and
authorizes the filing by the Administrative Agent of any financing statement
with respect to the Collateral made prior to the date hereof.

7.4 Authority of Administrative Agent. Each Grantor acknowledges that the rights
and responsibilities of the Administrative Agent under this Agreement with
respect to any action taken by the Administrative Agent or the exercise or
non-exercise by the Administrative Agent of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as between the Administrative Agent and the Secured
Parties, be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Administrative Agent and the Grantors, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Secured Parties with full
and valid authority so to act or refrain from acting, and no Grantor shall be
under any obligation, or entitlement, to make any inquiry respecting such
authority.

7.5 Exercise of Rights by Required Lenders. In the event there is no
Administrative Agent, the rights of the Administrative Agent may be exercised by
the Required Lenders.

SECTION 8 MISCELLANEOUS

8.1 Amendments in Writing. None of the terms or provisions of this Agreement may
be waived, amended, supplemented or otherwise modified except in accordance with
Section 10.1 of the Credit Agreement.

8.2 Notices. All notices, requests and demands to or upon the Administrative
Agent or any Grantor hereunder shall be effected in the manner provided for in
Section 10.2 of the Credit Agreement; provided that any such notice, request or
demand to or upon any Guarantor shall be addressed to such Guarantor at its
notice address set forth on Schedule 1.

8.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the
Administrative Agent nor any Lender shall by any act (except by a written
instrument pursuant to Section 8.1), delay, indulgence, omission or otherwise be
deemed to have waived any right or remedy hereunder or to have acquiesced in any
Default or Event of Default. No failure to exercise, nor any delay in
exercising, on the part of the Administrative Agent or any Lender, any right,
power or privilege hereunder shall operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Administrative Agent or any Lender of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Administrative Agent or such Lender would otherwise
have on any future occasion. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of any
other rights or remedies provided by law.

 

23

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8.4 Enforcement Expenses; Indemnification. (a) Each Guarantor agrees to pay or
reimburse each Lender and the Administrative Agent for all its costs and
expenses incurred in collecting against such Guarantor under the guarantee
contained in Section 2 or otherwise enforcing or preserving any rights under
this Agreement and the other Loan Documents to which such Guarantor is a party,
including, without limitation, the fees and disbursements of counsel (including
the allocated fees and expenses of in-house counsel) to each Lender and of
counsel to the Administrative Agent.

(b) Each Guarantor agrees to pay, and to save the Administrative Agent and the
Secured Parties harmless from, any and all liabilities with respect to, or
resulting from any delay in paying, any and all stamp, excise, sales or other
taxes which may be payable or determined to be payable with respect to any of
the Collateral or in connection with any of the transactions contemplated by
this Agreement.

(c) Each Guarantor agrees to pay, and to save the Administrative Agent and the
Secured Parties harmless from, any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement to the extent the
Parent Borrower would be required to do so pursuant to Section 10.5 of the
Credit Agreement.

(d) The agreements in this Section 8.4 shall survive repayment of the
Obligations and all other amounts payable under the Credit Agreement and the
other Loan Documents.

8.5 Successors and Assigns. This Agreement shall be binding upon the successors
and assigns of each Grantor and shall inure to the benefit of the Administrative
Agent and the Secured Parties and their successors and assigns; provided that no
Grantor may assign, transfer or delegate any of its rights or obligations under
this Agreement without the prior written consent of the Administrative Agent.

8.6 Set-Off. In addition to any rights and remedies of the Secured Parties
provided by law, each Secured Party shall have the right, without notice to any
Grantor, any such notice being expressly waived by each Grantor to the extent
permitted by applicable law, upon any Obligations becoming due and payable by
any Grantor (whether at the stated maturity, by acceleration or otherwise), to
apply to the payment of such Obligations, by setoff or otherwise, any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Secured Party, any affiliate
thereof or any of their respective branches or agencies to or for the credit or
the account of such Grantor. Each Secured Party agrees promptly to notify the
relevant Grantor and the Administrative Agent after any such application made by
such Secured Party, provided that the failure to give such notice shall not
affect the validity of such application.

8.7 Counterparts. This Agreement may be executed by one or more of the parties
to this Agreement on any number of separate counterparts (including by email or
telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.

8.8 Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

24

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8.9 Section Headings. The Section headings used in this Agreement are for
convenience of reference only and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.

8.10 Integration. This Agreement and the other Loan Documents represent the
agreement of the Grantors, the Administrative Agent and the Secured Parties with
respect to the subject matter hereof and thereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent or any
Lender relative to subject matter hereof and thereof not expressly set forth or
referred to herein or in the other Loan Documents.

8.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

8.12 Submission To Jurisdiction; Waivers. Each Grantor hereby irrevocably and
unconditionally:

(a) submits for itself and its property in any legal action or proceeding
relating to this Agreement and the other Loan Documents to which it is a party,
or for recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the courts of the State of New York, the
courts of the United States of America for the Southern District of New York,
and appellate courts from any thereof;

(b) consents that any such action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;

(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such Grantor at its
address referred to in Section 8.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;

(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue in
any other jurisdiction; and

(e) waives, to the maximum extent not prohibited by law, any right it may have
to claim or recover in any legal action or proceeding referred to in this
Section any special, exemplary, punitive or consequential damages.

8.13 Acknowledgements. Each Grantor hereby acknowledges that:

(a) it has been advised by counsel in the negotiation, execution and delivery of
this Agreement and the other Loan Documents to which it is a party;

(b) neither the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to any Grantor arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between
the Grantors, on the one hand, and the Administrative Agent and Secured Parties,
on the other hand, in connection herewith or therewith is solely that of debtor
and creditor; and

 

25

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(c) no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Secured Parties or among the Grantors and the Secured Parties.

8.14 Additional Grantors and Guarantors. Each Subsidiary of the Parent Borrower
that is required to become a party to this Agreement pursuant to Section 6.10 of
the Credit Agreement (each, an “Additional Grantor”) shall become a Grantor and
Guarantor for all purposes of this Agreement upon execution and delivery by such
Subsidiary of an Assumption Agreement in the form of Annex 1 hereto.

8.15 Releases. (a) On the Termination Date, the Collateral shall be released
from the Liens created hereby, and this Agreement and all obligations (other
than those expressly stated to survive such termination) of the Administrative
Agent and each Grantor hereunder shall terminate, all without delivery of any
instrument or performance of any act by any party, and all rights to the
Collateral shall revert to the Grantors. At the request and sole expense of any
Grantor following any such termination, the Administrative Agent shall deliver
to such Grantor any Collateral held by the Administrative Agent hereunder, and
execute and deliver to such Grantor such documents as such Grantor shall
reasonably request to evidence such termination.

(b) If any of the Collateral shall be sold, transferred or otherwise disposed of
by any Grantor in a transaction permitted by the Credit Agreement, then the
Administrative Agent, at the request and sole expense of such Grantor, shall
execute and deliver to such Grantor all releases or other documents reasonably
necessary or desirable for the release of the Liens created hereby on such
Collateral. At the request and sole expense of the Parent Borrower, a Subsidiary
Guarantor shall be released from its obligations hereunder in the event that all
the Capital Stock of such Subsidiary Guarantor shall be sold, transferred or
otherwise disposed of in a transaction permitted by the Credit Agreement;
provided that the Parent Borrower shall have delivered to the Administrative
Agent, at least five Business Days prior to the date of the proposed release, a
written request for release identifying the relevant Subsidiary Guarantor and
the terms of the sale or other disposition in reasonable detail, including the
price thereof and any expenses in connection therewith, together with a
certification by the Parent Borrower stating that such transaction is in
compliance with the Credit Agreement and the other Loan Documents.

8.16 WAIVER OF JURY TRIAL. EACH GRANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

 

26

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IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee and
Collateral Agreement to be duly executed and delivered as of the date first
above written.

 

TEMPUR SEALY INTERNATIONAL, INC. By:       Name:   Title: [GRANTORS] By:      
Name:   Title:

 

[Guarantee and Collateral Agreement]

--------------------------------------------------------------------------------

ACKNOWLEDGEMENT AND CONSENT

The undersigned hereby acknowledges receipt of a copy of the Guarantee and
Collateral Agreement dated as of April 6, 2016 (the “Agreement”), made by the
Grantors parties thereto for the benefit of JPMorgan Chase Bank, N.A., as
Administrative Agent. The undersigned agrees for the benefit of the
Administrative Agent and the Secured Parties as follows:

1. The undersigned will be bound by the terms of the Agreement and will comply
with such terms insofar as such terms are applicable to the undersigned.

2. The undersigned will notify the Administrative Agent promptly in writing of
the occurrence of any of the events described in Section 5.7(a) of the
Agreement.

3. The terms of Sections 6.3(c) and 6.7 of the Agreement shall apply to it,
mutatis mutandis, with respect to all actions that may be required of it
pursuant to Section 6.3(c) or 6.7 of the Agreement.

 

[NAME OF ISSUER] By:  

 

Name:   Title:   Address for Notices:

 

 

 

Fax:  

--------------------------------------------------------------------------------

Annex 1 to

Guarantee and Collateral Agreement

ASSUMPTION AGREEMENT, dated as of             , 20    , made by
                     (the “Additional Grantor”), in favor of JPMorgan Chase
Bank, N.A., as administrative agent (in such capacity, the “Administrative
Agent”) for the banks and other financial institutions or entities (the
“Lenders”) parties to the Credit Agreement referred to below. All capitalized
terms not defined herein shall have the meaning ascribed to them in such Credit
Agreement.

W I T N E S S E T H :

WHEREAS, Tempur Sealy International, Inc. (the “Parent Borrower”), the Lenders
and the Administrative Agent have entered into a Credit Agreement, dated as of
April 6, 2016 (as amended, supplemented or otherwise modified from time to time,
the “Credit Agreement”);

WHEREAS, in connection with the Credit Agreement, the Parent Borrower and
certain of its Affiliates (other than the Additional Grantor) have entered into
the Guarantee and Collateral Agreement, dated as of April 6, 2016 (as amended,
supplemented or otherwise modified from time to time, the “Guarantee and
Collateral Agreement”) in favor of the Administrative Agent for the ratable
benefit of the Secured Parties;

WHEREAS, the Credit Agreement requires the Additional Grantor to become a party
to the Guarantee and Collateral Agreement; and

WHEREAS, the Additional Grantor has agreed to execute and deliver this
Assumption Agreement in order to become a party to the Guarantee and Collateral
Agreement;

NOW, THEREFORE, IT IS AGREED:

1. Guarantee and Collateral Agreement. By executing and delivering this
Assumption Agreement, the Additional Grantor, as provided in Section 8.14 of the
Guarantee and Collateral Agreement, hereby becomes a party to the Guarantee and
Collateral Agreement as a Grantor and Guarantor thereunder with the same force
and effect as if originally named therein as a Grantor and, without limiting the
generality of the foregoing, hereby expressly assumes all obligations and
liabilities of a Grantor thereunder. The information set forth in Annex 1-A
hereto is hereby added to the information set forth in the Schedules to the
Guarantee and Collateral Agreement. The Additional Grantor hereby represents and
warrants that each of the representations and warranties contained in Section 4
of the Guarantee and Collateral Agreement is true and correct on and as the date
hereof (after giving effect to this Assumption Agreement) as if made on and as
of such date.

2. Governing Law. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to be
duly executed and delivered as of the date first above written.

 

[ADDITIONAL GRANTOR] By:  

 

Name:   Title:  

 

2

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Annex 1-A to

Assumption Agreement

Supplement to Schedule 1

Supplement to Schedule 2

Supplement to Schedule 3

Supplement to Schedule 4

Supplement to Schedule 5

Supplement to Schedule 6

--------------------------------------------------------------------------------

EXHIBIT B

[FORM OF] COMPLIANCE CERTIFICATE

Financial Statement Date:                     ,             

To: JPMorgan Chase Bank, N.A., as Administrative Agent

Ladies and Gentlemen:

Reference is made to the Credit Agreement dated as of April 6, 2016 (as amended,
restated, amended and restated, extended, supplemented or otherwise modified in
writing from time to time, the “Agreement”; the terms defined therein being used
herein as therein defined), among Tempur Sealy International, Inc., a Delaware
corporation, as the Parent Borrower, the Additional Borrowers from time to time
party thereto, the Lenders from time to time party thereto and JPMorgan Chase
Bank, N.A., as Administrative Agent.

The undersigned, a Responsible Officer of the Parent Borrower, hereby certifies
as of the date hereof that he/she is the                      of the Parent
Borrower, and that, as such, he/she is authorized to execute and deliver this
Compliance Certificate to the Administrative Agent on the behalf of the Parent
Borrower and each Loan Party, and hereby certifies on behalf of the Parent
Borrower and each Loan Party that:

[Use following paragraph 1 for fiscal year-end financial statements]

1. Attached hereto as Schedule 1 are the year-end audited financial statements
required by Section 6.1(a) of the Agreement for the fiscal year of the Parent
Borrower and its Subsidiaries ended                     , 20    , together with
the report and opinion of the independent certified public accountant required
by Section 6.2(a).

[Use following paragraph 1 for fiscal quarter financial statements]

1. Attached hereto as Schedule 1 are the unaudited financial statements required
by Section 6.1(b) of the Agreement for the fiscal quarter of the Borrower ended
                    , 20    . Such financial statements fairly present in all
material respects the financial condition, results of operations, shareholders’
equity and cash flows of the Parent Borrower and its Subsidiaries in accordance
with GAAP as at such date and for such period, subject only to normal year-end
audit adjustments and the absence of footnotes.

[select one:]

[2. To the knowledge of the undersigned Responsible Officer, no Default or Event
of Default has occurred during such fiscal period and is continuing as of the
date of such financial statements.]

–or–

--------------------------------------------------------------------------------

[2. To the knowledge of the undersigned Responsible Officer, the following is a
list of each Default or Event of Default (and its nature and status) that has
occurred during such fiscal period and is continuing on the Financial Statement
Date:]

3. To the knowledge of the undersigned Responsible Officer, each Loan Party
during such period has observed or performed all of its covenants and other
agreements, and satisfied every condition contained in the Agreement and the
other Loan Documents to which it is a party to be observed, performed or
satisfied by it.

4. Attached hereto as Schedule 2 are calculations in reasonable detail
demonstrating compliance with the financial covenants contained in the
Agreement, the calculation of and the amount of the Available Amount and the
usage thereof (for such period and in the aggregate), and a summary of all
material changes in GAAP and in the consistent application thereof that impact
the calculation of the financial covenants or other amounts under the Agreement,
the effect on the financial covenants or other amounts resulting therefrom, and
a reconciliation between calculation of the financial covenants (and
determination of the applicable pricing level under the definition of
“Applicable Margin”) or such amounts before and after giving effect to such
changes.

IN WITNESS WHEREOF, the undersigned Responsible Officer has executed this
Certificate on behalf of the Parent Borrower as of                     .

 

TEMPUR SEALY INTERNATIONAL, INC. By:    

 

  Name:   Title:

--------------------------------------------------------------------------------

SCHEDULE 1

to the Compliance Certificate

[Audited or unaudited financial statements required by Section 6.1(a) or (b) of
the Agreement]

--------------------------------------------------------------------------------

SCHEDULE 2

to the Compliance Certificate

See Attached.

--------------------------------------------------------------------------------

EXHIBIT C

[FORM OF] CLOSING CERTIFICATE

[Company]

[    ], 20[    ]

Reference is made to that certain Credit Agreement, dated as of April 6, 2016
(as amended, restated, amended and restated, modified and supplemented from time
to time, the “Credit Agreement”) by and among Tempur Sealy International, Inc.,
a Delaware corporation, as the Parent Borrower, the Additional Borrowers from
time to time party thereto, the Lenders from time to time party thereto and
JPMorgan Chase Bank, N.A., as Administrative Agent. Capitalized terms used but
not otherwise defined herein have the meanings provided in the Credit Agreement.

The undersigned, [                    ], does hereby certify that [he/she] is
the duly elected, qualified, and acting Secretary of the [entity name], a [state
of organization or incorporation] [type of entity] (the “Company”) and that:

1. Attached hereto as Exhibit A is a true, correct and complete copy of the
resolutions duly adopted by the [Board of Directors] [Sole Member] [Members] of
the Company in accordance with the Company’s [Certificate of Incorporation and
Bylaws] [Certificate of Formation and Limited Liability Company Agreement] and
approving and authorizing, among other things, the execution, delivery and
performance of the Credit Agreement, the other Loan Documents, as applicable,
and the Transactions to be consummated in connection therewith. Said resolutions
have not been amended, revoked, rescinded or modified in any respect since their
adoption and remain in full force and effect as of the date hereof and said
resolutions are the only resolutions adopted approving or authorizing the
execution, delivery and performance of the Credit Agreement, the other Loan
Documents, as applicable, and the Transactions to be consummated in connection
therewith.

2. Attached hereto as Exhibit B is a list of certain duly elected, qualified and
acting officers of the Company. Each such person holds on the date hereof the
office set forth opposite such officer’s name on Exhibit B, and the signature
appearing on Exhibit B opposite such officer’s name is such officer’s genuine
signature. Each such officer is duly authorized to execute and deliver, on
behalf of the Company, the Credit Agreement and any other documents delivered in
connection with the transactions contemplated by the Credit Agreement and the
Subsidiary Borrower Joinder Agreement.

3. Attached hereto as Exhibit C is a true and complete copy of the Company’s
[Certificate of Incorporation] [Certificate of Formation] as in effect on the
date hereof, certified by the [governmental authority] of [jurisdiction of
incorporation or organization]. No proceeding for the amendment, modification or
rescission thereof are pending or contemplated and no action has been taken by
the Company, its shareholders or officers in contemplation of the filing of any
such amendment or other document or in contemplation of the liquidation or
dissolution of the Company.

--------------------------------------------------------------------------------

4. Attached hereto as Exhibit D is a true, correct and complete copy of the
Company’s [By-laws] [Operating Agreement] as in effect on the date hereof. Such
[By-laws have] [Operating Agreement has] not been amended or rescinded and no
proceedings for the amendment, modification or rescission of such [By-laws are]
[Operating Agreement is] pending or contemplated.

5. Attached hereto as Exhibit E is a certificate as to the good standing of the
Company issued by the [jurisdiction of incorporation or organization]
[governmental authority], as of recent date.

[Remainder of page intentionally left blank.]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the undersigned has signed this Certificate in the
undersigned’s capacity as Secretary of the Company, and not in any personal
capacity, effective as of the date first above written.

 

  [Company] By:     Name:   Title:  

The undersigned, being a Responsible Officer of the Company, hereby certifies
that the person whose name appears above is the duly elected, qualified and
acting Secretary of the Company and the signature appearing over such name is
[his/her] true signature.

 

By:     Name:   Title:  

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EXHIBIT A

Resolutions

--------------------------------------------------------------------------------

EXHIBIT B

 

Name

  

Office

  

Specimen Signature

               

--------------------------------------------------------------------------------

EXHIBIT C

Certificate of Incorporation or Formation

--------------------------------------------------------------------------------

EXHIBIT D

By-Laws or Operating Agreements

--------------------------------------------------------------------------------

EXHIBIT E

Good Standing Certificate

--------------------------------------------------------------------------------

EXHIBIT D

[FORM OF] MORTGAGE

Subject to local counsel review and comment

MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS

AND LEASES AND FIXTURE FILING ([JURISDICTION])

by and from

[COMPANY],

as Mortgagor

to

JPMORGAN CHASE BANK, N.A.,

in its capacity as Agent for the Lenders

as defined in the Credit Agreement, as Mortgagee

Dated as of [MONTH]                     , 20    

 

Location:    [    ] Municipality:    [    ] County:    [    ] State:    [    ]

THE SECURED PARTY (MORTGAGEE) DESIRES THIS FIXTURE FILING

TO BE INDEXED AGAINST THE RECORD OWNER OF THE REAL ESTATE

DESCRIBED HEREIN

PREPARED BY, RECORDING REQUESTED BY,

AND WHEN RECORDED MAIL TO:

Davis Polk & Wardwell LLP

450 Lexington Avenue

New York, New York 10017

Attention: Real Estate Department

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MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS

AND LEASES AND FIXTURE FILING ([JURISDICTION])

THIS MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS AND LEASES AND FIXTURE
FILING ([JURISDICTION]) (this “Mortgage”) is dated as of [MONTH]             ,
20         by and from [Company], a [JURISDICTION OF FORMATION] [TYPE OF ENTITY]
(“Mortgagor”), whose address is [    ], to JPMORGAN CHASE BANK, N.A., a national
association, as administrative agent and collateral agent (in such capacities,
“Agent”) for the Lenders as defined in the Credit Agreement (defined below) and
their affiliates to the extent provided in the Credit Agreement, having an
address at [    ] (Agent, together with its successors and assigns,
“Mortgagee”).

ARTICLE 1

DEFINITIONS

Section 1.1 Definitions. All capitalized terms used herein without definition
shall have the respective meanings ascribed to them in that certain Credit
Agreement dated as of April 6, 2016 (as amended, restated, amended and restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
by and among Tempur Sealy International, Inc., a Delaware corporation, as the
Parent Borrower, the Additional Borrowers from time to time party thereto
(together with the Parent Borrower and the Subsidiary Guarantors, the “Loan
Parties” and individually, each a “Loan Party”), the Lenders from time to time
party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent. As used
herein, the following terms shall have the following meanings:

(a) “Acknowledgment”: has the meaning given to such term in Section 7.13 of this
Mortgage.

(b) “Indebtedness”: (1) All indebtedness of the Loan Parties to Mortgagee or any
of the other Lenders under the Credit Agreement or any other Loan Document to
which Mortgagor is a party, including, without limitation, the sum of all
(a) principal, interest and other amounts owing under or evidenced or secured by
the Loan Documents, (b) principal, interest and other amounts which may
hereafter be lent by Mortgagee or any of the Lenders under or in connection with
the Credit Agreement or any of the other Loan Documents, whether evidenced by a
promissory note or other instrument which, by its terms, is secured hereby, and
(c) obligations and liabilities of any nature now or hereafter existing under or
arising in connection with any other extensions of credit under the Credit
Agreement or any of the other Loan Documents and reimbursement obligations in
respect thereof, together with interest and other amounts payable with respect
thereto, and (2) all other indebtedness, obligations and liabilities now or
hereafter existing of any kind of Mortgagor to Mortgagee or any of the Lenders,
or their affiliates to the extent provided for in the Credit Agreement, arising
under the Credit Agreement or any of the other Loan Documents. Indebtedness
shall include, in the case of (1) and (2), all such indebtedness, obligations or
liabilities, whether direct or indirect, absolute or contingent, and whether for
principal, reimbursement obligations, interest, fees, premiums, penalties,
indemnifications, contract causes of action, costs, expenses or otherwise and
shall include any increases of the principal amount outstanding under such
documents.

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(c) “Mortgaged Property”: The fee interest in the real property described in
Exhibit A attached hereto and incorporated herein by this reference, together
with any greater estate in such real property as hereafter may be acquired by
Mortgagor (the “Land”), and all of Mortgagor’s right, title and interest in and
to (1) all improvements now owned or hereafter acquired by Mortgagor, now or at
any time situated, placed or constructed upon the Land (the “Improvements”; the
Land and Improvements are collectively referred to as the “Premises”), (2) all
materials, supplies, equipment, apparatus and other items of personal property
now owned or hereafter acquired by Mortgagor and now or hereafter attached to,
installed in or used in connection with any of the Premises, and water, gas,
electrical, telephone, storm and sanitary sewer facilities and all other
utilities used in connection with the Premises whether or not situated in
easements (the “Fixtures”), (3) all goods, accounts, general intangibles,
instruments, documents, chattel paper and all other personal property of any
kind or character, including such items of personal property as defined in the
UCC (defined below), now owned or hereafter acquired by Mortgagor and now or
hereafter affixed to, placed upon, used in connection with, arising from or
otherwise related to the Premises (the “Personalty”), (4) all reserves, escrows
or impounds required under the Credit Agreement or any of the other Loan
Documents and all deposit accounts maintained by Mortgagor with respect to the
Mortgaged Property (the “Deposit Accounts”), (5) all leases, licenses,
concessions, occupancy agreements or other agreements (written or oral, now or
at any time in effect) to which Mortgagor is a party which grant to any Person a
possessory interest in, or the right to use, all or any part of the Premises,
together with all related security and other deposits (the “Leases”), (6) all of
the rents, revenues, royalties, income, proceeds, profits, security and other
types of deposits, and other benefits paid or payable by parties to the Leases
for using, leasing, licensing, possessing, operating from, residing in, selling
or otherwise enjoying the Premises (the “Rents”), (7) all other agreements, such
as construction contracts, architects’ agreements, engineers’ contracts, utility
contracts, maintenance agreements, management agreements, service contracts,
listing agreements, guaranties, warranties, permits, licenses, certificates and
entitlements in any way relating to the construction, use, occupancy, operation,
maintenance, enjoyment or ownership of the Premises, to the extent assignable
(the “Property Agreements”), (8) all rights, privileges, tenements,
hereditaments, rights-of-way, easements, appendages and appurtenances
appertaining to the Premises, (9) all property tax refunds payable to Mortgagor
with respect to the Premises (the “Tax Refunds”), (10) all accessions,
replacements and substitutions for any of the foregoing and all proceeds thereof
(the “Proceeds”), (11) all insurance policies, unearned premiums therefor and
proceeds from such policies covering any of the above property now or hereafter
acquired by Mortgagor (the “Insurance”), and (12) all awards, damages,
remunerations, reimbursements, settlements or compensation heretofore made or
hereafter to be made by any governmental authority pertaining to any
condemnation or other taking (or any purchase in lieu thereof) of all or any
portion of the Land, Improvements, Fixtures or Personalty (the “Condemnation
Awards”). As used in this Mortgage, the term “Mortgaged Property” shall mean all
or, where the context permits or requires, any portion of the above or any
interest therein. Notwithstanding anything to the contrary contained in this
Mortgage, the lien and security interest created by this Mortgage shall not
extend to, and the term Mortgaged Property shall not include, any Excluded
Collateral (as such term is defined in the Guarantee and Collateral Agreement).

 

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(d) “Obligations”: All of the agreements, covenants, conditions, warranties,
representations and other obligations of Mortgagor under the Credit Agreement
and the other Loan Documents to which it is a party (as such Loan Documents may
be amended, amended and restated, supplemented, replaced, refinanced or
otherwise modified from time to time).

(e) “UCC”: The Uniform Commercial Code of [ ] or, if the creation, perfection
and enforcement of any security interest herein granted is governed by the laws
of a state other than [ ], then, as to the matter in question, the Uniform
Commercial Code in effect in that state.

ARTICLE 2

GRANT

Section 2.1 Grant. To secure the full and timely payment of the Indebtedness and
the full and timely performance of the Obligations, Mortgagor MORTGAGES, GRANTS,
BARGAINS, ASSIGNS, SELLS, CONVEYS and CONFIRMS to Mortgagee as Agent for the
Lenders, and the Lenders’ affiliates to the extent provided for in the Credit
Agreement, the Mortgaged Property, subject, however, only to the matters that
are set forth on Exhibit B attached hereto (the “Permitted Encumbrances”) and to
Permitted Liens.

TO HAVE AND TO HOLD the Mortgaged Property unto Mortgagee as Agent for the
Lenders, and Mortgagor does hereby bind itself, its successors and assigns to
WARRANT AND FOREVER DEFEND the title to the Mortgaged Property unto Mortgagee,
and Mortgagee’s permitted successors and assigns, as Agent for the Lenders,
subject to the Permitted Encumbrances and Permitted Liens.

Section 2.2 Lien Instrument. This Mortgage, however, is intended as a lien
instrument and security agreement and is made upon the following terms, and
conditions, to wit: In the event Mortgagor shall well and truly perform and pay
the Indebtedness and the Obligations to the legal holder thereof when the same
shall become due, then this Mortgage and all herein contained shall be null and
void and shall be released at Mortgagor’s cost and expense, otherwise this
Mortgage shall continue in full force and effect, provided, however, that the
Mortgagor’s indemnity obligations pursuant to Section 10.5 of the Credit
Agreement shall survive any such payment or release.

ARTICLE 3

WARRANTIES, REPRESENTATIONS AND COVENANTS

Mortgagor warrants, represents and covenants to Mortgagee as follows:

Section 3.1 Title to Mortgaged Property and Lien of this Instrument. Mortgagor
owns the Mortgaged Property free and clear of any Liens, except the Permitted
Encumbrances and Permitted Liens. This Mortgage creates valid, enforceable
second priority liens and security interests against the Mortgaged Property,
except for Permitted Encumbrances and Permitted Liens.

 

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Section 3.2 Second Lien Status; Subordinate Status. The liens and security
interests created under this Mortgage are expressly subordinate in priority to
the Liens created pursuant to, or that secure, the Convertible Notes. Until
payment in full of the Convertible Notes, Mortgagor shall preserve and protect
the second lien and security interest status of this Mortgage; after such
payment in full of the Convertible Notes, Mortgagor shall preserve and protect
the first lien and security interest status of this Mortgage. If any lien or
security interest other than a Permitted Encumbrance or a Permitted Lien is
asserted against the Mortgaged Property, Mortgagor shall comply with any
requirement set forth in the Credit Agreement with respect to such lien or
security interest.

Section 3.3 Payment and Performance. Mortgagor covenants and agrees that, so
long as any part of the Indebtedness shall remain unpaid, any Obligation shall
remain outstanding, or any Lender shall have any Commitment, Mortgagor shall
perform and observe all of the terms, covenants and agreements set forth in the
Loan Documents, with respect to the Mortgaged Property, on its part to be
performed or observed or that any Affiliate of Mortgagor has agreed to cause
Mortgagor to perform or observe, with respect to the Mortgaged Property,
pursuant to the Loan Documents.

Section 3.4 Replacement of Fixtures and Personalty. Mortgagor shall not, without
the prior written consent of Mortgagee (which shall not be unreasonably
withheld, delayed or conditioned), permit any of the Fixtures or Personalty
owned or leased by Mortgagor to be removed at any time from the Land or
Improvements, unless (i) the removed item is removed temporarily for maintenance
or repair, (ii) the removed item is obsolete, worn out or no longer useful
property or (iii) the removal would not violate the terms of the Credit
Agreement.

Section 3.5 Inspection. Mortgagor shall permit representatives and independent
contractors of the Mortgagee to visit and inspect the Mortgaged Property, to
conduct field audits and to examine the corporate, financial and operating
records of Mortgagor located thereon as and to the extent provided for in
Section 6.6 of the Credit Agreement.

Section 3.6 Insurance; Condemnation Awards and Insurance Proceeds.

(a) Insurance. Mortgagor shall maintain, or cause to be maintained, insurance
(including flood insurance, if applicable) with respect to the Mortgaged
Property as and to the extent required from time to time pursuant to, and in
accordance with, the terms of Section 6.5 of the Credit Agreement.

(b) Condemnation Awards. All Condemnation Awards awarded to Mortgagor in respect
of a condemnation event relating to the Mortgaged Property shall be reinvested
and/or applied, to the extent required under the terms of the Credit Agreement,
in accordance with the terms of the Credit Agreement, including without
limitation Section 2.12 thereof.

(c) Insurance Proceeds. All proceeds of any insurance policies required under
the Loan Documents relating to the Mortgaged Property shall be reinvested and/or
applied, to the extent required under the terms of the Credit Agreement, in
accordance with the terms of the Credit Agreement, including without limitation
Section 2.12 thereof.

 

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ARTICLE 4

DEFAULT AND FORECLOSURE

Section 4.1 Remedies. Upon the occurrence and during the continuance of an Event
of Default, Mortgagee may, at Mortgagee’s election, exercise any or all of the
following rights, remedies and recourses:

(a) Acceleration. Subject to any provisions of the Loan Documents providing for
the automatic acceleration of the Indebtedness upon the occurrence of certain
Events of Default (and subject to compliance with the terms and provisions of
the Loan Documents), declare the Indebtedness to be immediately due and payable,
without further notice, presentment, protest, notice of intent to accelerate,
notice of acceleration, demand or action of any nature whatsoever (each of which
hereby is expressly waived by Mortgagor), whereupon the same shall become
immediately due and payable.

(b) Entry on Mortgaged Property. Enter the Mortgaged Property and take exclusive
possession thereof and of all books, records and accounts relating thereto or
located thereon. If Mortgagor remains in possession of the Mortgaged Property
following the occurrence and during the continuance of an Event of Default, and
without Mortgagee’s prior written consent, Mortgagee may invoke any legal
remedies to dispossess Mortgagor.

(c) Operation of Mortgaged Property. Hold, lease, develop, manage, operate or
otherwise use the Mortgaged Property upon such terms and conditions as Mortgagee
may deem reasonable under the circumstances (making such repairs, alterations,
additions and improvements and taking other actions, from time to time, as
Mortgagee reasonably deems advisable or necessary), and apply all Rents and
other amounts collected by Mortgagee in connection therewith in accordance with
the provisions of Section 4.7.

(d) Foreclosure and Sale. Institute proceedings for the complete foreclosure of
this Mortgage by judicial action or by power of sale subject to and in
accordance with applicable law, in either of which cases the Mortgaged Property
may be sold for cash or credit in one or more parcels. In connection with the
exercise of any remedy under this Mortgage during the continuance of an Event of
Default, Mortgagor agrees that ten (10) days’ prior written notice shall be
deemed commercially reasonable with respect to any notices required or permitted
under the UCC with respect to such remedy. At any such sale by virtue of any
judicial proceedings, power of sale, or any other legal right, remedy or
recourse, the title to and right of possession of any such property shall pass
to the purchaser thereof, and to the fullest extent permitted by law, Mortgagor
shall be completely and irrevocably divested of all of its right, title,
interest, claim, equity, equity of redemption, and demand whatsoever, either at
law or in equity, in and to the property sold and such sale shall be a perpetual
bar both at law and in equity against Mortgagor, and against all other Persons
claiming or to claim the property sold or any part thereof, by,

 

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through or under Mortgagor. Mortgagee or any of the Lenders may be a purchaser
at such sale. If Mortgagee or any Lender is the highest bidder, Mortgagee or
such Lender may credit the portion of the purchase price that would be
distributed to Mortgagee or such Lender against the Indebtedness in lieu of
paying cash. In the event this Mortgage is foreclosed by judicial action,
appraisement of the Mortgaged Property is waived, to the extent permitted by
applicable law.

(e) Receiver. Make application to a court of competent jurisdiction for, and
obtain from such court as a matter of strict right and without notice to
Mortgagor (except such notice as may be required by applicable law) or regard to
the adequacy of the Mortgaged Property for the repayment of the Indebtedness,
the appointment of a receiver of the Mortgaged Property, and Mortgagor
irrevocably consents to such appointment. Any such receiver shall have all the
usual powers and duties of receivers in similar cases, including the full power
to rent, maintain and otherwise operate the Mortgaged Property upon such terms
as may be approved by the court, and shall apply such Rents in accordance with
the provisions of Section 4.7.

(f) Other. Exercise, with respect to the Mortgaged Property only, all other
rights, remedies and recourses granted under the Loan Documents or otherwise
available at law or in equity (in a manner consistent with the Loan Documents).

Section 4.2 Separate Sales. Upon the occurrence and during the continuance of an
Event of Default, to the extent permitted by applicable law and subject to any
notice required under applicable law, the Mortgaged Property may be sold in one
or more parcels and in such manner and order as Mortgagee in its sole discretion
may elect. The right of sale arising out of any Event of Default shall not be
exhausted by any one or more sales.

Section 4.3 Remedies Cumulative, Concurrent and Nonexclusive. Mortgagee shall
have all rights, remedies and recourses granted in the Loan Documents and
available at law or equity (including the UCC), which rights (a) shall be
cumulative and concurrent, (b) may be pursued separately, successively or
concurrently against Mortgagor or others obligated under the Loan Documents, or
against the Mortgaged Property, or against any one or more of them, at the sole
discretion of Mortgagee, (c) may be exercised as often as occasion therefor
shall arise, and the exercise or failure to exercise any of them shall not be
construed as a waiver or release thereof or of any other right, remedy or
recourse, and (d) are intended to be, and shall be, nonexclusive. No action by
Mortgagee in the enforcement of any rights, remedies or recourses under this
Mortgage or otherwise at law or equity, in respect of the Mortgaged Property,
shall be deemed to cure any Event of Default (unless otherwise agreed by
Mortgagee in writing).

Section 4.4 Release of and Resort to Collateral. Mortgagee may release,
regardless of consideration and without the necessity for any notice to or
consent by the holder of any subordinate lien on the Mortgaged Property, any
part of the Mortgaged Property without, as to the remainder, in any way
impairing, affecting, subordinating or releasing the lien or security interest
created in or evidenced by the Loan Documents or their status as a prior lien
and security interest in and to the Mortgaged Property. For payment of the
Indebtedness, Mortgagee may resort to any other security in such order and
manner as Mortgagee may elect (to the extent not inconsistent with the terms and
provisions Loan Documents).

 

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Section 4.5 Waiver of Redemption, Notice and Marshalling of Assets. To the
fullest extent permitted by law, Mortgagor hereby irrevocably and
unconditionally waives and releases (a) to the extent not inconsistent with the
terms of the Loan Documents, all benefit that might accrue to Mortgagor by
virtue of any present or future statute of limitations or law or judicial
decision exempting the Mortgaged Property from attachment, levy or sale on
execution or providing for any stay of execution, exemption from civil process,
redemption or extension of time for payment, (b) except to the extent provided
for herein, all notices of any Event of Default other than any notices
specifically required to be given under any Loan Document, (c) except to the
extent provided for herein, all notices of Mortgagee’s election to exercise or
the actual exercise of any right, remedy or recourse provided for under any Loan
Document, other than any notices specifically required to be given under any
Loan Document, and (d) any right to a marshalling of assets or a sale in inverse
order of alienation.

Section 4.6 Discontinuance of Proceedings. If Mortgagee shall have proceeded to
invoke any right, remedy or recourse permitted under this Mortgage and shall
thereafter elect to discontinue or abandon it for any reason, Mortgagee shall
have the unqualified right to do so and, in such an event, Mortgagor and
Mortgagee shall be restored to their former positions with respect to the
Indebtedness, the Obligations, this Mortgage, the Mortgaged Property and
otherwise, and the rights, remedies, recourses and powers of Mortgagee under
this Mortgage shall continue as if the right, remedy or recourse had never been
invoked, but no such discontinuance or abandonment shall waive any Event of
Default which may then exist or the right of Mortgagee thereafter to exercise
any right, remedy or recourse under this Mortgage for such Event of Default.

Section 4.7 Application of Proceeds. The Mortgagee shall apply the proceeds of
any foreclosure sale of, or other disposition or realization upon, or Rents or
profits from, the Mortgaged Property in the manner set forth in Section 2.18 of
the Credit Agreement.

Section 4.8 Occupancy After Foreclosure. Any sale of the Mortgaged Property or
any part thereof in accordance with Section 4.1(d) will divest all right, title
and interest of Mortgagor in and to the property sold. Subject to applicable
law, any purchaser at a foreclosure sale will receive immediate possession of
the property purchased. If Mortgagor retains possession of such property or any
part thereof subsequent to such sale, Mortgagor will be considered a tenant at
sufferance of the purchaser, and will, if Mortgagor remains in possession after
demand to remove, be subject to eviction and removal, forcible or otherwise (to
the extent permitted by applicable law), with or without process of law.

Section 4.9 Additional Advances and Disbursements; Costs of Enforcement.

 

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(a) On failure of Mortgagor to perform any of the covenants and agreements
contained in this Mortgage and after the expiration of any applicable cure
periods provided in Section 8 of the Credit Agreement, the Mortgagee may, at its
sole option and in its sole discretion, perform the same and in so doing may
expend such sums as the Mortgagee may reasonably deem advisable in the
performance thereof, including the payment of any insurance premiums, the
payment of any taxes, a payment to obtain a release of a Lien, expenditures made
in defending against any adverse claim and all other expenditures that the
Mortgagee, for the benefit of the holders of the Obligations, may make for the
protection of the security hereof or that may be compelled to make by operation
of law. All such sums and amounts so expended by the Mortgagor shall be
repayable by the Mortgagor promptly upon timely notice thereof and demand
therefor including, subject to Section 10.5 of the Credit Agreement, attorneys’
fees and expenses, shall constitute additional Obligations and shall bear
interest from the date said amounts are expended at the applicable default rate
set forth in Section 2.15(c) of the Credit Agreement (the “Default Rate”). No
such performance of any covenant or agreement by the Mortgagee or the holders of
the Obligations on behalf of Mortgagor, and no such advance or expenditure
therefor, shall relieve the Mortgagor of any default under the terms of this
Mortgage or the other Loan Documents. The Mortgagee may make any payment hereby
authorized in accordance with any bill, statement or estimate procured from the
appropriate public office or holder of the claim to be discharged without
inquiry into the accuracy of such bill, statement or estimate or into the
validity of any tax assessment, sale, forfeiture, tax lien, title or claim
except to the extent such payment is being contested in good faith by Mortgagor
in appropriate proceedings and against which adequate reserves are being
maintained in accordance with GAAP.

(b) Subject to and to the extent provided in Section 10.5 of the Credit
Agreement, Mortgagor shall pay all reasonable out-of-pocket expenses (including
reasonable attorneys’ fees and expenses) of or incidental to the perfection and
enforcement of this Mortgage, or the enforcement, compromise or settlement of or
any claim under this Mortgage, or for defending or asserting the rights and
claims of Mortgagee in respect thereof, by litigation or otherwise.

Section 4.10 No Mortgagee in Possession. Neither the enforcement of any of the
remedies under this Article 4, the assignment of the Rents and Leases under
Article 5, the security interests under Article 6, nor any other remedies
afforded to Mortgagee under the Loan Documents, at law or in equity shall cause
Mortgagee or any Lender to be deemed or construed to be a mortgagee in
possession of the Mortgaged Property, to obligate Mortgagee or any Lender to
lease the Mortgaged Property or attempt to do so, or to take any action, incur
any expense, or perform or discharge any obligation, duty or liability
whatsoever under any of the Leases or otherwise.

ARTICLE 5

ASSIGNMENT OF RENTS AND LEASES

Section 5.1 Assignment. In furtherance of and in addition to the assignment made
by Mortgagor in Section 2.1 of this Mortgage, Mortgagor hereby absolutely and

 

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unconditionally assigns, sells, transfers and conveys to Mortgagee all of its
right, title and interest in and to all Leases, whether now existing or
hereafter entered into, and all of its right, title and interest in and to all
Rents. This assignment is an absolute assignment and not an assignment for
additional security only. So long as no Event of Default shall have occurred and
be continuing, Mortgagor shall have a revocable license from Mortgagee to
exercise all rights extended to the landlord under the Leases, including the
right to receive and collect all Rents and to hold the Rents in trust for use in
the payment and performance of the Obligations and to otherwise use the same.
The foregoing license is granted subject to the conditional limitation that no
Event of Default shall have occurred and be continuing. Upon the occurrence and
during the continuance of an Event of Default, whether or not legal proceedings
have commenced, and without regard to waste, adequacy of security for the
Obligations or solvency of Mortgagor, at Mortgagee’s election the license herein
granted shall expire and terminate, without notice to Mortgagor by Mortgagee
(any such notice being hereby expressly waived by Mortgagor to the extent
permitted by applicable law).

Section 5.2 Perfection Upon Recordation. Mortgagor acknowledges that Mortgagee
has taken all actions necessary to obtain, and that upon recordation of this
Mortgage, Mortgagee shall have, to the extent permitted under applicable law, a
valid and fully perfected, second priority, present assignment of the Rents
arising out of the Leases and all security for such Leases. Mortgagor
acknowledges and agrees that upon recordation of this Mortgage, Mortgagee’s
interest in the Rents shall be deemed to be present and fully perfected,
“choate” and enforced as to Mortgagor and to the extent permitted under
applicable law, all third parties, including, without limitation, any
subsequently appointed trustee in any case under Title 11 of the United States
Code (the “Bankruptcy Code”), without the necessity of commencing a foreclosure
action with respect to this Mortgage, making formal demand for the Rents,
obtaining the appointment of a receiver or taking any other affirmative action.

Section 5.3 Bankruptcy Provisions. Without limitation of the absolute nature of
the assignment of the Rents hereunder, Mortgagor and Mortgagee agree that
(a) this Mortgage shall constitute a “security agreement” for purposes of
Section 552(b) of the Bankruptcy Code, (b) the security interest created by this
Mortgage extends to property of Mortgagor that comprises the Mortgaged Property
and was acquired before the commencement of a case in bankruptcy and to all
amounts paid as Rents and (c) such security interest shall extend to all Rents
acquired by the estate after the commencement of any case in bankruptcy.

Section 5.4 No Merger of Estates. So long as part of the Indebtedness and the
Obligations secured hereby remain unpaid and undischarged, the fee and leasehold
estates to the Mortgaged Property shall not merge, but shall remain separate and
distinct, notwithstanding the union of such estates either in Mortgagor,
Mortgagee, any tenant or any third party by purchase or otherwise.

 

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ARTICLE 6

SECURITY AGREEMENT

Section 6.1 Security Interest. This Mortgage constitutes a “security agreement”
on personal property within the meaning of the UCC and other applicable law and
with respect to the Personalty, Fixtures, Leases, Rents, Deposit Accounts,
Property Agreements, Tax Refunds, Proceeds, Insurance and Condemnation Awards.
To this end, Mortgagor grants to Mortgagee a second priority security interest
in the Personalty, Fixtures, Leases, Rents, Deposit Accounts, Property
Agreements, Tax Refunds, Proceeds, Insurance, Condemnation Awards and all other
Mortgaged Property which is personal property to secure the payment of the
Indebtedness and performance of the Obligations, and agrees that Mortgagee shall
have all the rights and remedies of a secured party under the UCC with respect
to such property. Any notice of sale, disposition or other intended action by
Mortgagee with respect to the Personalty, Fixtures, Leases, Rents, Deposit
Accounts, Property Agreements, Tax Refunds, Proceeds, Insurance and Condemnation
Awards sent following the occurrence and during the continuance of an Event of
Default to Mortgagor pursuant to Section 7.1 hereof at least ten (10) days prior
to any action under the UCC shall constitute reasonable notice to Mortgagor. In
the event of any inconsistency between the terms of this Mortgage and the terms
of the Guarantee and Collateral Agreement with respect to the collateral covered
both therein and herein, the Guarantee and Collateral Agreement shall control
and govern to the extent of any such inconsistency.

Section 6.2 Financing Statements. Mortgagor shall execute and deliver to
Mortgagee such documents, instruments and further assurances, in each case in
form and substance reasonably satisfactory to Mortgagee, as Mortgagee may, from
time to time, reasonably consider necessary to create, perfect and preserve
Mortgagee’s security interest hereunder. Mortgagor hereby irrevocably authorizes
Mortgagee to cause financing statements (and amendments thereto and
continuations thereof) and any such documents, instruments and assurances to be
recorded and filed, at such times and places as may be required or permitted by
law to so create, perfect and preserve Mortgagee’s security interest in the
Mortgaged Property hereunder. Mortgagor represents and warrants to Mortgagee
that, as of the date hereof, Mortgagor’s jurisdiction of organization is the
State of [state of organization or incorporation]. After the date of this
Mortgage, Mortgagor shall not change its name, type of organization,
organizational identification number (if any), jurisdiction of organization or
location (within the meaning of the UCC) without complying with the terms of the
Loan Documents with respect to any such changes.

Section 6.3 Fixture Filing. This Mortgage shall also constitute a “fixture
filing” for the purposes of the UCC against all of the Mortgaged Property which
is or is to become fixtures. The information provided in this Section 6.3 is
provided so that this Mortgage shall comply with the requirements of the UCC for
a mortgage instrument to be filed as a financing statement. Mortgagor is the
“Debtor” and its name and mailing address are set forth in the preamble of this
Mortgage immediately preceding Article 1. Mortgagee is the “Secured Party” and
its name and mailing address from which information concerning the security
interest granted herein may be obtained are also set forth in the preamble of
this Mortgage immediately

 

10

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preceding Article 1. A statement describing the portion of the Mortgaged
Property comprising the fixtures hereby secured is set forth in Section 1.1(c)
of this Mortgage. Mortgagor represents and warrants to Mortgagee that Mortgagor
is the record owner of the Mortgaged Property and the organizational
identification number of Mortgagor is [    ].

ARTICLE 7

MISCELLANEOUS

Section 7.1 Notices. Any notice required or permitted to be given under this
Mortgage shall be given in accordance with Section 10.2 of the Credit Agreement.

Section 7.2 Attorney-in-Fact. Mortgagor hereby irrevocably appoints Mortgagee as
its attorney-in-fact, which agency is coupled with an interest and with full
power of substitution, with full authority in the place and stead of Mortgagor
and in the name of Mortgagor or otherwise to take any or all of the following
actions after the occurrence and during the continuation of an Event of Default:
(a) to execute and/or record any notices of completion, cessation of labor or
any other notices, with respect to the Mortgaged Property, that Mortgagee
reasonably deems necessary and appropriate to protect Mortgagee’s interest, if
Mortgagor shall fail to do so promptly after written request by Mortgagee,
(b) upon the issuance of a deed pursuant to the foreclosure of this Mortgage or
the delivery of a deed in lieu of foreclosure, to execute all instruments of
assignment, conveyance or further assurance with respect to the Leases, Rents,
Deposit Accounts, Property Agreements, Tax Refunds, Proceeds, Insurance and
Condemnation Awards in favor of the grantee of any such deed and as may be
reasonably necessary or desirable for such purpose, (c) to prepare and file or
record financing statements and continuation statements, and to prepare, execute
and file or record applications for registration and like papers necessary to
create, perfect or preserve Mortgagee’s security interests and rights in or to
any of the Mortgaged Property, and (d) any other action with respect to the
Mortgaged Property expressly permitted to be taken by the Mortgagee under the
terms of the Credit Agreement; provided, however, that (1) Mortgagee shall not
under any circumstances be obligated to perform any obligation of Mortgagor;
(2) any sums advanced by Mortgagee in such performance shall be added to and
included in the Indebtedness and shall bear interest at the Default Rate;
(3) Mortgagee as such attorney-in-fact shall only be accountable for such funds
as are actually received by Mortgagee; and (4) Mortgagee shall not be liable to
Mortgagor or any other person or entity for any failure to take any action which
it is empowered to take under this Section 7.2. This power of attorney is
conferred on the Mortgagee solely to protect, preserve and realize upon its lien
on, and security interest in, the Mortgaged Property.

Section 7.3 Successors and Assigns. This Mortgage shall be binding upon and
inure to the benefit of Mortgagee and Mortgagor and their respective successors
and assigns permitted by the Credit Agreement. Neither Mortgagee nor Mortgagor
shall assign any rights, duties or obligations hereunder (except as permitted by
the Loan Documents).

Section 7.4 No Waiver. Any failure by Mortgagee or the Lenders to insist upon
strict performance of any of the terms, provisions or conditions of this
Mortgage shall not be deemed to be a waiver of same, and Mortgagee and the
Lenders shall have the right at any time to insist upon strict performance of
all of such terms, provisions and conditions.

 

11

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Section 7.5 Credit Agreement. If any conflict or inconsistency exists between
this Mortgage and the Credit Agreement, the Credit Agreement shall govern.

Section 7.6 Release or Reconveyance. Upon payment in full of the Indebtedness
(other than inchoate indemnification obligations) and performance in full of the
Obligations or upon a sale or other disposition of the Mortgaged Property
permitted by the Credit Agreement, Mortgagee, at Mortgagor’s request and
expense, shall promptly release the liens and security interests created by this
Mortgage or reconvey the Mortgaged Property to Mortgagor.

Section 7.7 Waiver of Stay, Moratorium and Similar Rights. Mortgagor agrees, to
the full extent that it may lawfully do so, that it will not at any time insist
upon or plead or in any way take advantage of any stay, marshalling of assets,
extension, redemption or moratorium law now or hereafter in force and effect so
as to prevent or hinder the enforcement (consistent with the terms of the Credit
Agreement) of the provisions of this Mortgage or the Indebtedness or Obligations
secured hereby, or (consistent with the terms of the Credit Agreement) any
rights or remedies provided hereunder in favor of Mortgagee or any Lender.

Section 7.8 Applicable Law. The provisions of this Mortgage regarding the
creation, perfection and enforcement of the liens and security interests herein
granted shall be governed by and construed under the laws of the state in which
the Mortgaged Property is located. All other provisions of this Mortgage shall
be governed by the laws of the State of New York (including, without limitation,
Section 5-1401 of the General Obligations Law of the State of New York).

Section 7.9 Headings. The Article, Section and Subsection titles hereof are
inserted for convenience of reference only and shall in no way alter, modify or
define, or be used in construing, the text of such Articles, Sections or
Subsections.

Section 7.10 Severability. If any provision of this Mortgage shall be held by
any court of competent jurisdiction to be unlawful, void or unenforceable for
any reason, such provision shall be deemed severable from and shall in no way
affect the enforceability and validity of the remaining provisions of this
Mortgage.

Section 7.11 Entire Agreement. This Mortgage and the other Loan Documents embody
the entire agreement and understanding between Mortgagee and Mortgagor relating
to the subject matter hereof and supersede all prior agreements and
understandings between such parties relating to the subject matter hereof.

Section 7.12 Mortgagee as Agent; Successor Agents.

(a) Agent has been appointed to act as Agent hereunder by the Lenders. Agent
shall have the right hereunder to make demands, to give notices, to exercise or
refrain from

 

12

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exercising any rights, and to take or refrain from taking any action (including,
without limitation, the release or substitution of the Mortgaged Property) in
accordance with the terms of the Credit Agreement, any related agency agreement
among Agent and the Lenders to the extent permitted by the Loan Documents
(collectively, as amended, amended and restated, supplemented or otherwise
modified or replaced from time to time, the “Agency Documents”) and this
Mortgage. Mortgagor and all other Persons shall be entitled to rely on releases,
waivers, consents, approvals, notifications and other acts of Agent, without
inquiry into the existence of required consents or approvals of the Lenders
therefor.

(b) Mortgagee shall at all times be the same Person that is Agent under the
Agency Documents. Written notice of resignation by Agent pursuant to the Agency
Documents shall also constitute notice of resignation as Agent under this
Mortgage. Removal of Agent pursuant to any provision of the Agency Documents
shall also constitute removal as Agent under this Mortgage. Appointment of a
successor Agent pursuant to the Agency Documents shall also constitute
appointment of a successor Agent under this Mortgage. Upon the acceptance of any
appointment as Agent by a successor Agent under the Agency Documents, that
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring or removed Agent as the
Mortgagee under this Mortgage, and the retiring or removed Agent shall promptly
(i) assign and transfer to such successor Agent all of its right, title and
interest in and to this Mortgage and the Mortgaged Property, and (ii) execute
and deliver to such successor Agent such assignments and amendments and take
such other actions, as may be necessary or appropriate in connection with the
assignment to such successor Agent of the liens and security interests created
hereunder, whereupon such retiring or removed Agent shall be discharged from its
duties and obligations under this Mortgage (to the extent provided in the Loan
Documents). After any retiring or removed Agent’s resignation or removal
hereunder as Agent, the provisions of this Mortgage and the Agency Documents
shall inure to its benefit as to any actions taken or omitted to be taken by it
under this Mortgage while it was Agent hereunder.

ARTICLE 8

LOCAL LAW PROVISIONS1

Section 8.1 [            ].

[The remainder of this page has been intentionally left blank]

 

1  Local counsel to provide.

 

13

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IN WITNESS WHEREOF, Mortgagor has on the date set forth in the acknowledgment
hereto, effective as of the date first above written, caused this instrument to
be duly EXECUTED AND DELIVERED by authority duly given.

 

MORTGAGOR:

  [COMPANY], a [state of organization or incorporation] [type of entity]     By:
          Name:       Title:

 

THE STATE OF                        §   § COUNTY OF                            §

This instrument was acknowledged before me on the          day of
                    , 20     by [                    ] of [Company], a [state of
organization or incorporation] [type of entity], on behalf of and as the act and
deed of said entity.

SWORN and SUBSCRIBED to this              day of                     , 20    .

 

          NOTARY PUBLIC FOR         My Commission Expires:         (SEAL)  

 

S - 1

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EXHIBIT A

LEGAL DESCRIPTION

[LEGAL]

Address:

 

Exh. A-1

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EXHIBIT B

PERMITTED ENCUMBRANCES

Those exceptions set forth in Schedule B of that certain policy of title
insurance issued to Mortgagee by [Title Insurance Company] on or about the date
hereof pursuant to commitment number [INSERT NUMBER].

 

Exh. A-1

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EXHIBIT E

[FORM OF] ASSIGNMENT AND ASSUMPTION

This Assignment and Assumption (this “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between
[the][each]2 Assignor identified in item 1 below ([the][each, an] “Assignor”)
and [the][each] Assignee identified in item 1 below ([the][each, an]
“Assignee”). [It is understood and agreed that the rights and obligations of
[the Assignors][the Assignees]3 hereunder are several and not joint.]4
Capitalized terms used but not defined herein shall have the meanings given to
them in the Credit Agreement identified below (the “Credit Agreement”), receipt
of a copy of which is hereby acknowledged by the Assignee. The Standard Terms
and Conditions set forth in Annex 1 attached hereto are hereby agreed to and
incorporated herein by reference and made a part of this Assignment and
Assumption as if set forth herein in full.

For an agreed consideration, [the][each] Assignor hereby irrevocably sells and
assigns to [the Assignee][the respective Assignees], and [the][each] Assignee
hereby irrevocably purchases and assumes from [the Assignor][the respective
Assignors], subject to and in accordance with the Standard Terms and Conditions
as set forth in Annex 1 hereto and the Credit Agreement, as of the Effective
Date inserted by the Administrative Agent as contemplated below (i) all of [the
Assignor’s][the respective Assignors’] rights and obligations in [its capacity
as a Lender][their respective capacities as Lenders] under the Credit Agreement
and any other documents or instruments delivered pursuant thereto to the extent
related to the amount and percentage interest identified below of all of such
outstanding rights and obligations of [the Assignor][the respective Assignors]
under the respective facilities identified below (including, without limitation,
Letters of Credit and Swingline Loans included in such facilities) and (ii) to
the extent permitted to be assigned under applicable law, all claims, suits,
causes of action and any other right of [the Assignor (in its capacity as a
Lender)][the respective Assignors (in their respective capacities as Lenders)]
against any Person, whether known or unknown, arising under or in connection
with the Credit Agreement, any other documents or instruments delivered pursuant
thereto or the loan transactions governed thereby or in any way based on or
related to any of the foregoing, including, but not limited to, contract claims,
tort claims, malpractice claims, statutory claims and all other claims at law or
in equity related to the rights and obligations sold and assigned pursuant to
clause (i) above (the rights and obligations sold and assigned by [the][any]
Assignor to [the][any] Assignee pursuant to

 

2  For bracketed language here and elsewhere in this form relating to the
Assignor(s), if the assignment is from a single Assignor, choose the first
bracketed language. If the assignment is from multiple Assignors, choose the
second bracketed language.

3  Select as appropriate.

4  Include bracketed language if there are either multiple Assignors or multiple
Assignees.

 

E-1

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clauses (i) and (ii) above being referred to herein collectively as [the][an]
“Assigned Interest”). Each such sale and assignment is without recourse to
[the][any] Assignor and, except as expressly provided in this Assignment and
Assumption, without representation or warranty by [the][any] Assignor.

1. Assignor[s]:

 

 

   2. Assignee[s]:                                       
                                                          [and is an
Affiliate/Approved Fund of [identify Lender]] 3. Parent Borrower:  
TEMPUR SEALY INTERNATIONAL, INC. 4. Administrative Agent:   JPMORGAN CHASE BANK,
N.A., as the administrative agent under the Credit Agreement 5. Credit
Agreement:   Credit Agreement dated as of April 6, 2016 (as amended, restated,
amended and restated, extended, supplemented or otherwise modified in writing
from time to time; unless otherwise defined herein, the terms defined therein
being used herein as therein defined), among Tempur Sealy International, Inc., a
Delaware corporation, as the Parent Borrower, the Additional Borrowers from time
to time party thereto, the Lenders from time to time party thereto and JPMorgan
Chase Bank, N.A., as Administrative Agent

 

E-2

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6. Assigned Interest:  

 

CUSIP Number

 

Assignor[s]5

 

Assignee[s]6

 

Facility Assigned

 

Aggregate
Amount of
Commitment/Loans
for all Lenders
under such Facility

 

Amount of
Commitment/Loans
Assigned under such
Facility

 

Percentage
Assigned of
Commitment/Loans
under such Facility7

      Term Facility              

 

 

 

 

 

      Delayed Draw Commitment8              

 

 

 

 

 

      Revolving Credit Facility              

 

 

 

 

 

Effective Date:                     , 20     [TO BE INSERTED BY THE
ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF
TRANSFER IN THE REGISTER THEREFOR.]

 

5  List each Assignor, as appropriate.

6  List each Assignee, as appropriate.

7  Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of
all Lenders thereunder.

8  Prior to Delayed Draw Termination Date.

 

E-3

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The terms set forth in this Assignment and Assumption are hereby agreed to:

 

ASSIGNOR

[NAME OF ASSIGNOR]

By:       Title:

 

ASSIGNEE

[NAME OF ASSIGNEE]

By:       Title:

 

[Consented to and]9 Accepted:

JPMORGAN CHASE BANK, N.A., as Administrative Agent

By:       Title:

 

[Consented to:

JPMORGAN CHASE BANK, N.A., as

Swingline Lender and Issuing Lender

By:       Title:

 

BANK OF AMERICA, N.A., as

Issuing Lender

By:       Title:

 

WELLS FARGO BANK, N.A., as

Issuing Lender

By:       Title:

 

9  To be added only if the consent of the Administrative Agent is required by
the terms of the Credit Agreement.

 

E-4

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FIFTH THIRD BANK, as

Issuing Lender

By:       Title: ]10

 

[Consented to:

TEMPUR SEALY INTERNATIONAL, INC.

By:       Title: ]11

 

10  To be added only if the consent of each Issuing Lender and/or the Swingline
Lender, as applicable, is required by the terms of the Credit Agreement.

11  To be added only if the consent of the Parent Borrower is required by the
terms of the Credit Agreement.

 

E-5

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Annex 1

To Assignment and Assumption

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

1. Representations and Warranties.

1.1. Assignor. [The][Each] Assignor (a) represents and warrants that (i) it is
the legal and beneficial owner of [the][the relevant] Assigned Interest,
(ii) [the][such] Assigned Interest is free and clear of any lien, encumbrance or
other adverse claim, (iii) it has full power and authority, and has taken all
action necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby and (iv) the sale and assignment
of the Assigned Interest is made by this Assignment and Assumption in accordance
with the terms and conditions contained in the Credit Agreement; and (b) assumes
no responsibility with respect to (i) any statements, warranties or
representations made in or in connection with the Credit Agreement or any other
Loan Document, (ii) the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Loan Documents, (iii) the financial
condition of the Parent Borrower, any of its Subsidiaries or Affiliates, or any
other Person obligated in respect of any Loan Document or (iv) the performance
or observance by the Parent Borrower, any of its Subsidiaries or Affiliates, or
any other Person of any of their respective obligations under any Loan Document.

1.2. Assignee. [The][Each] Assignee (a) represents and warrants that (i) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) it
meets all requirements of an eligible Assignee, if applicable, under the Credit
Agreement (subject to receipt of such consents as may be required under the
Credit Agreement), (iii) from and after the Effective Date, it shall be bound by
the provisions of the Credit Agreement as a Lender thereunder and, to the extent
of [the][the relevant] Assigned Interest, shall have the obligations of a Lender
thereunder, (iv) it is sophisticated with respect to decisions to acquire assets
of the type represented by [the][such] Assigned Interest and either it, or the
Person exercising discretion in making its decision to acquire [the][such]
Assigned Interest, is experienced in acquiring assets of such type, (v) it has
received a copy of the Credit Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 6.1 thereof, as applicable,
and such other documents and information as it deems appropriate to make its own
credit analysis and decision to enter into this Assignment and Assumption and to
purchase [the][such] Assigned Interest, (vi) it has, on the basis of which it
has made such analysis and decision independently and without reliance on the
Administrative Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Assignment and Assumption and to purchase
[the][such] Assigned Interest and (vii) if it is a Non-U.S. Lender, attached
hereto is any documentation required to be delivered by it pursuant to the terms
of the Credit Agreement, duly completed and executed by [the][such] Assignee;
and (b) agrees that (i) it will, independently and without reliance on the
Administrative Agent, [the][any] Assignor or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Loan
Documents, and (ii) it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender.

 

Annex 1-1

--------------------------------------------------------------------------------

2. Payments. From and after the Effective Date, the Administrative Agent shall
make all payments in respect of [the][each] Assigned Interest (including
payments of principal, interest, fees and other amounts) to [the][the relevant]
Assignor for amounts which have accrued to but excluding the Effective Date and
to [the][the relevant] Assignee for amounts which have accrued from and after
the Effective Date. The Assignor and the Assignee shall make all appropriate
adjustments in payments by the Administrative Agent for periods prior to the
Effective Date or with respect to the making of this assignment directly between
themselves.

3. General Provisions. This Assignment and Assumption shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
permitted assigns. This Assignment and Assumption may be executed in any number
of counterparts, which together shall constitute one instrument. Delivery of an
executed counterpart of a signature page of this Assignment and Assumption by
telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption.

4. GOVERNING LAW. THIS ASSIGNMENT AND ASSUMPTION SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

Annex 1-2

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EXHIBIT F-1

[FORM OF] U.S. TAX COMPLIANCE CERTIFICATE

(for Non-U.S. Lenders That Are Not Partnerships for U.S. Federal Income Tax
Purposes)

Reference is hereby made to the Credit Agreement dated as of April 6, 2016 (as
amended, restated, amended and restated, extended, supplemented or otherwise
modified in writing from time to time, the “Credit Agreement”; the terms defined
therein being used herein as therein defined), among Tempur Sealy International,
Inc., a Delaware corporation, as the Parent Borrower, the Additional Borrowers
from time to time party thereto, the Lenders from time to time party thereto and
JPMorgan Chase Bank, N.A., as Administrative Agent. Unless otherwise defined
herein, terms defined in the Credit Agreement and used herein shall have the
meanings given to them in the Credit Agreement.

Pursuant to the provisions of Section 2.20 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record and beneficial owner
of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of
which it is providing this certificate, (ii) it is not a bank within the meaning
of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder
of any Borrower within the meaning of Section 871(h)(3)(B) of the Code and
(iv) it is not a controlled foreign corporation related to any Borrower as
described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Administrative Agent and the Parent Borrower
with a certificate of its non-U.S. Person status on IRS Form W-8BEN or IRS Form
W-8BEN-E, as applicable. By executing this certificate, the undersigned agrees
that (1) if the information provided on this certificate changes, the
undersigned shall promptly so inform the Parent Borrower and the Administrative
Agent, and (2) the undersigned shall have at all times furnished the Parent
Borrower and the Administrative Agent with a properly completed and currently
effective certificate in either the calendar year in which each payment is to be
made to the undersigned, or in either of the two calendar years preceding such
payments.

 

[NAME OF LENDER] By:       Name:   Title:

Date:                              , 20[    ]

--------------------------------------------------------------------------------

EXHIBIT F-2

[FORM OF] U.S. TAX COMPLIANCE CERTIFICATE

(for Non-U.S. Participants That Are Not Partnerships for U.S. Federal Income Tax
Purposes)

Reference is hereby made to the Credit Agreement dated as of April 6, 2016 (as
amended, restated, amended and restated, extended, supplemented or otherwise
modified in writing from time to time, the “Credit Agreement”; the terms defined
therein being used herein as therein defined), among Tempur Sealy International,
Inc., a Delaware corporation, as the Parent Borrower, the Additional Borrowers
from time to time party thereto, the Lenders from time to time party thereto and
JPMorgan Chase Bank, N.A., as Administrative Agent. Unless otherwise defined
herein, terms defined in the Credit Agreement and used herein shall have the
meanings given to them in the Credit Agreement.

Pursuant to the provisions of Section 2.20 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record and beneficial owner
of the participation in respect of which it is providing this certificate,
(ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code,
(iii) it is not a ten percent shareholder of any Borrower within the meaning of
Section 871(h)(3)(B) of the Code, and (iv) it is not a controlled foreign
corporation related to any Borrower as described in Section 881(c)(3)(C) of the
Code.

The undersigned has furnished its participating Lender with a certificate of its
non-U.S. Person status on IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable.
By executing this certificate, the undersigned agrees that (1) if the
information provided on this certificate changes, the undersigned shall promptly
so inform such Lender in writing, and (2) the undersigned shall have at all
times furnished such Lender with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two calendar years preceding such payments.

 

[NAME OF PARTICIPANT] By:       Name:   Title:

Date:                              , 20[    ]

 

F-2-1

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EXHIBIT F-3

[FORM OF] U.S. TAX COMPLIANCE CERTIFICATE

(for Non-U.S. Participants That Are Partnerships for U.S. Federal Income Tax
Purposes)

Reference is hereby made to the Credit Agreement dated as of April 6, 2016 (as
amended, restated, amended and restated, extended, supplemented or otherwise
modified in writing from time to time, the “Credit Agreement”), among Tempur
Sealy International, Inc., a Delaware corporation, as the Parent Borrower, the
Additional Borrowers from time to time party thereto, the Lenders from time to
time party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent.
Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

Pursuant to the provisions of Section 2.20 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record owner of the
participation in respect of which it is providing this certificate, (ii) its
direct or indirect partners/members are the sole beneficial owners of such
participation, (iii) with respect to such participation, neither the undersigned
nor any of its direct or indirect partners/members is a bank extending credit
pursuant to a loan agreement entered into in the ordinary course of its trade or
business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of
its direct or indirect partners/members is a ten percent shareholder of any
Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of
its direct or indirect partners/members is a controlled foreign corporation
related to any Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished its participating Lender with IRS Form W-8IMY
accompanied by one of the following forms from each of its partners/members that
is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or IRS Form
W-8BEN-E, as applicable or (ii) an IRS Form W-8IMY accompanied by an IRS Form
W-8BEN or IRS Form W-8BEN-E, as applicable, from each of such partner’s/member’s
beneficial owners that is claiming the portfolio interest exemption. By
executing this certificate, the undersigned agrees that (1) if the information
provided on this certificate changes, the undersigned shall promptly so inform
such Lender and (2) the undersigned shall have at all times furnished such
Lender with a properly completed and currently effective certificate in either
the calendar year in which each payment is to be made to the undersigned, or in
either of the two calendar years preceding such payments.

 

[NAME OF PARTICIPANT] By:       Name:   Title:

Date:                              , 20[    ]

 

F-3-1

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EXHIBIT F-4

[FORM OF] U.S. TAX COMPLIANCE CERTIFICATE

(for Non-U.S. Lenders That Are Partnerships for U.S. Federal Income Tax
Purposes)

Reference is hereby made to the Credit Agreement dated as of April 6, 2016 (as
amended, restated, amended and restated, extended, supplemented or otherwise
modified in writing from time to time, the “Credit Agreement”), among Tempur
Sealy International, Inc., a Delaware corporation, as the Parent Borrower, the
Additional Borrowers from time to time party thereto, the Lenders from time to
time party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent.
Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

Pursuant to the provisions of Section 2.20 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record owner of the Loan(s)
(as well as any Note(s) evidencing such Loan(s)) in respect of which it is
providing this certificate, (ii) its direct or indirect partners/members are the
sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such
Loan(s)), (iii) with respect to the extension of credit pursuant to this Credit
Agreement or any other Loan Document, neither the undersigned nor any of its
direct or indirect partners/members is a bank extending credit pursuant to a
loan agreement entered into in the ordinary course of its trade or business
within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct
or indirect partners/members is a ten percent shareholder of any Borrower within
the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or
indirect partners/members is a controlled foreign corporation related to any
Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Administrative Agent and the Parent Borrower
with IRS Form W-8IMY accompanied by one of the following forms from each of its
partners/members that is claiming the portfolio interest exemption: (i) an IRS
Form W-8BEN or IRS Form W-8BEN-E, as applicable or (ii) an IRS Form W-8IMY
accompanied by an IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, from each
of such partner’s/member’s beneficial owners that is claiming the portfolio
interest exemption. By executing this certificate, the undersigned agrees that
(1) if the information provided on this certificate changes, the undersigned
shall promptly so inform the Parent Borrower and the Administrative Agent, and
(2) the undersigned shall have at all times furnished the Parent Borrower and
the Administrative Agent with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two calendar years preceding such payments.

 

[NAME OF LENDER] By:       Name:   Title:

Date:                      , 20[    ]

 

 

F-4-1

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EXHIBIT G

[RESERVED]

 

F-4-1

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EXHIBIT H

[FORM OF] BORROWING NOTICE

Date:                 ,         

To: JPMorgan Chase Bank, N.A., as Administrative Agent

Ladies and Gentlemen:

Reference is made to the Credit Agreement dated as of April 6, 2016 (as amended,
restated, amended and restated, extended, supplemented or otherwise modified in
writing from time to time, the “Agreement”), among Tempur Sealy International,
Inc., a Delaware corporation, as the Parent Borrower, the Additional Borrowers
from time to time party thereto, the Lenders from time to time party thereto and
JPMorgan Chase Bank, N.A., as Administrative Agent.

[Borrower] (the “Borrower”) hereby irrevocably requests (select one):

 

[    ] A borrowing of Term Loans

[    ] A borrowing of Revolving Loans

[    ] A borrowing of Delayed Draw Term Loans

   [    ] A conversion or continuation of Loans

1. On                                                                      

2. (a Business Day) (the “Borrowing Date”).

3. In the amount of                                         .

4. Comprised of                                          
                           .

   [Type of Loan requested or to be converted]

5. For Eurocurrency Rate Loans: with an Interest Period of      months.

6. [Currency: [ ]]12

   To be deposited in accordance with the following wire transfer instructions:

 

Bank:

     

ABA No.:

     

Account No.:

     

Account Name:

     

 

 

12  For Revolving Loans.

 

A-2

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[The Borrowing requested herein complies with the Section 2.4 of the
Agreement.]13

[The Borrower represents and warrants that the conditions specified in
Sections 5.2(a), 5.2(b) and 5.2(c) of the Agreement have been satisfied on and
as of the date of the Borrowing Date.]14

[Signature Page Follows]

 

 

 

13  Include if Revolving Loan borrowing requested.

14  Include for each request for an extension of credit (other than (i) a notice
requesting only a conversion of Loans to the other Type or a continuation of
Eurocurrency Loans).

 

A-3

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TEMPUR SEALY INTERNATIONAL, INC. By:       Name:   Title:

 

A-1

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EXHIBIT I

[RESERVED]

 

A-1

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EXHIBIT J-1

[FORM OF] ADDITIONAL BORROWER JOINDER AGREEMENT FOR DOMESTIC SUBSIDIARIES

Additional Borrower Joinder Agreement dated as of [ ] (this “Agreement”), among
TEMPUR SEALY INTERNATIONAL, INC., (the “Parent Borrower”), [            ], a
[            ] (the “New Subsidiary Borrower”), and JPMORGAN CHASE BANK, N.A.,
as Administrative Agent.

Reference is made to the Credit Agreement dated as of April 6, 2016 (as amended,
restated, amended and restated, extended, supplemented or otherwise modified in
writing from time to time, the “Credit Agreement”), among Tempur Sealy
International, Inc., a Delaware corporation, as the Parent Borrower, the
Additional Borrowers from time to time party thereto, the Lenders from time to
time party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent.
Capitalized terms used but not otherwise defined herein shall have the meanings
assigned to them in the Credit Agreement.

Under the Credit Agreement, the Lenders, Issuing Lenders and Swingline Lender
have agreed, upon the terms and subject to the conditions therein set forth, to
make Revolving Loans and Swingline Loans and to issue Letters of Credit to the
Additional Borrowers. The Parent Borrower and the New Subsidiary Borrower desire
that the New Subsidiary Borrower become an Additional Borrower under the Credit
Agreement pursuant to Section 10.21 thereof. The Parent Borrower and the New
Subsidiary Borrower represent that the New Subsidiary Borrower is a wholly owned
Subsidiary of the Parent Borrower organized under the laws of [state of
organization or incorporation] as a [type of entity]. The Parent Borrower agrees
that the guarantees of the Parent Borrower and the other U.S. Loan Parties
contained in the Guarantee and Collateral Agreement will apply to the
Obligations of the New Subsidiary Borrower. Upon execution of this Agreement by
each of the Parent Borrower, the New Subsidiary Borrower and the Administrative
Agent, the New Subsidiary Borrower shall be a party to the Credit Agreement and
shall constitute an “Additional Borrower” for all purposes thereof, and the New
Subsidiary Borrower hereby agrees to be bound by all provisions of the Credit
Agreement; provided that, in no event shall the Revolving Lenders, Issuing
Lenders or Swingline Lender be required to make any Loans or issue any Letters
of Credit to the New Subsidiary Borrower without prior satisfaction by the New
Subsidiary Borrower of the applicable conditions precedent for Additional
Borrowers that are Domestic Subsidiaries contained in Section 5.3 of the Credit
Agreement.

[As of the date hereof, the representations and warranties in Section 5.3(g) of
the Credit Agreement are each true and correct.]15

THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK.

 

 

15  Insert this language if applicable.

 

A-1

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their authorized officers as of the date first appearing above.

 

TEMPUR SEALY INTERNATIONAL, INC. By:       Name:   Title: [NAME OF NEW
SUBSIDIARY BORROWER], By:       Name:   Title: JPMORGAN CHASE BANK, N.A., as
Administrative Agent, By:       Name:   Title:

 

A-2

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EXHIBIT J-2

[FORM OF] ADDITIONAL BORROWER JOINDER AGREEMENT FOR NON-U.S. SUBSIDIARIES

Additional Borrower Joinder Agreement dated as of [                        ]
(this “Agreement”), among TEMPUR SEALY INTERNATIONAL, INC., (the “Parent
Borrower”), [            ], a [            ] (the “New Foreign Subsidiary
Borrower”), and JPMORGAN CHASE BANK, N.A., as Administrative Agent.

Reference is made to the Credit Agreement dated as of April 6, 2016 (as amended,
restated, amended and restated, extended, supplemented or otherwise modified in
writing from time to time, the “Credit Agreement”), among Tempur Sealy
International, Inc., a Delaware corporation, as the Parent Borrower, the
Additional Borrowers from time to time party thereto, the Lenders from time to
time party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent.
Capitalized terms used but not otherwise defined herein shall have the meanings
assigned to them in the Credit Agreement.

Under the Credit Agreement, the Lenders, Issuing Lenders and Swingline Lender
have agreed, upon the terms and subject to the conditions therein set forth, to
make Revolving Loans and Swingline Loans and to issue Letters of Credit to the
Additional Borrowers. The Parent Borrower and the New Foreign Subsidiary
Borrower desire that the New Foreign Subsidiary Borrower become an Additional
Borrower under the Credit Agreement pursuant to Section 10.21 thereof. The
Parent Borrower and the New Foreign Subsidiary Borrower represent that the New
Foreign Subsidiary Borrower is a wholly owned Subsidiary of the Parent Borrower
organized under the laws of [jurisdiction of organization or incorporation] as a
[type of entity]. The Parent Borrower agrees that the guarantees of the Parent
Borrower and the other U.S. Loan Parties contained in the Guarantee and
Collateral Agreement and the guarantees of the other Foreign Loan Parties
contained in the Foreign Guarantee Agreement will apply to the Obligations of
the New Foreign Subsidiary Borrower. Upon execution of this Agreement by each of
the Parent Borrower, the New Foreign Subsidiary Borrower and the Administrative
Agent, the New Foreign Subsidiary Borrower shall be a party to the Credit
Agreement and shall constitute an “Additional Borrower” for all purposes
thereof, and the New Foreign Subsidiary Borrower hereby agrees to be bound by
all applicable provisions of the Credit Agreement; provided that, in no event
shall the Revolving Lenders, Issuing Lenders or Swingline Lender be required to
make any Loans or issue any Letters of Credit to the New Foreign Subsidiary
Borrower without prior satisfaction by the New Foreign Subsidiary Borrower of
the applicable conditions precedent for Additional Borrowers that are Foreign
Subsidiaries contained in Section 5.3 of the Credit Agreement.

[As of the date hereof, the representations and warranties in Section 5.3(g) of
the Credit Agreement are each true and correct.]16

THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK.

 

 

16  Insert this language if applicable.

 

A-3

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their authorized officers as of the date first appearing above.

 

TEMPUR SEALY INTERNATIONAL, INC. By:       Name:   Title: [NAME OF NEW
SUBSIDIARY BORROWER], By:       Name:   Title:

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent,

By:       Name:   Title:

 

A-4

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EXHIBIT K

 

 

 

FOREIGN GUARANTEE AGREEMENT

made by

[                ],

as an Additional Borrower,

and the Additional Borrowers and Subsidiary Guarantors from time to time parties
hereto,

in favor of

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

Dated as of [ ]

 

 

 

 

A-1

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TABLE OF CONTENTS

 

         Page   SECTION 1  

DEFINED TERMS

     1    1.1    

Definitions

     1    1.2    

Other Definitional Provisions

     2    SECTION 2  

GUARANTEE

     2    2.1    

Guarantee

     2    2.2    

Right of Contribution

     3    2.3    

No Subrogation

     3    2.4    

Amendments, etc. with respect to the Obligations

     4    2.5    

Guarantee Absolute and Unconditional

     4    2.6    

Reinstatement

     5    2.7    

Payments

     5    2.8    

Keepwell

     5    2.9    

Stay of Acceleration

     6    2.10  

Continuing Guarantee

     6    SECTION 3  

[RESERVED]

     6    SECTION 4  

REPRESENTATIONS AND WARRANTIES

     6    SECTION 5  

COVENANTS

     6    SECTION 6  

REMEDIAL PROVISIONS

     6    6.1    

[Reserved].

     6    6.2    

[Reserved].

     6    6.3    

[Reserved].

     6    6.4    

[Reserved].

     6    6.5    

Application of Proceeds

     7    SECTION 7  

THE ADMINISTRATIVE AGENT

     7    7.1    

Administrative Agent’ s Appointment as Attorney-in-Fact, etc

     7    SECTION 8  

MISCELLANEOUS

     8    8.1    

Amendments in Writing

     8    8.2    

Notices

     8    8.3    

No Waiver by Course of Conduct; Cumulative Remedies

     8    8.4    

Enforcement Expenses; Indemnification

     8    8.5    

Successors and Assigns

     9    8.6    

Set-Off

     9    8.7    

Counterparts

     9    8.8    

Severability

     9    8.9    

Section Headings

     9    8.10  

Integration.

     9    8.11  

GOVERNING LAW

     9    8.12  

Submission To Jurisdiction; Waivers

     10    8.13  

Acknowledgements

     10    8.14  

Additional Guarantors

     10    8.15  

Releases

     10    8.16  

WAIVER OF JURY TRIAL

     11    8.17  

Appointment of Agent for Service of Process

     11    8.18  

Waiver of Immunity

     12    8.19  

Judgment Currency

     12   

 

i

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SCHEDULES

 

Schedule 1 Notice Addresses

 

ii

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FOREIGN GUARANTEE AGREEMENT

FOREIGN GUARANTEE AGREEMENT, dated as of [                 ], made by each of
the signatories hereto, in favor of JPMORGAN CHASE BANK, N.A., as Administrative
Agent (in such capacity, the “Administrative Agent”) for the banks and other
financial institutions or entities (the “Lenders”) from time to time parties to
the Credit Agreement dated as of April 6, 2016 (as amended, restated, amended
and restated, extended, supplemented or otherwise modified in writing from time
to time, the “Credit Agreement”), among Tempur Sealy International, Inc., a
Delaware corporation, as the Parent Borrower, the Additional Borrowers from time
to time party thereto, the Lenders from time to time party thereto and JPMorgan
Chase Bank, N.A., as Administrative Agent.

W I T N E S S E T H:

WHEREAS, pursuant to the Credit Agreement, the lenders thereunder made
extensions of credit to the Borrowers;

WHEREAS, pursuant to the Credit Agreement, the Lenders have severally agreed to
make extensions of credit to the Parent Borrower and the other Borrowers upon
the terms and subject to the conditions set forth therein;

WHEREAS, the Parent Borrower is a member of an affiliated group of companies
that includes each other Guarantor;

WHEREAS, the proceeds of the extensions of credit under the Credit Agreement
will be used in part to enable the Parent Borrower to make valuable transfers to
one or more of the other Guarantors in connection with the operation of their
respective businesses;

WHEREAS, the Parent Borrower and the other Guarantors are engaged in related
businesses, and each Guarantor will derive substantial direct and indirect
benefit from the making of the extensions of credit under the Credit Agreement;
and

WHEREAS, it is a condition precedent to the obligation of the Lenders to make
their respective extensions of credit to any Additional Borrower that is a
Foreign Subsidiary under the Credit Agreement that the Guarantors shall have
executed and delivered this Agreement (as defined below) to the Administrative
Agent for the ratable benefit of the Secured Parties;

NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective extensions of credit to the
Additional Borrowers under the Credit Agreement, each Guarantor hereby agrees
with the Administrative Agent, for the ratable benefit of the Secured Parties,
as follows:

SECTION 1 DEFINED TERMS

1.1 Definitions. (a) Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement.

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(b) The following terms shall have the following meanings:

“Agreement”: this Foreign Guarantee Agreement, as the same may be amended,
supplemented or otherwise modified from time to time.

“Borrowers”: the Parent Borrower and the Additional Borrowers.

“Guarantors”: the collective reference to each Foreign Loan Party signatory
hereto; provided that each Foreign Loan Party shall be considered a Guarantor
only with respect to the Obligations of any other Foreign Loan Party.

“Qualified Keepwell Provider”: in respect of any Swap Obligation, each Foreign
Loan Party that, at the time the relevant guarantee (or grant of the relevant
security interest, as applicable), becomes effective with respect to such Swap
Obligation, has total assets exceeding $10,000,000 or otherwise constitutes an
“eligible contract participant” under the Commodity Exchange Act or any
regulations promulgated thereunder and can cause another person to qualify as an
“eligible contract participant” with respect to such Swap Obligation at such
time by entering into a keepwell or guarantee pursuant to
Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

“Secured Agreement”: with respect to any Obligation, the collective reference to
each instrument, agreement or other document that sets forth obligations of any
Borrower, obligations of a guarantor and/or rights of the holder with respect to
such Obligation.

“Secured Parties”: the collective reference to the Administrative Agent, the
Foreign Currency Agents, the Swingline Lender, the Issuing Lenders, the Lenders
and any affiliate of the Administrative Agent, the Foreign Currency Agents or
any Lender to which Obligations are owed.

1.2 Other Definitional Provisions. (a) The words “hereof,” “herein”, “hereto”
and “hereunder” and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement, and Section and Schedule references are to this Agreement unless
otherwise specified.

(b) The meanings given to terms defined herein shall be equally applicable to
both the singular and plural forms of such terms.

SECTION 2 GUARANTEE

2.1 Guarantee. (a) Each of the Guarantors hereby, jointly and severally,
unconditionally and irrevocably, guarantees to the Administrative Agent, for the
ratable benefit of the Secured Parties and their respective successors,
indorsees, transferees and assigns, the prompt and complete payment and
performance by the other Foreign Loan Parties when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations of such other Foreign
Loan Parties (other than, with respect to any Guarantor, any Excluded Swap
Obligations of such Guarantor).

 

2

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(b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Loan Documents shall in no event exceed the amount which can be guaranteed
by such Guarantor under applicable local laws relating to the insolvency of
debtors (after giving effect to the right of contribution established in
Section 2.2).

(c) Each Guarantor agrees that the Obligations may at any time and from time to
time exceed the amount of the liability of such Guarantor hereunder without
impairing the guarantee contained in this Section 2 or affecting the rights and
remedies of the Administrative Agent or any Lender hereunder.

(d) The guarantee contained in this Section 2 shall remain in full force and
effect until the Termination Date.

(e) No payment made by the Borrowers, any other Foreign Loan Party with
Obligations, any of the Guarantors, any other guarantor or any other Person or
received or collected by the Administrative Agent or any Lender from any
Borrower, any other Foreign Loan Party with Obligations, any of the other
Guarantors, any other guarantor or any other Person by virtue of any action or
proceeding or any set-off or appropriation or application at any time or from
time to time in reduction of or in payment of the Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of any Guarantor
hereunder which shall, notwithstanding any such payment (other than any payment
made by such Guarantor in respect of the Obligations or any payment received or
collected from such Guarantor in respect of the Obligations), remain liable for
the Obligations up to the maximum liability of such Guarantor hereunder until
the Termination Date.

2.2 Right of Contribution. Each Guarantor hereby agrees that to the extent that
a Guarantor shall have paid more than its proportionate share of any payment
made hereunder, such Guarantor shall be entitled to seek and receive
contribution from and against any other Guarantor hereunder which has not paid
its proportionate share of such payment. Each Guarantor’s right of contribution
shall be subject to the terms and conditions of Section 2.3. The provisions of
this Section 2.2 shall in no respect limit the obligations and liabilities of
any Guarantor to the Secured Parties, and each Guarantor shall remain liable to
the Secured Parties for the full amount guaranteed by such Guarantor hereunder.

2.3 No Subrogation. Notwithstanding any payment made by any Guarantor hereunder
or any set-off or application of funds of any Guarantor by any Secured Party, no
Guarantor shall be entitled to be subrogated to any of the rights of any Secured
Party against any Borrower, any other Loan Party with Obligations or any other
Guarantor or any collateral security or guarantee or right of offset held by any
Secured Party for the payment of the Obligations, nor shall any Guarantor seek
or be entitled to seek any contribution or reimbursement from any Borrower, any
other Loan Party with Obligations or any other Guarantor in respect of payments
made by such Guarantor hereunder, until the Termination Date. If any amount
shall be paid to any Guarantor on account of such subrogation rights at any time
when all of the Obligations shall not have been paid in full, such amount shall
be held by such Guarantor in trust for the Secured Parties, segregated from
other funds of such Guarantor, and shall, forthwith upon receipt by such
Guarantor, be turned over to the Administrative Agent in the exact form received
by such Guarantor (duly indorsed by such Guarantor to the Administrative Agent,
if required), to be applied against the Obligations, whether matured or
unmatured, in such order as the Administrative Agent may determine.

 

3

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2.4 Amendments, etc. with respect to the Obligations. Each Guarantor shall
remain obligated hereunder notwithstanding that, without any reservation of
rights against any Guarantor and without notice to or further assent by any
Guarantor, any demand for payment of any of the Obligations made by any Secured
Party may be rescinded by such Secured Party and any of the Obligations
continued, and the Obligations, or the liability of any other Person upon or for
any part thereof, or any collateral security or guarantee therefor or right of
offset with respect thereto, may, from time to time, in whole or in part, be
renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by any Secured Party, and the Credit Agreement and the
other Loan Documents and any other documents executed and delivered in
connection therewith may be amended, modified, supplemented or terminated, in
whole or in part, as the Administrative Agent (or the Required Lenders or all
Lenders, as the case may be) may deem advisable from time to time, and any
collateral security, guarantee or right of offset at any time held by any
Secured Party for the payment of the Obligations may be sold, exchanged, waived,
surrendered or released. No Secured Party shall have any obligation to protect,
secure, perfect or insure any Lien at any time held by it as security for the
Obligations or for the guarantee contained in this Section 2 or any property
subject thereto.

2.5 Guarantee Absolute and Unconditional. Each Guarantor waives any and all
notice of the creation, renewal, extension or accrual of any of the Obligations
and notice of or proof of reliance by any Secured Party upon the guarantee
contained in this Section 2 or acceptance of the guarantee contained in this
Section 2. The Obligations, and any of them, shall conclusively be deemed to
have been created, contracted or incurred, or renewed, extended, amended or
waived, in reliance upon the guarantee contained in this Section 2, and all
dealings between the Loan Parties, on the one hand, and any Secured Party, on
the other hand, likewise shall be conclusively presumed to have been had or
consummated in reliance upon the guarantee contained in this Section 2. Each
Guarantor waives diligence, presentment, protest, demand for payment and notice
of default or nonpayment to or upon any Borrower, any other Foreign Loan Party
with Obligations or any of the other Guarantors with respect to the Obligations.
Each Guarantor understands and agrees that the guarantee contained in this
Section 2 shall be construed as a continuing, absolute and unconditional
guarantee of payment without regard to (a) any extension, renewal, settlement,
compromise, waiver or release in respect of any obligation of any Borrower, any
other Loan Party or any other Person under any Secured Agreement, by operation
of law or otherwise, (b) any modification or amendment of or supplement to any
Secured Agreement, (c) any change in the corporate existence, structure or
ownership of any Borrower, any other Guarantor or any other Person or any of
their respective subsidiaries, or any insolvency, bankruptcy, reorganization or
other similar proceeding affecting any Borrower, any other Guarantor or any
other Person or any of their assets or any resulting release or discharge of any
obligation of any Borrower, any other Guarantor or any other Person under any
Secured Agreement, (d) the existence of any claim, set-off or other right that
such Guarantor may have at any time against any Borrower, any other Guarantor,
any Secured Party or any other Person, whether in connection with the Loan
Documents or any unrelated transactions, provided that nothing herein shall
prevent the assertion of any such claim by separate suit or compulsory
counterclaim, (e) the validity or enforceability of the Credit Agreement or any
other Loan

 

4

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Document, any of the Obligations or any other collateral security therefor or
guarantee or right of offset with respect thereto at any time or from time to
time held by any Secured Party, (f) any defense, set-off or counterclaim (other
than a defense of payment or performance) which may at any time be available to
or be asserted by any Borrower or any other Person against any Secured Party, or
(g) any other circumstance whatsoever (with or without notice to or knowledge of
the Parent Borrower or any other Loan Party with Obligations or such other
Guarantor) which constitutes, or might be construed to constitute, an equitable
or legal discharge of such Borrower or other Guarantor for the Obligations, in
bankruptcy or in any other instance. When making any demand hereunder or
otherwise pursuing its rights and remedies hereunder against any Guarantor, any
Secured Party may, but shall be under no obligation to, make a similar demand on
or otherwise pursue such rights and remedies as it may have against any
Borrower, any other Foreign Loan Party with Obligations, any other Guarantor or
any other Person or against any collateral security or guarantee for the
Obligations or any right of offset with respect thereto, and any failure by any
Secured Party to make any such demand, to pursue such other rights or remedies
or to collect any payments from any Borrower, any other Foreign Loan Party with
Obligations, any other Guarantor or any other Person or to realize upon any such
collateral security or guarantee or to exercise any such right of offset, or any
release of any such Borrower, any other Foreign Loan Party with Obligations, any
other Guarantor or any other Person or any such collateral security, guarantee
or right of offset, shall not relieve any Guarantor of any obligation or
liability hereunder, and shall not impair or affect the rights and remedies,
whether express, implied or available as a matter of law, of any Secured Party
against any Guarantor. For the purposes hereof “demand” shall include the
commencement and continuance of any legal proceedings.

2.6 Reinstatement. The guarantee contained in this Section 2 shall continue to
be effective, or be reinstated, as the case may be, if at any time payment, or
any part thereof, of any of the Obligations is rescinded or must otherwise be
restored or returned by any Secured Party upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of any Borrower, any other Foreign
Loan Party with Obligations or any other Guarantor, or upon or as a result of
the appointment of a receiver, intervenor or conservator of, or trustee or
similar officer for, any Borrower, any other Foreign Loan Party with Obligations
or any other Guarantor or any substantial part of its property, or otherwise,
all as though such payments had not been made.

2.7 Payments. Each Guarantor hereby guarantees that payments hereunder will be
paid to the Administrative Agent without set-off or counterclaim in Dollars at
the Funding Office.

2.8 Keepwell. Each Qualified Keepwell Provider hereby jointly and severally
absolutely, unconditionally, and irrevocably undertakes to provide such funds or
other support as may be needed from time to time by each other Foreign Loan
Party to honor all of its obligations under this guarantee in respect of any
Swap Obligation (provided, however, that each Qualified Keepwell Provider shall
only be liable under this Section 2.8 for the maximum amount of such liability
that can be hereby incurred without rendering its obligations under this
Section 2.8, or otherwise under this guarantee, voidable under applicable law
relating to fraudulent conveyance or fraudulent transfer, and not for any
greater amount). The obligations of each Qualified Keepwell Provider under this
Section 2.8 shall remain in full force and effect until the Obligations shall
have been satisfied by payment in full, no Letter of Credit shall be outstanding
and the Commitments shall be terminated. Each Qualified Keepwell Provider
intends that this Section 2.8 constitute, and this Section 2.8 shall be deemed
to constitute, a “keepwell, support, or other agreement” for the benefit of each
other Foreign Loan Party for all purposes of section 1a(18)(A)(v)(II) of the
Commodity Exchange Act.

 

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2.9 Stay of Acceleration. If acceleration of the time for payment of any
Obligation by any Borrower, any Foreign Loan Party with Obligations or any other
Guarantor is stayed by reason of the insolvency or receivership of such
Borrower, such Foreign Loan Party or such other Guarantor or otherwise, all
Obligations otherwise subject to acceleration under the terms of any Secured
Agreement shall nonetheless be payable by the Guarantors hereunder forthwith on
demand by the Administrative Agent.

2.10 Continuing Guarantee. Each Guarantee is a continuing guarantee, shall be
binding on the relevant Guarantor and its successors and assigns, and shall be
enforceable by the Administrative Agent or the Secured Parties. If all or part
of any Secured Party’s interest in any Obligation is assigned or otherwise
transferred, the transferor’s rights under each Guarantee, to the extent
applicable to the obligation so transferred, shall automatically be transferred
with such obligation.

SECTION 3 [RESERVED]

SECTION 4 REPRESENTATIONS AND WARRANTIES

Each Guarantor makes to the Administrative Agent and the Lenders the
representations and warranties set forth with respect to such Guarantor in
Section 4 of the Credit Agreement, which representations and warranties are
incorporated by reference in this Agreement, mutatis mutandis, all of which
survive the execution and delivery of this Agreement and the making of the Loans
and issuance of the Letters of Credit.

SECTION 5 COVENANTS

Until the Obligations shall have been satisfied by payment in full, no Letter of
Credit shall be outstanding and the Commitments shall be terminated, each
Guarantor agrees that it will comply with the covenants set forth in Sections 6
and 7 of the Credit Agreement which are applicable to such Guarantor, which
covenants are incorporated by reference in this Agreement, mutatis mutandis.

SECTION 6 REMEDIAL PROVISIONS

6.1 [Reserved].

6.2 [Reserved].

6.3 [Reserved].

6.4 [Reserved].

 

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6.5 Application of Proceeds. At such intervals as may be agreed upon by the
Parent Borrower and the Administrative Agent, or, if an Event of Default shall
have occurred and be continuing, at any time at the Administrative Agent’s
election, the Administrative Agent may apply all and any proceeds of the
guarantee set forth in Section 2 in payment of the Obligations of such other
Foreign Loan Parties in the following order:

First, to pay incurred and unpaid fees and expenses of the Administrative Agent
under the Loan Documents;

Second, to the Administrative Agent, for application by it towards payment of
amounts then due and owing and remaining unpaid in respect of the Obligations of
the Foreign Loan Parties, pro rata among the Secured Parties according to the
amounts of the Obligations of the Foreign Loan Parties then due and owing and
remaining unpaid to the Secured Parties;

Third, to the Administrative Agent, for application by it towards prepayment of
the Obligations of the Foreign Loan Parties, pro rata among the Secured Parties
according to the amounts of the Obligations of the Foreign Loan Parties then
held by the Secured Parties; and

Fourth, any balance remaining after the Obligations of the Foreign Loan Parties
shall have been paid in full, no Letters of Credit shall be outstanding and the
Commitments shall have terminated shall be paid over to the Parent Borrower or
to whomsoever may be lawfully entitled to receive the same.

Notwithstanding the foregoing, no amounts received from any Guarantor shall be
applied to any Excluded Swap Obligations of such Guarantor.

SECTION 7 THE ADMINISTRATIVE AGENT

7.1 Administrative Agent’ s Appointment as Attorney-in-Fact, etc. (a) Each
Guarantor hereby irrevocably constitutes and appoints the Administrative Agent
and any officer or agent thereof, with full power of substitution, as its true
and lawful attorney-in-fact with full irrevocable power and authority in the
place and stead of such Guarantor and in the name of such Guarantor or in its
own name, for the purpose of carrying out the terms of this Agreement, to take
any and all appropriate action and to execute any and all documents and
instruments which may be necessary or desirable to accomplish the purposes of
this Agreement.

Anything in this Section 7.1(a) to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any rights under the power
of attorney provided for in this Section 7.1(a) unless an Event of Default shall
have occurred and be continuing.

(b) If any Guarantor fails to perform or comply with any of its agreements
contained herein, the Administrative Agent, at its option, but without any
obligation so to do, may perform or comply, or otherwise cause performance or
compliance, with such agreement.

(c) The expenses of the Administrative Agent incurred in connection with actions
undertaken as provided in this Section 7.1, together with interest thereon at a
rate per annum equal to the highest rate per annum at which interest would then
be payable on any category of past due ABR Loans under the Credit Agreement,
from the date of payment by the Administrative Agent to the date reimbursed by
the relevant Guarantor, shall be payable by such Guarantor to the Administrative
Agent on demand.

 

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(d) Each Guarantor hereby ratifies all that said attorneys shall lawfully do or
cause to be done by virtue hereof. All powers, authorizations and agencies
contained in this Agreement are coupled with an interest and are irrevocable
until this Agreement is terminated and the security interests created hereby are
released.

SECTION 8 MISCELLANEOUS

8.1 Amendments in Writing. None of the terms or provisions of this Agreement may
be waived, amended, supplemented or otherwise modified except in accordance with
Section 10.1 of the Credit Agreement.

8.2 Notices. All notices, requests and demands to or upon the Administrative
Agent or any Guarantor hereunder shall be effected in the manner provided for in
Section 10.2 of the Credit Agreement; provided that any such notice, request or
demand to or upon any Guarantor shall be addressed to such Guarantor at its
notice address set forth on Schedule 1.

8.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the
Administrative Agent nor any Lender shall by any act (except by a written
instrument pursuant to Section 8.1), delay, indulgence, omission or otherwise be
deemed to have waived any right or remedy hereunder or to have acquiesced in any
Default or Event of Default. No failure to exercise, nor any delay in
exercising, on the part of the Administrative Agent or any Lender, any right,
power or privilege hereunder shall operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Administrative Agent or any Lender of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Administrative Agent or such Lender would otherwise
have on any future occasion. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of any
other rights or remedies provided by law.

8.4 Enforcement Expenses; Indemnification. (a) Each Guarantor agrees to pay or
reimburse each Lender and the Administrative Agent for all its costs and
expenses incurred in collecting against such Guarantor under the guarantee
contained in Section 2 or otherwise enforcing or preserving any rights under
this Agreement, including, without limitation, any such fees and disbursements
of counsel (including the allocated fees and expenses of in-house counsel) to
each Lender and of counsel to the Administrative Agent.

(b) Each Guarantor agrees to pay, and to save the Administrative Agent and the
Lenders harmless from, any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement to the extent the Parent
Borrower would be required to do so pursuant to Section 10.5 of the Credit
Agreement.

(c) The agreements in this Section 8.4 shall survive repayment of the
Obligations and all other amounts payable under the Credit Agreement and the
other Loan Documents.

 

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8.5 Successors and Assigns. This Agreement shall be binding upon the successors
and assigns of each Guarantor and shall inure to the benefit of the
Administrative Agent and the Lenders and their successors and assigns; provided
that no Guarantor may assign, transfer or delegate any of its rights or
obligations under this Agreement without the prior written consent of the
Administrative Agent.

8.6 Set-Off. In addition to any rights and remedies of the Secured Parties
provided by law, each Secured Party shall have the right, without notice to any
Guarantor, any such notice being expressly waived by each Guarantor to the
extent permitted by applicable law, upon any Obligations becoming due and
payable by any Guarantor (whether at the stated maturity, by acceleration or
otherwise), to apply to the payment of such Obligations, by setoff or otherwise,
any and all deposits (general or special, time or demand, provisional or final),
in any currency, and any other credits, indebtedness or claims, in any currency,
in each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Secured Party, any affiliate
thereof or any of their respective branches or agencies to or for the credit or
the account of such Guarantor; provided further, that to the extent prohibited
by applicable law as described in the definition of “Excluded Swap Obligation,”
no amounts set off with respect to any Guarantor shall be applied to any
Excluded Swap Obligations of such Guarantor. Each Secured Party agrees promptly
to notify the relevant Guarantor and the Administrative Agent after any such
application made by such Secured Party, provided that the failure to give such
notice shall not affect the validity of such application.

8.7 Counterparts. This Agreement may be executed by one or more of the parties
to this Agreement on any number of separate counterparts (including by email or
telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.

8.8 Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

8.9 Section Headings. The Section headings used in this Agreement are for
convenience of reference only and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.

8.10 Integration. This Agreement and the other Loan Documents represent the
agreement of the Guarantors, the Administrative Agent and the Lenders with
respect to the subject matter hereof and thereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent or any
Lender relative to subject matter hereof and thereof not expressly set forth or
referred to herein or in the other Loan Documents.

8.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

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8.12 Submission To Jurisdiction; Waivers. Each Guarantor hereby irrevocably and
unconditionally:

(a) submits for itself and its property in any legal action or proceeding
relating to this Agreement and the other Loan Documents to which it is a party,
or for recognition and enforcement of any judgment in respect thereof, to the
exclusive general jurisdiction of the courts of the State of New York in the
Borough of Manhattan, the courts of the United States of America for the
Southern District of New York, and appellate courts from any thereof; provided,
that nothing contained herein or in any other Loan Document will prevent any
Lender or the Administrative Agent from bringing any action to enforce any award
or judgment or exercise any right under this Agreement in any other forum in
which jurisdiction can be established;

(b) consents that any such action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;

(c) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue in
any other jurisdiction; and

(d) waives, to the maximum extent not prohibited by law, any right it may have
to claim or recover in any legal action or proceeding referred to in this
Section any special, exemplary, punitive or consequential damages.

8.13 Acknowledgements. Each Guarantor hereby acknowledges that:

(a) it has been advised by counsel in the negotiation, execution and delivery of
this Agreement and the other Loan Documents to which it is a party;

(b) neither the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to any Guarantor arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between
the Guarantors, on the one hand, and the Administrative Agent and Lenders, on
the other hand, in connection herewith or therewith is solely that of debtor and
creditor; and

(c) no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Lenders or among the Guarantors and the Lenders.

8.14 Additional Guarantors. Each Additional Borrower that is a Foreign
Subsidiary of the Parent Borrower that is required to become a party to this
Agreement pursuant to Section 5.3(a) of the Credit Agreement shall become a
Guarantor for all purposes of this Agreement upon execution and delivery by such
Subsidiary of an assumption agreement (an “Assumption Agreement”) in the form of
Annex 1 hereto.

8.15 Releases. (a) On the Termination Date, this Agreement and all obligations
(other than those expressly stated to survive such termination) of the
Administrative Agent and each

 

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Guarantor hereunder shall terminate, all without delivery of any instrument or
performance of any act by any party. At the request and sole expense of any
Guarantor following any such termination, the Administrative Agent shall execute
and deliver to such Guarantor such documents as such Guarantor shall reasonably
request to evidence such termination.

(b) At the request and sole expense of the Parent Borrower, a Guarantor shall be
released from its obligations hereunder in the event that all the Capital Stock
of such Guarantor shall be sold, transferred or otherwise disposed of in a
transaction permitted by the Credit Agreement or such Guarantor ceases to be an
Additional Borrower under and pursuant to the terms of the Credit Agreement;
provided that the Parent Borrower shall have delivered to the Administrative
Agent, at least five Business Days prior to the date of the proposed release, a
written request for release identifying the relevant Guarantor and the terms of
the sale or other disposition or other occurrence in reasonable detail,
including in the case of a sale of the Capital Stock of such Guarantor the price
thereof and any expenses in connection therewith, together with a certification
by the Parent Borrower stating that such transaction is in compliance with the
Credit Agreement and the other Loan Documents.

8.16 WAIVER OF JURY TRIAL. EACH GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

8.17 Appointment of Agent for Service of Process.

(a) Each of the Guarantors hereby irrevocably designates, appoints, authorizes
and empowers as its agent for service of process, the Parent Borrower (the
“Process Agent”), to accept and acknowledge for and on behalf of such Guarantor
service of any and all process, notices or other documents that may be served in
any suit, action or proceeding relating hereto in any New York State or Federal
court sitting in the State of New York. Such designation and appointment shall
be irrevocable until all Obligations shall have been paid in full in accordance
with the provisions thereof. Each of the Guarantors covenants and agrees that it
shall take any and all reasonable action, including the execution and filing of
any and all documents, that may be necessary to continue the foregoing
designations and appointments in full force and effect and to cause the Process
Agent to continue to act in such capacity.

(b) Each of the Guarantors consents to process being served in any suit, action
or proceeding of the nature referred to in Section 8.12 by serving a copy
thereof upon the Process Agent. Each Guarantor agrees that such service
(i) shall be deemed in every respect effective service of process upon such
Guarantor in any such suit, action or proceeding and (ii) shall to the fullest
extent permitted by law, be taken and held to be valid personal service upon and
personal delivery to such Guarantor.

(c) Nothing in this Section shall affect the right of any party hereto to serve
process in any manner permitted by law, or limit any right that any party hereto
may have to bring proceedings against any other party hereto in the courts of
any jurisdiction or to enforce in any lawful manner a judgment obtained in one
jurisdiction in any other jurisdiction.

 

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8.18 Waiver of Immunity. To the extent that any Guarantor has or hereafter may
acquire any immunity from jurisdiction of any court or from any legal process
(whether through service or notice, attachment prior to judgment, attachment in
aid or execution, or otherwise) with respect to itself or its property, such
Guarantor hereby irrevocably waives such immunity in respect of its obligations
under the Loan Documents to the extent permitted by applicable law and, without
limiting the generality of the foregoing, agrees that the waivers set forth in
this Section shall have effect to the fullest extent permitted under the Foreign
Sovereign Immunities Act of 1976 of the United States of America and are
intended to be irrevocable for purposes of such Act.

8.19 Judgment Currency.

(a) The Guarantors’ obligations hereunder and under the other Loan Documents to
make payments in Dollars shall not be discharged or satisfied by any tender or
recovery pursuant to any judgment expressed in or converted into any currency
other than Dollars, except to the extent that such tender or recovery results in
the effective receipt by the Administrative Agent or the respective Secured
Party of the full amount of Dollars expressed to be payable to the
Administrative Agent or such Secured Party under this Agreement or the other
Loan Documents. If, for the purpose of obtaining or enforcing judgment against
any Guarantor in any court or in any jurisdiction, it becomes necessary to
convert into or from any currency other than Dollars (such other currency being
hereinafter referred to as the “Judgment Currency”) an amount due in Dollars,
the conversion shall be made at the Dollar Equivalent determined as of the
Business Day immediately preceding the day on which the judgment is given (such
Business Day being hereinafter referred to as the “Judgment Currency Conversion
Date”).

(b) If there is a change in the rate of exchange prevailing between the Judgment
Currency Conversion Date and the date of actual payment of the amount due, the
Loan Parties shall pay, or cause to be paid, such additional amounts, if any
(but in any event not a lesser amount) as may be necessary to ensure that the
amount paid in the Judgment Currency, when converted at the rate of exchange
prevailing on the date of payment, will produce the amount of Dollars which
could have been purchased with the amount of Judgment Currency stipulated in the
judgment or judicial award at the rate of exchange prevailing on the Judgment
Currency Conversion Date.

(c) For purposes of determining the Dollar Equivalent or any other rate of
exchange for this Section 8.19, such amounts shall include any premium and costs
payable in connection with the purchase of Dollars.

 

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IN WITNESS WHEREOF, each of the undersigned has caused this Foreign Guarantee
Agreement to be duly executed and delivered as of the date first above written.

 

[                     ] By:       Name:   Title:

 

[Signature Page to Foreign Guarantee Agreement]

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JPMORGAN CHASE BANK, N.A., as Administrative Agent By:       Name:   Title:

 

 

[Signature Page to Foreign Guarantee Agreement]

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Schedule 1

NOTICE ADDRESSES OF GUARANTORS

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ACKNOWLEDGEMENT AND CONSENT

The undersigned hereby acknowledges receipt of a copy of the Foreign Guarantee
Agreement dated as of [•], 20[ ] (the “Agreement”), made by the Guarantors
parties thereto for the benefit of JPMorgan Chase Bank, N.A., as Administrative
Agent. The undersigned agrees for the benefit of the Administrative Agent and
the Lenders as follows:

The undersigned will be bound by the terms of the Agreement and will comply with
such terms insofar as such terms are applicable to the undersigned.

 

[NAME OF GUARANTOR] By:       Name:   Title:

 

Address for Notices:  

 

 

 

 

 

Fax:

 

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Annex 1 to

Foreign Guarantee Agreement

ASSUMPTION AGREEMENT, dated as of                     , 20__, made by
                                                  (the “Additional Guarantor”),
in favor of JPMorgan Chase Bank, N.A., as administrative agent (in such
capacity, the “Administrative Agent”) for the banks and other financial
institutions or entities (the “Lenders”) parties to the Credit Agreement
referred to below. All capitalized terms not defined herein shall have the
meaning ascribed to them in such Credit Agreement.

W I T N E S S E T H:

WHEREAS, Tempur Sealy International, Inc. (the “Parent Borrower”), the Lenders
and the Administrative Agent and the other parties party thereto have entered
into a Credit Agreement, dated as of April 6, 2016 (as amended, restated,
amended and restated, extended, supplemented or otherwise modified in writing
from time to time, the “Credit Agreement”);

WHEREAS, in connection with the Credit Agreement, the Foreign Loan Parties have
entered into the Foreign Guarantee Agreement, dated as of [ ] (as amended,
supplemented or otherwise modified from time to time, the “Foreign Guarantee
Agreement”) in favor of the Administrative Agent for the ratable benefit of the
Secured Parties; and

WHEREAS, the Additional Guarantor has agreed to execute and deliver this
assumption agreement (this “Assumption Agreement”) in order to become a party to
the Foreign Guarantee Agreement;

NOW, THEREFORE, IT IS AGREED:

1. Foreign Guarantee Agreement. By executing and delivering this Assumption
Agreement, the Additional Guarantor, as provided in Section 8.14 of the Foreign
Guarantee Agreement, hereby becomes a party to the Foreign Guarantee Agreement
as a Guarantor thereunder with the same force and effect as if originally named
therein as a Guarantor and, without limiting the generality of the foregoing,
hereby expressly assumes all obligations and liabilities of a Guarantor
thereunder. The information set forth in Annex 1-A hereto is hereby added to the
information set forth in the Schedules to the Foreign Guarantee Agreement. The
Additional Guarantor hereby represents and warrants that each of the
representations and warranties contained in Section 4 of the Foreign Guarantee
Agreement is true and correct on and as the date hereof (after giving effect to
this Assumption Agreement) as if made on and as of such date.

2. Governing Law. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

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IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to be
duly executed and delivered as of the date first above written.

 

[ADDITIONAL GUARANTOR] By:       Name:   Title:

 

[Signature Page to Assumption Agreement Foreign Guarantee Agreement]

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Annex 1-A to

Assumption Agreement

Supplement to Schedule 1