Exhibit
10.37


	
   

  	
   

  	
   

  



 


J.P.Morgan


 


CREDIT AGREEMENT


 


Dated as of May 13, 2009


 


among


 


SEALY MATTRESS COMPANY,


as Borrower


 


SEALY MATTRESS CORPORATION,


as Holdings and a Guarantor


 


SEALY CORPORATION,


as Parent


 


The Several Lenders


from Time to Time Parties Hereto


 


JPMORGAN CHASE BANK, N.A.,


as Administrative Agent and Collateral Agent


 


J.P. MORGAN SECURITIES INC.,


as Joint Lead Arranger and Joint Bookrunner


 


GE CAPITAL MARKETS, INC.,


as Joint Lead Arranger and Joint Bookrunner


 


GENERAL ELECTRIC CAPITAL CORPORATION,


as Co-Collateral Agent,


 


CITIGROUP GLOBAL MARKETS INC.,


as Joint Lead Arranger and Joint Bookrunner


 


and


 


MIZUHO CORPORATE BANK, LTD.,


as Syndication Agent


	
   

  	
   

  	
   

  



 

















	
   

  	
   

  	
   

  



 


TABLE CONTENTS


 


	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 1.

  	
  DEFINITIONS

  	
   

  	
   

  
	
  1.1.

  	
  Defined Terms

  	
   

  	
  1

  
	
  1.2.

  	
  Exchange Rates

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.

  	
  AMOUNT AND TERMS OF CREDIT

  	
   

  	
   

  
	
  2.1.

  	
  Commitments

  	
   

  	
  36

  
	
  2.2. 

  	
  Minimum Amount of Each
  Borrowing; Maximum Number of Borrowings

  	
   

  	
  38

  
	
  2.3.

  	
  Notice of Borrowing

  	
   

  	
  38

  
	
  2.4.

  	
  Disbursement of Funds

  	
   

  	
  39

  
	
  2.5.

  	
  Repayment of Loans;
  Evidence of Debt

  	
   

  	
  40

  
	
  2.6.

  	
  Conversions and
  Continuations

  	
   

  	
  41

  
	
  2.7.

  	
  Pro rata Borrowings

  	
   

  	
  42

  
	
  2.8.

  	
  Interest

  	
   

  	
  42

  
	
  2.9.

  	
  Interest Periods

  	
   

  	
  43

  
	
  2.10.

  	
  Increased Costs,
  Illegality, etc

  	
   

  	
  43

  
	
  2.11.

  	
  Compensation

  	
   

  	
  45

  
	
  2.12.

  	
  Change of Lending Office

  	
   

  	
  46

  
	
  2.13.

  	
  Notice of Certain Costs

  	
   

  	
  46

  
	
  2.14.

  	
  Defaulting Lenders

  	
   

  	
  46

  
	
  2.15.

  	
  Incremental Facilities

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.

  	
  LETTERS OF CREDIT

  	
   

  	
   

  
	
  3.1.

  	
  Letters of Credit

  	
   

  	
  50

  
	
  3.2.

  	
  Letter of Credit Requests

  	
   

  	
  51

  
	
  3.3.

  	
  Letter of Credit
  Participations

  	
   

  	
  51

  
	
  3.4.

  	
  Agreement to Repay Letter
  of Credit Drawings

  	
   

  	
  53

  
	
  3.5.

  	
  Increased Costs

  	
   

  	
  54

  
	
  3.6.

  	
  Successor Letter of Credit
  Issuer

  	
   

  	
  54

  
	
  3.7.

  	
  Existing Letters of Credit

  	
   

  	
  55

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4.

  	
  FEES; COMMITMENTS

  	
   

  	
   

  
	
  4.1.

  	
  Fees

  	
   

  	
  55

  
	
  4.2.

  	
  Voluntary Reduction of
  Commitments

  	
   

  	
  56

  
	
  4.3.

  	
  Mandatory Termination of
  Commitments

  	
   

  	
  56

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
  PAYMENTS

  	
   

  	
   

  
	
  5.1.

  	
  Voluntary Prepayments

  	
   

  	
  56

  
	
  5.2.

  	
  Mandatory Prepayments

  	
   

  	
  57

  
	
   

  	
   

  	
   

  	
   

  



 

















 


	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  5.3.

  	
  Payments Generally

  	
   

  	
  58

  
	
  5.4.

  	
  Net Payments

  	
   

  	
  59

  
	
  5.5.

  	
  Computations of Interest
  and Fees

  	
   

  	
  62

  
	
  5.6.

  	
  Limit on Rate of Interest

  	
   

  	
  63

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
  CONDITIONS PRECEDENT TO INITIAL BORROWING

  	
   

  	
   

  
	
  6.1.

  	
  Credit Documents

  	
   

  	
  63

  
	
  6.2.

  	
  Collateral

  	
   

  	
  64

  
	
  6.3.

  	
  Legal Opinions

  	
   

  	
  64

  
	
  6.4.

  	
  No Default

  	
   

  	
  64

  
	
  6.5.

  	
  Concurrent Financings

  	
   

  	
  64

  
	
  6.6.

  	
  Existing Credit Agreement

  	
   

  	
  64

  
	
  6.7.

  	
  Effective Date Certificates

  	
   

  	
  64

  
	
  6.8.

  	
  Corporate Proceedings of
  Each Credit Party

  	
   

  	
  64

  
	
  6.9.

  	
  Corporate Documents

  	
   

  	
  64

  
	
  6.10.

  	
  Fees

  	
   

  	
  64

  
	
  6.11.

  	
  Representations and
  Warranties

  	
   

  	
  65

  
	
  6.12.

  	
  Borrowing Base Certificate

  	
   

  	
  65

  
	
  6.13.

  	
  Closing Availability

  	
   

  	
  65

  
	
  6.14.

  	
  Solvency

  	
   

  	
  65

  
	
  6.15.

  	
  Pledged Stock; Stock
  Powers; Pledged Notes

  	
   

  	
  65

  
	
  6.16.

  	
  Lien Searches

  	
   

  	
  65

  
	
  6.17.

  	
  Insurance

  	
   

  	
  65

  
	
  6.18.

  	
  Perfection Certificate

  	
   

  	
  65

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
  CONDITIONS PRECEDENT TO ALL CREDIT EVENTS

  	
   

  	
   

  
	
  7.1.

  	
  No Default;
  Representations and Warranties

  	
   

  	
  66

  
	
  7.2.

  	
  Notice of Borrowing;
  Letter of Credit Request

  	
   

  	
  66

  
	
  7.3.

  	
  Availability

  	
   

  	
  66

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8.

  	
  REPRESENTATIONS, WARRANTIES AND AGREEMENTS

  	
   

  	
   

  
	
  8.1.

  	
  Corporate Status

  	
   

  	
  66

  
	
  8.2.

  	
  Corporate Power and
  Authority

  	
   

  	
  66

  
	
  8.3.

  	
  No Violation

  	
   

  	
  67

  
	
  8.4.

  	
  Litigation

  	
   

  	
  67

  
	
  8.5.

  	
  Margin Regulations

  	
   

  	
  67

  
	
  8.6.

  	
  Governmental Approvals

  	
   

  	
  67

  
	
  8.7.

  	
  Investment Company Act

  	
   

  	
  67

  
	
  8.8.

  	
  True and Complete
  Disclosure

  	
   

  	
  67

  
	
  8.9.

  	
  Financial Condition;
  Financial Statements

  	
   

  	
  68

  
	
  8.10.

  	
  Tax Returns and Payments

  	
   

  	
  68

  
	
  8.11.

  	
  Compliance with ERISA

  	
   

  	
  68

  
	
  8.12.

  	
  Subsidiaries

  	
   

  	
  69

  
	
  8.13.

  	
  Labor Matters

  	
   

  	
  69

  
	
  8.14.

  	
  Patents, etc.

  	
   

  	
  69

  
	
  8.15.

  	
  Environmental Laws

  	
   

  	
  69

  



 


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  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  8.16.

  	
  Properties

  	
   

  	
  70

  
	
  8.17.

  	
  Solvency

  	
   

  	
  70

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9.

  	
  AFFIRMATIVE COVENANTS

  	
   

  	
   

  
	
  9.1.

  	
  Information Covenants

  	
   

  	
  70

  
	
  9.2.

  	
  Books, Records and
  Inspections

  	
   

  	
  73

  
	
  9.3.

  	
  Maintenance of Insurance

  	
   

  	
  73

  
	
  9.4.

  	
  Payment of Taxes

  	
   

  	
  74

  
	
  9.5.

  	
  Consolidated Corporate
  Franchises

  	
   

  	
  74

  
	
  9.6.

  	
  Compliance with Statutes,
  Obligations, etc.

  	
   

  	
  74

  
	
  9.7.

  	
  ERISA

  	
   

  	
  74

  
	
  9.8.

  	
  Good Repair

  	
   

  	
  75

  
	
  9.9.

  	
  Transactions with
  Affiliates

  	
   

  	
  75

  
	
  9.10.

  	
  End of Fiscal Years;
  Fiscal Quarters

  	
   

  	
  76

  
	
  9.11.

  	
  Additional Subsidiary
  Guarantors and Grantors

  	
   

  	
  76

  
	
  9.12.

  	
  Pledges of Additional
  Stock and Evidence of Indebtedness

  	
   

  	
  76

  
	
  9.13.

  	
  Use of Proceeds

  	
   

  	
  77

  
	
  9.14.

  	
  Changes in Business

  	
   

  	
  77

  
	
  9.15.

  	
  Further Assurances

  	
   

  	
  77

  
	
  9.16.

  	
  Appraisals

  	
   

  	
  78

  
	
  9.17.

  	
  Field Examinations

  	
   

  	
  78

  
	
  9.18.

  	
  Asset Sales; Casualty and
  Condemnation

  	
   

  	
  78

  
	
  9.19.

  	
  Post-Closing Covenant

  	
   

  	
  78

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 10.

  	
  NEGATIVE COVENANTS

  	
   

  	
   

  
	
  10.1.

  	
  Limitation on Indebtedness

  	
   

  	
  81

  
	
  10.2.

  	
  Limitation on Liens

  	
   

  	
  83

  
	
  10.3.

  	
  Limitation on Fundamental
  Changes

  	
   

  	
  84

  
	
  10.4.

  	
  Limitation on Sale of
  Assets

  	
   

  	
  86

  
	
  10.5.

  	
  Limitation on Investments

  	
   

  	
  88

  
	
  10.6.

  	
  Limitation on Restricted
  Payments

  	
   

  	
  89

  
	
  10.7.

  	
  Limitations on Debt
  Payments and Certain Amendments

  	
   

  	
  90

  
	
  10.8.

  	
  Limitations on Sale
  Leasebacks

  	
   

  	
  91

  
	
  10.9.

  	
  Fixed Charge Coverage
  Ratio

  	
   

  	
  91

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 11.

  	
  EVENTS OF DEFAULT

  	
   

  	
   

  
	
  11.1.

  	
  Payments

  	
   

  	
  92

  
	
  11.2.

  	
  Representations, etc.

  	
   

  	
  92

  
	
  11.3.

  	
  Covenants

  	
   

  	
  92

  
	
  11.4.

  	
  Default Under Other
  Agreements

  	
   

  	
  92

  
	
  11.5.

  	
  Bankruptcy, etc.

  	
   

  	
  92

  
	
  11.6.

  	
  ERISA

  	
   

  	
  93

  
	
  11.7.

  	
  Guarantee

  	
   

  	
  93

  
	
  11.8.

  	
  Pledge Agreement

  	
   

  	
  93

  
	
  11.9.

  	
  Security Agreement

  	
   

  	
  94

  
	
  11.10.

  	
  Mortgages

  	
   

  	
  94

  



 


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  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  11.11.

  	
  Subordination

  	
   

  	
  94

  
	
  11.12.

  	
  Judgments

  	
   

  	
  94

  
	
  11.13.

  	
  Change of Control

  	
   

  	
  94

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 12.

  	
  THE AGENTS

  	
   

  	
   

  
	
  12.1.

  	
  Appointment

  	
   

  	
  95

  
	
  12.2.

  	
  Delegation of Duties

  	
   

  	
  95

  
	
  12.3.

  	
  Exculpatory Provisions

  	
   

  	
  95

  
	
  12.4.

  	
  Reliance by Administrative
  Agent and Security Agents

  	
   

  	
  95

  
	
  12.5.

  	
  Notice of Default

  	
   

  	
  96

  
	
  12.6. 

  	
  Non-Reliance on
  Administrative Agent, Security Agents and Other Lenders

  	
   

  	
  96

  
	
  12.7.

  	
  Indemnification

  	
   

  	
  97

  
	
  12.8. 

  	
  Administrative Agent and
  Security Agents in Their Individual Capacities

  	
   

  	
  97

  
	
  12.9.

  	
  Successor Agent

  	
   

  	
  97

  
	
  12.10.

  	
  Withholding Tax

  	
   

  	
  98

  
	
  12.11.

  	
  Reports

  	
   

  	
  98

  
	
  12.12.

  	
  Security Agents

  	
   

  	
  98

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 13.

  	
  [RESERVED]

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 14.

  	
  MISCELLANEOUS

  	
   

  	
   

  
	
  14.1.

  	
  Amendments and Waivers

  	
   

  	
  99

  
	
  14.2.

  	
  Notices

  	
   

  	
  100

  
	
  14.3.

  	
  No Waiver; Cumulative
  Remedies

  	
   

  	
  102

  
	
  14.4.

  	
  Survival of
  Representations and Warranties

  	
   

  	
  102

  
	
  14.5.

  	
  Payment of Expenses and
  Taxes

  	
   

  	
  102

  
	
  14.6.

  	
  Successors and Assigns;
  Participations and Assignments

  	
   

  	
  103

  
	
  14.7.

  	
  Replacements of Lenders
  under Certain Circumstances

  	
   

  	
  107

  
	
  14.8.

  	
  Adjustments; Set-off

  	
   

  	
  107

  
	
  14.9.

  	
  Counterparts

  	
   

  	
  108

  
	
  14.10.

  	
  Severability

  	
   

  	
  108

  
	
  14.11.

  	
  Integration

  	
   

  	
  108

  
	
  14.12.

  	
  GOVERNING LAW

  	
   

  	
  108

  
	
  14.13.

  	
  Submission to
  Jurisdiction; Waivers

  	
   

  	
  108

  
	
  14.14.

  	
  Acknowledgments

  	
   

  	
  109

  
	
  14.15.

  	
  WAIVERS
  OF JURY TRIAL

  	
   

  	
  109

  
	
  14.16.

  	
  Confidentiality

  	
   

  	
  109

  
	
  14.17.

  	
  USA PATRIOT Act

  	
   

  	
  110

  



 


iv

















 


	
  SCHEDULES

  	
   

  
	
   

  	
   

  
	
  Schedule 1.1(a)

  	
  Mortgaged Properties

  
	
  Schedule 1.1(b)

  	
  Commitments of Lenders

  
	
  Schedule 1.1(c)

  	
  Immaterial Subsidiaries

  
	
  Schedule 1.1(d)

  	
  Existing Letters of Credit

  
	
  Schedule 8.12

  	
  Subsidiaries

  
	
  Schedule 10.1

  	
  Effective Date
  Indebtedness

  
	
  Schedule 10.2

  	
  Effective Date Liens

  
	
  Schedule 10.3

  	
  Effective Date Parent
  Assets

  
	
  Schedule 10.5

  	
  Effective Date Investments

  



 


v

















 


CREDIT
AGREEMENT dated as of May 13, 2009, among SEALY MATTRESS COMPANY, an Ohio
corporation (the “Borrower”), SEALY MATTRESS CORPORATION, a Delaware
corporation (“Holdings”), SEALY CORPORATION, a Delaware corporation (“Parent”),
the lending institutions from time to time parties hereto (each a “Lender”
and, collectively, the “Lenders”), GENERAL ELECTRIC CAPITAL CORPORATION,
as Co-Collateral Agent, and JPMORGAN CHASE BANK, N.A. (as Administrative Agent
and Collateral Agent (such term and each other capitalized term used but not
defined in this introductory statement having the meaning provided in Section 1)).


 


The
parties hereto hereby agree as follows:


 


SECTION 1.             Definitions


 


1.1.            Defined Terms.


 


(a)             As used herein, the following terms
shall have the meanings specified in this Section 1.1 unless the context
otherwise requires (it being understood that defined terms in this Agreement
shall include in the singular number the plural and in the plural the
singular):


 


“ABR”
shall mean, for any day, a rate per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) 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 Eurodollar Rate for a three month Interest Period
on such day (or if such day is not a  Business
Day, the immediately preceding Business Day) plus 1%; provided that, for
the avoidance of doubt, the Eurodollar Rate for any day shall be calculated on
a daily basis in a manner consistent with the definition of “Eurodollar Rate”.
Any change in the ABR due to a change in the Prime Rate, the Federal Funds
Effective Rate or the Eurodollar Rate shall be effective as of the opening of
business on the effective day of such change in the Prime Rate, the Federal
Funds Effective Rate or the Eurodollar Rate, respectively.


 


“ABR
Loan” shall mean each Loan bearing interest at the rate provided in Section 2.8(a) and,
in any event, shall include all Swingline Loans and Protective Advances.


 


“ABR
Margin” shall mean 3.00% per annum.


 


“Account”
shall mean, individually and collectively, any “Account” referred to in the
Security Agreement.


 


“Account
Debtor” shall mean any Person obligated on an Account.


 


“Account
Reserves” shall mean any and all reserves which the Security Agents deem
necessary, in their Permitted Discretion, to maintain (including, without
limitation, Dilution Reserves, reserves for rebates, discounts, warranty claims
and inventory returns and reserves for Permitted Liens on Eligible Accounts
ranking prior to the Lien of the Administrative Agent for the benefit of the
Secured Parties) with respect to the Eligible Accounts. The Security Agents
may, from time to time, in their Permitted Discretion, adjust Account Reserves
used in


 

















 


computing the Borrowing Base
upon not less than one Business Day’s prior written notice to the Borrower.


 


“Adjusted
Eligible Accounts” shall mean the excess, if any, of (i) Eligible
Accounts over (ii) Account Reserves.


 


“Adjusted
Eligible Inventory” shall mean the excess, if any, of (i) Eligible
Inventory over (ii) Inventory Reserves.


 


“Administrative
Agent” shall mean JPMorgan Chase Bank, N.A., together with its affiliates,
as the arranger of the Commitments and as the administrative agent for the
Lenders under this Agreement and the other Credit Documents.


 


“Administrative
Agent’s Office” shall mean the office of the Administrative Agent located
at 270 Park Avenue, New York, New York 10017, or such other office as the
Administrative Agent may hereafter designate in writing as such to the other
parties hereto.


 


“Affiliate”
shall mean, with respect to any Person, any other Person directly or indirectly
controlling, controlled by, or under direct or indirect common control with
such Person. A Person shall be deemed to control a corporation if such Person
possesses, directly or indirectly, the power to direct or cause the direction
of the management and policies of such corporation, whether through the
ownership of voting securities, by contract or otherwise.


 


“Agents”
shall mean each Joint Lead Arranger, the Administrative Agent, the Security
Agents and the Syndication Agent.


 


“Agreement”
shall mean this Credit Agreement, as the same may be amended, amended and
restated, supplemented or otherwise modified from time to time.


 


“Applicable
Percentage” shall mean, with respect to any Lender, (a) with respect
to Revolving Credit Loans, Letters of Credit Outstanding or Swingline Loans, a
percentage equal to a fraction the numerator of which is such Lender’s
Commitment and the denominator of which is the Total Commitment (if the Total
Commitment has terminated or expired, the Applicable Percentages shall be
determined based upon such Lender’s share of the Total Credit Exposure at that
time); provided that in the case of Section 2.14 when a Defaulting
Lender shall exist, any such Defaulting Lender’s Commitment shall be
disregarded in the calculation and (b) with respect to Protective Advances
or with respect to the Total Credit Exposure, a percentage based upon its share
of the Total Credit Exposure and the unused Commitments; provided that
in the case of Section 2.14 when a Defaulting Lender shall exist, any such
Defaulting Lender’s Commitment shall be disregarded in the calculation.


 


“Approved
Fund” shall have the meaning provided in Section 14.6.


 


“Assignment
and Acceptance” shall mean a customary assignment and acceptance
substantially in form reasonably satisfactory to the Administrative Agent.


 


2

















 


“Authorized
Officer” shall mean the Chairman of the Board, the President, the Chief
Financial Officer, the Treasurer or any other senior officer of the Borrower
designated as such in writing to the Administrative Agent and Collateral Agent
by the Borrower.


 


“Availability”
shall mean, at any time, an amount equal to (a) the lesser of (i) the
Total Commitment and (ii) the Borrowing Base minus (b) the
Total Credit Exposure.


 


“Available
Commitment” shall mean an amount equal to the excess, if any, of (a) the
amount of the Total Commitment over (b) the sum of (i) the aggregate
principal amount of all Revolving Credit Loans then outstanding and (ii) the
aggregate Letters of Credit Outstanding at such time.


 


“Bankruptcy
Code” shall have the meaning provided in Section 11.5.


 


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


 


“Borrower”
shall have the meaning provided in the preamble to this Agreement.


 


“Borrowing”
shall mean and include (a) the incurrence of Swingline Loans from the
Swingline Lender on a given date, (b) the incurrence of a Protective
Advance from the Administrative Agent on a given date, and (c) the
incurrence of one Type of Revolving Credit Loan on a given date (or resulting
from conversions on a given date) having, in the case of Eurodollar Loans, the
same Interest Period (provided that ABR Loans incurred pursuant to Section 2.10(b) shall
be considered part of any related Borrowing of Eurodollar Loans).


 


“Borrowing
Base” shall mean, at any time, the sum of (a) the product of 85% multiplied
by the Adjusted Eligible Accounts at such time, plus (b) the
lesser of (i) the product of 65% multiplied  by the Adjusted
Eligible Inventory, valued at the lower of cost or market value, determined on
a first-in-first-out basis, at such time and (ii) the product of 85% multiplied
by the Net Orderly Liquidation Value percentage identified in the most
recent inventory appraisal ordered by the Security Agents multiplied  by
Adjusted Eligible Inventory, valued at the lower of cost or market value,
determined on a first-in-first-out basis, at such time, minus (c) Reserves.


 


“Borrowing
Base Certificate” shall mean a certificate, duly completed and signed by an
Authorized Officer of the Borrower, in a form on the Effective Date which is
satisfactory to each Initial Lender and following the Effective Date in such
form or another form which is reasonably acceptable to the Security Agents in
their sole discretion.


 


“Business
Day” shall mean any day excluding Saturday, Sunday and any day that shall
be in The City of New York a legal holiday or a day on which banking
institutions are authorized by law or other governmental actions to close, provided
that, when used in connection with a Eurodollar Loan, the term “Business Day”
shall also exclude any day on which banks are not open for dealings in dollar
deposits in the London interbank market.


 


“Canadian
Dollars” and shall mean the lawful money of Canada.


 


3

















 


“Canadian
Letter of Credit Sublimit” shall mean $5,000,000, as the same may be
reduced from time to time pursuant to Section 3.1.


 


“Capital
Expenditures” shall mean, for any period, the aggregate of all expenditures
(whether paid in cash or accrued as liabilities and including in all events all
amounts expended or capitalized under Capital Leases, but excluding any amount
representing capitalized interest or amounts expended or expensed under leases
that are not Capital Leases) by Parent, Holdings, the Borrower and the
Restricted Subsidiaries during such period that, in conformity with GAAP, are
or are required to be included as additions during such period to property, plant
or equipment reflected in the consolidated balance sheet of the Parent, provided
that the term “Capital Expenditures” shall not include (a) expenditures
made in connection with the replacement, substitution or restoration of assets
to the extent financed (i) from insurance proceeds paid on account of the
loss of or damage to the assets being replaced or restored or (ii) with
awards of compensation arising from the taking by eminent domain or
condemnation of the assets being replaced, (b) the purchase price of
equipment that is purchased simultaneously with the trade-in of existing
equipment to the extent that the gross amount of such purchase price is reduced
by the credit granted by the seller of such equipment for the equipment being
traded in at such time or (c) the purchase of plant, property or equipment
made within one year of the sale of any asset (other than sales of inventory in
the ordinary course of business) to the extent purchased with the proceeds of
such sale.


 


“Capital
Lease” shall mean, as applied to any Person, any lease of any property
(whether real, personal or mixed) by that Person as lessee that, in conformity
with GAAP, is, or is required to be, accounted for as a capital lease on the
balance sheet of that Person.


 


“Capitalized
Lease Obligations” shall mean, as applied to any Person, all obligations
under Capital Leases of such Person or any of its Subsidiaries, in each case
taken at the amount thereof accounted for as liabilities in accordance with
GAAP.


 


“Cash
Dominion Period” shall mean (i) each period commencing on any date
that Availability shall have either (A) been less than the greater of (x) 15.0%
of the Total Commitment and (y) $15.0 million for five consecutive
Business Days or (B) been less than the lower of (x) 10.0% of the Borrowing
Base and (y) 10.0% of the Total Commitment on any Business Day and ending
on the date that Availability shall have been at least equal to the greater of (x) 15.0%
of the Total Commitment and (y) $15.0 million for 30 consecutive calendar
days, (ii) each period during which an Event of Default under Section 11.1
or 11.5 shall have occurred and is continuing or (iii) each period
commencing on the later of (A) the occurrence of an Event of Default under
(x) Section 11.3(a), 11.4, 11.7, 11.8, 11.9, 11.10 or 11.11 or (y) Section 11.3(b) (but
in the case of Section 11.3(b), solely to the extent resulting from a
breach of Section 9.1(a), 9.1(b), 9.2, 9.16 or 9.17) or (z) Section 11.2
(but solely to the extent that such representation or warranty relates to
financial statements referred to in Section 9.1(a) or 9.1(b) or
a Borrowing Base Certificate delivered pursuant to Section 9.1(e) and
an inaccuracy therein resulting in such Event of Default (I) resulted in a
Borrowing that would not have been otherwise permitted by this Agreement, (II) resulted
in the violation of a covenant set forth in Section 10 or (III) was
the basis for avoiding an earlier Cash Dominion Period) and (B) the date
on which the Administrative Agent, the Security Agents or the Required Lenders
have provided written notice to the Borrower of an


 


4














 


election to commence a Cash
Dominion Period as a result of such Event of Default, and ending on the date on
which such Event of Default has been cured or waived.


 


“Cash
Management Agreement” shall mean any agreement or arrangement to provide
cash management services, including treasury, depository, overdraft, credit or
debit card, purchase card, electronic funds transfer, controlled disbursement
services, foreign exchange facilities, merchant services (other than those
constituting a line of credit) and other cash management arrangements.


 


“Cash
Management Bank” shall mean any Person that at the time it enters into a
Cash Management Agreement is a Lender or an Affiliate of a Lender, in its
capacity as a party to such Cash Management Agreement.


 


“Change
of Control” shall mean the occurrence of any of the following:


 


(1)             the acquisition by
any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of
the Exchange Act, or any successor provision), including any group acting for
the purpose of acquiring, holding or disposing of securities (within the
meaning of Rule 13d-5(b)(1) under the Exchange Act), other than the
Permitted Holders, in a single transaction or in a related series of
transactions, by way of merger, consolidation or other business combination or
purchase of beneficial ownership (within the meaning of Rule 13d-3 under
the Exchange Act, or any successor provision) of 50% or more of the total
voting power of the Voting Stock of Parent or any of its direct or indirect
parent corporations;


 


(2)             Holdings shall
cease to own directly and of record 100% of the equity interests of the
Borrower; or


 


(3)             Parent shall cease
to own directly and of record 100% of the equity interests of Holdings.


 


“Co-Collateral
Agent” shall mean General Electric Capital Corporation, as the
co-collateral agent for the Lenders under this Agreement and the other Credit
Documents.


 


“Code”
shall mean the Internal Revenue Code of 1986, as amended from time to time, and
the regulations promulgated and rulings issued thereunder. Section references
to the Code are to the Code, as in effect at the date of this Agreement, and
any subsequent provisions of the Code, amendatory thereof, supplemental thereto
or substituted therefor.


 


“Collateral”
shall have the meaning assigned to such term in the Pledge Agreement, the
Security Agreement or any Mortgage, as applicable, and shall include any
equivalent term in any such document.


 


“Collateral
Access Agreement” shall have the meaning assigned to such term in the
Security Agreement.


 


 “Collateral Agent” shall mean JPMorgan
Chase Bank, N.A., as the Administrative Agent, (i) in its capacity as
“secured party” named in all Uniform Commercial Code financing


 


5

















 


statements (or similar filings
under other personal property security legislation) filed pursuant to the
Credit Documents and (ii) as “collateral agent” for the Secured Parties
under the Security Documents, together with its successors in any such capacity
(it being understood that JPMorgan Chase Bank, N.A. shall serve in such
capacity as “secured party” subject to direction by the Security Agents).


 


“Collection
Account” shall have the meaning assigned to such term in the Security
Agreement.


 


“Commitment”
shall mean (a) with respect to each Initial Lender, the amount set forth
opposite such Initial Lender’s name on Schedule 1.1(b) as such Initial
Lender’s “Commitment” and (b) in the case of any Lender that becomes a
Lender after the Signing Date, the amount specified as such Lender’s
“Commitment” in the Assignment and Acceptance pursuant to which such Lender
assumed a portion of the Total Commitment, in each case of the same may be
changed from time to time pursuant to terms hereof. The aggregate amount of the
Commitments as of the Signing Date is $100,000,000.


 


“Commitment
Fee Rate” shall mean, with respect to the Available Commitment on any day,
the rate per annum set forth below opposite the Status in effect on such day:


 




	
   

  	
   

  	
  Commitment

  	
   

  
	
  Status

  	
   

  	
  Fee Rate

  	
   

  
	
  Level I Status

  	
   

  	
  1.00

  	
  %

  
	
  Level II Status

  	
   

  	
  0.75

  	
  %

  






 


Notwithstanding the
foregoing, the term “Commitment Fee Rate” shall mean 1.00%, during the period
from and including the Effective Date to but excluding November 30, 2009.


 


“Commitment
Utilization Percentage” shall mean, on any date, the percentage equivalent
to a fraction (a) the numerator of which is the Total Credit Exposure and (b) the
denominator of which is the Total Commitment.


 


“Confidential
Information” shall have the meaning provided in Section 14.16.


 


“Consolidated
Earnings” shall mean, for any period, “income (loss) before the deduction
of income taxes” of Parent, Holdings, the Borrower and the Restricted
Subsidiaries, excluding extraordinary losses and extraordinary gains, for such
period, determined in accordance with GAAP, provided that any “income
(loss) before the deduction of income taxes” from disposed or discontinued
operations shall be excluded.


 


“Consolidated
EBITDA” shall mean, for any period, the sum, without duplication, of the
amounts for such period of (a) Consolidated Earnings and to the extent
already deducted in arriving at Consolidated Earnings for such period: (b) Consolidated
Interest Expense, (c) depreciation expense, (d) amortization expense,
including amortization of deferred financing fees, (e) unusual or
non-recurring charges and restructuring charges or reserves (including
severance, relocation costs and one-time compensation charges and other costs
related to closure of facilities) in an amount not to exceed $15,000,000 in any
Test Period, (f) non-cash charges (other than


 


6

















 


accruals of liabilities in
the ordinary course of business) (provided that if any such non cash
charges represent an accrual or reserve for potential cash items in any future
period, the cash payment in respect thereof in such future period shall be
subtracted from Consolidated EBITDA to such extent, and excluding amortization
of a prepaid cash item that was paid in a prior period), (g) losses on
asset sales (other than sales of inventory in the ordinary course of business),
(h) Transaction Expenses, (i) any expenses or charges incurred in
connection with any issuance of debt, equity securities or any refinancing
transaction and (j) any fees and expenses related to Permitted Acquisitions,
(k) any deduction for minority interest expense (except to the extent of
dividends to minority stockholders during such period), (l) the amount of
consulting and advisory fees and related expenses paid to KKR Capstone, KKR or
any of their respective Affiliates and directors and officers’ insurance
premiums paid for the account of any of the foregoing in an amount not to
exceed $4,000,000 in any Test Period, less, without duplication, the sum
of the following amounts for such period to the extent they increased
Consolidated Earnings in such period of (m) non-recurring gains, (n) non-cash
gains (excluding (i) accruals of revenue in the ordinary course of
business and (ii) any such non-cash gain to the extent it represents the
reversal of an accrual or reserve for potential cash items that reduced
Consolidated EBITDA in any prior period) and (o) gains on asset sales
(other than sales of inventory in the ordinary course of business), all as
determined on a consolidated basis for Parent, Holdings, the Borrower and the
Restricted Subsidiaries in accordance with GAAP, provided that (i) there
shall be excluded from Consolidated Earnings for any period the income from
continuing operations before income taxes and extraordinary items of all
Unrestricted Subsidiaries for such period to the extent otherwise included in
Consolidated Earnings, except to the extent actually received in cash by
Holdings, the Borrower or its Restricted Subsidiaries during such period
through dividends or other distributions, (ii) there shall be excluded in
determining Consolidated EBITDA non-operating currency transaction gains and
losses and (iii) to the extent included in Consolidated Earnings, there
shall be excluded in determining Consolidated EBITDA for any period any
non-cash adjustments resulting from the application of Statement of Financial
Accounting Standards No. 133 and its related pronouncements and
interpretations.


 


“Consolidated
Interest Expense” shall mean, for any period, the cash interest expense
(including that attributable to Capital Leases in accordance with GAAP), net of
cash interest income, of Parent, Holdings, the Borrower and the Restricted
Subsidiaries on a consolidated basis with respect to all outstanding
Indebtedness of Parent, Holdings, the Borrower and the Restricted Subsidiaries,
including all commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers’ acceptance financing and net costs
under Hedge Agreements (other than (x) currency swap agreements, currency
future or option contracts and other similar agreements and (y) any
non-cash interest expense attributable to the movement in the mark to market
valuation of obligations under Hedge Agreements or other derivative instruments
pursuant to Statement of Financial Accounting Standards No. 133), but
excluding, however, (a) amortization of deferred financing costs, debt
issuance costs, commissions, fees and expenses, (b) expensing of financing
fees and (c) any other amounts of non-cash interest, all as calculated on
a consolidated basis in accordance with GAAP; provided that there shall
be excluded from Consolidated Interest Expense for any period the cash interest
expense (or income) of all Unrestricted Subsidiaries for such period to the
extent otherwise included in Consolidated Interest Expense.


 


7

















 


“Consolidated
Senior Secured Debt” shall mean, as of any date of determination, the sum
of all Indebtedness of Parent, Holdings, the Borrower and the Restricted
Subsidiaries for borrowed money outstanding on such date under this Agreement,
the Initial Secured Notes and any Permitted Additional Secured Notes.


 


“Consolidated
Senior Secured Debt to Consolidated EBITDA Ratio” shall mean, as of any
date of determination, the ratio of (a) Consolidated Senior Secured Debt
as of the last day of the relevant Test Period to (b) Consolidated EBITDA
for such Test Period, provided that the Consolidated Senior Secured Debt
to Consolidated EBITDA Ratio shall be calculated on a Pro Forma Basis.


 


“Credit
Documents” shall mean this Agreement, the Intercreditor Agreement, the
Security Documents, each Letter of Credit and any promissory notes issued by
the Borrower hereunder.


 


“Credit
Event” shall mean and include the making (but not the conversion or
continuation) of a Loan and the issuance, extension or amendment (to the extent
such amendment increases the amount thereof) or renewal of a Letter of Credit.


 


“Credit
Exposure” shall mean with respect to any Lender the sum of the following on
such date: (i) the outstanding amount of Revolving Credit Loans of such
Lender plus (ii) the Letter of Credit Exposure of such Lender plus
(iii) the Swingline Exposure of such Lender plus (iv) an
amount equal to such Lender’s Applicable Percentage, if any, of the aggregate
principal amount of Protective Advances outstanding at such time.


 


“Credit
Party” shall mean each of the Borrower and the Guarantors.


 


“Default”
shall mean an Event of Default or any event, act or condition that with notice
or lapse of time, or both, would constitute an Event of Default.


 


“Defaulting
Lender” shall mean any Lender, as reasonably determined by the
Administrative Agent in good faith, that has (a) failed to fund any
portion of its Loans or participations in Letters of Credit, Swingline Loans or
Protective Advances within three Business Days of the date required to be
funded by it hereunder, (b) notified the Borrower, the Administrative
Agent, the Letter of Credit Issuer, the Swingline Lender or any Lender in
writing that it does not intend to comply with any of its funding obligations
under this Agreement or has made a public statement to the effect that it does
not intend to comply with its funding obligations under this Agreement or under
other agreements generally (as reasonably determined by the Administrative
Agent) under which it has committed to extend credit, (c) failed, within
three Business Days after written request by the Administrative Agent, to
confirm that it will comply with the terms of this Agreement relating to its
obligations to fund prospective Revolving Credit Loans and participations in
then outstanding Letters of Credit, Swingline Loans and Protective Advances, (d) otherwise
failed to pay over to the Administrative Agent or any other Lender any other
amount required to be paid by it hereunder within three Business Days of the
date when due, unless the subject of a good faith dispute, or (e) (i) become
or is insolvent or has a parent company that has become or is insolvent or (ii) become
the subject of a bankruptcy or insolvency proceeding, or has had a receiver,
conservator, trustee or custodian appointed for it, or has taken any action in


 


8

















 


furtherance of, or
indicating its consent to, approval of or acquiescence in any such proceeding
or appointment or has a parent company that has become the subject of a
bankruptcy or insolvency proceeding, or has had a receiver, conservator,
trustee or custodian appointed for it, or has taken any action in furtherance
of, or indicating its consent to, approval of or acquiescence in any such
proceeding or appointment.


 


“Dilution
Factors” shall mean, without duplication, with respect to any period, the
aggregate amount of all deductions, credit memos, returns, adjustments,
allowances, bad debt write-offs and other non-cash credits which are recorded
to reduce accounts receivable.


 


“Dilution
Ratio” shall mean, at any date, the amount (expressed as a percentage)
equal to (a) the aggregate amount of the applicable Dilution Factors for
the 12 most recently ended fiscal months divided by (b) total gross sales
for the 12 most recently ended fiscal months.


 


“Dilution
Reserve” shall mean, at any date, the product of (a) the excess (if
positive) of (i) the applicable Dilution Ratio minus (ii) 5.0%
multiplied  by (b) the Eligible Accounts of the applicable
Credit Parties, as the context may require, on such date.


 


“Document”
shall have the meaning assigned to such term in the Security Agreement.


 


“Dollar
Equivalent” shall mean, on any date of determination, (a) with respect
to any amount denominated in Dollars, such amount, and (b) with regard to
any Letter of Credit denominated in Canadian Dollars, the amount of Dollars
which is equivalent to the amount so expressed in Canadian Dollars at the
applicable quoted spot rate on the appropriate page of the Reuter’s Screen
as determined by the Administrative Agent at the relevant time.


 


“Dollars”
and “$” shall mean dollars in lawful currency of the United States of America.


 


“Domestic
Subsidiary” shall mean each Subsidiary of the Borrower that is organized
under the laws of the United States, any state thereof, or the District of
Columbia.


 


“Drawing”
shall have the meaning provided in Section 3.4(b).


 


“Effective
Date” shall mean the date upon which the conditions set forth in Section 6
are satisfied.


 


“Eligible
Accounts” shall mean, at any time, the Accounts of any Credit Party (other
than Holdings) which in accordance with the terms hereof are eligible as the
basis for the extension of Revolving Loans and Swingline Loans and the issuance
of Letters of Credit hereunder. Eligible Accounts shall not include any
Account:


 


(a)             which is not
subject to a first priority perfected security interest in favor of the
Administrative Agent (for the benefit of the Secured Parties);


 


9

















 


(b)             which is subject
to any Lien other than (i) a Lien in favor of the Collateral Agent for the
benefit of the Secured Parties, (ii) a Permitted Lien and (iii) Liens
permitted hereunder pursuant to clause (h) of Section 10.2(A);


 


(c)             (i) which is
unpaid more than 90 days after the date of the original invoice therefor
(except that up to $2,500,000 of Accounts which are unpaid more than 120 days
after the date of the original invoice but otherwise meet the requirements of
this definition may be included) or more than 60 days after the original due
date, or (ii) which has been written off the books of the Credit Parties
or otherwise designated as uncollectible;


 


(d)             which is owing by
an Account Debtor for which more than 50% of the Accounts owing from such
Account Debtor and its Affiliates are ineligible;


 


(e)             which is owing by
an Account Debtor to the extent the aggregate amount of Accounts owing from
such Account Debtor and its Affiliates to the Credit Parties exceeds 10.0% (or,
in the case of an Account Debtor (i) identified in writing to the Security
Agents prior to the Signing Date (and acknowledged in writing by the Security
Agents), 15%, (ii) with an Investment Grade Rating but not a High Investment
Grade Rating, 20.0% or (ii) with a High Investment Grade Rating, 30.0%) of
the aggregate amount of Eligible Accounts of the Credit Parties but only to the
extent of such excess over the applicable threshold;


 


(f)              with respect to
which any covenant, representation, or warranty contained in this Agreement or
in the Security Agreement has been breached or is not true in any material
respect;


 


(g)             which (i) does
not arise from the sale of goods or performance of services in the ordinary
course of business, (ii) is not evidenced by an invoice or other
documentation reasonably satisfactory to the Security Agents which has been
sent to the Account Debtor, (iii) represents a progress billing, (iv) is
contingent upon a Credit Party’s completion of any further performance, (v) represents
a sale on a bill-and-hold, guaranteed sale, sale-and-return, sale on approval,
consignment, cash-on-delivery or any other repurchase or return basis or (vi) relates
to payments of interest;


 


(h)             for which (i) the
goods giving rise to such Account have not been shipped to the Account Debtor
or (ii) the services giving rise to such Account have not been performed
by the applicable Credit Party or if such Account was invoiced more than once,
unless, (A) in the case of clause (h)(i) preceding, the Account
Debtor on such Account has instructed the applicable Credit Party in writing to
deliver such goods to a designated area at or near the applicable Credit
Party’s facility or otherwise store such goods for the account of such Account
Debtor and has agreed, pursuant to the terms of the quotation or purchase order
for such Account or by separate agreement, that such delivery or storage
constitutes delivery of such goods by the Borrower, in any such case in form
and substance reasonably satisfactory to the Security Agents;


 


(i)              which is owed by
an Account Debtor which has (i) applied for, suffered, or consented to the
appointment of any receiver, custodian, trustee, or liquidator of its


 


10

















 


assets,
(ii) had possession of all or a material part of its property taken by any
receiver, custodian, trustee or liquidator, (iii) filed, or had filed
against it, any request or petition for liquidation, reorganization,
arrangement, adjustment of debts, adjudication as bankrupt, winding-up or
voluntary or involuntary case under any state or federal bankruptcy laws unless
the Security Agents shall have determined in their sole discretion to include
such Accounts, (iv) admitted in writing its inability to pay its debts as
they become due, (v) become insolvent or (vi) ceased operation of its
business;


 


(j)              which is owed by
any Account Debtor which has sold all or a substantially all of its assets;


 


(k)             which is owed by
an Account Debtor which (i) does not maintain an office in the U.S. or
Canada (other than Quebec) or (ii) is not organized under applicable law
of the U.S., any state of the U.S. or the District of Columbia, Canada, or any
province or other political subdivision of Canada (other than Quebec) unless,
in either case, such Account is backed by a letter of credit reasonably
acceptable to the Security Agents which is in the possession of, has been
assigned to and is directly drawable by the Collateral Agent;


 


(l)              which is owed
in any currency other than U.S. dollars;


 


(m)            which is owed
by (i) the government (or any department, agency, public corporation, or
instrumentality thereof) of any country other than the U.S. unless such Account
is backed by a letter of credit reasonably acceptable to the Security Agents
which is in the possession of and directly drawable by the Collateral Agent or (ii) the
government of the U.S., or any department, agency, public corporation, or
instrumentality thereof, unless the Federal Assignment of Claims Act of 1940,
as amended (31 U.S.C. § 3727 et seq. and 41 U.S.C. § 15 et seq.),
and any other steps necessary to perfect the Lien of the Collateral Agent in
such Account have been complied with to the Security Agents’ reasonable
satisfaction;


 


(n)             which is owed by (i) any
employee, officer, director, agent or direct stockholder of any Credit Party or
(ii) any other Affiliate of any Credit Party with respect to which such
Credit Party does not deal on an arms-length basis;


 


(o)             which is owed by
an Account Debtor or any Affiliate of such Account Debtor to which such Credit
Party is indebted, but only to the extent of such indebtedness or is subject to
any security, deposit, progress payment, advance payment or deposit, retainage
or other similar advance made by or for the benefit of an Account Debtor, in
each case to the extent thereof;


 


(p)             which is subject
to any counterclaim, deduction, defense, setoff or dispute but only to the
extent of any such counterclaim, deduction, defense, setoff or dispute;


 


(q)             which is
evidenced by any promissory note, chattel paper, or instrument;


 


(r)              which is owed
by an Account Debtor located in any jurisdiction which requires filing of a
“Notice of Business Activities Report” or other similar report in order to


 


11

















 


permit
the Borrower to seek judicial enforcement in such jurisdiction of payment of
such Account, unless the Borrower has filed such report or qualified to do
business in such jurisdiction;


 


(s)             with respect to
which such Credit Party has made any agreement with the Account Debtor for any
reduction thereof, other than discounts and adjustments given in the ordinary
course of business, or any Account which was partially paid and such Credit
Party created a new receivable for the unpaid portion of such Account;


 


(t)              which does not
comply in all material respects with the requirements of all applicable laws
and regulations, whether Federal, state or local, including without limitation
the Federal Consumer Credit Protection Act, the Federal Truth in Lending Act
and Regulation Z of the Board;


 


(u)             which is for goods
that have been sold under a purchase order or pursuant to the terms of a
contract or other agreement or understanding (written or oral) that indicates
or purports that any Person other than a Credit Party has or has had an
ownership interest in such goods, or which indicates any party other than a
Credit Party as payee or remittance party;


 


(v)             which was
created on cash on delivery terms; or


 


(w)            which the
Security Agents in their Permitted Discretion otherwise determine to be
ineligible.


 


In
determining the amount of an Eligible Account, the face amount of an Account
may, in the Security Agents’ Permitted Discretion, be reduced by, without
duplication, to the extent not reflected in such face amount, (i) the
amount of all accrued and actual discounts, claims, credits or credits pending,
promotional program allowances, price adjustments, finance charges or other
allowances (including any amount that the applicable Credit Party may be obligated
to rebate to an Account Debtor pursuant to the terms of any agreement or
understanding (written or oral)) and (ii) the aggregate amount of all cash
received in respect of such Account but not yet applied by such Credit Party to
reduce the amount of such Account.


 


Standards
of eligibility may be made more restrictive (and such increased restrictiveness
subsequently reversed in whole or in part) from time to time solely by the
Security Agents in the exercise of their Permitted Discretion, with any such
changes to be effective one Business Day after delivery of written notice
thereof to the Borrower and the Lenders.


 


“Eligible
Inventory” shall mean, at any time, the Inventory of any Credit Party
(other than Holdings) which in accordance with the terms hereof is eligible as
the basis for the extension of Revolving Loans, Swingline Loans and the
issuance of Letters of Credit hereunder. Eligible Inventory shall not include
any Inventory:


 


(a)             which is not
subject to a first priority perfected Lien in favor of the Administrative Agent
(for the benefit of the Secured Parties);


 


12

















 


(b)             which is subject
to any Lien other than (i) a Lien in favor of the Administrative Agent for
the benefit of the Secured Parties, (ii) a Permitted Lien and (iii) Liens
permitted hereunder pursuant to clause (h) of Section 10.2(A);


 


(c)             which is, in the
Security Agents’ Permitted Discretion, slow moving, obsolete, unmerchantable,
defective, unfit for sale or unacceptable due to age, type, category and/or
quantity;


 


(d)             with respect to
which any covenant, representation, or warranty contained in this Agreement or
the Security Agreement has been breached or is not true in any material respect
and which does not conform in any material respect to all standards imposed by
any Governmental Authority;


 


(e)             in which any
Person other than a Credit Party shall (i) have any direct or indirect
ownership, interest or title to such Inventory or (ii) be indicated on any
purchase order or invoice with respect to such Inventory as having or
purporting to have an interest therein;


 


(f)              which constitutes
spare or replacement parts, subassemblies, packaging and shipping material,
manufacturing supplies, samples, prototypes, displays or display items, bill-and-hold
goods, repossessed goods, defective or damaged goods, goods held on
consignment, or goods which are not of a type held for sale in the ordinary
course of business;


 


(g)             which is not
located in the U.S. or is in transit with a common carrier from vendors and
suppliers; provided that up to $5,000,000 of Inventory in transit of the
Credit Parties from vendors and suppliers may be included as eligible pursuant
to this clause (g) so long as (i) the Security Agents shall have
received (1) a true and correct copy of the bill of lading and other
shipping documents for such Inventory, (2) evidence of satisfactory
casualty insurance naming the Collateral Agent as loss payee and otherwise
covering such risks as the Security Agents may reasonably request and (3) if
the bill of lading is (A) non-negotiable and the inventory is in transit
within the United States, a duly executed Collateral Access Agreement from the
applicable customs broker for such Inventory or (B) negotiable,
confirmation that the bill is issued in the name of the Borrower and consigned
to the order of the Collateral Agent, and an acceptable agreement has been
executed with the Borrower’s customs broker, in which the customs broker agrees
that it holds the negotiable bill as agent for the Collateral Agent and has
granted the Collateral Agent access to the Inventory and (ii) the common
carrier is not an Affiliate of the applicable vendor or supplier;


 


(h)             which is located
in any location leased by a Credit Party unless (A) the lessor has
delivered to the Collateral Agent a Collateral Access Agreement or (B) a
Reserve for rent, charges and other amounts due or to become due with respect
to such facility has been established by the Security Agents in their Permitted
Discretion (which Reserve may be reduced if a subsequent Collateral Access
Agreement has been received by the Collateral Agent);


 


13

















 


(i)              which is located
in any third party warehouse or is in the possession of a bailee (other than a
third party processor) and is not evidenced by a Document (other than bills of
lading to the extent permitted by clause (g) above), unless (i) such
warehouseman or bailee has delivered to the Collateral Agent a Collateral
Access Agreement and such other documentation as the Security Agents may
require or (ii) an appropriate Inventory Reserve has been established by
the Security Agents in their Permitted Discretion;


 


(j)              which is being
processed offsite at a third party location or outside processor or is
in-transit to or from said third party location or outside processor;


 


(k)             which is a
discontinued product or component thereof;


 


(l)              which is the
subject of a consignment by such Credit Party as consignor, unless (i) a
protective UCC-1 financing statement has been properly filed against the
consignee and (ii) there is a written agreement acknowledging that such
Inventory is held on consignment, that such Credit Party retains title to such
Inventory, that no Lien arising by, through or under such consignee has
attached or will attach to such Inventory and requiring consignee to segregate
the consigned Inventory from the consignee’s other personal or movable property
and having such other terms as the Security Agents may require for consigned
Inventory in their Permitted Discretion;


 


(m)            which contains or
bears any intellectual property rights licensed to such Credit Party unless the
Security Agents are satisfied that the Collateral Agent may sell or otherwise
dispose of such Inventory without (i) infringing the rights of such
licensor, (ii) violating any contract with such licensor, or (iii) incurring
any liability with respect to payment of royalties other than royalties
incurred pursuant to sale of such Inventory in the ordinary course under the
current licensing agreement;


 


(n)             which is not
reflected in a current perpetual inventory report of such Credit Party (unless
such Inventory is reflected in a report to the Collateral Agent as “in transit”
Inventory); or


 


(o)             for which reclamation rights have
been asserted by the seller.


 


Standards
of eligibility may be made more restrictive from time to time (and such
increased restrictiveness subsequently reversed in whole or in part) solely by
the Security Agents in the exercise of their Permitted Discretion, with any
such changes to be effective one Business Day after delivery of written notice
thereof to the Borrower and the Lenders.


 


“Environmental
Claims” shall mean any and all administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigations (other than internal reports
prepared by the Borrower or any of the Subsidiaries (a) in the ordinary
course of such Person’s business or (b) as required in connection with a
financing transaction or an acquisition or disposition of Real Estate) or
proceedings relating in any way to any Environmental Law or any permit issued,
or any approval given, under any such Environmental Law (hereinafter, “Claims”),
including (i) any and all Claims by governmental or regulatory authorities
for enforcement, cleanup, removal, response, remedial or other actions or
damages pursuant to any applicable Environmental Law and (ii) any and all
Claims by any third


 


14














 


party seeking damages,
contribution, indemnification, cost recovery, compensation or injunctive relief
resulting from Hazardous Materials or arising from alleged injury or threat of
injury to health, safety or the environment.


 


“Environmental
Law” shall mean any applicable Federal, state, foreign or local statute,
law, rule, regulation, ordinance, code and rule of common law now or
hereafter in effect and in each case as amended, and any binding judicial or
administrative interpretation thereof, including any binding judicial or
administrative order, consent decree or judgment, relating to the environment,
human health or safety or Hazardous Materials.


 


“Equipment”
shall have the meaning assigned to such term in the Security Agreement.


 


“Equity
Cure” shall have the meaning set forth in Section 10.9.


 


“ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as amended from
time to time. Section references to ERISA are to ERISA as in effect at the
date of this Agreement and any subsequent provisions of ERISA amendatory
thereof, supplemental thereto or substituted therefor.


 


“ERISA
Affiliate” shall mean each person (as defined in Section 3(9) of
ERISA) that together with the Borrower or a Subsidiary would be deemed to be a
“single employer” within the meaning of Section 414(b) or (c) of
the Code or, solely for purposes of Section 302 of ERISA and Section 412
of the Code, is treated as a single employer under Section 414 of the
Code.


 


“Eurodollar
Loan” shall mean any Revolving Credit Loan bearing interest at a rate
determined by reference to the Eurodollar Rate.


 


“Eurodollar
Margin” shall mean 4.00% per annum.


 


“Eurodollar
Rate” shall mean, with respect to any Eurodollar Loan for any Interest
Period, the rate appearing on Reuters Screen LIBOR01 Page (or on any
successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the “Eurodollar Rate” with respect
to such Eurodollar Loan for such Interest Period shall be the rate at which dollar
deposits of $5,000,000 and for a maturity comparable to such Interest Period
are offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of
such Interest Period.


 


“Event
of Default” shall have the meaning provided in Section 11.


 


15

















 


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


 


“Excluded
Subsidiary” shall mean shall mean (a) each Domestic Subsidiary that is
not a Material Subsidiary, (b) any Domestic Subsidiary substantially all
the assets of which consist of capital stock or other equity interests of
Foreign Subsidiaries, (c) each Domestic Subsidiary that is prohibited by (i) any
Requirement of Law or (ii) any applicable contractual requirement existing
at the time such Subsidiary becomes a Restricted Subsidiary (and for so long as
such restriction or any replacement or renewal thereof is in effect), in each
case, from guaranteeing or granting Liens to secure the Obligations, (d) each
Domestic Subsidiary that is a Subsidiary of a Foreign Subsidiary, (e) any
other Domestic Subsidiary with respect to which, in the reasonable judgment of
the Administrative Agent (confirmed in writing by notice to the Borrower), the
cost or other consequences (including any adverse tax consequences) of
guaranteeing or granting Liens to secure the Obligations shall be excessive in
view of the benefits to be obtained by the Lenders therefrom, (f) each
Unrestricted Subsidiary and (g) any non-wholly owned Subsidiary. Each
Domestic Subsidiary that is not a Material Subsidiary as of the Signing Date is
listed on Schedule 1.1(c).


 


“Existing
Credit Agreement” shall mean the Third Amended and Restated Credit
Agreement, dated as of August 25, 2006, among the Borrower, Holdings,
Parent, Sealy Canada Ltd. Ltee, as Canadian Borrower, the lending institutions
from time to time parties thereto, J. P. Morgan Securities Inc., as joint lead
arranger and joint bookrunner, Citigroup Global Markets Inc., as joint lead
arranger and joint bookrunner, Citibank, N.A., as syndication agent, JPMorgan
Chase Bank, N.A., as administrative agent, JPMorgan Chase Bank, N.A., Toronto
Branch, as Canadian administrative agent, and General Electric Capital
Corporation, Wachovia Bank, National Association, and LaSalle Bank National
Association, as co-documentation agents.


 


“Existing
Letters of Credit” shall mean the letters of credit identified on Schedule
1.1(d) hereto and shall in any event include amendments, extensions
and renewals thereof.


 


“Federal
Funds Effective Rate” shall mean, for any day, the weighted average of the
per annum rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published on the
next succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day that is a Business Day, the average of
the quotations for the day of such transactions received by the Administrative
Agent from three federal funds brokers of recognized standing selected by it.


 


“Fees”
shall mean all amounts payable pursuant to, or referred to in, Section 4.1.


 


“Final
Date” shall mean the date on which the Commitments shall have terminated,
no Loans shall be outstanding, the Letters of Credit Outstanding shall have
been reduced to zero and all other Obligations under this Agreement (other than
(a) obligations under Secured Hedge Agreements not yet due and payable, (b) obligations
under Cash Management Agreements not yet due and payable and (c) contingent
indemnification and expense reimbursement obligations with respect to which no
claim has been asserted) shall have been paid in full.


 


“Fitch”
means Fitch Ratings, Ltd., a division of Fitch, Inc., or any successor by
merger or consolidation to its business.


 


16

















 


“Fixed
Charge Coverage Ratio” shall mean the ratio, for any Test Period, of (a) Consolidated
EBITDA for such Test Period minus the unfinanced portion of Capital
Expenditures made by Holdings, the Borrower and the Restricted Subsidiaries
during such Test Period minus expense for taxes paid in cash during such
Test Period net of cash refunds received during such Test Period to (b) Fixed
Charges for such Test Period, all calculated for Parent, Holdings, the Borrower
and the Restricted Subsidiaries on a consolidated basis, provided that
the Fixed Charge Coverage Ratio shall be calculated on a Pro Forma Basis.


 


“Fixed
Charges” shall mean, with reference to any Test Period, without
duplication, cash Consolidated Interest Expense paid during such Test Period plus
payments of Capitalized Lease Obligations during such Test Period plus
scheduled principal payments on Indebtedness made during such Test Period plus
Restricted Payments (other than refinancings of Indebtedness with the proceeds
of Permitted Refinancing Indebtedness) paid in cash during such Test Period
pursuant to Section 10.6(c) or (d), all calculated for Parent,
Holdings, the Borrower and the Restricted Subsidiaries on a consolidated basis,
provided that there shall be excluded from Fixed Charges for any Test
Period any of the foregoing items to the extent attributable to Unrestricted
Subsidiaries for such Test Period and to the extent otherwise included in Fixed
Charges for such Test Period, except to the extent actually paid in cash by
Parent, Holdings, the Borrower or its Restricted Subsidiaries during such
period (other than from dividends or other distributions from an Unrestricted
Subsidiary).


 


“Flood
Insurance Laws” shall mean, collectively, (i) the National Flood
Insurance Act of 1968 as now or hereafter in effect or any successor statute
thereto, (ii) the Flood Disaster Protection Act of 1973 as now or
hereafter in effect or any successor statute thereto, (iii) the National
Flood Insurance Reform Act of 1994 as now or hereafter in effect or any
successor statute thereto and (iv) the Flood Insurance Reform Act of 2004
as now or hereafter in effect or any successor statute thereto.


 


“Foreign
Subsidiary” shall mean each Subsidiary of the Borrower that is not a
Domestic Subsidiary.


 


“Forward
Purchase Contract” shall mean the letter agreement to be dated prior to the
Effective Date, by and among the Borrower, Parent and Sealy Holding LLC in form
reasonably satisfactory to each Initial Lender.


 


“Fronting
Fee” shall have the meaning provided in Section 4.1(c).


 


“GAAP”
shall mean generally accepted accounting principles in the United States of
America as in effect from time to time; provided, however, that
if there occurs after the date hereof any change in GAAP that affects in any
respect the calculation of any covenant contained in Section 10, the
Lenders and the Borrower shall negotiate in good faith amendments to the
provisions of this Agreement that relate to the calculation of such covenant
with the intent of having the respective positions of the Lenders and the
Borrower after such change in GAAP conform as nearly as possible to their
respective positions as of the date of this Agreement and, until any such
amendments have been agreed upon, the covenants in Section 10 shall be
calculated as if no such change in GAAP has occurred. Notwithstanding any other
provision contained herein, all terms of an accounting or financial nature used
herein shall be construed, and all computations


 


17

















 


of amounts and ratios
referred to herein shall be made, without giving effect to any election under
Statement of Financial Accounting Standards 159 (or any other Financial
Accounting Standard having a similar result or effect) to value any
Indebtedness or other liabilities of Parent, Holdings, the Borrower or any
Restricted Subsidiary at “fair value”, as defined therein.


 


“Governmental
Authority” shall mean any nation or government, any state, province,
territory or other political subdivision thereof, and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.


 


“Guarantee”
shall mean the Guarantee, made by each Guarantor in favor of the Administrative
Agent for the benefit of the Secured Parties, in form reasonably satisfactory
to each Initial Lender, as the same may be amended, supplemented or otherwise
modified from time to time.


 


“Guarantee
Obligations” shall mean, as to any Person, any obligation of such Person
guaranteeing or intended to guarantee any Indebtedness of any other Person (the
“primary obligor”) in any manner, whether directly or indirectly,
including any obligation of such Person, whether or not contingent, (a) to
purchase any such Indebtedness or any property constituting direct or indirect
security therefor, (b) to advance or supply funds (i) for the purchase
or payment of any such Indebtedness or (ii) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (c) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such
Indebtedness of the ability of the primary obligor to make payment of such
Indebtedness or (d) otherwise to assure or hold harmless the owner of such
Indebtedness against loss in respect thereof; provided, however,
that the term “Guarantee Obligations” shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Guarantee Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the Indebtedness in respect of which such
Guarantee Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.


 


“Guarantors”
shall mean Holdings and the Subsidiary Guarantors.


 


“Hazardous
Materials” shall mean (a) any petroleum or petroleum products,
radioactive materials, friable asbestos, urea formaldehyde foam insulation,
transformers or other equipment that contain dielectric fluid containing
regulated levels of polychlorinated biphenyls, and radon gas; (b) any
chemicals, materials or substances defined as or included in the definition of
“hazardous substances”, “hazardous waste”, “hazardous materials”, “extremely
hazardous waste”, “restricted hazardous waste”, “toxic substances”, “toxic
pollutants”, “contaminants”, or “pollutants”, or words of similar import, under
any applicable Environmental Law; and (c) any other chemical, material or substance,
which is prohibited, limited or regulated by any Environmental Law.


 


“Hedge
Agreements” shall mean interest rate swap, cap or collar agreements,
interest rate future or option contracts, currency swap agreements, currency
future or option contracts, commodity price protection agreements or other
commodity price hedging agreements, and other similar agreements entered into
by the Borrower or any Restricted Subsidiary.


 


18

















 


“Hedge
Bank” shall mean any Person that (a) at the time it enters into a
Secured Hedge Agreement is a Lender or an Affiliate of a Lender or (b) with
respect to any Hedge Agreement entered into prior to the Signing Date, any
Person that is a Lender or an Affiliate of a Lender on the Signing Date, in its
capacity as a party to such Secured Hedge Agreement.


 


“High
Investment Grade Rating” shall mean with respect to any Person, such Person
has at least the minimum rating indicated below from two out of the three
ratings agencies named below:


 




	
  Ratings Agency

  	
   

  	
  Minimum
  Rating

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  S&P

  	
   

  	
  A- (stable)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Moody’s

  	
   

  	
  A3 (stable)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Fitch

  	
   

  	
  A- (stable)

  	
   

  






 


“Historical
Financial Statements” means as of the Signing Date, the audited financial
statements of Parent and its Subsidiaries, for the immediately preceding three
fiscal years, consisting of balance sheets and the related consolidated
statements of income, stockholders’ equity and cash flows for such fiscal
years.


 


“Holdings”
shall have the meaning provided in the preamble to this Agreement.


 


“Increased
Amount Date” shall have the meaning provided in Section 2.15.


 


“Indebtedness”
of any Person shall mean (a) all indebtedness of such Person for borrowed
money, (b) the deferred purchase price of assets or services that in
accordance with GAAP would be included as liabilities in the balance sheet of
such Person, (c) the face amount of all letters of credit issued for the
account of such Person and, without duplication, all drafts drawn thereunder, (d) all
Indebtedness of a second Person secured by any Lien on any property owned by
such first Person, whether or not such Indebtedness has been assumed, (e) all
Capitalized Lease Obligations of such Person, (f) all obligations of such
Person under Hedge Agreements and (g) without duplication, all Guarantee
Obligations of such Person with respect to the obligations of another Person of
a type described in clauses (a) through (f) above, provided
that (i) Indebtedness shall not include trade payables and accrued
expenses, in each case payable directly or through a bank clearing arrangement
and arising in the ordinary course of business and (ii) for purposes of Section 11.4,
the amount of any Indebtedness in respect of any Hedge Agreement at any time,
shall be the amount of any required early termination payment by the Borrower
or any Subsidiary at such time.


 


“Initial
Lender” shall mean each Lender listed on Schedule 1.1(b).


 


“Initial
PIK Convertible Notes” shall mean an aggregate principal amount of 8.0%
convertible senior secured third lien notes due 2016 of Parent and the
Borrower, as co-issuers that, when aggregated with the aggregate principal
amount of the Initial Secured Notes, does not exceed $550,000,000, provided
that the covenants and other material terms in the Convertible


 


19

















 


Notes are consistent with
the description of notes delivered to the Initial Lenders on the Effective Date
pursuant to the Forward Purchase Contract.


 


“Initial
Secured Notes” shall mean an aggregate principal amount of the Borrower’s
Senior Secured Notes due 2016 issued on the Effective Date that when aggregated
with the aggregate principal amount of the Initial PIK Convertible Notes
subject to the Forward Purchase Contract does not exceed $550,000,000.


 


“Intercreditor
Agreement” shall mean the Intercreditor Agreement, to be dated as of the
Effective Date, by and among, the Administrative Agent, the collateral agent
under the Secured Notes Indenture and the collateral agent under the PIK
Convertible Notes Indenture in form reasonably acceptable to each Initial
Lender, as the same may be amended or supplemented or otherwise modified from
time to time.


 


“Interest
Payment Date” shall mean (a) with respect to any ABR Loan (other than
a Swingline Loan), the first day of each January, April, July and October and
the Maturity Date, (b) with respect to any Eurodollar Loan, the last day
of the Interest Period applicable to the Borrowing of which such Loan is a part
and, in the case of a Eurodollar Loan Borrowing with an Interest Period of more
than three months’ duration, each day prior to the last day of such Interest
Period that occurs at intervals of three months’ duration after the first day
of such Interest Period and the Maturity Date, and (c) with respect to any
Swingline Loan, the day that such Loan is repaid and the Maturity Date.


 


“Interest
Period” shall mean, with respect to any Eurodollar Loan, the interest
period applicable thereto, as determined pursuant to Section 2.9.


 


“Inventory”
shall have the meaning assigned to such term in the Security Agreement.


 


“Inventory
Reserves” shall mean any and all reserves which the Security Agents deem
necessary, in their Permitted Discretion, to maintain (including, without
limitation, reserves for slow moving Inventory, intercompany profits and
Inventory shrinkage and Permitted Liens on any Eligible Inventory ranking prior
to the Liens of the Administrative Agent for the benefit of the Secured
Parties) with respect to the Inventory or any Credit Party. The Security Agents
may, from time to time, in their Permitted Discretion, adjust Inventory
Reserves used in computing the Borrowing Base upon not less than one Business
Day’s prior written notice to the Borrower.


 


“Investment”
shall have the meaning provided in Section 10.5.


 


“Investment
Grade Rating” shall mean with respect to any Person, such Person has at
least the minimum rating indicated below from two out of the three ratings
agencies named below:


 




	
  Ratings Agency

  	
   

  	
  Minimum
  Rating

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  S&P

  	
   

  	
  BBB- (stable)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Moody’s

  	
   

  	
  Baa3 (stable)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Fitch

  	
   

  	
  BBB- (stable)

  	
   

  






 


20

















 


“Joinder
Agreement” shall mean an agreement pursuant to which a New Commitment is
implemented pursuant to Section 2.15 in form reasonably satisfactory to
the Administrative Agent.


 


“Joint
Lead Arrangers” shall mean J.P. Morgan Securities Inc., GE Capital Markets, Inc.
and Citigroup Global Markets Inc., as the joint lead arrangers for the Lenders
under this Agreement and the other Credit Documents.


 


“JPMCB”
shall mean JPMorgan Chase Bank, N.A. and any successor thereto by merger,
consolidation or otherwise.


 


“KKR”
shall mean each of Kohlberg Kravis Roberts & Co., L.P. and KKR
Associates, L.P.


 


“L/C
Maturity Date” shall mean the date that is five Business Days prior to the Maturity
Date.


 


“L/C
Participant” shall have the meaning provided in Section 3.3(a).


 


“L/C
Participation” shall have the meaning provided in Section 3.3(a).


 


“Lender”
shall have the meaning provided in the preamble to this Agreement.


 


“Letter
of Credit” shall mean each standby letter of credit issued pursuant to Section 3.1
and shall include the Existing Letters of Credit.


 


“Letter
of Credit Commitment” shall mean $35,000,000, as the same may be reduced
from time to time pursuant to Section 3.1.


 


“Letter
of Credit Exposure” shall mean, with respect to any Lender at any time,
such Lender’s Applicable Percentage of the Letters of Credit Outstanding at
such time.


 


“Letter
of Credit Fee” shall have the meaning provided in Section 4.1(b) .


 


“Letter
of Credit Issuer” shall mean JPMCB, any of its Affiliates or any successor
pursuant to Section 3.6. The Letter of Credit Issuer may, in its
discretion, arrange for one or more Letters of Credit to be issued by
Affiliates of the Letter of Credit Issuer (including, without limitation,
JPMorgan Chase Bank, N.A., Toronto Branch), and in each such case the term
“Letter of Credit Issuer” shall include any such Affiliate with respect to
Letters of Credit issued by such Affiliate. In the event that there is more
than one Letter of Credit Issuer at any time, references herein and in the
other Credit Documents to the Letter of Credit Issuer shall be deemed to refer
to the Letter of Credit Issuer in respect of the applicable Letter of Credit or
to all Letter of Credit Issuers, as the context requires.


 


21

















 


“Letter
of Credit Request” shall have the meaning provided in Section 3.2.


 


“Letters
of Credit Outstanding” shall mean, at any time, the sum of, without
duplication, (a) the aggregate Stated Amount of all outstanding Letters of
Credit and (b) the aggregate amount of all Unpaid Drawings in respect of
all Letters of Credit.


 


“Level
I Status” shall mean, on any date, the Commitment Utilization Percentage
for the fiscal quarter most recently ended prior to such date was less than or
equal to 50%.


 


“Level
II Status” shall mean, on any date, the Commitment Utilization Percentage
for the fiscal quarter most recently ended prior to such date was greater than
50%.


 


“Lien”
shall mean any mortgage, pledge, security interest, hypothecation, assignment,
lien (statutory or other) or similar encumbrance (including any agreement to
give any of the foregoing, any conditional sale or other title retention
agreement or any lease in the nature thereof).


 


“Loan”
shall mean any Revolving Credit Loan, Swingline Loan or Protective Advance.


 


“Management
Group” shall mean, at any time, the Chairman of the Board, any President,
any Executive Vice President or Vice President, any Managing Director, any
Treasurer and any Secretary of any of Holdings, the Borrower or any
Subsidiaries at such time.


 


“Mandatory
Borrowing” shall have the meaning provided in Section 2.1(c) .


 


“Material
Adverse Effect” shall mean a circumstance or condition affecting the
business, assets, operations, properties or financial condition of Holdings,
the Borrower and the Restricted Subsidiaries, taken as a whole, that would
materially adversely affect (a) the ability of Holdings, the Borrower and
the other Credit Parties, taken as a whole, to perform their obligations under
this Agreement or any of the other Credit Documents or (b) the rights and
remedies of the Administrative Agent, the Security Agents and the Lenders under
this Agreement or any of the other Credit Documents.


 


“Material
Subsidiary” shall mean any Restricted Subsidiary other than (i) a
Restricted Subsidiary set forth on Schedule 1.1(c) or (ii) any
other Restricted Subsidiary of the Borrower (a) whose total assets at the
last day of the Test Period ending on the last day of the most recent fiscal
period for which Section 9.1 Financials have been delivered were less than
or equal 5% of the consolidated total assets of Parent, Holdings, the Borrower
and the Restricted Subsidiaries at such date or (b) whose gross revenues
for such Test Period were less than or equal to 5% of the consolidated gross
revenues of Parent, Holdings, the Borrower and the Restricted Subsidiaries for
such period, in each case determined in accordance with GAAP; provided
that, not-withstanding subclauses (i) and (ii) above, “Material
Subsidiary” shall also include any of the Borrower’s Subsidiaries selected by
the Borrower which is required to ensure that all Material Subsidiaries have in
the aggregate (x) total assets at the last day of the Test Period ending
on the last day of the most recent fiscal period for which Section 9.1
Financials have been delivered equal to or greater than 95% of the total assets
of Parent, Holdings, the Borrower and the Restricted Subsidiaries at such date
and (y) gross revenues for such Test Period that were equal to


 


22

















 


or greater than 95% of the
consolidated gross revenues of Parent, Holdings, the Borrower and the
Restricted Subsidiaries for such period, in each case determined in accordance
with GAAP.


 


“Maturity
Date” shall mean the date that is four years after the Effective Date, or,
if such date is not a Business Day, the immediately preceding Business Day.


 


“Minimum
Availability Period” shall mean any period (a) commencing when
Availability for any consecutive two calendar day period is less than the
greater of (i) 15% of the Total Commitment and (ii) $15,000,000 and (b) ending
after Availability is at least the greater of (i) 15% of the Total
Commitment and (ii) $15,000,000 for a period of 30 consecutive days.


 


“Moody’s”
shall mean Moody’s Investors Service, Inc. or any successor by merger or
consolidation to its business.


 


“Mortgage”
shall mean a Mortgage, Assignment of Leases and Rents, Security Agreement and
Financing Statement or other security document entered into by the owner of a
Mortgaged Property (or, to the extent any Credit Party holds a leasehold
interest in any Mortgaged Property, by the lessee of such Mortgaged Property)
in favor of the Collateral Agent for the benefit of the Secured Parties in
respect of that Mortgaged Property, in form reasonably satisfactory to each
Initial Lender, as the same may be amended, supplemented or otherwise modified
from time to time.


 


“Mortgaged
Property” shall mean, initially, each parcel of real estate and the
improvements thereto identified on Schedule 1.1(a), and includes each other
parcel of real property and improvements thereto with respect to which a
Mortgage is granted pursuant to Section 9.15.


 


“Net
Orderly Liquidation Value” shall mean, with respect to Inventory of any
Person, the net orderly liquidation value thereof as determined in a manner
reasonably acceptable to the Security Agents by an appraiser reasonably
acceptable to the Security Agents.


 


“New
Commitments” shall have the meaning provided in Section 2.15.


 


“New
Lender” shall have the meaning provided in Section 2.15.


 


“Non-Excluded
Taxes” shall have the meaning provided in Section 5.4(a).


 


“Notice
of Borrowing” shall have the meaning provided in Section 2.3. 


 


“Notice
of Conversion or Continuation” shall have the meaning provided in Section
2.6.


 


“Obligations”
shall have the meaning assigned to such term in the Security Agreement.


 


“Parent”
shall have the meaning provided in the preamble to this Agreement.


 


“Participant”
shall have the meaning provided in Section 14.6(c)(i) .


 


23

















 


“PBGC”
shall mean the Pension Benefit Guaranty Corporation established pursuant to Section 4002
of ERISA, or any successor thereto.


 


“Perfection
Certificate” shall mean a certificate of the Borrower in a form approved by
the Security Agents.


 


“Permitted
Acquisition” shall mean the acquisition, by merger or otherwise, by the
Borrower or any of the Restricted Subsidiaries of assets or capital stock or
other equity interests, so long as (a) such acquisition and all
transactions related thereto shall be consummated in accordance with applicable
law; (b) such acquisition shall result in the issuer of such capital stock
or other equity interests becoming a Subsidiary Guarantor to the extent
required by Section 9.11; and (c) such acquisition shall result in
the Administrative Agent for the benefit of the applicable Lenders, being
granted a security interest in any capital stock or any assets so acquired to
the extent required by Sections 9.11, 9.12 and/or 9.15.


 


“Permitted
Additional PIK Convertible Notes” shall mean up to $25,000,000 aggregate
principal amount of convertible senior secured third lien notes due 2016 of
Parent and the Borrower, as co-issuers, having terms and conditions not less
favorable to the Lenders than the Initial PIK Convertible Notes and with
respect to which the holders (or a trustee or agent on behalf of such holders)
shall have executed a supplement to the Intercreditor Agreement agreeing to be bound
thereby on the same terms applicable to the holders of Initial PIK Convertible
Notes.


 


“Permitted
Additional Secured Notes” shall mean any Indebtedness of the Borrower
(other than the Initial Secured Notes) that is secured by a Lien ranking pari passu
with the Lien of the Initial Secured Notes pursuant to the terms of the
Intercreditor Agreement; provided that (a) the terms of such
Indebtedness do not provide for any scheduled repayment, mandatory redemption
or sinking fund obligation prior to the Maturity Date (other than customary
offers to purchase upon a change of control, asset sale or event of loss and
customary acceleration rights after an event of default), (b) no
Subsidiary of the Borrower other than a Subsidiary Guarantor is a guarantor or
obligor with respect to such Indebtedness, (c) the holders of such
Permitted Additional Secured Notes (or a trustee or agent authorized to act on
behalf of such holders) shall have executed a supplement to the Intercreditor
Agreement agreeing to be bound thereby on the same terms applicable to the
holders of Initial Secured Notes, (d) no Event of Default shall have
occurred and is continuing immediately after giving effect to the issuance
thereof and the application of proceeds therefrom and (e) either (x) on
a Pro Forma Basis immediately after giving effect to the issuance of any
Permitted Additional Secured Notes (i) the Consolidated Senior Secured
Debt to Consolidated EBITDA Ratio as of the last day of the most recent Test
Period for which Section 9.1 Financials have been delivered is less than
2.75 to 1.0 and (ii) the Fixed Charge Coverage Ratio for the most recent
Test Period for which Section 9.1 Financials have been delivered would be
at least 1.1 to 1.0 (or, in the case of Permitted Additional Secured Notes
issued as Permitted Refinancing Indebtedness, the Fixed Charge Coverage Ratio
for such Test Period is higher than immediately prior to such refinancing
transaction) or (y) the aggregate amount of Permitted Additional Secured
Notes outstanding at the time of issuance thereof does not exceed $50,000,000.


 


“Permitted
Discretion” shall mean the Security Agents’ commercially reasonable
judgment, exercised in good faith in accordance with their customary business
practices for 


 


24














 


asset-based lending
transactions; provided that any standard of eligibility or reserve
established or modified by the Security Agents shall have a reasonable
relationship to circumstances, conditions, events or contingencies which are
the basis for such standard of eligibility or reserve, as reasonably
determined, without duplication, by the Security Agents in good faith.


 


“Permitted
Holders” shall mean, collectively, KKR, its Affiliates and the Management
Group.


 


“Permitted
Investments” shall mean (a) (i) Dollars, Pounds Sterling, Euros
and Canadian Dollars and (ii) securities issued or unconditionally
guaranteed by the United States government or any agency or instrumentality
thereof, in each case having maturities of not more than 24 months from the
date of acquisition thereof; (b) securities issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof or any political subdivision of any such state
or any public instrumentality thereof having maturities of not more than 24
months from the date of acquisition thereof and, at the time of acquisition,
having an investment grade rating from at least two out of the three of Fitch,
Moody’s and S&P; (c) commercial paper maturing no more than 12 months
after the date of creation thereof and, at the time of acquisition, having a
minimum rating from at least two out of three of the ratings agencies as
follows: S&P: A-2, Moody’s: P-2 and Fitch: F2; (d) domestic and
eurodollar certificates of deposit or bankers’ acceptances maturing no more
than two years after the date of acquisition thereof issued by any Lender or
any other bank having combined capital and surplus of not less than
$250,000,000 in the case of domestic banks and $100,000,000 (or the dollar
equivalent thereof) in the case of foreign banks; (e) repurchase
agreements with a term of not more than 30 days for underlying securities of
the type described in clauses (a)(ii), (b) and (d) above entered into
with any bank meeting the qualifications specified in clause (d) above or
securities dealers of recognized national standing; (f) marketable
short-term money market and similar securities, having a minimum rating from at
least two out of three of the ratings agencies as follows: S&P: A-2,
Moody’s: P-2 and Fitch: F2; (g) shares of investment companies that are
registered under the Investment Company Act of 1940 and invest solely in one or
more of the types of securities described in clauses (a) through (f) above;
and (h) in the case of investments by any Restricted Foreign Subsidiary,
other customarily utilized high-quality investments in the country where such
Restricted Foreign Subsidiary is located.


 


“Permitted
Junior Lien or Unsecured Notes” shall mean any Indebtedness of the Borrower
(other than the Initial PIK Convertible Notes and any Permitted Additional PIK
Convertible Notes) that is either unsecured or secured by a Lien ranking junior
to the Lien securing the Permitted Additional Secured Notes and the Obligations
pursuant to the terms of the Inter-creditor Agreement; provided that (a) the
terms of such Indebtedness do not provide for any scheduled repayment,
mandatory redemption or sinking fund obligation prior to the Maturity Date
(other than customary offers to purchase upon a change of control, asset sale
or event of loss and customary acceleration rights after an event of default), (b) no
Subsidiary of the Borrower other than a Subsidiary Guarantor is a guarantor or
obligor with respect to such Indebtedness, (c) if such Permitted Junior
Lien or Unsecured Notes are secured by any Liens, the holders of such Permitted
Junior Lien or Unsecured Notes (or a trustee or agent authorized to act on
behalf of such holders) shall have executed a supplement to the Intercreditor
Agreement agreeing to be bound thereby on the same terms applicable to the
holders of Initial PIK Convertible Notes giving effect to the priority of the
Lien securing such Indebtedness and (d) on a Pro Forma Basis


 


25

















 


after giving effect to the
issuance of such Permitted Junior Lien or Unsecured Notes and the application
of proceeds therefrom, (i) no Event of Default shall have occurred and is
continuing and (ii) the Fixed Charge Coverage Ratio for the most recent
Test Period for which Section 9.1 Financials have been delivered would be
at least 1.1 to 1.0 (or, in the case of Permitted Junior Lien or Unsecured
Notes issued as Permitted Refinancing Indebtedness, the Fixed Charge Coverage
Ratio for such Test Period is higher than immediately prior to such refinancing
transaction).


 


“Permitted
Liens” shall mean (a) Liens for taxes, assessments or governmental
charges or claims not yet due or which are being contested in good faith and by
appropriate proceedings for which appropriate reserves have been established in
accordance with GAAP; (b) Liens in respect of property or assets of the
Borrower or any of the Subsidiaries imposed by law, such as carriers’,
warehousemen’s and mechanics’ Liens and other similar Liens arising in the
ordinary course of business, in each case so long as such Liens arise in the
ordinary course of business and do not individually or in the aggregate have a
Material Adverse Effect; (c) Liens arising from judgments or decrees in
circumstances not constituting an Event of Default under Section 11.12; (d) Liens
incurred or deposits made in connection with workers’ compensation,
unemployment insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety and appeal bonds, bids,
leases, government contracts, performance and return-of-money bonds and other
similar obligations incurred in the ordinary course of business; (e) ground
leases in respect of real property on which facilities owned or leased by the
Borrower or any of its Subsidiaries are located; (f) easements,
rights-of-way, restrictions, minor defects or irregularities in title and other
similar charges or encumbrances not interfering in any material respect with
the business of the Borrower and its Subsidiaries, taken as a whole; (g) any
interest or title of a lessor or secured by a lessor’s interest under any lease
permitted by this Agreement; (h) 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; (i) Liens on goods the purchase
price of which is financed by a documentary letter of credit issued for the
account of the Borrower or any of its Subsidiaries, provided that such
Lien secures only the obligations of the Borrower or such Subsidiaries in
respect of such letter of credit to the extent permitted under Section 10.1(A);
(j) leases or subleases granted to others not interfering in any material
respect with the business of the Borrower and its Subsidiaries, taken as a
whole and (k) Liens (i) of a collecting bank arising in the ordinary
course of business under Section 4-210 of the Uniform Commercial Code in
effect in the relevant jurisdiction covering only the items being collected
upon or (ii) in favor of a banking institution arising as a matter of law,
encumbering amounts credited to deposit or securities accounts (including the
right of set-off) and which are within the general parameters customary in the
banking industry.


 


“Permitted
Refinancing Indebtedness” shall mean any Indebtedness (“Refinancing
Indebtedness”) incurred to refinance, refund, renew or extend (including,
without limitation, pursuant to any exchange offer) any Indebtedness (the “Initial
Indebtedness”) specified in clause (i) or (k) of Section 10.1(A),
provided that (a) the principal amount of any Refinancing
Indebtedness is not increased above the principal amount of the Initial
Indebtedness refinanced thereby (except by the amount of any accrued and unpaid
interest thereon and by the amount of any fees and expenses payable in
connection with such refinancing), (b) Initial Indebtedness of the
Borrower or a Subsidiary Guarantor may not be refinanced with Refinancing
Indebtedness incurred or guaranteed by any Restricted Subsidiary that is not a
Guarantor, (c) except in the case of a refinancing


 


26

















 


of the Subordinated Notes,
if the Initial Indebtedness is subordinated to the Obligations, then such
Refinancing Indebtedness shall be subordinated to the Obligations to at least
the same extent, (d) such Refinancing Indebtedness (x) does not have
a final maturity prior to the final maturity of the Initial Indebtedness
refinanced thereby and (y) does not have a Weighted Average Life to
Maturity that is less than the Weighted Average Life to Maturity of the Initial
Indebtedness and (e) except in the case of Refinancing Indebtedness
constituting Permitted Additional Secured Notes or Permitted Junior Lien or
Unsecured Notes, the Refinancing Indebtedness is not secured by a Lien on any
assets of the Borrower or any of the Restricted Subsidiaries other than any
assets subject to a Lien securing the Initial Indebtedness, provided further
that no Permitted Refinancing Indebtedness in respect of the Initial PIK
Convertible Notes or any Permitted Additional PIK Convertible Notes (or any
Permitted Refinancing Indebtedness in respect thereof) shall provide (a) for
any cash interest payments or other cash distributions in respect thereof on or
prior to the Maturity Date, (b) by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable or
exercisable) or upon the happening of any event that such Indebtedness (i)(x) matures
or becomes mandatorily redeemable pursuant to a sinking fund obligation or
otherwise (other than for equity interests of Parent), (y) that such
Indebtedness becomes convertible or exchangeable at the option of the holder
thereof for Indebtedness or other securities that do not meet the requirements
of this proviso or (z) become redeemable at the option of the holder
thereof (other than as a result of a change of control event or in exchange for
equity interests of Parent), in whole or in part, in each case on or prior to
the first anniversary of the Maturity Date or (c) provide holders
thereunder with any rights to require redemption or repayment (other than in
equity interests of Parent) upon the occurrence of a “change of control” event
prior to the Final Date.


 


“Permitted
Sale Leaseback” shall mean any Sale Leaseback consummated by the Borrower
or any of the Restricted Subsidiaries after the Effective Date, provided
that (i) with respect to any property owned as of the Signing Date, the
value of such Sale Leasebacks shall not exceed $50,000,000 in the aggregate and
(ii) such Sale Leaseback is consummated for fair value as determined at
the time of consummation in good faith by the Borrower and, in the case of any
Sale Leaseback (or series of related Sales Leasebacks) the aggregate proceeds of
which exceed $20,000,000, the board of directors of the Borrower (which such
determination may take into account any retained interest or other investment
of the Borrower or such Restricted Subsidiary in connection with, and any other
material economic terms of, such Sale Leaseback).


 


“Person”
shall mean any individual, partnership, joint venture, firm, corporation,
limited liability company, association, trust or other enterprise or any
Governmental Authority.


 


“PIK
Convertible Note Indenture” shall mean the Indenture among Parent, the
Borrower, the guarantors party thereto and the trustee thereunder in the form
contemplated by the Forward Purchase Contract, pursuant to which the Initial
PIK Convertible Notes are issued, as the same may be amended, supplemented or
otherwise modified from time to time.


 


“Plan”
shall mean any multiemployer or single-employer plan, as defined in Section 4001
of ERISA and subject to Title IV of ERISA, that is or was within any of the
preceding five plan years maintained or contributed to by (or to which there is
or was an obligation to contribute or to make payments to) the Borrower, a
Subsidiary or an ERISA Affiliate.


 


27

















 


“Pledge
Agreement” shall mean the Pledge Agreement, entered into by Holdings, the
Borrower, the other pledgors party thereto and the Collateral Agent for the
benefit of the Secured Parties, in form reasonably satisfactory to each Initial
Lender, as the same may be amended, supplemented or otherwise modified from
time to time.


 


“Prime
Rate” shall mean the rate of interest per annum publicly announced from
time to time by the Administrative Agent as its reference 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 JPMCB in connection with extensions of
credit to debtors).


 


“Pro
Forma Adjustment” shall mean, for any Test Period that includes any of the
six fiscal quarters first ending following any acquisition or disposition of
any Restricted Subsidiary or division or line of business, the pro forma
increase or decrease in Consolidated EBITDA, projected by the Borrower in good
faith as a result of reasonably identifiable and factually supportable
recurring net cost savings or recurring additional net costs, as the case may
be, realizable during such period as a result of such transaction, provided
that so long as such net cost savings or additional net costs will be
realizable at any time during such six-quarter period, it shall be assumed, for
purposes of projecting such pro forma increase or decrease to Consolidated
EBITDA, that such net cost savings or additional net costs will be realizable
during the entire such period; provided further that any
such pro forma increase or decrease to Consolidated EBITDA shall be without
duplication of net cost savings or additional net costs actually realized
during such period and already included in Consolidated EBITDA.


 


“Pro
Forma Adjustment Certificate” shall mean any certificate of an Authorized
Officer of the Borrower delivered pursuant to Section 9.1(i) or
setting forth the information described in clause (iv) to Section 9.1(d) .


 


“Pro
Forma Basis” shall mean, with respect to any financial test specified
herein as of any date (a “Determination Date”) such test shall be
determined on a pro forma basis after giving effect to:


 


(A)            any acquisition or
disposition of any Restricted Subsidiary or division or line of business made
following the first day of the most recent Test Period ending prior to the
Determination Date (the “Relevant Test Period”) and on or prior to such
Determination Date as though such acquisition or disposition had occurred on
the first day of the Relevant Test Period;


 


(B)             any designation of
a Restricted Subsidiary as an Unrestricted Subsidiary or any redesignation of
an Unrestricted Subsidiary as a Restricted Subsidiary and any Restricted
Payment, in each case, following the first day of the Relevant Test Period and
on or prior to the Determination Date as though such designation, redesignation
or Restricted Payment had occurred on the first day of the Relevant Test
Period;


 


(C)             any incurrence or
repayment of Indebtedness during the Relevant Test Period and on or prior to
the Determination Date as though such incurrence or repayment had occurred on
the first day of the Relevant Test Period;


 


28

















 


(D)            any other
transaction to occur on or prior to the Determination Date which requires that
any financial ratio be calculated on a Pro Forma Basis as though such
Transaction had occurred on the first day of the Relevant Test Period; and


 


(E)             any applicable Pro
Forma Adjustment.


 


“Protective
Advance” shall have the meaning assigned to such term in Section 2.1.


 


“Qualified
PIK Securities” shall mean (1) any preferred capital stock or
preferred equity interest of Parent (a) that does not provide for any cash
dividend payments or other cash distributions in respect thereof on or prior to
the Maturity Date and (b) that by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable or
exercisable) or upon the happening of any event does not (i)(x) mature or
become mandatorily redeemable pursuant to a sinking fund obligation or
otherwise, (y) become convertible or exchangeable at the option of the
holder thereof for Indebtedness or preferred stock that is not Qualified PIK
Securities or (z) become redeemable at the option of the holder thereof
(other than as a result of a change of control event), in whole or in part, in
each case on or prior to the first anniversary of the Maturity Date and (ii) provide
holders thereunder with any rights upon the occurrence of a “change of control”
event prior to the Final Date and (2) any Indebtedness of Parent which has
payments terms at least as favorable to the Borrower and Lenders as described
in clause (1)(a) above and is subordinated and has other terms, other than
with respect to interest rates, at least as favorable to the Borrower and
Lenders as the Subordinated Notes.


 


“Real
Estate” shall have the meaning given to that term in Section 9.1(g) .


 


“Register”
shall have the meaning provided in Section 14.6(b)(iv) .


 


“Regulation
D” shall mean Regulation D of the Board as from time to time in effect and
any successor to all or a portion thereof establishing reserve requirements.


 


“Regulation
T” shall mean Regulation T of the Board as from time to time in effect and
any successor to all or a portion thereof establishing margin requirements.


 


“Regulation
U” shall mean Regulation U of the Board as from time to time in effect and
any successor to all or a portion thereof establishing margin requirements.


 


“Regulation
X” shall mean Regulation X of the Board as from time to time in effect and
any successor to all or a portion thereof establishing margin requirements.


 


“Regulation
Z” shall mean Regulation Z of the Board as from time to time in effect and
any successor to all or a portion thereof establishing margin requirements.


 


“Related
Parties” shall mean, with respect to any specified Person, such Person’s
Affiliates and the directors, officers, employees, agents, trustees, advisors
of such Person and any Person that possesses, directly or indirectly, the power
to direct or cause the direction of the management or policies of such Person,
whether through the ability to exercise voting power, by contract or otherwise.


 


29

















 


“Report”
shall mean reports prepared by the Administrative Agent, any Security Agent or
another Person showing the results of appraisals, field examinations or audits
pertaining to the Credit Parties’ assets from information furnished by or on
behalf of the Credit Parties, after the Administrative Agent or any Security
Agent has exercised its rights of inspection pursuant to this Agreement, which
Reports may be distributed to the Lenders by the Administrative Agent or any
such Security Agent.


 


“Reportable
Event” shall mean an event described in Section 4043 of ERISA and the
regulations thereunder.


 


“Required
Lenders” shall mean, at any date, Lenders having or holding a majority of
the Total Commitment at such date or, if the Total Commitment has been
terminated, Lenders having a majority of the Total Credit Exposure at such
date.


 


“Required
Supermajority Lenders” shall mean, at any date, Lenders having Commitments
representing at least 75% of the Total Commitment at such date or, if the Total
Commitment has terminated, having at least 75% of the Total Credit Exposure at
such date.


 


“Requirement
of Law” shall mean, 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 assets or to which such Person or
any of its property or assets is subject.


 


“Reserves”
shall mean any and all reserves (other than Account Reserves and Inventory
Reserves) which the Security Agents deem necessary, in their Permitted
Discretion, to maintain (including, without limitation, reserves for accrued
and unpaid interest on the Obligations, reserves for rent at locations leased
by any Credit Party and for consignee’s, warehousemen’s and bailee’s charges
(unless a Collateral Access Agreement shall be in effect with respect to the
subject property), reserves for Secured Hedge Agreements (but in the case of
such Secured Hedge Agreements, only with the consent of the Borrower), reserves
for contingent liabilities of any Credit Party, reserves for uninsured losses
of any Credit Party, reserves for un-insured, underinsured, un-indemnified or
under-indemnified liabilities or potential liabilities with respect to any
litigation and reserves for taxes, fees, assessments and other governmental
charges) with respect to the Collateral or any Credit Party. The Security
Agents may, from time to time, in their Permitted Discretion, adjust Reserves
upon not less than one Business Day’s prior written notice to the Borrower.


 


“Restricted
Domestic Subsidiary” shall mean each Restricted Subsidiary that is also a
Domestic Subsidiary.


 


“Restricted
Foreign Subsidiary” shall mean a Foreign Subsidiary that is a Restricted
Subsidiary.


 


“Restricted
Payment” shall mean (a) any dividend or other distribution (whether in
cash, securities or other property) with respect to any equity interests of
Parent, Holdings or the Borrower, or any payment (whether in cash, securities
or other property), including any sinking fund or similar deposit, on account
of the purchase, redemption, retirement, acquisition, cancellation


 


30

















 


or termination of any such
equity interests in Parent, Holdings or the Borrower or any option, warrant or other
right to acquire any such equity interests in Parent, Holdings or the Borrower
(including the Initial PIK Convertible Notes and any Permitted Additional PIK
Convertible Notes) and any payment under any cash-settled incentive awards
payable to employees or directors of Parent or any of its Subsidiaries with
reference to any such equity interest, warrant or right to acquire, other than (i) dividends,
distributions, payments or purchases made with common stock of Parent or
warrants or options to purchase such common stock or made with common stock
upon the conversion or exercise of any options, warrants or rights (including
upon conversion of any Initial PIK Convertible Notes or Permitted Additional
PIK Convertible Notes) or (ii) the receipt of replacement rights
(excluding payments except as provided above) under any replacement incentive
award program, (b) the designation of any Restricted Subsidiary as an
Unrestricted Subsidiary (which shall be deemed to be a Restricted Payment in an
amount equal to the sum of (i) the net worth of such designated Subsidiary
immediately prior to such designation (such net worth to be calculated without
regard to any guarantee provided by such designated Subsidiary) and (ii) the
aggregate principal amount of any Indebtedness owed by such designated
Subsidiary to the Borrower or any Restricted Subsidiary immediately prior to
such designation), all calculated, except as set forth in the parenthetical to
clause (b), on a consolidated basis in accordance with GAAP and (c) any payment
pursuant to the Forward Purchase Contract by Holdings, the Borrower or any
Restricted Subsidiary including any return of cash collateral or any other
property or securities of any Credit Party other than (i) the issuance of
the Initial PIK Convertible Notes or common stock of Parent or warrants or
options to purchase common stock, (ii) a return by Holdings, the Borrower
and the Restricted Subsidiaries of a portion of the cash collateral deposited
pursuant to the Forward Purchase Contract to Sealy Holding LLC solely upon
issuance of the Initial PIK Convertible Notes and solely to the extent of and
with the net cash proceeds received by the Borrower from the issuance and sale
of Initial PIK Convertible Notes or (iii) payments to Sealy Holding LLC by
Holdings, the Borrower and the Restricted Subsidiaries of (x) fees paid on
the date of execution of the Forward Purchase Contract of up to $1,000,000 and (y) cash
interest on the cash collateral deposited pursuant to the Forward Purchase
Contract (prior to settlement or return to Sealy Holding LLC) in respect of the
period from deposit to no later than September 30, 2009 at a rate equal to
one month LIBOR plus 3.00% per annum.


 


“Restricted
Subsidiary” shall mean any Subsidiary of the Borrower other than an Unrestricted
Subsidiary.


 


“Revolving
Credit Loans” shall have the meaning provided in Section 2.1(a) .


 


“S&P”
shall mean Standard & Poor’s Ratings Services or any successor by
merger or consolidation to its business.


 


“Sale
Leaseback” shall mean any transaction or series of related transactions
pursuant to which the Borrower or any of the Restricted Subsidiaries (a) sells,
transfers or otherwise disposes of any property, real or personal, whether now
owned or hereafter acquired, and (b) as part of such transaction,
thereafter rents or leases such property or other property that it intends to
use for substantially the same purpose or purposes as the property being sold,
transferred or disposed.


 


31

















 


“SEC”
shall mean the Securities and Exchange Commission or any successor thereto.


 


“Section 9.1
Financials” shall mean the financial statements delivered, or required to
be delivered, pursuant to Section 9.1(a) or (b) together with
the accompanying officer’s certificate delivered, or required to be delivered,
pursuant to Section 9.1(d) .


 


“Secured
Cash Management Agreement” shall mean any Cash Management Agreement that is
entered into by and between the Borrower or any of its Restricted Subsidiaries
and any Cash Management Bank.


 


“Secured
Hedge Agreement” shall mean any Hedge Agreement that is entered into by and
between the Borrower or any of its Restricted Subsidiaries and any Hedge Bank.


 


“Secured
Note Indenture” shall mean the Indenture to be dated as of the Effective Date,
among the Borrower, the guarantors party thereto and The Bank of New York
Mellon Trust Company, N.A., as trustee, in form reasonably satisfactory to each
Initial Lender pursuant to which the Initial Secured Notes are issued, as the
same may be amended, supplemented or otherwise modified from time to time.


 


“Secured
Parties” shall have the meaning assigned to such term in the applicable
Security Documents.


 


“Security
Agents” shall mean the Collateral Agent and the Co-Collateral Agent.


 


“Security
Agreement” shall mean the Security Agreement entered into by the Borrower,
the other grantors party thereto and the Collateral Agent for the benefit of
the Secured Parties, in form reasonably satisfactory to each Initial Lender, as
the same may be amended, supplemented or otherwise modified from time to time.


 


“Security
Documents” shall mean, collectively, (a) the Guarantee, (b) the
Pledge Agreement, (c) the Security Agreement, (d) the Mortgages and (e) each
other security agreement or other instrument or document executed and delivered
pursuant to Section 9.11, 9.12 or 9.15 or pursuant to any of the Security
Documents to secure any of the Obligations.


 


“Signing
Date” shall mean the date of execution and delivery of the Credit Agreement
by each of the parties listed on the signature pages hereto, which date
was May 13, 2009.


 


“Solvent”
shall mean, with respect to the Borrower, that as of the Effective Date, both (i) (a) the
sum of the Borrower’s debts (including contingent liabilities) does not exceed
the present fair saleable value of the Borrower’s present assets; (b) the
Borrower’s capital is not unreasonably small in relation to its business as
contemplated on the Effective Date; and (c) the Borrower has not incurred
and does not intend to incur, or believe that it will incur, debts including
current obligations beyond its ability to pay such debts as they become due
(whether at maturity or otherwise); and (ii) the Borrower is “solvent”
within the meaning given that term and similar terms under applicable laws relating
to fraudulent transfers and conveyances. For purposes of this definition, the
amount of any contingent liability at any time shall be computed as the amount
that, in light of all of the facts and circumstances existing at such time,
represents the


 


32

















 


amount that can reasonably
be expected to become an actual or matured liability (irrespective of whether
such contingent liabilities meet the criteria for accrual under Statement of
Financial Accounting Standard No. 5).


 


“Specified
Secured Hedge Agreement” shall mean any Secured Hedge Agreement with
respect to which, with the consent of the Borrower at the time such Reserve is
established, the Security Agents maintain a Reserve.


 


“Specified
Subsidiary” shall mean, at any date of determination, (a) any Material
Subsidiary or (b) any Unrestricted Subsidiary (i) whose total assets
at the last day of the Test Period ending on the last day of the most recent
fiscal period for which Section 9.1 Financials have been delivered (when
taken together with all other Unrestricted Subsidiaries as to which a specified
condition applies) were equal to or greater than 15% of the consolidated total
assets of the Borrower and the Subsidiaries at such date or (ii) whose
gross revenues for such Test Period (when taken together with all other
Unrestricted Subsidiaries as to which a specified condition applies) were equal
to or greater than 15% of the consolidated gross revenues of the Borrower and
the Subsidiaries for such period, in each case determined in accordance with
GAAP.


 


“Stated
Amount” of any Letter of Credit shall mean, at any time, the Dollar
Equivalent of the maximum amount available to be drawn thereunder at such time,
determined without regard to whether any conditions to drawing could then be
met.


 


“Status”
shall mean, as to the Borrower as of any date, the existence of Level I Status
or Level II Status, as the case may be, on such date. Changes in Status shall
become effective as of the end of each fiscal quarter of Holdings.


 


“Statutory
Reserve Rate” shall mean for any day as applied to any Eurodollar Loan, 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 that are in effect on that day (including any marginal, special,
emergency or supplemental reserves), expressed as a decimal, as prescribed by
the Board and to which the Administrative Agent is subject, 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. Eurodollar 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.


 


“Subordinated
Note Indenture” shall mean the Indenture dated as of April 6, 2004,
among the Borrower, the guarantors party thereto and The Bank of New York, as
trustee, pursuant to which the Subordinated Notes were issued, as the same may
be amended, supplemented or otherwise modified from time to time.


 


“Subordinated
Notes” shall mean the Borrower’s 8.25% Subordinated Notes due 2014
outstanding on the Effective Date.


 


33

















 


“Subsidiary”
of any Person shall mean and include (a) any corporation more than 50% of
whose stock of any class or classes having by the terms thereof ordinary voting
power to elect a majority of the directors of such corporation (irrespective of
whether or not at the time stock of any class or classes of such corporation
shall have or might have voting power by reason of the happening of any
contingency) is at the time owned by such Person directly or indirectly through
Subsidiaries and (b) any partnership, association, joint venture or other
entity in which such Person directly or indirectly through Subsidiaries has
more than a 50% equity interest at the time. Unless otherwise expressly
provided, all references herein to a “Subsidiary” shall mean a Subsidiary of
the Borrower.


 


“Subsidiary
Guarantors” shall mean (a) each Domestic Subsidiary on the Effective
Date (other than any Excluded Subsidiary) and (b) each Restricted Domestic
Subsidiary that becomes a party to the Guarantee after the Effective Date
pursuant to Section 9.11.


 


“Swingline
Commitment” shall mean $25,000,000.


 


“Swingline
Exposure” shall mean, with respect, to any Lender at any time, such
Lender’s Applicable Percentage of the outstanding Swingline Loans at such time.


 


“Swingline
Lender” shall mean JPMCB in its capacity as lender of Swingline Loans
hereunder.


 


“Swingline
Loans” shall have the meaning provided in Section 2.1(b) .


 


“Swingline
Maturity Date” shall mean, with respect to any Swingline Loan, the date that
is five Business Days prior to the Maturity Date.


 


“Syndication
Agent” shall mean Mizuho Corporate Bank, Ltd., as the syndication agent for
the Lenders under this Agreement and the other Credit Documents.


 


“Test
Period” shall mean, for any date of determination under this Agreement, the
four consecutive fiscal quarters of the Borrower then last ended.


 


“Total
Commitment” shall mean the sum of the Commitments of all Lenders.


 


“Total
Credit Exposure” shall mean, at any date, the sum of the Credit Exposures of
all Lenders.


 


“Transaction
Expenses” shall mean any fees or expenses incurred or paid by Holdings or
any of its Subsidiaries in connection with the Transactions, including, without
limitation, early termination payments under the Borrower’s interest rate
hedging agreements with respect to the Existing Credit Agreement.


 


“Transactions”
shall mean (i) the negotiation, execution and delivery of this Agreement,
the Forward Purchase Contract, Initial PIK Convertible Notes Indenture and the
Initial Secured Notes Indenture, (ii) the repayment in full of the
Existing Credit Agreement and the termination of all commitments thereunder and
(iii) all other transactions in connection with the foregoing (including
the rights offering contemplated by the Forward Purchase Contract).


 


34














 


“Transferee”
shall have the meaning provided in Section 14.6(e).


 


“Type”
shall mean, as to any Loan, its nature as an ABR Loan or a Eurodollar Loan.


 


“Unfunded
Current Liability” of any Plan shall mean the amount, if any, by which the
present value of the accrued benefits under the Plan as of the close of its
most recent plan year, determined in accordance with Statement of Financial
Accounting Standards No. 87 as in effect on the date hereof, based upon
the actuarial assumptions that would be used by the Plan’s actuary in a
termination of the Plan, exceeds the fair market value of the assets allocable
thereto.


 


“Unpaid
Drawing” shall have the meaning provided in Section 3.4(a).


 


“Unrestricted
Subsidiary” shall mean (a) any Subsidiary of the Borrower that is
formed or acquired after the Effective Date (other than a Subsidiary that
becomes or is required to become a Credit Party hereunder), provided
that at such time (or promptly thereafter) the Borrower designates such
Subsidiary an Unrestricted Subsidiary in a written notice to the Administrative
Agent, (b) any Restricted Subsidiary (other than a Restricted Subsidiary
that is or becomes a Credit Party) subsequently re-designated as an
Unrestricted Subsidiary by the Borrower in a written notice to the Administrative
Agent, provided that no Default would result from such re-designation
and (c) each Subsidiary of an Unrestricted Subsidiary; provided, however,
that at the time of any written re-designation by the Borrower to the
Administrative Agent that any Unrestricted Subsidiary shall no longer
constitute an Unrestricted Subsidiary, such Unrestricted Subsidiary shall cease
to be an Unrestricted Subsidiary to the extent no Default would result from
such re-designation. On or promptly after the date of its formation,
acquisition or redesignation, as applicable, each Unrestricted Subsidiary
(other than an Unrestricted Subsidiary that is a Foreign Subsidiary) shall have
entered into a tax sharing agreement containing terms that, in the reasonable
judgment of the Administrative Agent, provide for an appropriate allocation of
tax liabilities and benefits.


 


“Voting
Stock” shall mean, with respect to any Person, shares of such Person’s
capital stock having the right to vote for the election of directors of such
Person under ordinary circumstances.


 


“Weekly
Reporting Period” shall mean any period during which the Availability is
less than the greater of (x) 20.0% of the Total Commitments and (y) $20,000,000.


 


“Weighted
Average Life to Maturity” when applied to any Indebtedness at any date,
means the number of years obtained by dividing (1) the sum of the products
obtained by multiplying (a) the amount of each then remaining installment,
sinking fund, serial maturity or other required payment of principal, including
payment at final maturity, in respect thereof by (b) the number of years
(calculated to the nearest one-twelfth) that will elapse between such date and
the making of such payment by (2) the then outstanding principal amount of
such Indebtedness.


 


(b)             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 references are to Sections of this Agreement unless


 


35

















 


otherwise specified. The
words “include”, “includes” and “including” shall be deemed to be followed by
the phrase “without limitation”.


 


1.2.            Exchange Rates. For purposes
of determining compliance under Section 10.4, 10.5 or 10.6 with respect to
any amount in a foreign currency, such amount shall be deemed to equal the
Dollar equivalent thereof based on the average exchange rate for such foreign
currency for the most recent twelve-month period immediately prior to the date
of determination in a manner consistent with that used in calculating
Consolidated EBITDA for the related period. For purposes of determining
compliance with Sections 10.1 and 10.2, with respect to any amount of
Indebtedness in a foreign currency, compliance will be determined at the time
of incurrence thereof using the Dollar equivalent thereof at the exchange rate
in effect for such currency at the time of such incurrence.


 


SECTION 2.            Amount and Terms of Credit


 


2.1.            Commitments.


 


(a)             (i) Subject to and upon the
terms and conditions herein set forth, each Lender severally agrees to make a
loan or loans denominated in Dollars (each a “Revolving Credit Loan”) to the
Borrower which Revolving Credit Loans (A) shall be made at any time and
from time to time on and after the Effective Date and prior to the Maturity
Date, (B) may, at the option of the Borrower be incurred and maintained
as, and/or converted into, ABR Loans or Eurodollar Loans, provided that
all Revolving Credit Loans made by each of the Lenders pursuant to the same
Borrowing shall, unless otherwise specifically provided herein, consist
entirely of Revolving Credit Loans of the same Type, (C) may be repaid and
reborrowed in accordance with the provisions hereof, (D) shall not, for
any such Lender, result in such Lender’s Credit Exposure at such time exceeding
such Lender’s Commitment at such time and (E) shall not result in the
Total Credit Exposure exceeding the lesser of (i) the Total Commitment at
such time and (ii) the Borrowing Base at such time.


 


(ii)             Each Lender may at its option make
any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of
such Lender to make such Loan, provided that (A) any exercise of
such option shall not affect the obligation of the Borrower to repay such Loan
and (B) in exercising such option, such Lender shall use its reasonable
efforts to minimize any increased costs to the Borrower resulting therefrom
(which obligation of the Lender shall not require it to take, or refrain from
taking, actions that it determines would result in increased costs for which it
will not be compensated hereunder or that it determines would be otherwise
disadvantageous to it and in the event of such request for costs for which
compensation is provided under this Agreement, the provisions of Section 3.5
shall apply).


 


(b)             Subject to and upon the terms and
conditions herein set forth, the Swingline Lender in its individual capacity
agrees, at any time and from time to time on and after the Effective Date and
prior to the Swingline Maturity Date, to make a loan or loans (each a “Swingline
Loan” and, collectively, the “Swingline Loans”) to the Borrower in
Dollars, which Swingline Loans (i) shall be ABR Loans, (ii) shall
have the benefit of the provisions of Section 2.1(c), (iii) shall not
exceed at any time outstanding the Swingline Commitment, (iv) shall not
result at any time in the Total Credit Exposure at such time exceeding the
lesser of (i) the Total


 


36

















 


Commitment at such time and (ii) the
Borrowing Base at such time and (v) may be repaid and reborrowed in
accordance with the provisions hereof. On the Swingline Maturity Date, each
outstanding Swingline Loan shall be repaid in full. The Swingline Lender shall
not make any Swingline Loan after receiving a written notice from the Borrower
or any Lender stating that a Default exists and is continuing until such time
as the Swingline Lender shall have received written notice of (i) rescission
of all such notices from the party or parties originally delivering such notice
or (ii) the waiver of such Default in accordance with the provisions of Section 14.1.


 


(c)             On any Business Day, the Swingline
Lender may, in its sole discretion, give notice to the Lenders that all then-outstanding
Swingline Loans shall be funded with a Borrowing of Revolving Credit Loans
(and, if any Swingline Loan is outstanding on the seventh calendar day
following the date of Borrowing of such Swingline Loan, then on the first
Business Day following such seventh calendar day, the Swingline Lender shall be
required to give such notice), in which case Revolving Credit Loans
constituting ABR Loans (each such Borrowing, a “Mandatory Borrowing”)
shall be made on the immediately succeeding Business Day by all Lenders with
Commitments pro rata based on each Lender’s Applicable
Percentage, and the proceeds thereof shall be applied directly to the Swingline
Lender to repay the Swingline Lender for such outstanding Swingline Loans. Each
Lender hereby irrevocably agrees to make such Revolving Credit Loans upon one
Business Day’s notice pursuant to each Mandatory Borrowing in the amount and in
the manner specified in the preceding sentence and on the date specified to it
in writing by the Swingline Lender notwithstanding (i) that the amount of
the Mandatory Borrowing may not comply with the minimum amount for each
Borrowing specified in Section 2.2, (ii) whether any conditions
specified in Section 7 are then satisfied, (iii) whether a Default
has occurred and is continuing, (iv) the date of such Mandatory Borrowing
or (v) any reduction in the Total Commitment or Availability after any
such Swingline Loans were made. In the event that, in the sole judgment of the
Swingline Lender, any Mandatory Borrowing cannot for any reason be made on the
date otherwise required above (including as a result of the commencement of a
proceeding under the Bankruptcy Code in respect of the Borrower), each Lender
hereby agrees that it shall forthwith purchase from the Swingline Lender (without
recourse or warranty) such participation of the outstanding Swingline Loans as
shall be necessary to cause such Lenders to share in such Swingline Loans
ratably based upon their Applicable Percentages, provided that all
principal and interest payable on such Swingline Loans shall be for the account
of the Swingline Lender until the date the respective participation is
purchased and, to the extent attributable to the purchased participation, shall
be payable to the Lender purchasing the same from and after such date of
purchase.


 


(d)             Subject to the limitations set
forth below, the Administrative Agent is authorized by the Borrower and the
Lenders, from time to time in the Administrative Agent’s sole discretion (but
shall have absolutely no obligation to), to make Loans to the Borrower, on
behalf of all Lenders, which the Administrative Agent, in its reasonable
discretion, deems necessary or desirable (i) to preserve or protect the
Collateral, or any portion thereof, (ii) to enhance the likelihood of, or
maximize the amount of, repayment of the Loans and other Obligations or (iii) to
pay any other amount chargeable to or required to be paid by the Credit Parties
pursuant to the terms of this Agreement, including payments of reimbursable
expenses (including costs, fees, and expenses as described in Section 14.5)
and other sums payable under the Credit Documents (any of such Loans are herein
referred to as “Protective Advances”); provided that, the
aggregate amount of Protective Advances outstanding at any time shall not at
any time exceed the lesser of


 


37

















 


(x) $7,500,000 and (y) 7.5%
of the Total Commitment; provided further that the aggregate
amount of outstanding Protective Advances plus the aggregate amount of the
other Total Credit Exposure shall not exceed the Total Commitment. Protective
Advances may be made even if the conditions precedent set forth in Section 7
have not been satisfied. The Protective Advances shall be secured by the
Security Documents and shall constitute Obligations hereunder and under the
other Credit Documents. All Protective Advances shall be ABR Loans. The
Administrative Agent’s authorization to make Protective Advances may be revoked
at any time by the Required Lenders. Any such revocation must be in writing and
shall become effective prospectively upon the Administrative Agent’s receipt
thereof. At any time that there is sufficient Availability and the conditions
precedent set forth in Section 7 have been satisfied, the Administrative
Agent may request the Lenders to make a Revolving Credit Loan to repay a
Protective Advance. At any other time the Administrative Agent may require the
Lenders to fund their risk participations described in Section 2.1(e).


 


(e)             Upon the making of a Protective
Advance by the Administrative Agent (whether before or after the occurrence of
a Default), each Lender shall be deemed, without further action by any party
hereto, to have unconditionally and irrevocably purchased from the
Administrative Agent without recourse or warranty an undivided interest and
participation in such Protective Advance in proportion to its Applicable
Percentage. On any Business Day, the Administrative Agent may, in its sole
discretion, give notice to the Lenders that the Lenders are required to fund
their risk participations in Protective Advances (and, if any Protective
Advance is outstanding on the thirtieth calendar day following the date of
Borrowing of such Protective Advance, then on the first Business Day following
such thirtieth calendar day, the Administrative Agent shall give such notice)
in which case each Lender shall fund its participation on the date specified in
such notice. From and after the date, if any, on which any Lender is required
to fund its participation in any Protective Advance purchased hereunder, the
Administrative Agent shall promptly distribute to such Lender, such Lender’s
Applicable Percentage of all payments of principal and interest and all
proceeds of Collateral received by the Administrative Agent in respect of such
Protective Advance.


 


2.2.            Minimum Amount of Each Borrowing;
Maximum Number of Borrowings. Each Borrowing of Revolving Credit Loans
shall be in a minimum amount of $2,000,000 and in an integral multiple of
$1,000,000 and Swingline Loans shall be in a multiple of $100,000 (except that
Mandatory Borrowings shall be made in the amounts required by Section 2.1(c) and
Revolving Credit Loans made to refinance Protective Advances pursuant to Section 2.1(e)).
More than one Borrowing may be incurred on any date, provided that at no
time shall there be outstanding more than 10 Borrowings of Eurodollar Loans
under this Agreement.


 


2.3.            Notice of Borrowing.


 


(a)             Whenever the Borrower desires to
incur Revolving Credit Loans hereunder (other than Mandatory Borrowings,
Borrowings to repay Unpaid Drawings or Borrowings to repay Protective
Advances), it shall give the Administrative Agent at the Administrative Agent’s
Office, (i) prior to 12:00 Noon (New York time) at least three Business
Days’ prior written notice (or telephonic notice promptly confirmed in writing)
of each Borrowing of Eurodollar Loans, and (ii) prior to 12:00 Noon (New
York time) at least one Business Day’s prior written notice (or telephonic
notice promptly confirmed in writing) of each Borrowing of ABR Loans


 


38

















 


(each such notice, a “Notice
of Borrowing”). Each such Notice of Borrowing, except as otherwise
expressly provided in Section 2.10, shall be irrevocable and shall specify
(i) the aggregate principal amount of the Revolving Credit Loans to be
made pursuant to such Borrowing, (ii) the date of Borrowing (which shall
be a Business Day) and (iii) whether the respective Borrowing shall
consist of ABR Loans or Eurodollar Loans and, if Eurodollar Loans, the Interest
Period to be initially applicable thereto. The Administrative Agent shall
promptly give each Lender written notice (or telephonic notice promptly
confirmed in writing) of each proposed Borrowing of Revolving Credit Loans, of
such Lender’s Applicable Percentage thereof and of the other matters covered by
the related Notice of Borrowing.


 


(b)             Whenever the Borrower desires to
incur Swingline Loans hereunder, it shall give the Administrative Agent written
notice (or telephonic notice promptly confirmed in writing) of each Borrowing
of Swingline Loans prior to 2:30 p.m. (New York time) on the date of such
Borrowing. Each such notice shall be irrevocable and shall specify (i) the
aggregate principal amount of the Swingline Loans to be made pursuant to such
Borrowing and (ii) the date of Borrowing (which shall be a Business Day).
The Administrative Agent shall promptly give the Swingline Lender written
notice (or telephonic notice promptly confirmed in writing) of each proposed
Borrowing of Swingline Loans and of the other matters covered by the related
Notice of Borrowing.


 


(c)             Mandatory Borrowings shall be made
upon the notice specified in Section 2.1(c), with the Borrower irrevocably
agreeing, by its incurrence of any Swingline Loan, to the making of Mandatory
Borrowings as set forth in such Section.


 


(d)             Borrowings to reimburse Unpaid
Drawings shall be made upon the notice specified in Section 3.4(a).


 


(e)             Without in any way limiting the
obligation of the Borrower to confirm in writing any notice it may give
hereunder by telephone, the Administrative Agent may act prior to receipt of
written confirmation without liability upon the basis of such telephonic notice
believed by the Administrative Agent in good faith to be from an Authorized Officer
of the Borrower. In each such case, the Borrower hereby waives the right to
dispute the Administrative Agent’s record of the terms of any such telephonic
notice.


 


2.4.            Disbursement of Funds.


 


(a)             No later than 12:00 Noon (New York
time) on the date specified in each Notice of Borrowing (including Mandatory
Borrowings) of Revolving Credit Loans, each Lender will make available its
Applicable Percentage, if any, of each Borrowing of Revolving Credit Loans
requested to be made on such date in the manner provided below. No later than
3:00 p.m. (New York time) on the date specified in each Notice of
Borrowing relating to Swingline Loans, the Swingline Lender shall make
available to the Borrower its Swingline Loan to be made on such date.


 


(b)             Each Lender shall make available
all amounts it is to fund to the Borrower under any Borrowing in Dollars in
immediately available funds to the Administrative Agent at the Administrative
Agent’s Office and the Administrative Agent will (except in the case of
Mandatory


 


39

















 


Borrowings and Borrowings to
repay Unpaid Drawings and Protective Advances) make available to the Borrower,
by depositing to the Borrower’s account at the Administrative Agent’s Office
the aggregate of the amounts so made available in Dollars. Unless the
Administrative Agent shall have been notified by any Lender prior to the date
of any such Borrowing that such Lender does not intend to make available to the
Administrative Agent its portion of the Borrowing or Borrowings to be made on
such date, the Administrative Agent may assume that such Lender has made such
amount available to the Administrative Agent on such date of Borrowing, and the
Administrative Agent, in reliance upon such assumption, may (in its sole
discretion and without any obligation to do so) make available to the Borrower
a corresponding amount. If such corresponding amount is not in fact made
available to the Administrative Agent by such Lender and the Administrative
Agent has made available the same to the Borrower, the Administrative Agent
shall be entitled to recover such corresponding amount from such Lender. If
such Lender does not pay such corresponding amount forthwith upon the
Administrative Agent’s demand therefor the Administrative Agent shall promptly
notify the Borrower and the Borrower shall immediately pay such corresponding
amount to the Administrative Agent. The Administrative Agent shall also be
entitled to recover from such Lender or the Borrower interest on such corresponding
amount in respect of each day from the date such corresponding amount was made
available by the Administrative Agent to the Borrower to the date such
corresponding amount is recovered by the Administrative Agent, at a rate per
annum equal to (i) if paid by such Lender, the greater of (x) the
Federal Funds Effective Rate and (y) a rate determined by the
Administrative Agent in accordance with banking industry rules on
interbank compensation or (ii) if paid by the Borrower, the
then-applicable rate of interest for ABR Loans.


 


(c)             Nothing in this Section 2.4
shall be deemed to relieve any Lender from its obligation to fulfill its
commitments hereunder or to prejudice any rights that the Borrower may have
against any Lender as a result of any default by such Lender hereunder (it
being understood, however, that no Lender shall be responsible for the failure
of any other Lender to fulfill its commitments hereunder).


 


2.5.            Repayment of Loans; Evidence of
Debt.


 


(a)             The Borrower shall repay to the
Administrative Agent in Dollars, for the benefit of the Lenders, on the
Maturity Date, the then-unpaid Revolving Credit Loans. The Borrower shall repay
to the Administrative Agent in Dollars, for the account of the Swingline
Lender, on the Swingline Maturity Date, the then-unpaid Swingline Loans. The
Borrower shall repay to the Administrative Agent the then-unpaid amount of each
Protective Advance on the earlier of the Maturity Date and demand by the
Administrative Agent.


 


(b)             On each Business Day during any
Cash Dominion Period, the Administrative Agent shall apply all funds credited
to the Collection Account the previous Business Day (whether or not immediately
available) first to prepay any Protective Advances that may be
outstanding, second to prepay any Swingline Loans outstanding, third
to prepay any Revolving Credit Loans and fourth to cash collateralize
outstanding Letter of Credit Exposure at one hundred five percent (105%).


 


(c)             Each Lender shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower to the appropriate lending office


 


40

















 


of such Lender resulting
from each Loan made by such lending office of such Lender from time to time,
including the amounts of principal and interest payable and paid to such
lending office of such Lender from time to time under this Agreement.


 


(d)             The Administrative Agent shall
maintain the Register pursuant to Section 14.6(b), and a subaccount for
each Lender, in which Register and subaccounts (taken together) shall be
recorded (i) the amount of each Loan made hereunder, whether such Loan is
a Revolving Credit Loan, a Swingline Loan or a Protective Advance, the Type of
each Loan made and the Interest Period applicable thereto, (ii) the amount
of any principal or interest due and payable or to become due and payable from
the Borrower to each Lender, the Swingline Lender or the Administrative Agent
hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder from the Borrower and each Lender’s share thereof.


 


(e)             The entries made in the Register
and accounts and subaccounts maintained pursuant to paragraphs (c) and (d) of
this Section 2.5 shall, to the extent permitted by applicable law, be
prima facie evidence of the existence and amounts of the obligations of the
Borrower therein recorded; provided, however, that the failure of
any Lender or the Administrative Agent to maintain such account, such Register
or such subaccount, as applicable, or any error therein, shall not in any
manner affect the obligation of the Borrower to repay (with applicable
interest) the Loans made to the Borrower in accordance with the terms of this
Agreement.


 


2.6.            Conversions and Continuations.


 


(a)             The Borrower shall have the option
on any Business Day to convert all or a portion equal to at least $2,000,000 of
the outstanding principal amount of Revolving Credit Loans made to the Borrower
from one Type into a Borrowing or Borrowings of another Type and the Borrower
shall have the option on any Business Day to continue the outstanding principal
amount of any Eurodollar Loans as Eurodollar Loans for an additional Interest
Period, provided that (i) no partial conversion of Eurodollar Loans
shall reduce the outstanding principal amount of Eurodollar Loans made pursuant
to a single Borrowing to less than $2,000,000, (ii) ABR Loans may not be
converted into Eurodollar Loans if a Default is in existence on the date of the
conversion and the Administrative Agent has or the Required Lenders have
determined in its or their sole discretion not to permit such conversion, (iii) Eurodollar
Loans may not be continued as Eurodollar Loans for an additional Interest
Period if a Default is in existence on the date of the proposed continuation and
the Administrative Agent has or the Required Lenders have determined in its or
their sole discretion not to permit such continuation, (iv) no conversion
or continuation of Eurodollar Loans may be made on a day other than the last
day of the Interest Period applicable thereto and (v) Borrowings resulting
from conversions pursuant to this Section 2.6 shall be limited in number
as provided in Section 2.2. Each such conversion or continuation shall be
effected by the Borrower by giving the Administrative Agent at the
Administrative Agent’s Office prior to 12:00 noon (New York time) at least
three Business Days’ (or one Business Day’s notice in the case of a conversion
into ABR Loans) prior written notice (or telephonic notice promptly confirmed
in writing) (each a “Notice of Conversion or Continuation”) specifying
the Revolving Credit Loans to be so converted or continued, the Type of
Revolving Credit Loans to be converted or continued into and, if such Revolving
Credit Loans are to be converted into or continued as Eurodollar Loans, the
Interest Period to be initially applicable thereto. The


 


41

















 


Administrative Agent shall
give each Lender notice as promptly as practicable of any such proposed
conversion or continuation affecting any of its Revolving Credit Loans.


 


(b)             If any Default is in existence at
the time of any proposed continuation of any Eurodollar Loans and the
Administrative Agent has or the Required Lenders have determined in its or
their sole discretion not to permit such continuation, such Eurodollar Loans
shall be automatically converted on the last day of the current Interest Period
into ABR Loans. If upon the expiration of any Interest Period in respect of
Eurodollar Loans, the Borrower has failed to elect a new Interest Period to be
applicable thereto as provided in paragraph (a) above, the Borrower shall
be deemed to have elected to continue such Borrowing of Eurodollar Loans into a
Borrowing of ABR Loans effective as of the expiration date of such current
Interest Period.


 


2.7.            Pro rata Borrowings.
Each Borrowing of Revolving Credit Loans under this Agreement shall be granted
by the Lenders pro rata on the basis of their Applicable
Percentages. It is understood that no Lender shall be responsible for any
default by any other Lender in its obligation to make Loans hereunder and that
each Lender shall be obligated to make the Loans provided to be made by it
hereunder, regardless of the failure of any other Lender to fulfill its
commitments hereunder.


 


2.8.            Interest.


 


(a)             The unpaid principal amount of each
ABR Loan shall bear interest from the date of the Borrowing thereof until
maturity (whether by acceleration or otherwise) at a rate per annum that shall
at all times be the ABR Margin plus the ABR in effect from time to time.


 


(b)             The unpaid principal amount of each
Eurodollar Loan shall bear interest from the date of the Borrowing thereof
until maturity thereof (whether by acceleration or otherwise) at a rate per
annum that shall at all times be the Eurodollar Margin in effect from time to
time plus the relevant Eurodollar Rate.


 


(c)             If all or a portion of (i) the
principal amount of any Loan or (ii) any interest payable thereon or Fee
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 that is
(x) in the case of overdue principal, the rate that would otherwise be
applicable thereto plus 2% or (y) in the case of any overdue
interest or Fee, to the extent permitted by applicable law, the rate described
in Section 2.8(a) plus 2% from and including the date of such
non-payment to but excluding the date on which such amount is paid in full
(after as well as before judgment).


 


(d)             Accrued interest on each Loan shall
be payable in arrears on each Interest Payment Date for such Loan and upon
termination of the Commitments; provided that (i) in the event of
any repayment or prepayment of any Loan (other than a prepayment of an ABR Loan
that is a Revolving Credit Loan prior to the Maturity Date), accrued interest
on the principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment and (ii) in the event of any conversion of any
Eurodollar Loan prior to the end of the current Interest Period therefor,
accrued interest on such Loan shall be payable on the effective date of such
conversion.


 


42

















 


(e)             All computations of interest
hereunder shall be made in accordance with Section 5.5.


 


(f)              The Administrative Agent, upon
determining the interest rate for any Borrowing of Eurodollar Loans, shall
promptly notify the Borrower and the relevant Lenders thereof. Each such
determination shall, absent clearly demonstrable error, be final and conclusive
and binding on all parties hereto.


 


2.9.            Interest Periods. At the time
the Borrower gives a Notice of Borrowing or Notice of Conversion or
Continuation in respect of the making of, or conversion into or continuation
as, a Borrowing of Eurodollar Loans (in the case of the initial Interest Period
applicable thereto) or prior to 10:00 a.m. (New York time) on the third
Business Day prior to the expiration of an Interest Period applicable to a
Borrowing of Eurodollar Loans, the Borrower shall have the right to elect by
giving the Administrative Agent written notice (or telephonic notice promptly
confirmed in writing) the Interest Period applicable to such Borrowing, which
Interest Period shall, at the option of the Borrower, be a three, six or, if
agreed to by each Lender, a nine or twelve month period or any shorter period.
Notwithstanding anything to the contrary contained above:


 


(i)              the initial
Interest Period for any Borrowing of Eurodollar Loans shall commence on the
date of such Borrowing (including the date of any conversion from a Borrowing
of ABR Loans) and each Interest Period occurring thereafter in respect of such
Borrowing shall commence on the day on which the next preceding Interest Period
expires;


 


(ii)             if any Interest
Period relating to a Borrowing of Eurodollar Loans begins on the last Business
Day of a calendar month or begins on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period,
such Interest Period shall end on the last Business Day of the calendar month
at the end of such Interest Period;


 


(iii)            if any Interest
Period would otherwise expire on a day that is not a Business Day, such
Interest Period shall expire on the next succeeding Business Day, provided
that if any Interest Period in respect of a Eurodollar Loan would otherwise
expire on a day that is not a Business Day but is a day that is after the last
Business Day in such month, such Interest Period shall expire on the next
preceding Business Day; and


 


(iv)            the Borrower shall
not be entitled to elect any Interest Period in respect of any Eurodollar Loan
if such Interest Period would extend beyond the Maturity Date.


 


2.10.          Increased Costs,
Illegality, etc.


 


(a)             In the event that (x) in the
case of clause (i) below, the Administrative Agent or (y) in the case
of clauses (ii) and (iii) below, any Lender shall have reasonably
determined (which determination shall, absent clearly demonstrable error, be
final and conclusive and binding upon all parties hereto):


 


43

















 


(i)              on any date for
determining the Eurodollar Rate for any Interest Period that (x) deposits
in the principal amounts of the Loans comprising such Eurodollar Loan Borrowing
are not generally available in the relevant market, (y) by reason of any
changes arising on or after the Signing Date affecting the interbank eurodollar
market, adequate and fair means do not exist for ascertaining the applicable
interest rate on the basis provided for in the definition of Eurodollar Rate or
(z) the Administrative Agent is advised in writing by the Required Lenders
that the Eurodollar Rate for such Interest Period will not adequately and
fairly reflect the cost to such Lenders of making or maintaining their Loans
included in such Borrowing for such Interest Period; or


 


(ii)             at any time, that
such Lender shall incur increased costs or reductions in the amounts received
or receivable hereunder with respect to any Eurodollar Loans (other than any
such increase or reduction attributable to taxes) because of (x) any
change since the date hereof in any applicable law, governmental rule,
regulation, guideline or order (or in the interpretation or administration
thereof and including the introduction of any new law or governmental rule,
regulation, guideline or order), such as, for example, without limitation, a
change in official reserve requirements, and/or (y) other circumstances
affecting the interbank eurodollar market or the position of such Lender in
such market; or


 


(iii)            at any time, that
the making or continuance of any Eurodollar Loan has become unlawful by
compliance by such Lender in good faith with any law, governmental rule,
regulation, guideline or order (or would conflict with any such governmental
rule, regulation, guideline or order not having the force of law even though
the failure to comply therewith would not be unlawful), or has become
impracticable as a result of a contingency occurring after the date hereof that
materially and adversely affects the interbank eurodollar market;


 


then, and in any such event,
such Lender (or the Administrative Agent, in the case of clause (i) above)
shall within a reasonable time thereafter give notice (if by telephone,
confirmed in writing) to the Borrower and to the Administrative Agent of such determination
(which notice the Administrative Agent shall promptly transmit to each of the
other Lenders). Thereafter (x) in the case of clause (i) above,
Eurodollar Loans shall no longer be available until such time as the
Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice by the Administrative Agent no longer
exist (which notice the Administrative Agent agrees to give at such time when
such circumstances no longer exist), and any Notice of Borrowing or Notice of
Conversion given by the Borrower with respect to Eurodollar Loans that have not
yet been incurred shall be deemed rescinded by the Borrower, (y) in the
case of clause (ii) above, the Borrower shall pay to such Lender, promptly
after receipt of written demand therefor such additional amounts (in the form
of an increased rate of, or a different method of calculating, interest or
otherwise as such Lender in its reasonable discretion shall determine) as shall
be required to compensate such Lender for such increased costs or reductions in
amounts receivable hereunder (it being agreed that a written notice as to the
additional amounts owed to such Lender, showing in reasonable detail the basis
for the calculation thereof, submitted to the Borrower by such Lender shall,
absent clearly demonstrable error, be final and conclusive and binding upon all
parties hereto) and (z) in the case of clause (iii) above, the
Borrower shall take one


 


44














 


of the actions specified in Section 2.10(b) as
promptly as possible and, in any event, within the time period required by law.


 


(b)           At any time that any Eurodollar Loan
is affected by the circumstances described in Section 2.10(a)(ii) or
(iii), the Borrower may (and in the case of a Eurodollar Loan affected pursuant
to Section 2.10(a)(iii) shall) either (x) if the affected
Eurodollar Loan is then being made pursuant to a Borrowing, cancel such
Borrowing by giving the Administrative Agent telephonic notice (confirmed
promptly in writing) thereof on the same date that the Borrower was notified by
a Lender pursuant to Section 2.10(a)(ii) or (iii) or (y) if
the affected Eurodollar Loan is then outstanding, upon at least three Business
Days’ notice to the Administrative Agent, require the affected Lender to
convert each such Eurodollar Loan into an ABR Loan, provided that if
more than one Lender is affected at any time, then all affected Lenders must be
treated in the same manner pursuant to this Section 2.10(b).


 


(c)           If, after the date hereof, the
adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any Governmental Authority, the National Association
of Insurance Commissioners, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by a Lender or its
parent with any request or directive made or adopted after the date hereof
regarding capital adequacy (whether or not having the force of law) of any such
authority, association, central bank or comparable agency, has or would have
the effect of reducing the rate of return on such Lender’s or its parent’s or
its Related Party’s capital or assets as a consequence of such Lender’s
commitments or obligations hereunder to a level below that which such Lender or
its parent or its Related Party could have achieved but for such adoption,
effectiveness, change or compliance (taking into consideration such Lender’s or
its parent’s policies with respect to capital adequacy), then from time to
time, promptly after demand by such Lender (with a copy to the Administrative
Agent), the Borrower shall pay to such Lender such additional amount or amounts
as will compensate such Lender or its parent for such reduction, it being
understood and agreed, however, that a Lender shall not be entitled to such
compensation as a result of such Lender’s compliance with, or pursuant to any
request or directive to comply with, any such law, rule or regulation as
in effect on the date hereof. Each Lender, upon determining in good faith that
any additional amounts will be payable pursuant to this Section 2.10(c),
will give prompt written notice thereof to the Borrower (on its own behalf) which
notice shall set forth in reasonable detail the basis of the calculation of
such additional amounts, although the failure to give any such notice shall
not, subject to Section 2.13, release or diminish any of the Borrower’s
obligations to pay additional amounts pursuant to this Section 2.10(c) upon
receipt of such notice.


 


2.11.        Compensation.  If (a) any payment of principal of any
Eurodollar Loan is made by the Borrower to or for the account of a Lender other
than on the last day of the Interest Period for such Eurodollar Loan as a
result of a payment or conversion pursuant to Section 2.5, 2.6, 2.10, 5.1
or 5.2 or a required assignment pursuant to Section 14.7, as a result of
acceleration of the maturity of the Loans pursuant to Section 11 or for
any other reason, (b) any Borrowing of Eurodollar Loans is not made as a
result of a withdrawn Notice of Borrowing, (c) any ABR Loan is not
converted into a Eurodollar Loan as a result of a withdrawn Notice of
Conversion or Continuation, (d) any Eurodollar Loan is not continued as a
Eurodollar Loan as a result of a withdrawn Notice of Conversion or Continuation
or (e) any prepayment of principal of any Eurodollar


 


45

















 


Loan is not made as a result
of a withdrawn notice of prepayment pursuant to Section 5.1 or 5.2, the
Borrower shall, after receipt of a written request by such Lender (which
request shall set forth in reasonable detail the basis for requesting such
amount), pay to the Administrative Agent for the account of such Lender any
amounts required to compensate such Lender for any additional losses, costs or
expenses that such Lender may reasonably incur as a result of such payment,
failure to convert, failure to continue or failure to prepay, including any loss,
cost or expense (excluding loss of anticipated profits) actually incurred by
reason of the liquidation or re-employment of deposits or other funds acquired
by any Lender to fund or maintain such Eurodollar Loan.


 


2.12.        Change of Lending Office. Each Lender
agrees that, upon the occurrence of any event giving rise to the operation of Section 2.10(a)(ii),
2.10(a)(iii), 2.10(b), 3.5 or 5.4 with respect to such Lender, it will, if
requested by the Borrower, use reasonable efforts (subject to overall policy
considerations of such Lender) to designate another lending office for any
Loans affected by such event, provided that such designation is made on
such terms that such Lender and its lending office suffer no economic, legal or
regulatory disadvantage, with the object of avoiding the consequence of the
event giving rise to the operation of any such Section. Nothing in this Section 2.12
shall affect or postpone any of the obligations of the Borrower or the right of
any Lender provided in Section 2.10, 3.5 or 5.4.


 


2.13.        Notice of Certain Costs.
Notwithstanding anything in this Agreement to the contrary, to the extent any
notice required by Section 2.10, 2.11, 3.5 or 5.4 is given by any Lender
more than 180 days after such Lender has knowledge (or should have had
knowledge) of the occurrence of the event giving rise to the additional cost,
reduction in amounts, loss, tax or other additional amounts described in such
Sections, such Lender shall not be entitled to compensation under Section 2.10,
2.11, 3.5 or 5.4, as the case may be, for any such amounts incurred or accruing
prior to the 180th day prior to the giving of such notice to the Borrower.


 


2.14.        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 Available Commitment of such Defaulting Lender pursuant to Section 4.1(a);


 


(b)           the Commitment and
Credit Exposure of such Defaulting Lender shall not be included in determining
whether all Lenders or the Required Lenders have taken or may take any action
hereunder (including any consent to any amendment or waiver pursuant to Section 14.1),
provided that any waiver, amendment or modification requiring the
consent of all Lenders or each affected Lender which affects such Defaulting
Lender differently than each other applicable Lender shall require the consent
of such Defaulting Lender;


 


(c)           if any Swingline Loan
or Letters of Credit Outstanding exists at the time a Lender becomes a
Defaulting Lender then:


 


46

















 


(i)            all or any part of
such Swingline Loan and Letters of Credit Outstanding shall be reallocated
among the non-Defaulting Lenders in accordance with their respective Applicable
Percentages but only to the extent (x) the sum of all non-Defaulting
Lenders’ Credit Exposures plus such Defaulting Lender’s Swingline Exposure and
Letter of Credit Exposure does not exceed the total of all non-Defaulting
Lenders’ Commitments and (y) the conditions set forth in Section 7
are satisfied at such time;


 


(ii)           if the reallocation
described in clause (i) above cannot, or can only partially, be effected,
the Borrower shall within one Business Day following notice by the
Administrative Agent (x) first, prepay such Defaulting Lender’s
Swingline Exposure (after giving effect to any partial reallocation pursuant to
clause (i) above) and (y) second, cash collateralize such
Defaulting Lender’s Letter of Credit Exposure (after giving effect to any
partial reallocation pursuant to clause (i) above) in accordance with the
procedures set forth in Section 5.2(a) for so long as such Letter of
Credit Exposure is outstanding;


 


(iii)          if the Borrower
cash collateralizes any portion of such Defaulting Lender’s Letter of Credit
Exposure pursuant to this Section 2.14(c), the Borrower shall not be
required to pay any fees to such Defaulting Lender pursuant to Section 4.1(b) with
respect to such cash collateralized portion of such Defaulting Lender’s Letter
of Credit Exposure during the period such Letter of Credit Exposure is cash
collateralized;


 


(iv)          to the extent the
Letter of Credit Exposure of the non-Defaulting Lenders is reallocated pursuant
to this Section 2.14(c), then the fees payable to the Lenders pursuant to Section 4.1(a) and
Section 4.1(b) shall be adjusted in accordance with such
non-Defaulting Lenders’ Applicable Percentages;


 


(v)           to the extent any
Defaulting Lender’s Letter of Credit Exposure is neither cash collateralized
nor reallocated pursuant to this Section 2.14(c), then, without prejudice
to any rights or remedies of the Letter of Credit Issuer or any Lender
hereunder, all fees that would have otherwise been payable to such Defaulting
Lender under Section 4.1(b) with respect to such portion of such
Letter of Credit Exposure shall instead be payable to the Letter of Credit
Issuer until such portion of such Defaulting Lender’s Letter of Credit Exposure
is cash collateralized and/or reallocated;


 


(vi)          so long as any
Lender is a Defaulting Lender, the Swingline Lender shall not be required to
fund any Swingline Loan and the Letter of Credit Issuer shall not be required
to issue, amend or increase any Letter of Credit, unless it is satisfied that
the related exposure will be 100% covered by the Commitments of the
non-Defaulting Lenders and/or cash collateral will be provided by the Borrowers
in accordance with Section 2.14(c), and participating interests in any
such newly issued or increased Letter of Credit or newly made Swingline Loan
shall be allocated among non-Defaulting Lenders in a manner consistent with Section 2.14(c)(i) (and
Defaulting Lenders shall not participate therein); and


 


47

















 


(vii)         any amount payable
to such Defaulting Lender hereunder (whether on account of principal, interest,
fees or otherwise and including any amount that would otherwise be payable to
such Defaulting Lender pursuant to Section 14.8(b) but excluding Section 14.7)
shall, in lieu of being distributed to such Defaulting Lender, be retained by
the Administrative Agent in a segregated account and, subject to any applicable
requirements of law, be applied at such time or times as may be determined by
the Administrative Agent (i) first, to the payment of any amounts
owing by such Defaulting Lender to the Administrative Agent hereunder, (ii) second, pro rata,
to the payment of any amounts owing by such Defaulting Lender to the Letter of
Credit Issuer or Swingline Lender hereunder, (iii) third, if so
determined by the Administrative Agent or requested by a Letter of Credit
Issuer or Swingline Lender, to be held in such account as cash collateral for
future funding obligations of the Defaulting Lender of any participating
interest in any Swingline Loan or Letter of Credit, (iv) fourth, to
the funding of any Loan in respect of which such Defaulting Lender has failed
to fund its portion thereof as required by this Agreement, as determined by the
Administrative Agent, (v) fifth, if so determined by the
Administrative Agent and the Borrower, held in such account as cash collateral
for future funding obligations of the Defaulting Lender of any Revolving Credit
Loans under this Agreement, (vi) sixth, to the payment of any amounts
owing to the Lenders, in respect of obligations under this Agreement, a Letter
of Credit Issuer or Swingline Lender as a result of any judgment of a court of
competent jurisdiction obtained by any Lender, such Letter of Credit Issuer or
Swingline Lender against such Defaulting Lender as a result of such Defaulting
Lender’s breach of its obligations under this Agreement, (vii) seventh,
to the payment of any amounts owing to the Borrower as a result of any judgment
of a court of competent jurisdiction obtained by the Borrower against such
Defaulting Lender as a result of such Defaulting Lender’s breach of its
obligations under this Agreement, and (viii) eighth, to such
Defaulting Lender or as otherwise directed by a court of competent
jurisdiction; provided that if such payment is (x) a prepayment of
the principal amount of any Revolving Credit Loans or drawings in respect of
Letter of Credits for which a Defaulting Lender has funded its participation
obligations and (y) made at a time when the conditions set forth in Section 7
are satisfied, such payment shall be applied solely to prepay the Revolving
Credit Loans of, and reimbursement obligations owed to, all non-Defaulting
Lenders pro rata prior to being applied to the prepayment of
any Revolving Credit Loans, or reimbursement obligations owed to, any
Defaulting Lender; and


 


(d)           in the event that
the Administrative Agent, the Borrower, the Letter of Credit Issuer and the
Swingline Lender each agree that a Defaulting Lender has adequately remedied
all matters that caused such Lender to be a Defaulting Lender, then such Lender
shall cease to be a Defaulting Lender, and the Swingline Exposure and Letter of
Credit Exposure of the Lenders shall be readjusted to reflect the inclusion of
such Lender’s 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 Applicable Percentage.


 


48

















 


2.15.        Incremental Facilities. The
Borrower may by written notice to the Administrative Agent elect to request,
prior to the Maturity Date, an increase to the existing Commitments (any such
increase, the “New Commitments”) by an amount not in excess of
$25,000,000 in the aggregate and not less than $10,000,000 individually (or
such lesser amount which shall be approved by Administrative Agent), and
integral multiples of $5,000,000 in excess of that amount. Each such notice
shall specify (A) the date (each, an “Increased Amount Date”) on
which the Borrower proposes that the New Commitments shall be effective, which
shall be a date not less than 10 Business Days after the date on which such notice
is delivered to the Administrative Agent and (B) the identity of each
Lender or other Person that is an eligible assignee pursuant to Section 14.6(b) (each,
a “New Lender”) to whom the Borrower proposes any portion of such New
Commitments be allocated and the amounts of such allocations; provided
that the Borrower shall first approach the Lenders to provide all of the New
Commitments in accordance with their Applicable Percentages (excluding for this
purpose the Commitment of any Lender that declines to provide any portion of
the New Commitments) prior to approaching any other Person that is an eligible
assignee pursuant to Section 14.6(b) (and no such Person shall be
offered to provide the New Commitments on terms (including with respect to
upfront fees and other economic terms) that are more favorable to such Person
than the terms offered to the existing Lenders) and no Lender shall provide a
New Commitment unless the Administrative Agent, the Swingline Lender and the
Letter of Credit Issuer shall have consented thereto; provided further
that any Lender approached to provide all or a portion of the New Commitments
may elect or decline, in its sole discretion, to provide a New Commitment. Such
New Commitments shall become effective, as of such Increased Amount Date; provided
that (1) no Default shall exist on such Increased Amount Date before or
after giving effect to such New Commitments; (2) the New Commitments shall
be effected pursuant to one or more Joinder Agreements executed and delivered
by the Borrower, the Lender providing the New Commitment and Administrative
Agent, and each of which shall be recorded in the Register and shall be subject
to the requirements set forth in Section 5.4(c); (3) the Borrower
shall make any payments required pursuant to Section 2.11 in connection
with the New Commitments; and (4) the Borrower shall deliver or cause to
be delivered any legal opinions or other documents reasonably requested by
Administrative Agent in connection with any such transaction.


 


On
any Increased Amount Date, subject to the satisfaction of the foregoing terms
and conditions, (a) each of the Lenders with Commitments shall assign to
each of the New Lenders, and each of the New Lenders shall purchase from each
of the Lenders with Commitments, at the principal amount thereof (together with
accrued interest), such interests in the Revolving Credit Loans outstanding on
such Increased Amount Date as shall be necessary in order that, after giving
effect to all such assignments and purchases, such Revolving Credit Loans will
be held by existing Lenders with Revolving Credit Loans and New Lenders ratably
in accordance with their respective Commitments after giving effect to the
addition of such New Commitments to the Commitments, (b) each New
Commitment shall be deemed for all purposes a Commitment and each Loan made
thereunder shall be deemed, for all purposes, a Revolving Credit Loan and (c) each
New Lender shall become a Lender with respect to the New Commitment and all
matters relating thereto.


 


The
Administrative Agent shall notify the Security Agents and Lenders promptly upon
receipt of the Borrower’s notice of each Increased Amount Date and in respect
thereof (y)


 


49

















 


the New Commitments and the
New Lenders and (z) the respective interests in such Lender’s Revolving
Credit Loans, in each case subject to the assignments contemplated by this
Section.


 


Each
Joinder Agreement may, without the consent of any other Lenders, effect such
amendments to this Agreement (including with respect to the interest rates and
fees payable with respect to the New Commitment only) and the other Credit
Documents as may be necessary or appropriate, in the opinion of the
Administrative Agent, to effect the provision of this Section 2.15.


 


SECTION 3.           Letters of Credit


 


3.1.          Letters of Credit.


 


(a)           Subject to and upon the terms and
conditions herein set forth, at any time and from time to time after the
Effective Date and prior to the L/C Maturity Date, (i) the Borrower, may
request that the Letter of Credit Issuer issue for the account of the Borrower
a Letter of Credit or Letters of Credit in Dollars or Canadian Dollars in such
form as may be approved by the Letter of Credit Issuer in its reasonable
discretion.


 


(b)           Notwithstanding the foregoing, (i) no
Letter of Credit shall be issued the Stated Amount of which, when added to the
Letters of Credit Outstanding at such time, would exceed the Letter of Credit
Commitment then in effect; (ii) no Letter of Credit shall be issued,
amended (to increase the Stated Amount thereof), extended or renewed if, after
giving effect to such issuance, amendment, extension or renewal, the Total
Credit Exposure would exceed the lesser of (x) the Total Commitment then
in effect and (y) the Borrowing Base then in effect; (iii) no Letter
of Credit denominated in Canadian Dollars shall be issued the Stated Amount of
which when added to the Stated Amount of all other Letters of Credit
denominated in Canadian Dollars would exceed the Canadian Letter of Credit Sublimit;
(iv) each Letter of Credit shall have an expiration date occurring no
later than one year after the date of issuance thereof, unless otherwise agreed
upon by the Administrative Agent and the Letter of Credit Issuer, provided
that in no event shall such expiration date occur later than the L/C Maturity
Date; (v) no Letter of Credit shall be issued if it would be illegal under
any applicable law for the beneficiary of the Letter of Credit to have a Letter
of Credit issued in its favor; and (vi) no Letter of Credit shall be
issued by a Letter of Credit Issuer after it has received a written notice from
the Borrower or any Lender stating that a Default has occurred and is
continuing until such time as the Letter of Credit Issuer shall have received a
written notice of (x) rescission of such notice from the party or parties
originally delivering such notice or (y) the waiver of such Default in
accordance with the provisions of Section 14.1.


 


(c)           Upon at least one Business Day’s
prior written notice (or telephonic notice promptly confirmed in writing) to
the Administrative Agent and the Letter of Credit Issuer (which notice the
Administrative Agent shall promptly transmit to each of the applicable
Lenders), the Borrower shall have the right, on any day, permanently to
terminate or reduce the Letter of Credit Commitment in whole or in part, provided
that, after giving effect to such termination or reduction, the Letters of
Credit Outstanding shall not exceed the Letter of Credit Commitment.


 


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3.2.          Letter of Credit Requests.


 


(a)           Whenever the Borrower desires that a
Letter of Credit be issued for its account, it shall give the Administrative
Agent and the Letter of Credit Issuer at least five (or such lesser number as
may be agreed upon by the Administrative Agent and the Letter of Credit Issuer)
Business Days’ written notice thereof. Each notice shall be executed by the
Borrower and shall be in a form reasonably acceptable to the Letter of Credit
Issuer and the Administrative Agent (each a “Letter of Credit Request”).
The Administrative Agent shall promptly transmit copies of each Letter of
Credit Request to each Lender.


 


(b)           The making of each Letter of Credit
Request shall be deemed to be a representation and warranty by the Borrower
that the Letter of Credit may be issued in accordance with, and will not
violate the requirements of, Section 3.1(b).


 


3.3.          Letter of Credit Participations.


 


(a)           Immediately upon the issuance by the
Letter of Credit Issuer of any Letter of Credit, the Letter of Credit Issuer
shall be deemed to have sold and transferred to each other Lender that has a
Commitment (each such other Lender, in its capacity under this Section 3.3,
an “L/C Participant”), and each such L/C Participant shall be deemed
irrevocably and unconditionally to have purchased and received from the Letter
of Credit Issuer, without recourse or warranty, an undivided interest and
participation (each an “L/C Participation”), to the extent of such L/C
Participant’s Applicable Percentage of such Letter of Credit, each substitute
letter of credit, each drawing made thereunder and the obligations of the
Borrower under this Agreement with respect thereto, and any security therefor
or guaranty pertaining thereto (although Letter of Credit Fees will be paid
directly to the Administrative Agent for the ratable account of the L/C
Participants as provided in Section 4.1(b) and the L/C Participants
shall have no right to receive any portion of any Fronting Fees).


 


(b)           In determining whether to pay under
any Letter of Credit, the Letter of Credit Issuer shall have no obligation
relative to the L/C Participants other than to confirm that any documents
required to be delivered under such Letter of Credit have been delivered and
that they appear to comply on their face with the requirements of such Letter
of Credit. Any action taken or omitted to be taken by the Letter of Credit
Issuer under or in connection with any Letter of Credit issued by it, if taken
or omitted in the absence of gross negligence or willful misconduct, shall not
create for the Letter of Credit Issuer any resulting liability.


 


(c)           In the event that the Letter of
Credit Issuer makes any payment under any Letter of Credit issued by it and the
Borrower shall not have repaid such amount in full to the respective Letter of
Credit Issuer pursuant to Section 3.4(a), the Letter of Credit Issuer
shall promptly notify the Administrative Agent and each L/C Participant of such
failure, and each L/C Participant shall promptly and unconditionally pay to the
Administrative Agent, for the account of the Letter of Credit Issuer, the
amount of such L/C Participant’s Applicable Percentage of such unreimbursed
payment in Dollars and in immediately available funds; provided, however,
that no L/C Participant shall be obligated to pay to the Administrative Agent
for the account of the Letter of Credit Issuer its Applicable Percentage of
such unreimbursed amount arising from any wrongful payment made by the Letter
of Credit Issuer under a Letter of Credit as a result of acts or omissions
constituting willful misconduct or gross negligence on the part of the Letter
of Credit Issuer. If the Letter of Credit Issuer so notifies, prior to 11:00 a.m.
(New York time) on


 


51

















 


any Business Day, any L/C
Participant required to fund a payment under a Letter of Credit, such L/C
Participant shall make available to the Administrative Agent for the account of
the Letter of Credit Issuer such L/C Participant’s Applicable Percentage of the
amount of such payment on such Business Day in immediately available funds. If
and to the extent such L/C Participant shall not have so made its Applicable
Percentage of the amount of such payment available to the Administrative Agent,
for the account of the Letter of Credit Issuer, such L/C Participant agrees to
pay to the Administrative Agent, for the account of the Letter of Credit
Issuer, forthwith on demand, such amount, together with interest thereon for
each day from such date until the date such amount is paid to the
Administrative Agent, for the account of the Letter of Credit Issuer at a rate
equal to the greater of (x) the Federal Funds Effective Rate and (y) a
rate determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation. The failure of any L/C Participant to
make available to the Administrative Agent, for the account of the Letter of
Credit Issuer its Applicable Percentage of any payment under any Letter of
Credit shall not relieve any other L/C Participant of its obligation hereunder
to make available to the Administrative Agent, for the account of the Letter of
Credit Issuer its Applicable Percentage of any payment under such Letter of
Credit on the date required, as specified above, but, except as provided Section 2.14,
no L/C Participant shall be responsible for the failure of any other L/C
Participant to make available to the Administrative Agent such other L/C
Participant’s Applicable Percentage of any such payment.


 


(d)           Whenever the Letter of Credit Issuer
receives a payment in respect of an unpaid reimbursement obligation as to which
the Administrative Agent has received for the account of the Letter of Credit
Issuer any payments from the L/C Participants pursuant to paragraph (c) above,
the Letter of Credit Issuer shall pay to the Administrative Agent and the
Administrative Agent shall promptly pay to each L/C Participant that has paid
its Applicable Percentage of such reimbursement obligation, in Dollars and in
immediately available funds, an amount equal to such L/C Participant’s share
(based upon the proportionate aggregate amount originally funded by such L/C
Participant to the aggregate amount funded by all L/C Participants) of the
principal amount of such reimbursement obligation and interest thereon accruing
after the purchase of the respective L/C Participations.


 


(e)           The obligations of the L/C
Participants to make payments to the Administrative Agent for the account of
the Letter of Credit Issuer with respect to Letters of Credit shall be
irrevocable and not subject to counterclaim, set-off or other defense or any
other qualification or exception whatsoever and shall be made in accordance
with the terms and conditions of this Agreement under all circumstances, including
under any of the following circumstances:


 


(i)            any lack of
validity or enforceability of this Agreement or any of the other Credit
Documents;


 


(ii)           the existence of
any claim, set-off, defense or other right that the Borrower may have at any
time against a beneficiary named in a Letter of Credit, any transferee of any
Letter of Credit (or any Person for whom any such transferee may be acting),
the Administrative Agent, the Letter of Credit Issuer, any Lender or other
Person, whether in connection with this Agreement, any Letter of Credit, the
transactions contemplated herein or any unrelated transactions (including any
underlying transaction between the Borrower and the beneficiary named in any
such Letter of Credit);


 


52

















 


(iii)          any draft,
certificate or any other document presented under any Letter of Credit proving
to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;


 


(iv)          the surrender or
impairment of any security for the performance or observance of any of the
terms of any of the Credit Documents; or


 


(v)           the occurrence of
any Default;


 


provided, however,
that no L/C Participant shall be obligated to pay to the Administrative Agent
for the account of the Letter of Credit Issuer its Applicable Percentage of any
unreimbursed amount arising from any wrongful payment made by the Letter of
Credit Issuer under a Letter of Credit as a result of acts or omissions
constituting willful misconduct or gross negligence on the part of the Letter
of Credit Issuer.


 


3.4.          Agreement to Repay Letter of Credit
Drawings.


 


(a)           The Borrower hereby agrees to
reimburse the Letter of Credit Issuer, by making payment in Dollars to the
Administrative Agent in immediately available funds for any payment or
disbursement made by the Letter of Credit Issuer under any Letter of Credit
(the Dollar Equivalent of each such amount so paid until reimbursed, an “Unpaid
Drawing”) immediately after, and in any event on the date of, such payment,
with interest on the amount so paid or disbursed by the Letter of Credit
Issuer, to the extent not reimbursed prior to 5:00 p.m. (New York time) on
the date of such payment or disbursement, from and including the date paid or
disbursed to but excluding the date the Letter of Credit Issuer is reimbursed
therefor at a rate per annum that shall at all times be the ABR Margin plus the
ABR as in effect from time to time, provided that, notwithstanding
anything contained in this Agreement to the contrary, (i) unless the
Borrower shall have notified the Administrative Agent and the Letter of Credit
Issuer prior to 10:00 a.m. (New York time) on the date of such drawing
that the Borrower intends to reimburse the Letter of Credit Issuer for the
amount of such drawing with funds other than the proceeds of Loans, the
Borrower be shall be deemed to have given a Notice of Borrowing requesting that
the Lenders with Commitments make Revolving Credit Loans (which shall be ABR
Loans) on the date on which such drawing is honored in an amount equal to the
amount of such drawing and (ii) the Administrative Agent shall promptly
notify each relevant L/C Participant of such drawing and the amount of its
Revolving Credit Loan to be made in respect thereof, and, subject to the
conditions set forth in Section 2.1(a), each L/C Participant shall be
irrevocably obligated to make a Revolving Credit Loan to the Borrower in the
manner deemed to have been requested in the amount of its Applicable Percentage
of the applicable Unpaid Drawing by 12:00 noon (New York time) on such Business
Day by making the amount of such Revolving Credit Loan available to the
Administrative Agent. Such Revolving Credit Loans shall be made without regard
to the minimum Borrowing amount for ABR Loans set forth in Section 2.2.
The Administrative Agent shall use the proceeds of such Revolving Credit Loans
solely for purpose of reimbursing the Letter of Credit Issuer for the related
Unpaid Drawing.


 


(b)           The obligations of the Borrower under
this Section 3.4 to reimburse the Letter of Credit Issuer with respect to
Unpaid Drawings (including, in each case, interest thereon) shall be absolute
and unconditional under any and all circumstances and irrespective of


 


53

















 


any set-off, counterclaim or
defense to payment that the Borrower or any other Person may have or have had
against the Letter of Credit Issuer, the Administrative Agent or any Lender
(including in its capacity as an L/C Participant), including any defense based
upon the failure of any drawing under a Letter of Credit (each a “Drawing”)
to conform to the terms of the Letter of Credit or any non-application or
misapplication by the beneficiary of the proceeds of such Drawing, provided
that the Borrower shall not be obligated to reimburse the Letter of Credit
Issuer for any wrongful payment made by the Letter of Credit Issuer under the
Letter of Credit issued by it as a result of acts or omissions constituting
willful misconduct or gross negligence on the part of the Letter of Credit
Issuer.


 


3.5.          Increased Costs. If after the
date hereof, the adoption of any applicable law, rule or regulation, or
any change therein, or any change in the interpretation or administration
thereof by any Governmental Authority, central bank or comparable agency
charged with the interpretation or administration thereof, or actual compliance
by the Letter of Credit Issuer or any L/C Participant with any request or
directive made or adopted after the date hereof (whether or not having the
force of law), by any such authority, central bank or comparable agency shall
either (a) impose, modify or make applicable any reserve, deposit, capital
adequacy or similar requirement against letters of credit issued by the Letter
of Credit Issuer, or any L/C Participant’s L/C Participation therein, or (b) impose
on the Letter of Credit Issuer or any L/C Participant any other conditions
affecting its obligations under this Agreement in respect of Letters of Credit
or L/C Participations therein or any Letter of Credit or such L/C Participant’s
L/C Participation therein, and the result of any of the foregoing is to
increase the cost to the Letter of Credit Issuer or such L/C Participant of
issuing, maintaining or participating in any Letter of Credit, or to reduce the
amount of any sum received or receivable by the Letter of Credit Issuer or such
L/C Participant hereunder (other than any such increase or reduction
attributable to taxes) in respect of Letters of Credit or L/C Participations therein,
then, promptly after receipt of written demand to the Borrower by the Letter of
Credit Issuer or such L/C Participant, as the case may be, (a copy of which
notice shall be sent by the Letter of Credit Issuer or such L/C Participant to
the Administrative Agent), the Borrower shall pay to the Letter of Credit
Issuer or such L/C Participant such additional amount or amounts as will
compensate the Letter of Credit Issuer or such L/C Participant for such
increased cost or reduction, it being understood and agreed, however, that the
Letter of Credit Issuer or a L/C Participant shall not be entitled to such
compensation as a result of such Person’s compliance with, or pursuant to any
request or directive to comply with, any such law, rule or regulation as in
effect on the date hereof. A certificate submitted to the Borrower by the
relevant Letter of Credit Issuer or a L/C Participant, as the case may be, (a
copy of which certificate shall be sent by the Letter of Credit Issuer or such
L/C Participant to the Administrative Agent) setting forth in reasonable detail
the basis for the determination of such additional amount or amounts necessary
to compensate the Letter of Credit Issuer or such L/C Participant as aforesaid
shall be conclusive and binding on the Borrower absent clearly demonstrable
error.


 


3.6.            Successor Letter of Credit Issuer.
A Letter of Credit Issuer may resign as Letter of Credit Issuer upon 60 days’
prior written notice to the Administrative Agent, the Lenders and the Borrower.
If the Letter of Credit Issuer shall resign as Letter of Credit Issuer under
this Agreement, then the Borrower shall appoint from among the Lenders (with
the consent of such Lender) with Commitments a successor issuer of Letters of
Credit, whereupon such successor issuer shall succeed to the rights, powers and
duties of the Letter of Credit Issuer, and the


 


54














 


term “Letter of Credit
Issuer” shall mean such successor issuer effective upon such appointment
(except with respect to Letters of Credit issued by the resigning Letter of
Credit Issuer). After the resignation of the Letter of Credit Issuer hereunder,
the resigning Letter of Credit Issuer shall remain a party hereto and shall
continue to have all the rights and obligations of a Letter of Credit Issuer
under this Agreement and the other Credit Documents with respect to Letters of
Credit issued by it prior to such resignation, but shall not be required to
issue additional Letters of Credit. After any retiring Letter of Credit Issuer’s
resignation as Letter of Credit Issuer, the provisions of this Agreement
relating to the Letter of Credit Issuer shall inure to its benefit as to any
actions taken or omitted to be taken by it (a) while it was Letter of
Credit Issuer under this Agreement or (b) at any time with respect to
Letters of Credit issued by such Letter of Credit Issuer.


 


3.7.          Existing Letters of Credit. The
parties hereto agree that the Existing Letters of Credit shall be deemed to be
Letters of Credit for all purposes under this Agreement from and after the
Effective Date, without any further action by the Borrower, the Letter of
Credit Issuer or any other Person.


 


SECTION 4.           Fees; Commitments


 


4.1.          Fees.


 


(a)           The Borrower agrees to pay to the
Administrative Agent in Dollars, for the account of each Lender having a
Commitment (in each case pro rata according to the
respective Applicable Percentages of all such Lenders), a commitment fee for
each day from and including the Effective Date to but excluding the Maturity
Date. Such commitment fee shall be payable in arrears (i) on the first day
of each January, April, July and October (for the three-month period
(or portion thereof) ended on the preceding day for which no payment has been
received) and (ii) on the Final Date (for the period ended on such date
for which no payment has been received pursuant to clause (i) above), and
shall be computed for each day during such period at a rate per annum equal to
the Commitment Fee Rate in effect on such day on the Available Commitments in
effect on such day.


 


(b)           The Borrower agrees to pay to the
Administrative Agent in Dollars for the account of the Lenders pro rata
on the basis of their respective Applicable Percentages, a fee in respect of
each Letter of Credit (the “Letter of Credit Fee”), for the period from
and including the date of issuance of such Letter of Credit to but excluding
the termination date of such Letter of Credit computed at the per annum rate
for each day equal to the Eurodollar Margin for Revolving Credit Loans on the
average daily Stated Amount of such Letter of Credit. Such Letter of Credit
Fees shall be due and payable quarterly in arrears on the first day of each
April, July, October and January and on the date upon which the Total
Commitment terminates and the Letters of Credit Outstanding shall have been
reduced to zero.


 


(c)           The Borrower agrees to pay to the
Administrative Agent in Dollars for the account of the Letter of Credit Issuer
a fee in respect of each Letter of Credit issued by it (the “Fronting Fee”),
for the period from and including the date of issuance of such Letter of Credit
to but excluding the termination date of such Letter of Credit, computed at the
rate for each day equal to 0.25% per annum on the average daily Stated Amount
of such Letter of Credit. Such


 


55

















 


Fronting Fees shall be due
and payable quarterly in arrears on the first day of each April, July, October and
January and on the date upon which the Total Commitment terminates and the
Letters of Credit Outstanding shall have been reduced to zero.


 


(d)           The Borrower agrees to pay directly
to the Letter of Credit Issuer in Dollars upon each issuance of, drawing under,
and/or amendment of, a Letter of Credit issued by it such Letter of Credit
Issuer’s customary fees for issuances of, drawings under or amendments of,
letters of credit issued by it.


 


4.2.          Voluntary Reduction of Commitments.
Upon at least one Business Day’s prior written notice (or telephonic notice
promptly confirmed in writing) to the Administrative Agent at the
Administrative Agent’s Office (which notice the Administrative Agent shall
promptly transmit to each of the Lenders), the Borrower shall have the right,
without premium or penalty, on any day, permanently to terminate or reduce the
Commitments in whole or in part, provided that (a) any such
reduction shall apply proportionately and permanently to reduce the Commitment
of each of the Lenders in accordance with their Applicable Percentages, (b) any
partial reduction pursuant to this Section 4.2 shall be in the amount of
at least $1,000,000 and (c) after giving effect to such termination or
reduction and to any prepayments of the Loans made on the date thereof in
accordance with this Agreement, (i) the Total Credit Exposure shall not
exceed the lesser of (x) the Total Commitment and (y) the Borrowing
Base.


 


4.3.          Mandatory Termination of
Commitments.


 


(a)           The Total Commitment shall terminate
at 5:00 p.m. (New York time) on the Maturity Date.


 


(b)           The Swingline Commitment shall
terminate at 5:00 p.m. (New York time) on the Swingline Maturity Date.


 


SECTION 5.           Payments


 


5.1.          Voluntary Prepayments. The
Borrower shall have the right to prepay Revolving Credit Loans and Swingline
Loans in whole or in part from time to time on the following terms and
conditions: (a) the Borrower shall give the Administrative Agent at the
Administrative Agent’s Office written notice (or telephonic notice promptly
confirmed in writing) of its intent to make such prepayment, the amount of such
prepayment and (in the case of Eurodollar Loans) the specific Borrowing(s) pursuant
to which made, which notice shall be given by the Borrower no later than (i) in
the case of Revolving Credit Loans, 10:00 a.m. (New York time) one
Business Day prior to, or (ii) in the case of Swingline Loans or
Protective Advances, 10:00 a.m. (New York time) on, the date of such
prepayment and, in the case of a prepayment of Revolving Credit Loans or
Swingline Loans shall promptly be transmitted by the Administrative Agent to
each of the Lenders or the Swingline Lender, as the case may be; (b) each
partial prepayment of any Borrowing of Revolving Credit Loans shall be in a
multiple of $100,000 and in an aggregate principal amount of at least
$1,000,000 and each partial prepayment of Swingline Loans or Protective
Advances shall be in a multiple of $100,000 and in an aggregate principal
amount of at least $100,000, provided that no partial prepayment of
Eurodollar Loans made pursuant to a single Borrowing shall reduce the
outstanding Eurodollar Loans made pursuant to such Borrowing to


 


56

















 


an amount less than
$2,000,000; and (c) any prepayment of Eurodollar Loans pursuant to this Section 5.1
on any day other than the last day of an Interest Period applicable thereto
shall be subject to compliance by the Borrower with the applicable provisions
of Section 2.11. Notwithstanding the foregoing, Borrower shall not be
permitted to prepay any Revolving Credit Loans or Swingline Loans under this
Agreement, in whole or in part, if at such time, any Protective Advances are
outstanding.


 


5.2.          Mandatory Prepayments.


 


(a)           Mandatory Prepayments of Loans.
If on any date the Total Credit Exposure (excluding Protective Advances)
exceeds the lesser of (x) the Total Commitment and (y) the Borrowing
Base, the Borrower shall forthwith repay on such date the principal amount of
Swingline Loans and, after all Swingline Loans have been paid in full,
Revolving Credit Loans in an amount equal to such excess. If, after giving
effect to the prepayment of all outstanding Swingline Loans and Revolving
Credit Loans, the Total Credit Exposure (excluding Protective Advances) exceeds
the lesser of (x) the Total Commitment and (y) the Borrowing Base,
the Borrower shall pay to the Administrative Agent an amount in cash equal to
such excess and the Administrative Agent shall hold such payment for the
benefit of the Lenders as security for the Obligations of the Borrower
hereunder (including one hundred five percent (105%) of Obligations in respect
of Letters of Credit Outstanding) pursuant to a cash collateral agreement to be
entered into in form and substance reasonably satisfactory to the Security
Agents. Additionally, if on any date the Total Credit Exposure exceeds the
Total Commitment for any reason, the Borrower shall forthwith reduce the Total
Credit Exposure in the manner provided above except that all Protective
Advances, if any, outstanding, shall be repaid prior to any Swingline Loans.


 


(b)           Application to Revolving Credit
Loans. With respect to each prepayment of Revolving Credit Loans required
by Section 5.2(a), the Borrower may designate the Types of Loans that are
to be prepaid and the specific Borrowing(s) pursuant to which made, provided
that (x) Eurodollar Loans may be designated for prepayment pursuant to
this Section 5.2 only on the last day of an Interest Period applicable
thereto unless all Eurodollar Loans with Interest Periods ending on such date
of required prepayment and all ABR Loans have been paid in full; (y) if
any prepayment by the Borrower of Eurodollar Loans made pursuant to a single
Borrowing shall reduce the outstanding amount of the Revolving Credit Loans
made pursuant to such Borrowing to an amount less than $2,000,000, such
Borrowing shall immediately be converted into ABR Loans; and (z) each
prepayment of any Revolving Credit Loans made pursuant to a Borrowing shall be
applied pro rata among such Revolving Credit Loans of each
Lender in accordance with their respective Applicable Percentages. In the
absence of a designation by the Borrower as described in the preceding
sentence, the Administrative Agent shall, subject to the above, make such
designation in its reasonable discretion with a view, but no obligation, to
minimize breakage costs owing under Section 2.11.


 


(c)           Interest Periods. In lieu of
making any payment pursuant to this Section 5.2 in respect of any
Eurodollar Loan other than on the last day of the Interest Period therefor so
long as no Default shall have occurred and be continuing, the Borrower at its
option may deposit with the Administrative Agent an amount equal to the amount
of the Eurodollar Loan to be prepaid and such Eurodollar Loan shall be repaid
on the last day of the Interest Period therefor in the required amount. Such
deposit shall be held by the Administrative Agent in a corporate time


 


57

















 


deposit account established
on terms reasonably satisfactory to the Administrative Agent, earning interest
at the then-customary rate for accounts of such type. Such deposit shall
constitute cash collateral for the Obligations, provided that the
Borrower may at any time direct that such deposit be applied to make the
applicable payment required pursuant to this Section 5.2.


 


5.3.          Payments Generally.


 


(a)           Except as otherwise specifically
provided herein, all payments under this Agreement shall be made by the
Borrower, without set-off, counterclaim or deduction of any kind, to the
Administrative Agent for the ratable account of the Lenders entitled thereto,
the Letter of Credit Issuer, the Administrative Agent or the Swingline Lender,
as the case may be, not later than 12:00 Noon (New York time) on the date when
due and shall be made in Dollars in immediately available funds at the
Administrative Agent’s Office, it being understood that written or facsimile
notice by the Borrower to the Administrative Agent to make a payment from the
funds in the Borrower’s account at the Administrative Agent’s Office shall
constitute the making of such payment to the extent of such funds held in such
account. The Administrative Agent will thereafter cause to be distributed on
the same day (if payment was actually received by the Administrative Agent
prior to 2:00 p.m. (New York time) on such day) like funds relating to the
payment of principal or interest or Fees ratably to the Lenders entitled
thereto.


 


(b)           Any payments under this Agreement that
are made later than 2:00 p.m. (New York time) shall be deemed to have been
made on the next succeeding Business Day. Whenever any payment to be made
hereunder shall be stated to be due on a day that is not a Business Day, the
due date thereof shall be extended to the next succeeding Business Day and,
with respect to payments of principal, interest shall be payable during such
extension at the applicable rate in effect immediately prior to such extension.


 


(c)           Subject to the terms of the
Intercreditor Agreement, (x) any proceeds of the sale, transfer or other
disposition of Collateral outside of the ordinary course of business received
by the Administrative Agent after an Event of Default has occurred and is
continuing or (y) any other proceeds of Collateral received by the
Administrative Agent after an Event of Default specified in Section 11.5
or a termination of the Total Commitment or acceleration of the Obligations
under this Agreement pursuant to Section 11 has occurred and is continuing
shall in the case of either (x) or (y) be applied ratably first,
to pay any fees, indemnities, or expense reimbursements including amounts then
due to the Administrative Agent, the Security Agents and the Letter of Credit
Issuer from the Credit Parties (other than in connection with Secured Cash
Management Agreements and Secured Hedge Agreements), second, to pay any
fees or expense reimbursements then due to the Lenders from the Credit Parties
(other than in connection with Secured Cash Management Agreements and Secured Hedge
Agreements), third, to pay interest due in respect of the Protective Advances, fourth,
to pay the principal of the Protective Advances, fifth, to pay interest
then due and payable on the Loans (other than the Protective Advances) ratably,
sixth, to prepay principal on the remaining Loans, Unpaid Drawings and
any Specified Secured Hedge Agreement, ratably, seventh, to pay an
amount to the Administrative Agent equal to one hundred five percent (105%) of
the aggregate undrawn face amount of all outstanding Letters of Credit and the
aggregate amount of any unpaid Unpaid Drawings, to be held as cash collateral
for such Obligations, eighth, to the payment of any amounts owing with
respect to Secured Hedge Agreements, ninth, to payment of any amounts
owing with respect to


 


58

















 


Secured Cash Management
Agreements, and tenth, to the payment of any other Obligation due to the
Administrative Agent or any Secured Party.


 


(d)           At the election of the Administrative
Agent, all payments of principal, interest, Unpaid Drawings, Fees, reimbursable
expenses (including, without limitation, all reimbursement for fees and
expenses pursuant to Section 14.5), and other sums payable under the
Credit Documents that are not paid when due in accordance with the Credit
Documents (after giving effect to any applicable grace period(s)), may be paid
from the proceeds of Borrowings made hereunder whether made following a request
by the Borrower pursuant to Section 2.3 or a deemed request as provided in
this Section or may be deducted from any deposit account of the Credit
Parties maintained with the Administrative Agent. The Borrower hereby
irrevocably authorizes solely to the extent a payment is not paid by a Credit
Party by the time when required to be paid, (i) the Administrative Agent
to make a Borrowing for the purpose of paying each payment of principal,
interest and Fees as it becomes due hereunder or any other amount due under the
Credit Documents and agrees that all such amounts charged shall constitute
Loans (including Swingline Loans, but such a Borrowing may only constitute a
Protective Advance if it is to reimburse costs, fees and expenses as described
in Section 14.5) and that all such Borrowings shall be deemed to have been
requested pursuant to Section 2.3 and (ii) the Administrative Agent
to charge any deposit account of any Credit Party maintained with the
Administrative Agent for each payment of principal, interest and Fees as it
becomes due hereunder or any other amount due under the Credit Documents; provided
that in either case the Administrative Agent shall promptly notify the Borrower
of any such Borrowing or charge.


 


(e)           Unless the Administrative Agent shall
have received notice from the Borrower prior to the date on which any payment
is due to the Administrative Agent for the account of the Lenders or the Letter
of Credit Issuer hereunder that the Borrower will not make such payment, the
Administrative Agent may assume that the Borrower has made such payment on such
date in accordance herewith and may, in reliance upon such assumption,
distribute to the Lenders or the Letter of Credit Issuer, as the case may be,
the amount due. In such event, if the Borrower has not in fact made such
payment, then each of the Lenders or the Letter of Credit Issuer, as the case
may be, severally agrees to repay to the Administrative Agent forthwith on
demand the amount so distributed to such Lender or Letter of Credit Issuer with
interest thereon, for each day from and including the date such amount is
distributed to it to but excluding the date of payment to the Administrative
Agent, at the greater of the Federal Funds Effective Rate and a rate determined
by the Administrative Agent in accordance with banking industry rules on
interbank compensation.


 


5.4.          Net Payments.


 


(a)           Subject to the following sentence,
all payments made by or on behalf of the Borrower (or any Credit Party) under
this Agreement or any other Credit Document shall be made free and clear of,
and without deduction or withholding for or on account of, any current or
future income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings (including additions to tax, interest and penalties
with respect thereto), now or hereafter imposed, levied, collected, withheld or
assessed by any Governmental Authority (“Taxes”), excluding (i) taxes
imposed on or measured by its overall net income and franchise taxes (imposed
in lieu of net income taxes) imposed on the Administrative Agent, any Lender or
any other 


 


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recipient of a payment
hereunder by the United States of America or a jurisdiction under the laws of
which such recipient is organized or in which its principal office is located,
or in the case of any Lender, in which its applicable lending office is located
or as a result of a current or former connection between such recipient and the
jurisdiction of the Governmental Authority imposing such tax or any political
subdivision or taxing authority thereof or therein (other than any connections
arising solely from such recipient having executed, delivered, enforced, become
a party to, performed its obligations or received payments under, received or
perfected a security interest under, or engaged in any other transaction
pursuant to, any Credit Document), (ii) in the case of any Lender (or any
other recipient of a payment hereunder) that is not organized under the laws of
the United States of America or a state thereof (a “Non-U.S. Lender”),
any U.S. federal withholding tax that is imposed on amounts payable to such
Non-U.S. Lender under a law in effect at the time such Non-U.S. Lender becomes
a party to this Agreement (or, in the case of a Participant that is not
organized under the laws of the United States of America or a state thereof (a “Non-U.S.
Participant”), on the date such Non-U.S. Participant became a Participant
hereunder), except to the extent that (a) the indemnity payments or
additional amounts any Lender (or Participant) would be entitled to receive
(without regard to this subclause (ii)) do not exceed the indemnity payment or
additional amounts that the person making the assignment or participation to
such Lender (or Participant) would have been entitled to receive in the absence
of such assignment or participation or (b) such assignment or
participation was requested by the Borrower, (iii) in the case of a
Non-U.S. Lender who designates a new lending office, any U.S. federal
withholding tax that is imposed on amounts payable to such Non-U.S. Lender
under a law in effect at the time of such change in lending office, except to
the extent that (a) such Non-U.S. Lender was entitled, immediately prior
to such change in lending office, to receive additional amounts or indemnity
payments from Borrower with respect to such withholding tax pursuant to this Section 5.4
or (b) such transfer was requested by the Borrower, (iv) any tax to
the extent attributable to a Lender’s failure to comply with Section 5.4(c) and
(v) any penalties caused by the gross negligence of the recipient of the
payment. If any such non-excluded Taxes, levies, imposts, duties, charges,
fees, deductions or withholdings (including additions to tax, interest and
penalties with respect thereto) (“Non-Excluded Taxes”) are required to be
withheld from any amounts payable under this Agreement, the Borrower (or
applicable Credit Party), shall increase the amounts payable to the
Administrative Agent or such Lender to the extent necessary to yield to the
Administrative Agent or such Lender (after payment of all Non-Excluded Taxes)
interest or any such other amounts payable hereunder at the rates or in the
amounts specified in this Agreement. Whenever any Non-Excluded Taxes are
payable by the Borrower (or another Credit Party) as promptly as possible
thereafter such Credit Party shall send to the Administrative Agent for its own
account or for the account of such Lender, as the case may be, a certified copy
of an original official receipt (or other evidence acceptable to such Lender,
acting reasonably) received by the Borrower showing payment thereof. If the
Borrower (or applicable Credit Party) fails to pay any Non-Excluded Taxes when
due to the appropriate taxing authority or fails to remit to the Administrative
Agent the required receipts or other required documentary evidence, such Credit
Party shall indemnify the Administrative Agent and the Lenders for any
incremental taxes, interest, costs or penalties that may become payable by the
Administrative Agent or any Lender as a result of any such failure. The
agreements in this Section 5.4(a) shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable
hereunder.


 


(b)           The Borrower shall indemnify the
Administrative Agent and each Lender, within 20 days after demand therefor, for
the full amount of any Non-Excluded Taxes (including


 


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Non-Excluded Taxes imposed
or asserted on or attributable to amounts payable under this Section) payable
by the Administrative Agent or such Lender, as the case may be, and any
reasonable expenses arising therefrom or with respect thereto, whether or not
such Non-Excluded 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 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.


 


(c)           Each Non-U.S. Lender shall, to the
extent it is legally able to do so:


 


(i)            deliver to the
Borrower and the Administrative Agent two copies of either (x) in the case
of Non-U.S. Lender claiming exemption from U.S. Federal withholding tax under Section 871(h) or
881(c) of the Code with respect to payments of “portfolio interest”,
Internal Revenue Service Form W-8BEN (together with a certificate
representing that such Non-U.S. Lender is not a bank for purposes of Section 881(c) of
the Code, is not a 10-percent shareholder (within the meaning of Section 871(h)(3)(B) of
the Code) of the Borrower, is not a controlled foreign corporation related to
the Borrower (within the meaning of Section 864(d)(4) of the Code)
and that no payments in connection with the Credit Documents are effectively
connected with such Non-U.S. Lender’s conduct of a U.S. trade or business (a “Certificate”)),
(y) Internal Revenue Service Form W-8BEN or Form W-8ECI, in each
case properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or reduced rate of, U.S. Federal withholding tax on
payments by the Borrower under this Agreement or (z) in the case of a
Non-U.S. Lender that not the beneficial owner (for example, where the Non-U.S.
Lender is a partnership or participating Lender granting a typical
participation), Internal Revenue Service Form W-8IMY, accompanied by a Form W-8ECI,
W-8BEN, a Certificate, 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 not a participating Lender) and one or more
beneficial owners of such Non-U.S. Lender are claiming the portfolio interest
exemption, such Non-U.S. Lender may provide a Certificate on behalf of such
beneficial owner(s);


 


(ii)           deliver to the
Borrower and the Administrative Agent two further copies of any such form or
certification (or any applicable successor form) on or before the date that any
such form or certification expires or becomes obsolete, after the occurrence of
any event requiring a change in the most recent form previously delivered by it
to the Borrower and the Administrative Agent; and


 


(iii)          obtain such
extensions of time for filing and complete such forms or certifications as may
reasonably be requested by the Borrower or the Administrative Agent;


 


unless in any such case any
change in treaty, law or regulation has occurred prior to the date on which any
such delivery would otherwise be required that renders any such form
inapplicable or would prevent such Lender from duly completing and delivering
any such form with respect to it and such Lender so advises the Borrower and
the Administrative Agent. Each Person that shall become a Participant pursuant
to Section 14.6 or a Lender pursuant to Section 14.6 shall, upon the
effectiveness of the related transfer, be required to provide all the forms and
statements


 


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required pursuant to this Section 5.4(c),
provided that in the case of a Participant such Participant shall
furnish all such required forms and statements to the Lender from which the
related participation shall have been purchased.


 


(d)           Each Lender that is organized under
the laws of the United States of America or a state thereof shall deliver to
the 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
as prescribed by applicable law, on or before the date that any such form or
certification expires or becomes obsolete, after the occurrence of any event
involving the Lender requiring a change in the most recent form previously
delivered by it or upon the request of Borrower or the Administrative Agent)
duly executed and properly completed copies of Internal Revenue Service Form W-9
certifying that it is not subject to backup withholding.


 


(e)           If the Borrower determines in good
faith that a reasonable basis exists for contesting any Non-Excluded Taxes for
which indemnification has been made hereunder, the relevant Lender or the
Administrative Agent, as applicable, shall use reasonable efforts to cooperate
with Borrower in challenging such taxes at Borrower’s expense if so requested
by Borrower in writing; provided that nothing in this Section 5.4(e) shall
obligate the Administrative Agent or any Lender to take any action that, in its
reasonable judgment, would be materially disadvantageous to such person. If any
Lender or the Administrative Agent, as applicable, receives a refund of a
Non-Excluded Tax for which a payment has been made by the Borrower pursuant to
this Agreement, which refund in the sole good faith judgment of such Lender or
Administrative Agent, as the case may be, is attributable to such payment made
by such Borrower, then the Lender or the Administrative Agent, as the case may
be, shall reimburse Borrower for such amount (without interest other than any
interest received by the Governmental Authority with respect to such refund) as
the Lender or Administrative Agent, as the case may be, determines to be the
proportion of the refund as will leave it, after such reimbursement, in no
better or worse net after-tax position than it would have been in if the
Non-Excluded Taxes giving rise to such refund had not been imposed in the first
instance; provided that the Borrower, upon the request of the
Administrative Agent or such Lender, agrees to repay the amount paid over to
the Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or such Lender in
the event the Administrative Agent or such Lender is required to repay such
refund to such Governmental Authority. Neither a Lender nor the Administrative
Agent shall be obliged to disclose any information regarding its tax affairs or
computations to the Borrower in connection with this paragraph (e) or any
other provision of this Section 5.4.


 


5.5.          Computations of Interest and Fees.


 


(a)           Interest on Eurodollar Loans and,
except as provided in the next succeeding sentence, ABR Loans shall be
calculated on the basis of a 360-day year for the actual days elapsed. Interest
on ABR Loans in respect of which the rate of interest is calculated on the
basis of the Prime Rate and interest on overdue interest shall be calculated on
the basis of a 365- (or 366-, as the case may be) day year for the actual days
elapsed.


 


(b)           Fees and Letters of Credit
Outstanding shall be calculated on the basis of a 360-day year for the actual
days elapsed.


 


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5.6.          Limit on Rate of Interest.


 


(a)           No Payment Shall Exceed Lawful
Rate. Notwithstanding any other term of this Agreement, the Borrower shall
not be obliged to pay any interest or other amounts under or in connection with
this Agreement in excess of the amount or rate permitted under or consistent
with any applicable law, rule or regulation.


 


(b)           Payment at Highest Lawful Rate.
If the Borrower is not obliged to make a payment which it would otherwise be
required to make, as a result of Section 5.6(a), the Borrower shall make
such payment to the maximum extent permitted by or consistent with applicable
laws, rules and regulations.


 


(c)           Adjustment if Any Payment Exceeds
Lawful Rate. If any provision of this Agreement or any of the other Credit
Documents would obligate the Borrower to make any payment of interest or other
amount payable to any Lender in an amount or calculated at a rate which would
be prohibited by any applicable law, rule or regulation, then
notwithstanding such provision, such amount or rate shall be deemed to have
been adjusted with retroactive effect to the maximum amount or rate of
interest, as the case may be, as would not be so prohibited by law, such
adjustment to be effected, to the extent necessary, as follows:


 


(i)            firstly, by
reducing the amount or rate of interest required to be paid by the Borrower to
the affected Lender under Section 2.8; and


 


(ii)           thereafter, by
reducing any fees, commissions, premiums and other amounts required to be paid
by the Borrower to the affected Lender.


 


Notwithstanding the
foregoing, and after giving effect to all adjustments contemplated thereby, if
any Lender shall have received from the Borrower an amount in excess of the
maximum permitted by any applicable law, rule or regulation, then the
Borrower shall be entitled, by notice in writing to the Administrative Agent to
obtain reimbursement from that Lender in an amount equal to such excess, and
pending such reimbursement, such amount shall be deemed to be an amount payable
by that Lender to the Borrower. Any amount or rate of interest referred to in
this Section 5.6(c) shall be determined in accordance with generally
accepted actuarial practices and principles as an effective annual rate of
interest over the term that any Loan remains outstanding.


 


SECTION 6.           Conditions Precedent to Initial
Borrowing


 


The
initial Borrowing of Loans under this Agreement or the initial issuance (or
deemed issuance, in the case of Existing Letters of Credit) of any Letter of
Credit hereunder is subject to the satisfaction of the following conditions
precedent following the Signing Date and on or prior to 5:30 p.m, New York time
on June 10, 2009:


 


6.1.          Credit Documents. The
Administrative Agent and Security Agents shall have received executed
counterparts from each of the parties thereto of (i) the Guarantee, (ii) the
Intercreditor Agreement, (iii) the Pledge Agreement and (iv) the
Security Agreement.


 


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6.2.            Collateral. All documents and
instruments, including Uniform Commercial Code or other applicable personal
property security financing statements reasonably requested by the Collateral
Agent to be filed, registered or recorded to create the Liens intended to be
created by the Security Agreement and perfect such Liens to the extent required
by, and with the priority required by, the Security Agreement shall have been
filed, registered or recorded or delivered to the Collateral Agent for filing,
registration or recording.


 


6.3.            Legal Opinions. The
Administrative Agent shall have received the executed legal opinions of (a) Simpson
Thacher & Bartlett LLP, special New York counsel to the Borrower, in
form reasonably acceptable to each Initial Lender, and (b) Kenneth L.
Walker, General Counsel to the Borrower, in form reasonably acceptable to each
Initial Lender. The Borrower, the other Credit Parties and the Administrative
Agent hereby instruct such counsel to deliver such legal opinions.


 


6.4.            No Default. After giving
effect to the Borrowings on the Effective Date and the other transactions
contemplated hereby, no Default shall have occurred and is continuing.


 


6.5.            Concurrent Financings. Prior
to or substantially simultaneously with the initial credit extension, the
Borrower shall have received not less than $475.0 million in gross proceeds
from the issuance and sale of the Initial Secured Notes pursuant to the Secured
Note Indenture and delivery of cash collateral pursuant to the Forward Purchase
Contract.


 


6.6.            Existing Credit Agreement.
The Administrative Agent and the Security Agents shall have received evidence
that the Existing Credit Agreement has been, or concurrently with the Effective
Date is being, terminated and all amounts outstanding thereunder are being
repaid in full and all liens securing obligations under the Existing Credit
Agreement have been, or concurrently with the Effective Date are being,
released.


 


6.7.            Effective Date Certificates.
The Administrative Agent shall have received a certificate of each Credit
Party, dated the Effective Date, in form reasonably acceptable to the
Administrative Agent, with appropriate insertions, executed by the President or
any Vice President and the Secretary or any Assistant Secretary of such Credit
Party, and attaching the documents referred to in Sections 6.8 and 6.9 (if
applicable).


 


6.8.            Corporate Proceedings of Each
Credit Party. The Administrative Agent shall have received a copy of the
resolutions, in form and substance satisfactory to the Administrative Agent, of
the board of directors of each Credit Party (or a duly authorized committee
thereof) authorizing (a) the execution, delivery and performance of the
Credit Documents (and any agreements relating thereto) to which it is a party
and (b) in the case of the Borrower, the extensions of credit contemplated
hereunder.


 


6.9.            Corporate Documents. The
Administrative Agent shall have received true and complete copies of the
certificate of incorporation and by laws (or equivalent organizational
documents) of each Credit Party.


 


6.10.          Fees. The Lenders shall have
received the fees in the amounts previously agreed in writing by the Agents and
such Lenders to be received on the Effective Date and all


 


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expenses (including the
reasonable fees, disbursements and other charges of counsel) for which invoices
have been presented on or prior to the Effective Date shall have been paid.


 


6.11.        Representations and Warranties.
On the Effective Date, the representations and warranties made by each of
Holdings and the Borrower shall be true and correct in all material respects.


 


6.12.        Borrowing Base Certificate. The
Security Agents shall have received a Borrowing Base Certificate which
calculates the Borrowing Base as of a date preceding the Effective Date that is
specified by the Security Agents.


 


6.13.        Closing Availability. After
giving effect to all Borrowings to be made on the Effective Date, the issuance
of any Letters of Credit (or deemed issuance, in the case of Existing Letters
of Credit) on the Effective Date and payment of all fees and expenses due
hereunder, Availability shall not be less than $30,000,000.


 


6.14.        Solvency. The Administrative
Agent shall have received a certificate as to the Solvency of the Borrower from
an Authorized Officer in form reasonably acceptable to each Initial Lender.


 


6.15.        Pledged Stock; Stock Powers; Pledged
Notes. The collateral agent for the Initial Secured Notes shall have
received (i) the certificates representing the certificated equity
interests pledged pursuant to the Pledge 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 Collateral Agent pursuant to the Security Agreement or the
Pledge Agreement endorsed (without recourse) in blank (or accompanied by an
executed transfer form in blank) by the pledgor thereof.


 


6.16.        Lien Searches. The Administrative
Agent shall have received the results of a recent lien search report in such
jurisdictions as may be reasonably requested by the Administrative Agent and
such reports shall reflect no Liens other than Liens permitted by Section 10.2
and Liens securing the Existing Credit Agreement to be terminated on the
Effective Date.


 


6.17.        Insurance. The Administrative
Agent shall have received evidence of insurance coverage in form, scope and
substance evidencing compliance with the terms of Section 9.3 and the Security
Agreement.


 


6.18.        Perfection Certificate. The
Administrative Agent and the Security Agents shall have received a duly
completed and signed Perfection Certificate together with all attachments
thereto.


 


SECTION 7.           Conditions Precedent to All Credit
Events


 


The
agreement of each Lender to make any Loan requested to be made by it on any
date (excluding Mandatory Borrowings and Protective Advances) and the
obligation of the Letter of Credit Issuer to issue, extend, renew or increase
the amount of any Letters of Credit on any date is subject to the satisfaction
of the following conditions precedent:


 


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7.1.          No Default; Representations and
Warranties. At the time of each Credit Event and also after giving effect
thereto (a) no Default shall have occurred and be continuing and (b) all
representations and warranties made by any Credit Party contained herein or in
the other Credit Documents shall be true and correct in all material respects
with the same effect as though such representations and warranties had been
made on and as of the date of such Credit Event (except where 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).


 


7.2.          Notice of Borrowing; Letter of
Credit Request.


 


(a)           Prior to the making of each Loan and
each Swingline Loan, the Administrative Agent shall have received a Notice of
Borrowing (whether in writing or by telephone) meeting the requirements of Section 2.3.


 


(b)           Prior to the issuance of each Letter
of Credit, the Administrative Agent and the Letter of Credit Issuer shall have
received a Letter of Credit Request meeting the requirements of Section 3.2(a).


 


7.3.          Availability. After giving
effect to any Borrowing or the issuance of any Letter of Credit, Availability
is not less than zero.


 


The
acceptance of the benefits of each Credit Event shall constitute a
representation and warranty by each Credit Party to each of the Lenders that
all the applicable conditions specified above exist as of that time.


 


SECTION 8.           Representations, Warranties and
Agreements


 


In
order to induce the Lenders to enter into this Agreement, to make the Loans and
issue or participate in Letters of Credit as provided for herein, Holdings and
the Borrower make the following representations and warranties to, and
agreements with, the Lenders, all of which shall survive the execution and
delivery of this Agreement and the making of the Loans and the issuance of the
Letters of Credit:


 


8.1.          Corporate Status. Holdings, the
Borrower, each Credit Party and each Material Subsidiary (a) is a duly
organized and validly existing corporation or other entity in good standing
under the laws of the jurisdiction of its organization and has the corporate or
other organizational power and authority to own its property and assets and to
transact the business in which it is engaged and (b) is duly qualified and
is authorized to do business and is in good standing in all jurisdictions where
it is required to be so qualified, except where the failure to be so qualified
could not reasonably be expected to result in a Material Adverse Effect.


 


8.2.          Corporate Power and Authority.
Parent and each Credit Party has the corporate or other organizational power
and authority to execute, deliver and carry out the terms and provisions of the
Credit Documents to which it is a party and has taken all necessary corporate
or other organizational action to authorize the execution, delivery and
performance of the Credit Documents to which it is a party. Parent and each
Credit Party has duly executed and delivered each Credit Document to which it
is a party and each such Credit Document constitutes the legal,


 


66

















 


valid and binding obligation
of Parent or such Credit Party enforceable in accordance with its terms, except
as the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors’ rights generally and subject to general
principles of equity.


 


8.3.          No Violation. Neither the
execution, delivery or performance by Parent or any Credit Party of the Credit
Documents to which it is a party nor compliance with the terms and provisions
thereof nor the consummation of the Transactions and the other transactions
contemplated hereby or thereby will (a) contravene any applicable
provision of any material law, statute, rule, regulation, order, writ,
injunction or decree of any court or governmental instrumentality, (b) result
in any breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or the
obligation to create or impose) any Lien upon any of the property or assets of
any of Parent, Holdings, the Borrower or any of the Restricted Subsidiaries
(other than Liens created under the Credit Documents and Liens securing the
Initial Secured Notes and the Initial PIK Convertible Notes) pursuant to, the
terms of any material indenture (including the Subordinated Note Indenture, the
Secured Note Indenture and the PIK Convertible Note Indenture), loan agreement,
lease agreement, mortgage, deed of trust, agreement or other material
instrument to which Parent, Holdings, the Borrower or any of the Restricted
Subsidiaries is a party or by which it or any of its property or assets is
bound or (c) violate any provision of the certificate of incorporation,
By-Laws or other constitutional documents of Parent, Holdings, the Borrower or
any of the Restricted Subsidiaries.


 


8.4.          Litigation. There are no
actions, suits, investigations or proceedings (including Environmental Claims)
pending or, to the knowledge of Holdings or the Borrower, threatened with
respect to Holdings, the Borrower or any of its Subsidiaries that could
reasonably be expected to result in a Material Adverse Effect.


 


8.5.          Margin Regulations. Neither the
making of any extension of credit hereunder nor the use of the proceeds thereof
will violate the provisions of Regulation T, U or X of the Board.


 


8.6.          Governmental Approvals. No
order, consent, approval, license, authorization, or validation of, or filing,
recording or registration with, or exemption by, any Governmental Authority is
required to authorize or is required in connection with (a) the execution,
delivery and performance of any Credit Document or (b) the legality,
validity, binding effect or enforceability of any Credit Document, except any
of the foregoing the failure to obtain or make could not reasonably be expected
to have a Material Adverse Effect.


 


8.7.          Investment Company Act. Neither
Holdings nor the Borrower is an “investment company” within the meaning of the
Investment Company Act of 1940, as amended.


 


8.8.          True and Complete Disclosure.


 


(a)           None of the factual information and
data (taken as a whole) heretofore or contemporaneously furnished by any of
Holdings, the Borrower, any of the Subsidiaries or any of their respective
authorized representatives in writing to the Administrative Agent, the
Collateral Agent and/or any Lender on or before the Effective Date (including
all information contained in the Credit Documents) for purposes of or in
connection with this Agreement or any


 


67

















 


transaction contemplated
herein contained any untrue statement or omitted to state any material fact
necessary to make such information and data (taken as a whole) not misleading
at such time in light of the circumstances under which such information or data
was furnished, it being understood and agreed that for purposes of this Section 8.8(a),
such factual information and data shall not include projections and pro forma
financial information.


 


(b)           The projections and pro forma
financial information contained in the information and data referred to in
paragraph (a) above were based on good faith estimates and assumptions
believed by such Persons to be reasonable at the time made, it being recognized
by the Lenders that such projections as to future events are not to be viewed
as facts and that actual results during the period or periods covered by any
such projections may differ from the projected results.


 


8.9.          Financial Condition; Financial
Statements. The (a) unaudited historical quarterly consolidated
financial information of Parent filed with the SEC for the most recently ended
fiscal quarter prior to the Signing Date (and the corresponding prior year
period), and (b) the Historical Financial Statements, in each case present
or will, when provided, present fairly in all material respects the combined
financial position of the Borrower at the respective dates of said information,
statements and results of operations for the respective periods covered
thereby. The financial statements referred to in clause (b) of this Section 8.9
have been prepared in accordance with GAAP consistently applied except to the
extent provided in the notes to said financial statements. There has been no
Material Adverse Effect since November 30, 2008.


 


8.10.        Tax Returns and Payments. Each of
Holdings, the Borrower and the Subsidiaries (a) has timely filed all
federal income tax returns and all other material tax returns, domestic and
foreign, required to be filed by it and (b) has paid all material Taxes
and assessments payable by it that have become due, other than those not yet
delinquent or those being contested in good faith by the appropriate
proceedings and for which adequate reserves have been provided in accordance
with GAAP. Each of Holdings, the Borrower and each of the Subsidiaries has
paid, or, in the case of Taxes not yet due and payable or those being contested
in good faith, has provided adequate reserves (in the good faith judgment of
the management of the Borrower) in accordance with GAAP for the payment of, all
material federal, state, provincial and foreign Taxes applicable for all prior
fiscal years and for the current fiscal year to the Effective Date.


 


8.11.        Compliance with ERISA. Each Plan
is in compliance with ERISA, the Code and any applicable Requirement of Law; no
Reportable Event has occurred (or is reasonably likely to occur) with respect
to any Plan; no Plan is insolvent or in reorganization (or is reasonably likely
to be insolvent or in reorganization), and no written notice of any such
insolvency or reorganization has been given to any of Holdings, the Borrower,
any Subsidiary or any ERISA Affiliate; no Plan (other than a multiemployer
plan) has an accumulated or waived funding deficiency (or is reasonably likely
to have such a deficiency); none of Holdings, the Borrower, any Subsidiary or
any ERISA Affiliate has incurred (or is reasonably likely expected to incur)
any liability to or on account of a Plan pursuant to Section 409, 502(i),
502(l), 515, 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA or Section 4971
or 4975 of the Code or has been notified in writing that it will incur any
liability under any of the foregoing Sections with respect to any Plan; no
proceedings have been instituted (or are reasonably likely to be instituted) to
terminate or to reorganize any Plan or to appoint a trustee to administer any
Plan, and no written notice of any


 


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such proceedings has been
given to any of Holdings, the Borrower, any Subsidiary or any ERISA Affiliate;
and no lien imposed under the Code or ERISA on the assets of any of Holdings,
the Borrower or any Subsidiary or any ERISA Affiliate exists (or is reasonably
likely to exist) nor has Holdings, the Borrower, any Subsidiary or any ERISA
Affiliate been notified in writing that such a lien will be imposed on the
assets of any of Holdings, the Borrower, any Subsidiary or any ERISA Affiliate
on account of any Plan, except to the extent that a breach of any of the
representations, warranties or agreements in this Section 8.11 would not
result, individually or in the aggregate, in an amount of liability that would
be reasonably likely to have a Material Adverse Effect. No Plan (other than a
multiemployer plan) has an Unfunded Current Liability that would, individually
or when taken together with any other liabilities referenced in this Section 8.11,
be reasonably likely to have a Material Adverse Effect. With respect to Plans
that are multiemployer plans (as defined in Section 3(37) of ERISA), the
representations and warranties in this Section 8.11, other than any made
with respect to (a) liability under Section 4201 or 4204 of ERISA or (b) liability
for termination or reorganization of such Plans under ERISA, are made to the
best knowledge of the Borrower.


 


8.12.        Subsidiaries. On the Effective
Date, Holdings does not have any Subsidiaries other than the Borrower and its
Subsidiaries. Schedule 8.12 lists each Subsidiary of the Borrower (and the
direct and indirect ownership interest of the Borrower therein), in each case
existing on the Effective Date. Each Material Subsidiary as of the Effective
Date has been so designated on Schedule 8.12.


 


8.13.        Labor Matters. On the Effective
Date, (a) there are no strikes, slowdowns, work stoppages or
controversies pending or, to the best knowledge of any Credit Party after due
inquiry, threatened between such Credit Party and its employees, other than
employee grievances arising in the ordinary course of business which could not
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect and (b) hours worked by and payment made to
employees of the Credit Parties, comply in all material respects with the Fair
Labor Standards Act and each other federal, state, provincial, local or foreign
law applicable to such matters.


 


8.14.        Patents, etc. Holdings, the
Borrower and each of the Restricted Subsidiaries have obtained all patents,
trademarks, servicemarks, trade names, copyrights, licenses and other rights,
free from burdensome restrictions, that are necessary for the operation of
their respective businesses as currently conducted and as proposed to be
conducted, except where the failure to obtain any such rights could not
reasonably be expected to have a Material Adverse Effect.


 


8.15.        Environmental Laws.


 


(a)           Except as could not reasonably be
expected to have a Material Adverse Effect: (i) each of Holdings, the
Borrower and each of the Subsidiaries are in compliance with all Environmental
Laws in all jurisdictions in which Holdings, the Borrower and each of the
Subsidiaries are currently doing business (including having obtained all
material permits required under Environmental Laws); (ii) each of Holdings
and the Borrower will comply and cause each of the Subsidiaries to comply with
all such Environmental Laws (including all permits required under Environmental
Laws); and (iii) none of Holdings, the Borrower and each of the Subsidiaries



 


69

















 


has become subject to any
Environmental Claim or any other liability under any Environmental Law.


 


(b)           None of Holdings, the Borrower or any
of the Subsidiaries has treated, stored, transported, released or disposed of
Hazardous Materials at or from any currently or formerly owned Real Estate or
facility relating to its business in a manner that could reasonably be expected
to have a Material Adverse Effect.


 


8.16.        Properties. Each of Holdings, the
Borrower and each of the Subsidiaries have good and marketable title to or
leasehold interest in all properties that are necessary for the operation of
their respective businesses as currently conducted and as proposed to be
conducted, free and clear of all Liens (other than any Liens permitted by this
Agreement) and except where the failure to have such good title could not
reasonably be expected to have a Material Adverse Effect.


 


8.17.        Solvency. On
Effective Date, immediately after the consummation of the Transactions to occur
on the Effective Date, the Borrower is Solvent.


 


SECTION 9.           Affirmative Covenants


 


Each
of Holdings and the Borrower hereby covenants and agrees that from the
Effective Date and thereafter, until the Final Date:


 


9.1.          Information Covenants. Holdings
or the Borrower will furnish to each Lender and the Administrative Agent:


 


(a)           Annual Financial
Statements. As soon as available and in any event on or before the date on
which such financial statements are required to be filed with the SEC (or, if
such financial statements are not required to be filed with the SEC, on or
before the date that is 90 days after the end of each such fiscal year), the
consolidated balance sheet of (i) Parent, Holdings, the Borrower and the
Restricted Subsidiaries and (ii) Parent, Holdings and its Subsidiaries, in
each case as at the end of such fiscal year, and the related consolidated
statement of operations and cash flows for such fiscal year, setting forth
comparative consolidated figures for the preceding fiscal year, and certified
by independent certified public accountants of recognized national standing
whose opinion shall not be qualified as to the scope of audit or as to the
status of Parent, Holdings, the Borrower or any of the Material Subsidiaries as
a going concern, together in any event with a certificate of such accounting
firm stating that in the course of its regular audit of the business of Parent,
Holdings, the Borrower and the Material Subsidiaries, which audit was conducted
in accordance with generally accepted auditing standards, such accounting firm
has obtained no knowledge of any Event of Default relating to Section 10.9
that has occurred and is continuing or, if in the opinion of such accounting
firm such an Event of Default has occurred and is continuing, a statement as to
the nature thereof. The requirements of this Section 9.1(a) shall be
satisfied by delivery of financial statements of Parent and its Subsidiaries
which otherwise meet the requirements hereof and are accompanied by
reconciliations for any difference between what is delivered hereunder and


 


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what
would have been delivered by Holdings and its Subsidiaries pursuant to this Section 9.1(a).


 


(b)           Quarterly
Financial Statements. As soon as available and in any event on or before
the date on which such financial statements are required to be filed with the
SEC with respect to each of the first three quarterly accounting periods in
each fiscal year of Parent (or, if such financial statements are not required
to be filed with the SEC, on or before the date that is 45 days after the end
of each such quarterly accounting period), the consolidated balance sheet of (i) Parent,
Holdings, the Borrower and the Restricted Subsidiaries and (ii) Parent,
Holdings and its Subsidiaries, in each case as at the end of such quarterly
period and the related consolidated statement of operations for such quarterly
accounting period and for the elapsed portion of the fiscal year ended with the
last day of such quarterly period, and the related consolidated statement of
cash flows for the elapsed portion of the fiscal year ended with the last day
of such quarterly period, and setting forth comparative consolidated figures
for the related periods in the prior fiscal year or, in the case of such
consolidated balance sheet, for the last day of the prior fiscal year, all of
which shall be certified by an Authorized Officer of the Borrower, subject to
changes resulting from audit and normal year-end audit adjustments.


 


(c)           Budgets.
Within 60 days after the commencement of each fiscal year of Parent, budgets of
Parent, Holdings and the Borrower, collectively, in reasonable detail for the
fiscal year (including for each fiscal quarter in such fiscal year) as are
customarily prepared by management of Parent, Holdings and the Borrower for
their internal use consistent in scope with the financial statements provided
pursuant to Section 9.1(a), setting forth the principal assumptions upon
which such budgets are based.


 


(d)           Officer’s
Certificates. At the time of the delivery of the financial statements
provided for in Sections 9.1(a) and (b), a certificate of an Authorized
Officer of the Borrower to the effect that no Default exists or, if any Default
does exist, specifying the nature and extent thereof, which certificate shall
set forth (i) reasonably detailed calculations required to establish the
Fixed Charge Coverage Ratio and, during any Minimum Availability Period,
demonstrating compliance with the provisions of Section 10.9 as of the end
of such fiscal year or period, as the case may be, (ii) a specification of
any change in the identity of the Restricted Subsidiaries, Unrestricted
Subsidiaries and Foreign Subsidiaries as at the end of such fiscal year or
period, as the case may be, from the Restricted Subsidiaries, Unrestricted
Subsidiaries and Foreign Subsidiaries, respectively, provided to the Lenders on
the Signing Date or the most recent fiscal year or period, as the case may be, (iii) the
then applicable Status and (iv) the amount of any Pro Forma Adjustment not
previously set forth in a Pro Forma Adjustment Certificate or any change in the
amount of a Pro Forma Adjustment set forth in any Pro Forma Adjustment
Certificate previously provided and, in either case, in reasonable detail, the
calculations and basis therefor.


 


(e)           Borrowing Base
Certificate. As soon as available, but in any event within 15 Business Days
of the end of each calendar month (or, within five calendar days, or if the
fifth calendar day is not a Business Day, the immediately preceding Business
Day, of the end of each calendar week during any Weekly Reporting Period), a
Borrowing Base


 


71

















 


Certificate
in form reasonably satisfactory to each Initial Lender, which calculates the
Borrowing Base as of the last day of the fiscal month ended on or around the
calendar month then ended (but in the case of any calendar week which is not
the end of a fiscal month, based on Eligible Inventory as of the end of the
most recent calendar month) and updated information thereto as required by such
Borrowing Base Certificate, together with supporting information in connection
therewith and any additional reports with respect to the Borrowing Base as the
Security Agents may reasonably request.


 


(f)            Notice of
Material Events. Promptly after an Authorized Officer of any of Holdings,
the Borrower or any of the Subsidiaries obtains knowledge thereof, notice of (i) the
occurrence of any event that constitutes a Default, which notice shall specify
the nature thereof, the period of existence thereof and what action any of
Holdings or the Borrower proposes to take with respect thereto, (ii) any
litigation or governmental proceeding pending against any of Holdings, the
Borrower or any of the Subsidiaries that could reasonably be expected to result
in a Material Adverse Effect, (iii) any Lien (other than Liens permitted
by Section 10.02) or material claim made or asserted in writing against
any material portion of the Collateral; (iv) any loss, damage or
destruction to a material portion of the Collateral in the amount of $5,000,000
or more, whether or not covered by insurance; and (v) any and all default
notices received under or with respect to any leased location or public
warehouse where Collateral with a cost in excess of $250,000 is located (which
shall be delivered within two Business Days after receipt thereof).


 


(g)           Environmental
Matters. Holdings and the Borrower will promptly advise the Lenders in
writing after obtaining knowledge of any one or more of the following
environmental matters, unless such environmental matters would not,
individually or when aggregated with all other such matters, be reasonably
expected to result in a Material Adverse Effect:


 


(i)            Any pending or
threatened Environmental Claim against any of Holdings, the Borrower or any of
the Subsidiaries or any Real Estate;


 


(ii)           Any condition or
occurrence on any Real Estate that (x) results in noncompliance by any of
Holdings, the Borrower or any of the Subsidiaries with any applicable
Environmental Law or (y) could reasonably be anticipated to form the basis
of an Environmental Claim against any of Holdings, the Borrower or any of the
Subsidiaries or any Real Estate;


 


(iii)          Any condition or
occurrence on any Real Estate that could reasonably be anticipated to cause
such Real Estate to be subject to any restrictions on the ownership, occupancy,
use or transferability of such Real Estate under any Environmental Law; and


 


(iv)          The taking of any
removal or remedial action in response to the actual or alleged presence of any
Hazardous Material on any Real Estate.


 


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All such notices shall describe in reasonable detail the nature of the
claim, investigation, condition, occurrence or removal or remedial action and
the response thereto. The term “Real Estate” shall mean land, buildings
and improvements owned or leased by any of Holdings, the Borrower or any of the
Subsidiaries, but excluding all operating fixtures and equipment, whether or
not incorporated into improvements.


 


(h)           Other Information.
Promptly upon filing thereof, copies of any filings (including on Form 10-K,
10-Q or 8-K) or registration statements with, and reports to, the SEC or any
analogous Governmental Authority in any relevant jurisdiction by any of
Holdings, the Borrower or any of the Subsidiaries (other than amendments to any
registration statement (to the extent such registration statement, in the form
it becomes effective, is delivered to the Lenders), exhibits to any
registration statement and, if applicable, any registration statements on Form S-8)
and copies of all financial statements, proxy statements, notices and reports
that Holdings, the Borrower or any of the Subsidiaries shall send to the
holders of any publicly issued debt of Holdings, the Borrower and/or any of the
Subsidiaries (including the Subordinated Notes and Initial Secured Notes, in
each case, whether publicly issued or not) in their capacity as such holders
(in each case to the extent not theretofore delivered to the Lenders pursuant
to this Agreement) and, with reasonable promptness, such other information
(financial or otherwise) as the Administrative Agent or either Security Agent,
each on its own behalf or on behalf of any Lender may reasonably request in
writing from time to time.


 


(i)            Pro Forma
Adjustment Certificate. Not later than the consummation of the acquisition
or disposition by the Borrower or any Restricted Subsidiary for which there
shall be a Pro Forma Adjustment or not later than any date on which financial
statements are delivered with respect to any four-quarter period in which a Pro
Forma Adjustment is made as a result of the consummation of the acquisition or
disposition by the Borrower or any Restricted Subsidiary for which there shall
be a Pro Forma Adjustment, a certificate of an Authorized Officer of the
Borrower setting forth the amount of such Pro Forma Adjustment and, in
reasonable detail, the calculations and basis therefor.


 


9.2.          Books, Records and Inspections.
Each of Holdings and the Borrower will, and will cause each of the Subsidiaries
to, permit officers and designated representatives of the Administrative Agent,
either Security Agent or the Required Lenders to visit and inspect any of the
properties or assets of Holdings, the Borrower and any such Subsidiary in
whomsoever’s possession to the extent that it is within such party’s control to
permit such inspection, and to examine the books of account of Holdings, the
Borrower and any such Subsidiary and discuss the affairs, finances and accounts
of Holdings, the Borrower and of any such Subsidiary with, and be advised as to
the same by, its and their officers and independent accountants, all at such
reasonable times and intervals and to such reasonable extent as the
Administrative Agent, either Security Agent or the Required Lenders may desire.


 


9.3.          Maintenance of Insurance.


 


(a)           Each of Holdings and
the Borrower will, and will cause each of the Material Subsidiaries to, at all
times maintain in full force and effect, with insurance companies that the
Borrower believes (in the good faith judgment of the management of the


 


73

















 


Borrower)
are financially sound and responsible at the time the relevant coverage is
placed or renewed, insurance in at least such amounts and against at least such
risks (and with such risk retentions) as are usually insured against in the
same general area by companies engaged in the same or a similar business; and
will furnish to the Lenders, upon written request from the Administrative Agent
or Collateral Agent, information presented in reasonable detail as to the
insurance so carried.


 


(b)           If any portion of
any Mortgaged Property is at any time located in an area identified by the
Federal emergency Management Agency (or any successor agency) as a Special
Flood Hazard Area with respect to which flood insurance has been made available
under the National Flood Insurance Act of 1968 (not or as hereafter in effect
or successor act thereto), then the Borrower shall, or shall cause each Credit
Party to (i) maintain, or cause to be maintained, with a financially sound
and reputable insurer, flood insurance in an amount and otherwise sufficient to
comply with all applicable rules and regulations promulgated pursuant to
the Flood Insurance Laws and (ii) deliver to the Administrative Agent
evidence of such compliance in form and substance reasonably acceptable to the
Security Agents.


 


9.4.          Payment of Taxes. Each of
Holdings and the Borrower will pay and discharge, and will cause each of the
Subsidiaries to pay and discharge, all material Taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits,
or upon any properties belonging to it, prior to the date on which material
penalties attach thereto, and all lawful material claims that, if unpaid, could
reasonably be expected to become a material Lien upon any properties of the
Borrower or any of the Restricted Subsidiaries, provided that neither
Holdings, the Borrower nor any of the Subsidiaries shall be required to pay any
such Tax, assessment, charge, levy or claim that is being contested in good
faith and by proper proceedings if it has maintained adequate reserves (in the
good faith judgment of the management of the Borrower) with respect thereto in
accordance with GAAP.


 


9.5.          Consolidated Corporate Franchises.
Each of Holdings and the Borrower will do, and will cause each Material
Subsidiary to do, or cause to be done, all things necessary to preserve and
keep in full force and effect its existence, corporate rights and authority,
except to the extent that the failure to do so could not reasonably be expected
to have a Material Adverse Effect; provided, however, that the
Borrower and its Subsidiaries may consummate any transaction permitted under Section 10.3,
10.4 or 10.5.


 


9.6.          Compliance with Statutes,
Obligations, etc. Each of Holdings and the Borrower will, and will cause
each Subsidiary to, comply with all applicable laws, rules, regulations and
orders, except to the extent the failure to do so could not reasonably be
expected to have a Material Adverse Effect.


 


9.7.          ERISA. Promptly after Holdings
and the Borrower or any Subsidiary or any ERISA Affiliate knows or has reason
to know of the occurrence of any of the following events that, individually or
in the aggregate (including in the aggregate such events previously disclosed
or exempt from disclosure hereunder, to the extent the liability therefor
remains outstanding), would be reasonably likely to have a Material Adverse
Effect, Parent, Holdings or the Borrower will deliver to each of the Lenders a
certificate of an Authorized Officer or any other


 


74














 


senior officer of the
Borrower setting forth details as to such occurrence and the action, if any,
that Holdings, the Borrower, such Subsidiary or such ERISA Affiliate is
required or proposes to take, together with any notices (required, proposed or
otherwise) given to or filed with or by Holdings, the Borrower, such
Subsidiary, such ERISA Affiliate, the PBGC, a Plan participant (other than
notices relating to an individual participant’s benefits) or the Plan
administrator with respect thereto: that a Reportable Event has occurred; that
an accumulated funding deficiency has been incurred or an application is to be
made to the Secretary of the Treasury for a waiver or modification of the
minimum funding standard (including any required installment payments) or an
extension of any amortization period under Section 412 of the Code with
respect to a Plan; that a Plan having an Unfunded Current Liability has been or
is to be terminated, reorganized, partitioned or declared insolvent under Title
IV of ERISA (including the giving of written notice thereof); that a Plan has
an Unfunded Current Liability that has or will result in a lien under ERISA or
the Code; that proceedings will be or have been instituted to terminate a Plan
having an Unfunded Current Liability (including the giving of written notice
thereof); that a proceeding has been instituted against the Borrower, a
Subsidiary or an ERISA Affiliate pursuant to Section 515 of ERISA to
collect a delinquent contribution to a Plan; that the PBGC has notified Holdings,
the Borrower, any Subsidiary or any ERISA Affiliate of its intention to appoint
a trustee to administer any Plan; that Holdings, the Borrower, any Subsidiary
or any ERISA Affiliate has failed to make a required installment or other
payment pursuant to Section 412 of the Code with respect to a Plan; or
that Holdings, the Borrower, any Subsidiary or any ERISA Affiliate has incurred
or will incur (or has been notified in writing that it will incur) any
liability (including any contingent or secondary liability) to or on account of
a Plan pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064,
4069, 4201 or 4204 of ERISA or Section 4971 or 4975 of the Code.


 


9.8.            Good Repair. Each of Holdings
and the Borrower will, and will cause each of the Restricted Subsidiaries to,
ensure that its properties and equipment used or useful in its business in
whomsoever’s possession they may be to the extent that it is within the control
of such party to cause same, are kept in good repair, working order and condition,
normal wear and tear excepted, and that from time to time there are made in
such properties and equipment all needful and proper repairs, renewals,
replacements, extensions, additions, betterments and improvements thereto, to
the extent and in the manner customary for companies in similar businesses and
consistent with third party leases, except in each case to the extent the
failure to do so could not be reasonably expected to have a Material Adverse
Effect.


 


9.9.            Transactions with Affiliates.
Each of Holdings and the Borrower will conduct, and cause each of the
Restricted Subsidiaries to conduct, all transactions with any of its Affiliates
on terms that are substantially as favorable to Holdings, the Borrower or such
Restricted Subsidiary as it would obtain in a comparable arm’s-length
transaction with a Person that is not an Affiliate, provided that the
foregoing restrictions shall not apply to (a) the payment of customary
annual fees to KKR and/or its Affiliates for management, consulting and
financial services rendered to Holdings, the Borrower and the Subsidiaries and
customary investment banking fees paid to KKR and its Affiliates for services
rendered to Holdings, the Borrower and the Subsidiaries in connection with
divestitures, acquisitions, financings and other transactions, (b) customary
fees paid to members of the board of directors of Holdings, the Borrower and
the Subsidiaries, (c) transactions permitted by Section 10.6 and (d) the
transactions pursuant to the Forward Purchase Contract and the Initial PIK
Convertible Notes.


 


75

















 


9.10.          End of Fiscal Years; Fiscal
Quarters. Holdings and the Borrower will, for financial reporting purposes,
cause (a) each of its, and each of its Subsidiaries’, fiscal years to end
on the Sunday closest to November 30 of each year (but in no event later
than December 2) and (b) each of its, and each of its Subsidiaries’,
fiscal quarters to end on dates consistent with such fiscal year-end and
Holdings and the Borrower’s past practice; provided, however,
that Holdings and the Borrower may, upon written notice to the Administrative
Agent, change the financial reporting convention specified above to any other
financial reporting convention reasonably acceptable to the Administrative
Agent, in which case Holdings and the Borrower and the Administrative Agent
will, and are hereby authorized by the Lenders to, make any adjustments to this
Agreement that are necessary in order to reflect such change in financial
reporting.


 


9.11.          Additional Subsidiary Guarantors
and Grantors. Each of Holdings and the Borrower will cause any direct or
indirect Restricted Domestic Subsidiary (other than an Excluded Subsidiary) (a) formed
or otherwise purchased or acquired after the Effective Date (including pursuant
to a Permitted Acquisition) or (b) which ceases to be an Excluded
Subsidiary following the Effective Date, in each case to execute a supplement
to each of the Guarantee and the Security Agreement, substantially in the form
of Annex B or Annex 1, as applicable, to the respective agreement in order to
become a Guarantor under the Guarantee and a grantor under the Security
Agreement.


 


9.12.          Pledges of Additional Stock and
Evidence of Indebtedness.


 


(a)             The Borrower will pledge, and, if applicable,
will cause each Subsidiary Guarantor to pledge, to the Administrative Agent,
for the benefit of the Secured Parties, (i) all the capital stock of each
Restricted Domestic Subsidiary and each Restricted Foreign Subsidiary (but
excluding any capital stock representing in excess of 65% of the issued and
outstanding Voting Stock in any Foreign Subsidiary) held by any Credit Party,
in each case, formed or otherwise purchased or acquired after the date hereof,
in each case pursuant to the Pledge Agreement, (ii) all evidences of
Indebtedness in excess of $5,000,000 received by any Credit Party in connection
with any disposition of assets pursuant to Section 10.4(b), in each case
pursuant to the Pledge Agreement, substantially in the form of Annex A thereto
and (iii) any global promissory notes executed after the date hereof
evidencing Indebtedness of any of Holdings, the Borrower and each Subsidiary
that is owing to any Credit Party, in each case pursuant to the requirements of
the Pledge Agreement (it being understood that the equity interests of
Subsidiaries that are not Material Subsidiaries shall not be required to be
delivered to the Administrative Agent).


 


(b)             [Reserved].


 


(c)             Holdings will pledge to the
Administrative Agent, for the benefit of the Lenders, all capital stock of the
Borrower acquired by it after the Effective Date.


 


(d)             Holdings and the Borrower agree
that all Indebtedness in excess of $5,000,000 of any of Holdings, the Borrower
and each Subsidiary that is owing to any Credit Party to the Pledge Agreement
shall be evidenced by one or more global promissory notes.


 


76

















 


9.13.          Use of Proceeds. The Letters of
Credit and the proceeds of all Loans will be used (a) to repay in full the
Existing Credit Agreement, (b) pay fees and expenses in connection with
the Transactions and (c) for working capital needs and general corporate
purposes, including, without limitation, for acquisitions, Restricted Payments,
Investments and payments with respect to Indebtedness, in each case, as
permitted hereunder.


 


9.14.          Changes in Business. Holdings,
the Borrower and the Subsidiaries, taken as a whole, will not fundamentally and
substantively alter the character of their business, taken as a whole, from the
business conducted by Holdings, the Borrower and the Subsidiaries, taken as a
whole, on the Signing Date and other business activities incidental or related
to any of the foregoing.


 


9.15.          Further Assurances.


 


(a)             Each of Holdings and the Borrower
will, and will cause each other Credit Party to, execute any and all further
documents, financing statements, agreements and instruments, and take all such
further actions (including the filing and recording of financing statements,
fixture filings, mortgages, deeds of trust and other documents), which may be
required under any applicable law, or which the Administrative Agent, the
Security Agents or the Required Lenders may reasonably request, in order to
grant, preserve, protect and perfect the validity and priority of the security
interests created or intended to be created by the Security Agreement, the
Pledge Agreement or any Mortgage, all at the expense of Holdings, the Borrower
and the Restricted Subsidiaries.


 


(b)             If any assets (including any real
estate or improvements thereto or any interest therein) with a book value or
fair market value in excess of $1,000,000 are acquired by any Credit Party
after the Effective Date (other than assets constituting Collateral under the
Security Agreement that become subject to the Lien of the Security Agreement
upon acquisition thereof) that are of the nature secured by the Security
Agreement or any Mortgage, as the case may be, the Borrower will notify the
Administrative Agent and the Lenders thereof, and, if requested by the Administrative
Agent or the Required Lenders, the Borrower will cause such assets to be
subjected to a Lien securing the Obligations and will take, and cause the other
Credit Parties to take, such actions as shall be necessary or reasonably
requested by the Administrative Agent to grant and perfect such Liens
consistent with the applicable requirements of the Security Documents,
including actions described in paragraph (a) of this Section, all at the
expense of the Credit Parties. Any Mortgage delivered to the Administrative
Agent in accordance with the preceding sentence shall be accompanied by (w) a
policy or policies of title insurance issued by a nationally recognized title
insurance company insuring the Lien of each Mortgage as a valid second Lien on
the Mortgaged Property described therein, free of any other Liens except as
expressly permitted by Section 10.2, together with such endorsements,
coinsurance and reinsurance as the Administrative Agent may reasonably request,
(x) an opinion of local counsel to the Borrower (or in the event a
Subsidiary of the Borrower is the mortgagor, to such Subsidiary) in form
reasonably satisfactory to the Administrative Agent with respect to customary
matters, (y) a “Life-of-Loan” Federal Emergency Management Agency Standard
Flood Hazard Determination with respect to each Mortgaged Property (together
with a notice about special flood hazard area status and flood disaster
assistance duly executed by the Borrower and each Credit Party relating thereto
in the event any such Mortgaged Property is located in a special flood hazard
area) and


 


77

















 


(z) a copy of or a
certificate as to coverage under the insurance policies required by Section 9.3
(including, without limitation, flood insurance policies) and the applicable
provisions of the Security Documents.


 


9.16.          Appraisals. At any time that
the Security Agents reasonably request, Holdings and the Borrower will provide
the Security Agents with appraisals or updates thereof of their Inventory from
an appraiser selected and engaged by the Security Agents, and prepared on a
basis satisfactory to the Security Agents, such appraisals and updates to
include, without limitation, information required by applicable law and
regulations; provided, however, (a) only reasonable
out-of-pocket costs of two such appraisals per calendar year shall be at the
sole expense of the Credit Parties and (b) reasonable out-of-pocket costs
of three such appraisals per calendar year shall be at the sole expense of the
Credit Parties if a Weekly Reporting Period has occurred during such calendar
year; provided further, however, if an Event of
Default has occurred and is continuing there shall be no limitation as to the
number and frequency of such appraisals during such calendar year at the sole
expense of the Credit Parties. For purposes of this Section 9.16, it is
understood and agreed that a single appraisal may consist of examinations
conducted at multiple relevant sites and involve one or more relevant Credit Parties
and their assets. All such appraisals shall be commenced upon reasonable notice
to the Borrower and performed during normal business hours of the Borrower.


 


9.17.          Field Examinations. At any time
that the Security Agents reasonably request, Holdings, the Borrower and the
Subsidiaries will permit upon reasonable notice the Security Agents to conduct
field examinations or updates thereof during normal business hours to ensure
the adequacy of Collateral included in the Borrowing Base and related reporting
and control systems; provided, however, (a) only reasonable
costs of two such field examination per calendar year shall be at the sole
expense of the Credit Parties and (b) reasonable costs of three such field
examinations per calendar year shall be at the sole expense of the Credit
Parties if a Weekly Reporting Period has occurred during such calendar year; provided further, however,
if an Event of Default has occurred and is continuing during any calendar year
there shall be no limitation as to the number and frequency of such field
examinations during such calendar year at the sole expense of the Credit
Parties. For purposes of this Section 9.17, it is understood and agreed
that a single field examination may consist of examinations conducted at
multiple relevant sites and involve one or more relevant Credit Parties and
their assets.


 


9.18.          Asset Sales; Casualty and
Condemnation. The Borrower will furnish to the Administrative Agent (for
delivery to the Lenders) prompt written notice of (i) any sale, transfer
or other disposition of any material portion of the Accounts or Inventory
outside the ordinary course of business or (ii) any casualty or other
insured damage to any material portion of the Collateral or the commencement of
any action or proceeding for the taking of any material portion of the
Collateral or interest therein under power of eminent domain or by condemnation
or similar proceeding.


 


9.19.          Post-Closing Covenant. The
Borrower shall deliver, furnish and/or cause to be furnished all of the obligations
set forth below within the time periods specified therewith: within thirty (30)
days after the Effective Date, in each case in form and substance reasonably
acceptable to the Security Agents:


 


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(i)              Mortgages.
Fully executed counterparts of Mortgages which Mortgages shall cover each
Mortgaged Property (provided however that, in the case of the Mortgaged
Property located at 1799 S. Academy Boulevard, Colorado Springs, Colorado, such
Mortgage shall be delivered to the extent a landlord consent, waiver and access
agreement shall have been obtained after Borrower shall have used of
commercially reasonable efforts to obtain same),  together with evidence that counterparts of all the Mortgages
have been delivered to the Title Company for recording in all places to the
extent necessary or, in the reasonable opinion of the Security Agents,
desirable to effectively create a valid and enforceable second priority
mortgage lien on each Mortgaged Property in favor of the Collateral Agent for
its benefit and the benefit of the Secured Parties, securing the Obligations (provided
that in jurisdictions that impose mortgage recording taxes, such Mortgages
shall not secure indebtedness in an amount exceeding 100% of the fair market
value of such Mortgaged Property, as reasonably determined, in good faith, by
the Borrower and reasonably acceptable to the Security Agents), subject to
Permitted Liens of a type described in clause (iv) of this Section 9.19.


 


(ii)             Landlord Agreement.
In the case of the Mortgaged Properties located at (y) 1799 S. Academy
Boulevard, Colorado Springs, Colorado, and (z) 3100 Fairfax Traffic Way,
Kansas City, Kansas, the Borrower shall use commercially reasonable efforts to
obtain a landlord consent, waiver and access agreement in a form and substance
reasonably acceptable to the Security Agents.


 


(iii)            Counsel
Opinions. Opinions addressed to the Administrative Agent, Security Agents
and the Lenders, of local counsel in each jurisdiction where Mortgaged Property
is located, in form and substance reasonably acceptable to the Security Agents.


 


(iv)            Title Insurance.
With respect to each Mortgage encumbering any Mortgaged Property, a policy of
title insurance (or commitment to issue such a policy having the effect of a
policy of title insurance) insuring (or committing to insure) the lien of such
Mortgage as a valid and enforceable second priority mortgage or deed of trust
lien on the Mortgaged Property described therein, in an amount not less than
100% of the fair market value of such Mortgaged Property as reasonably
determined, in good faith, by the Borrower and reasonably acceptable to the
Security Agents, (such policies collectively, the “Mortgage Policies”)
issued by such Title Company, which reasonably assures the Security Agents that
the Mortgages on such Mortgaged Properties are valid and enforceable mortgage
liens on the respective Mortgaged Properties, free and clear of all defects and
encumbrances except (I) Permitted Liens of the type described as (A) survey
exceptions, encumbrances, easements or reservations of, or rights of others
for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone
lines and other similar purposes, or zoning or other similar restrictions as to
the use of real properties or liens incidental to the conduct of the business
of such person or to the ownership of its properties which were not incurred in
connection with debt and which do not individually or in the aggregate
materially adversely affect the value of the property affected thereby or
materially impair the use of such property in the operation of the business of
such person, (B) general real estate taxes and assessments not yet
delinquent or being contested in good faith for which adequate reserves are
maintained in accordance with GAAP; provided that the Borrower shall
bond over or take any other action necessary or required by the Title Company
to


 


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delete
any exception to title relating to unpaid taxes and assessments, (C) other
liens (not securing Indebtedness) incidental to the conduct of the business of
the Borrower or any of its subsidiaries, as the case may be, or the ownership
of their assets which do not individually or in the aggregate materially
adversely affect the value of the property affected thereby or materially
impair the use of such property in the operation of the business of the
Borrower or its subsidiaries, (D) any warehousemen’s, materialmen’s,
landlord’s or other similar liens arising by law for sums not then due and
payable (or which, if due and payable, are being contested in good faith and
with respect to which adequate reserves are being maintained, to the extent
required by GAAP; provided that the Borrower shall take any and all
commercially reasonable actions necessary or required by the Title Company to
delete any exception to title relating thereto, (E) leases, subleases,
licenses or sublicenses granted to others in the ordinary course of business so
long as such leases, subleases, licenses or sublicenses are subordinate in all
respects to the liens granted and evidenced by the Security Documents and which
do not materially interfere with the ordinary conduct of the business of the
Borrower or any subsidiaries and do not secure any Indebtedness, (II) Liens
of the type described in clauses (a) and (h) of Section 10.2(A) and
(III) such other similar items as the Security Agents may consent to (such
consent not to be unreasonably withheld), and such Mortgage Policies shall otherwise
be in form and substance reasonably satisfactory to the Security Agents and
shall include such title endorsements as the Security Agents shall reasonably
request, to the extent available at commercially reasonably rates (excluding
endorsements or coverage related to creditor’s rights).


 


(v)             Survey. Any
and all surveys, opinions of special counsel, or opinions or reports from
architects, engineers or zoning report companies as may be reasonably necessary
to cause the Title Company to issue the title insurance required pursuant to
clause (iv) above.


 


(vi)            Fixture filings.
Proper fixture filings under the Uniform Commercial Code on Form UCC-1 for
filing under the Uniform Commercial Code in the appropriate jurisdiction in
which the Mortgaged Properties are located, desirable to perfect the security
interests in fixtures purported to be created by the Mortgages in favor of the
Collateral Agent for its benefit and the benefit of the Secured Parties.


 


(vii)           Flood Hazard
Determination. A “Life-of-Loan” Federal Emergency Management Agency
Standard Flood Hazard Determination with respect to each Mortgaged Property
(together with a notice about special flood hazard area status and flood
disaster assistance duly executed by the Borrower and each Credit Party relating
thereto and evidence of flood insurance in compliance with Section 9.3 of
the Credit Agreement, in the event any such Mortgaged Property is located in a
special flood hazard area).


 


(viii)          Mortgaged
Property Indemnification. With respect to each Mortgaged Property, such
affidavits, certificates, instruments of indemnification and other items
(including a so-called “gap” indemnification) as shall be reasonably required
to induce the Title Company to issue the Mortgage Policies and endorsements
contemplated above.


 


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(ix)             Collateral
Fees and Expenses. Evidence reasonably acceptable to the Security Agents
and the Secured Parties of payment by the Borrower of all Mortgage Policy
premiums, search and examination charges, mortgage recording taxes, fees,
charges, costs and expenses required for the recording of the Mortgages,
fixture filings and issuance of the Mortgage Policies referred to above.


 


SECTION 10.           Negative
Covenants


 


Each
of Holdings and the Borrower hereby covenant and agree that on the Effective
Date and thereafter until the Final Date:


 


10.1.          Limitation on Indebtedness.


 


(A)            The Borrower will not, and will not
permit any of the Restricted Subsidiaries to, create, incur, assume or suffer
to exist any Indebtedness, except:


 


(a)             Indebtedness arising under
the Credit Documents;


 


(b)             Indebtedness of
(i) the Borrower to any Restricted Subsidiary of the Borrower, (ii) any
Subsidiary Guarantor to the Borrower or any Restricted Subsidiary of the
Borrower, (iii) any Restricted Subsidiary of the Borrower which is not a
Subsidiary Guarantor to any other Restricted Subsidiary of the Borrower which
is not a Subsidiary Guarantor and (iv) subject to compliance with the
requirements of Section 10.5, the Borrower or any Subsidiary Guarantor to
any Restricted Subsidiary of the Borrower which is not a Subsidiary Guarantor; provided,
that, any Indebtedness of the Borrower or any Subsidiary Guarantor to any
Restricted Subsidiary which is not a Subsidiary Guarantor shall be subordinated
in right of payment to the Obligations following an Event of Default;


 


(c)             Indebtedness in
respect of any bankers’ acceptance, letter of credit, warehouse receipt or
similar facilities entered into in the ordinary course of business;


 


(d)             Guarantee
Obligations incurred by (i) Restricted Subsidiaries which are not
Subsidiary Guarantors in respect of Indebtedness of the Borrower or other
Restricted Subsidiaries that is permitted to be incurred under this Agreement, (ii) the
Borrower or Subsidiary Guarantors in respect of Indebtedness of the Borrower or
Restricted Subsidiaries that are Subsidiary Guarantors that is permitted to be
incurred under this Agreement (including where the Parent is the co-issuer of
such Indebtedness, a guarantee of the obligations of Parent thereunder) and (iii) subject
to compliance with the requirements of Section 10.5, the Borrower or
Subsidiary Guarantors in respect of Indebtedness of Restricted Subsidiaries
that are not Subsidiary Guarantors that is permitted to be incurred under this
Agreement, provided that there shall be no Guarantee (a) by a
Restricted Foreign Subsidiary of any Indebtedness of the Borrower or a
Subsidiary Guarantor and (b) in respect of Indebtedness that is
subordinated to the Obligations, unless such Guarantee is made by a Guarantor
and such Guarantee is unsecured and subordinated to the Obligations to the same
extent as the Indebtedness so Guaranteed;


 


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(e)             Guarantee
Obligations incurred in the ordinary course of business in respect of
obligations of suppliers, customers, franchisees, lessors and licensees in an
aggregate amount not to exceed $2,000,000 at any time outstanding;


 


(f)              (i) Indebtedness
(including Indebtedness arising under Capital Leases) (A) incurred within
270 days of the acquisition, construction or improvement of fixed or capital
assets to finance the acquisition, construction or improvement of such fixed or
capital assets or otherwise incurred in respect of Capital Expenditures and (B) arising
under Capital Leases, other than Capital Leases in effect on the date hereof
and Capital Leases entered into pursuant to subclause (ii) below, provided
that the aggregate amount of Indebtedness incurred pursuant to this subclause (i) (when
aggregated with the amount of refinancing Indebtedness in respect thereof
outstanding pursuant to subclause (iii) below) shall not exceed
$75,000,000 at any time outstanding, (ii) Indebtedness arising under
Capital Leases entered into in connection with Permitted Sale Leasebacks and (iii) any
refinancing, refunding, renewal or extension of any Indebtedness specified in
subclause (i) or (ii) above, provided that the principal
amount thereof is not increased above the principal amount thereof outstanding
immediately prior to such refinancing, refunding, renewal or extension;


 


(g)             Indebtedness
outstanding on the Effective Date (other than the Subordinated Notes) and
listed on Schedule 10.1 and any refinancing, refunding, renewal or
extension thereof, provided that (i) the principal amount thereof
is not increased above the principal amount thereof outstanding immediately
prior to such refinancing, refunding, renewal or extension, except to the
extent otherwise permitted hereunder and (ii) the direct and contingent obligors
with respect to such Indebtedness are not changed;


 


(h)             Indebtedness in
respect of Hedge Agreements entered into in the ordinary course of business
(and not for speculative purposes) in order to protect the Borrower or any of
the Restricted Subsidiaries against fluctuations in interest rates, currency
exchange rates or commodity prices;


 


(i)              Indebtedness in
respect of the Subordinated Notes and any Permitted Refinancing Indebtedness in
respect thereof;


 


(j)              (i) Indebtedness
of a Person or Indebtedness attaching to assets of a Person that, in either
case, becomes a Restricted Subsidiary or Indebtedness attaching to assets that
are acquired by the Borrower or any Restricted Subsidiary, in each case after
the Effective Date as the result of an Investment permitted by Section 10.5,
provided that (x) such Indebtedness existed at the time such Person
became a Restricted Subsidiary or at the time such assets were acquired and, in
each case, was not created in anticipation thereof and (y) such
Indebtedness is not guaranteed in any respect by the Borrower or any Restricted
Subsidiary (other than any such person that so becomes a Restricted Subsidiary)
and (ii) any refinancing, refunding, renewal or extension of any
Indebtedness specified in subclause (i) above, provided that except
to the extent otherwise permitted hereunder, (x) the principal amount of
any such Indebtedness is not increased above the principal amount thereof
outstanding immediately prior to such refinancing, refunding, renewal or
extension and (y) the direct and contingent obligors with respect to such 


 


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Indebtednesses
are not changed in respect thereof in an aggregate principal amount outstanding
pursuant to this clause (j) not to exceed $20,000,000 at any time;


 


(k)             (i) the
Initial Secured Notes, (ii) Permitted Additional Secured Notes, (iii) the
Initial PIK Convertible Notes, (iv) Permitted Additional PIK Convertible
Notes, (v) Permitted Junior Lien or Unsecured Notes and (vi) Permitted
Refinancing Indebtedness in respect of Indebtedness set forth in subclauses (i) through
(v) of this clause (k);


 


(l)              Indebtedness of
Restricted Foreign Subsidiaries in an aggregate amount at any time outstanding
not to exceed $75,000,000 (which amount shall include the aggregate outstanding
amount at any time of any Indebtedness of Restricted Foreign Subsidiaries
existing at the Effective Date); and


 


(m)            additional
Indebtedness, provided that the aggregate amount of Indebtedness
outstanding at any time pursuant to this clause (m) shall not exceed
$100,000,000.


 


(B)            Neither Parent nor Holdings will
create, incur, assume or suffer to exist any Indebtedness except (1) with
respect to Parent, Indebtedness in respect of cash collateral pursuant to the
Forward Purchase Contract, the Initial PIK Convertible Notes, Additional PIK
Convertible Notes and any Permitted Refinancing Indebtedness in respect
thereof, Qualified PIK Securities and Indebtedness representing deferred
compensation to directors and employees of Parent, Holdings, the Borrower or
any of the Restricted Subsidiaries incurred in the ordinary course of business
or in connection with the Transactions and (2) guarantee obligations of
Indebtedness permitted by clauses (a) and (k) of Section 10.1(A),
the Subordinated Notes and any Permitted Refinancing Indebtedness of the
Subordinated Notes.


 


(C)            None of Parent, Holdings or the
Borrower will, nor will they permit any Subsidiary to, issue any preferred
stock or other preferred equity interests, other than, in the case of Parent,
Qualified PIK Securities.


 


10.2.          Limitation on Liens.


 


(A)            The Borrower will not, and will not
permit any of the Restricted Subsidiaries to, create, incur, assume or suffer
to exist any Lien upon any property or assets of any kind (real or personal,
tangible or intangible) of the Borrower or any Restricted Subsidiary, whether
now owned or hereafter acquired, except:


 


(a)             Liens arising under the
Credit Documents;


 


(b)             Permitted Liens;


 


(c)             Liens securing
Indebtedness permitted pursuant to Section 10.1(A)(f), provided
that such Liens attach at all times only to the assets so financed, and Liens
on the assets of Foreign Subsidiaries securing Indebtedness permitted pursuant
to Section 10.1(A)(l);


 


(d)             Liens existing on
the Effective Date and listed on Schedule 10.2;


 


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(e)             (i) Liens
securing Permitted Refinancing Indebtedness and (ii) the replacement,
extension or renewal of any Lien permitted by clause (c), (d) or (f) of
this Section 10.2(A) upon or in the same assets theretofore subject
to such Lien or the replacement, extension or renewal (without any increase in
the amount of Indebtedness secured thereby);


 


(f)              Liens existing on
the assets of any Person that becomes a Restricted Subsidiary, or existing on
assets acquired, pursuant to an Investment permitted pursuant to Section 10.5
to the extent the Liens on such assets secure Indebtedness permitted by Section 10.1(A)(j),
provided that such Liens attach at all times only to the same assets
that such Liens attached to, and secure only the same Indebtedness that such
Liens secured, immediately prior to such Investment and were not created in
contemplation thereof;


 


(g)             additional Liens
so long as the aggregate principal amount of the obligations so secured does
not exceed $50,000,000 at any time outstanding less the lesser of (x) the
principal amount of Permitted Additional Secured Notes outstanding in reliance
on subclause (e)(y) of the definition thereof and (y) $40,000,000;
and


 


(h)             Liens securing
Indebtedness permitted by Section 10.1(A)(k) and Guarantee
Obligations in respect thereof.


 


Notwithstanding
the foregoing, none of the Liens permitted pursuant to this Section 10.2(A) may
at any time attach to any Credit Party’s (1) Accounts, other than involuntary
Permitted Liens and those permitted under clauses (a) or (h) above or
(2) Inventory, other than those permitted under involuntary Permitted
Liens and those permitted under clauses (a) or (h) above.


 


(B)            Neither Parent nor Holdings will
create, incur, assume or suffer to exist any Lien on any property or asset now
owned or hereafter acquired by it, or assign or sell any income or revenues
(including Accounts) or rights in respect thereof, except (a) Liens of the
nature set forth in the definition of the term “Permitted Liens”, (b) Liens
created under the Pledge Agreement and (c) Liens on the Collateral pledged
pursuant to the Pledge Agreement securing Indebtedness permitted by Section 10.1(A)(k) and
Guarantee Obligations in respect thereof.


 


10.3.          Limitation on Fundamental Changes.


 


(A)            Each of Holdings and the Borrower
will not, and will not permit any of the Restricted Subsidiaries to, enter into
any merger, consolidation or amalgamation, or liquidate, wind up or dissolve
itself (or suffer any liquidation or dissolution), or convey, sell, lease,
assign, transfer or otherwise dispose of, all or substantially all its business
units, assets or other properties, except that:


 


(a)             any Subsidiary of
the Borrower or any other Person may be merged or consolidated with or into (i) Holdings,
provided that (A) Holdings shall be the continuing or surviving
corporation and (B) no Default would result from the consummation of such
merger or consolidation or (ii) the Borrower, provided that (i) the
Borrower shall be the continuing or surviving corporation or the Person formed
by or surviving any such merger or consolidation (if other than the Borrower)
shall be an entity organized or exising


 


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under
the laws of the United States or any of the forty-eight (48) continental states
thereof (such Person other than the Borrower being herein referred to as the “Successor
Credit Party”), (ii) the Successor Credit Party shall expressly assume
all of the obligations of the Borrower under this Agreement and the other
Credit Documents pursuant to a supplement hereto or thereto in form reasonably
satisfactory to the Administrative Agent, (iii) no Default
would result from the consummation of such merger or consolidation; and (iv) the Borrower
shall have delivered to the Administrative Agent and the Security Agents an
Officer’s Certificate and an opinion of counsel, each stating that such merger
or consolidation and such supplement to this Agreement or any Security Document
comply with this Agreement; provided further that if the
foregoing are satisfied, the Successor Credit Party will succeed to, and be
substituted for, the Borrower under this Agreement;


 


(b)             any Subsidiary of
the Borrower or any other Person may be merged, amalgamated or consolidated
with or into any one or more Subsidiaries of the Borrower, provided that
(i) in the case of any merger or consolidation involving one or more
Restricted Subsidiaries, (A) a Restricted Subsidiary shall be the continuing
or surviving corporation or (B) the Borrower shall take all steps
necessary to cause the Person formed by or surviving any such merger or
consolidation (if other than a Restricted Subsidiary) to become a Restricted
Subsidiary, (ii) in the case of any merger, amalgamation or consolidation
involving one or more Subsidiary Guarantors, a Subsidiary Guarantor shall be
the continuing or surviving corporation or the Person formed by or surviving
any such merger, amalgamation or consolidation (if other than a Subsidiary
Guarantor), (A) shall be an entity organized or existing under the laws of
the United States or any of the forty-eight (48) continental states thereof and
(B) shall execute a supplement to the Guarantee Agreement, the Pledge
Agreement and the Security Agreement and any applicable Mortgage, in form and
substance reasonably satisfactory to the Security Agents in order to become a
Subsidiary Guarantor and pledgor, mortgagor and grantor of Collateral for the
benefit of the Secured Parties, (iii) no Default would result from the
consummation of such merger, amalgamation or consolidation and (iv) the
Borrower shall have delivered to the Administrative Agent and the Security
Agents an Officers’ Certificate stating that such merger, amalgamation or consolidation
and such supplements to any Security Document comply with this Agreement;


 


(c)             any Restricted
Subsidiary that is not a Subsidiary Guarantor may sell, lease, transfer or
otherwise dispose of any or all of its assets (upon voluntary liquidation or otherwise)
to the Borrower or any other Restricted Subsidiary;


 


(d)             any Subsidiary
Guarantor may sell, lease, transfer or otherwise dispose of any or all of its
assets (upon voluntary liquidation or otherwise) to the Borrower or any
Subsidiary Guarantor;


 


(e)             any Restricted
Subsidiary may liquidate or dissolve if (x) the Borrower determines in
good faith that such liquidation or dissolution is in the best interests of the
Borrower and is not materially disadvantageous to the Lenders and (y) to
the extent such Restricted Subsidiary is a Credit Party, any assets or business
not otherwise disposed of or transferred in accordance with Section 10.4
or 10.5, or, in the case of any such business, discontinued without being
disposed of or transferred, shall be transferred to, or


 


85

















 


otherwise
owned or conducted by, another Credit Party after giving effect to such
liquidation or dissolution; and


 


(f)              any merger,
dissolution, liquidation, consolidation or disposition of a Restricted
Subsidiary, the purpose of which is to effect (i) a disposition permitted
by Section 10.4 (other that Section 10.4(d)) shall be permitted or (ii) any
Investment permitted by Section 10.5 shall be permitted.


 


(B)             Holdings will not engage in any
business or activity other than (a) the ownership of all the outstanding
shares of capital stock of the Borrower, (b) maintaining its corporate
existence (and consummating any merger or consolidation permitted by Section 10.3(A)(a)),
(c) participating in tax, accounting and other administrative matters as a
member of the consolidated group of Parent and its Subsidiaries, (d) the
performance of the Credit Documents to which it is a party, (e) making any
Restricted Payment permitted by Section 10.6 or holding any cash received
in connection with Restricted Payments made by the Borrower in accordance with Section 10.6
pending application thereof by Holdings in the manner contemplated by Section 10.6,
(f) adopting or entering into employment or similar agreements with
current or former employees, directors and independent contractors of Parent or
any of its Subsidiaries and sponsoring or maintaining executive compensation
and employee benefit plans, programs, arrangements and policies for the benefit
of current and former directors and employees of Parent or any of its
Subsidiaries and (g) activities incidental to the businesses or activities
described in clauses (a) to (f) of this Section 10.3(B) .
Holdings will not own or acquire any assets (other than shares of capital stock
of the Borrower, cash and Permitted Investments) or incur any liabilities
(other than Indebtedness permitted by Section 10.1(B) and liabilities
imposed by law, including tax liabilities, and other liabilities incidental to
its existence and business and activities permitted by this Agreement).


 


(C)             Parent will not engage in any
business or activity other than (a) the ownership of all the outstanding
shares of capital stock of Holdings, (b) maintaining its corporate
existence, (c) participating in tax, accounting and other administrative
matters as a member of the consolidated group of Holdings and Borrower, (d) the
performance of the Credit Documents to which it is a party, the Forward
Purchase Contract and the PIK Convertible Note Indenture, (e) holding any
cash received in connection with dividends made by Holdings in accordance with Section 10.6
pending application thereof by Parent in the manner contemplated by Section 10.6,
(f) owning the assets set forth on Schedule 10.3(c), (g) activities
related to Qualified PIK Securities and other permitted capital stock and (h) activities
incidental to the businesses or activities described in clauses (a) to (g) of
this Section 10.3(C) and Indebtedness and liabilities described in
the next sentence. Parent will not own or acquire any assets (other than shares
of capital stock of Holdings, cash and Permitted Investments) or incur any
liabilities (other than Indebtedness permitted by Section 10.1(B) or
liabilities imposed by law, including tax liabilities, and other liabilities
incidental to its existence and business and activities permitted by this
Agreement).


 


10.4.          Limitation on Sale of Assets.
The Borrower will not, and will not permit any of the Restricted Subsidiaries
to, (i) convey, sell, lease, assign, transfer or otherwise dispose of any
of its property, business or assets (including receivables and leasehold
interests), whether now owned or hereafter acquired or (ii) sell to any
Person any shares owned by it of any Restricted Subsidiary’s capital stock,
except that:


 


86

















 


(a)             the Borrower and
the Restricted Subsidiaries may sell, transfer or otherwise dispose of used or
surplus equipment, vehicles, inventory and other assets in the ordinary course
of business;


 


(b)             the Borrower and
the Restricted Subsidiaries may sell, transfer or otherwise dispose of other
assets (other than accounts receivable) for fair value, provided that (i) the
aggregate amount of such sales, transfers and disposals by the Borrower and the
Restricted Subsidiaries, taken as a whole, pursuant to this clause (b) shall
not exceed in the aggregate $150,000,000, (ii) any consideration in excess
of $5,000,000 received by the Borrower or any Guarantor in connection with such
sales, transfers and other dispositions of assets pursuant to this clause (b) that
is in the form of Indebtedness shall be pledged to the Administrative Agent
pursuant to Section 9.12, (iii) the consideration received for any
such sales, transfers and disposals shall consist of not less than 75% cash
consideration; provided that for the purposes of this clause (iii) the
following shall be deemed to be cash: (A) any liabilities (as shown on the
Borrower’s or such Restricted Subsidiary’s most recent balance sheet provided
hereunder or in the footnotes thereto) of the Borrower or such Restricted
Subsidiary assumed by the transferee with respect to the applicable sale,
transfer or disposal, as to which the Borrower and all of the Restricted
Subsidiaries shall have been released by all applicable creditors in writing,
other than liabilities that are by their terms (1) subordinated to the
payment in cash of the Obligations or (2) in the case of a sale by the
Borrower or a Subsidiary Guarantor, not secured by the assets that are the
subject of such sale, transfer or disposal and (B) any securities received
by the Person making such sale, transfer or disposal from the transferee that
are converted by such Person into cash (to the extent of the cash received)
within 180 days following the closing of the applicable sale, transfer or
disposal and (iv) after giving effect to any such sale, transfer or
disposition, no Default shall have occurred and be continuing;


 


(c)             the Borrower and
the Restricted Subsidiaries may make sales of assets to the Borrower or to any
Restricted Subsidiary, provided that no sale of any assets by the
Borrower or any Subsidiary Guarantor to any Restricted Subsidiary that is not a
Subsidiary Guarantor shall be permitted pursuant to this clause (c);


 


(d)             (i) mergers,
liquidations and transfers of all or substantially all assets permitted by Section 10.3,
(ii) Investments permitted by Section 10.5 and (iii) Restricted
Payments permitted by Section 10.6, in each case, shall be permitted;


 


(e)             the Borrower and the
Restricted Subsidiaries may sell without recourse Accounts arising in the
ordinary course of business in connection with the compromise, settlement,
collection thereof or conversion of Accounts to notes receivable;


 


(f)              sales, transfers,
assignments or other dispositions resulting from any casualty or condemnation
of any assets of the Borrower or any of its Subsidiaries; and


 


(g)             the Borrower and
the Restricted Subsidiaries may effect the unwinding of any Hedge Agreement.


 


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10.5.          Limitation on Investments.
Holdings and the Borrower will not, and will not permit any of the Restricted
Subsidiaries to, make any advance, loan, extensions of credit or capital
contribution to, or purchase any stock, bonds, notes, debentures or other
securities of or any assets of, or make any other investment (including
pursuant to any Guarantee Obligation with respect to the obligations of another
Person) (“Investments”) in, any Person, except:


 


(a)             extensions of trade credit and
asset purchases in the ordinary course of business;


 


(b)             Permitted Investments;


 


(c)             loans and
advances to officers, directors and employees of Parent or any of its
Subsidiaries (i) to finance the purchase of capital stock of Parent
(provided that the amount of such loans and advances used to acquire such
capital stock shall be contributed by Parent to Holdings, which shall in turn
contribute it to the Borrower in cash as common equity) and (ii) for
additional purposes not contemplated by subclause (i) above in an
aggregate principal amount at any time outstanding with respect to this clause (ii) not
exceeding $10,000,000;


 


(d)             Investments
existing on the date hereof and listed on Schedule 10.5 and any extensions,
renewals or reinvestments with respect to any return therefrom (including
through a repayment, return of capital, interest or dividends) (but without any
increase in the amount thereof and in the case of any reinvestment, only if
such reinvestment is made within 60 days after the date of receipt of any such
returned amount);


 


(e)             Hedge Agreements
permitted by Section 10.1(A)(h);


 


(f)              Investments
received in connection with the bankruptcy or reorganization of suppliers or
customers and in settlement of delinquent obligations of, and other disputes with,
customers arising in the ordinary course of business;


 


(g)             Investments to the
extent that payment for such investments is made solely with capital stock of
Parent;


 


(h)             Investments
constituting non-cash proceeds of sales, transfers and other dispositions of
assets to the extent permitted by Section 10.4;


 


(i)              Investments (i) in
the Borrower or any Subsidiary Guarantor, (ii) Investments by any
Restricted Subsidiary that is not a Subsidiary Guarantor in any other
Subsidiary that is not a Subsidiary Guarantor and (iii) Investments by the
Borrower or any Subsidiary Guarantor in any Restricted Subsidiary that is not a
Subsidiary Guarantor in an aggregate principal amount not to exceed $1,000,000
at any time outstanding;


 


(j)              Permitted
Acquisitions, provided that (i) no Event of Default shall have
occurred and is continuing after giving effect to such Permitted Acquisition, (ii) on
a Pro Forma Basis (x) the Fixed Charge Coverage Ratio for the most
recently ended Test Period for which Section 9.1 Financials have been
delivered would be at least 1.1 to 1.0, (y) average daily Availability for
the period of sixty (60) consecutive days immediately preceding


 


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such
Investment has been and for the period of six consecutive months immediately
following such Investment is projected by the Borrower to be not less than the
greater of (1) 20% of the Total Commitment on the date of such Permitted
Acquisition and (2) $20,000,000 and (z) the fair market value of any
assets acquired in any transaction that are not owned directly by the Borrower
or a Subsidiary Guarantor (including a Person who becomes a Subsidiary
Guarantor as a result of such Permitted Acquisition) shall be deemed to be an
Investment not permitted by this clause (j);


 


(k)             other Investments,
provided that, at the time each such Investment is made or otherwise
acquired and after giving effect thereto(i) no Default shall have occurred
and be continuing or would result therefrom, (ii) on a Pro Forma Basis, (x) the
Fixed Charge Coverage Ratio for the most recently ended Test Period is at least
1.25 to 1.00, and (y) average daily Availability for the period of sixty
(60) consecutive days immediately preceding such Investment has been and for
the period of six consecutive months immediately following such Investment is
projected by the Borrower to be not less than the greater of (1) 25% of
the Total Commitment on the date of such Investment and (2) $25,000,000;


 


(l)              other
Investments in an amount not to exceed $5,000,000; and


 


(m)            Investments
constituting Restricted Payments permitted by Section 10.6 and Guarantee
Obligations permitted by Section 10.1(d)(ii) .


 


10.6.          Limitation on Restricted Payments.
None of Holdings, the Borrower or any Restricted Subsidiary will make any
Restricted Payment, provided that, (a) so long as no Default or
Event of Default exists or would exist after giving effect thereto, Holdings or
the Borrower may redeem in whole or in part any of its capital stock for
another class of capital stock or rights to acquire its capital stock or with
proceeds from substantially concurrent equity contributions or issuances of new
shares of its capital stock (or pay dividends with such proceeds), provided
that such other class of capital stock contains terms and provisions at least
as advantageous to the Lenders in all respects material to their interests as
those contained in the capital stock redeemed thereby, (b) the Borrower
and Holdings may declare and pay dividends and/or make distributions on its
capital stock, as applicable the proceeds of which will be used by Parent or
Holdings solely to pay (i) taxes of Parent, Holdings, the Borrower and the
Subsidiaries as part of a consolidated tax filing group for U.S. federal, state
or local tax purposes in an amount not to exceed the income tax liabilities
that would have been payable by the Borrower and its Restricted Subsidiaries on
a stand-alone basis, reduced by any such income taxes paid or to be paid
directly by Borrower or its Restricted Subsidiaries, and (ii) franchise
taxes, administrative and similar expenses related to Parent’s and Holdings’
existence and ownership of the Borrower, as applicable, provided that
the amount of such dividends pursuant to this subclause (ii) does not
exceed in any fiscal year the amount of such taxes and expenses payable for
such fiscal year (it being understood that such expenses shall in no event
exceed $1,000,000 in the aggregate per fiscal year), (c) Holdings, the
Borrower and the Restricted Subsidiaries may make other Restricted Payments; provided
that (A) both immediately before and immediately after giving effect to
such Restricted Payment, no Event of Default shall have occurred and be
continuing, (B) at the time any Restricted Payment is made on a Pro Forma
Basis, (x) the Fixed Charge Coverage Ratio for the most recently ended
Test Period for which Section 9.1 Financials have been delivered


 


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shall not be less than 1.25
to 1.00 and (y) average daily Availability for the period of sixty (60)
consecutive days immediately preceding such Restricted Payment has been and for
the period of six consecutive months immediately following such Restricted
Payment is projected to be not less than the greater of (1) 25% of the
Total Commitment and (2) $25,000,000 and (C) any amount received by
Holdings shall be promptly used by Holdings to make a Restricted Payment and (d) Holdings,
the Borrower and its Restricted Subsidiaries may make Restricted Payments to
repurchase or settle shares of capital stock of Parent (or options, warrants or
stock appreciation rights with respect to such capital stock or any other
equity-based award) in an aggregate amount not to exceed (x) $15,000,000
prior to the Final Date or (y) $5,000,000 in any twelve month period.


 


10.7.          Limitations on Debt Payments and
Certain Amendments.


 


(a)             The Borrower will not, and will not
permit any of its Restricted Subsidiaries to, make directly or indirectly, any
payment or other distribution (whether in cash, securities or other property)
of or in respect of principal of or interest on any Indebtedness for borrowed
money, or any payment or other distribution (whether in cash, securities or
other property), including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement, acquisition, cancellation or termination
of any Indebtedness for borrowed money, except:


 


(A)            payments of Indebtedness
created under the Credit Documents;


 


(B)             payments of
regularly scheduled interest and principal payments as and when due in respect
of any Indebtedness, other than payments in respect of any Indebtedness that is
subordinated to the Obligations prohibited by the subordination provisions
thereof;


 


(C)             refinancings,
replacements and renewals of Indebtedness to the extent made with (or in
exchange for) Permitted Refinancing Indebtedness (or, in the case of
Indebtedness outstanding pursuant to clause (f), (g) or (j) of Section 10.1(A),
with the proceeds of refinancing Indebtedness incurred pursuant to such
clauses);


 


(D)            payments of secured
Indebtedness that becomes due as a result of the voluntary sale or transfer of
the property or assets securing such Indebtedness on a first lien basis;


 


(E)             payments with
respect to Indebtedness owed to the Borrower or any Subsidiary Guarantor;


 


(F)             payments by
Restricted Subsidiaries that are not Subsidiary Guarantors with respect to
Indebtedness of such Restricted Subsidiaries;


 


(G)             payments with
respect to the Initial Secured Notes and any Permitted Additional Secured Notes
made solely from the proceeds of Notes Priority Collateral to the extent
required by the Secured Notes Documents;


 


(H)            other payments with
respect to Indebtedness; provided that (A) both immediately before
and immediately after giving effect to such payment, no Event of 


 


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Default
shall have occurred and be continuing and (B) at the time any payment is
made on a Pro Forma Basis, (x) the Fixed Charge Coverage Ratio for the
most recently ended Test Period for which Section 9.1 Financials have been
delivered shall not be less than 1.25 to 1.00 and (y) average daily
Availability for the period of sixty (60) consecutive days immediately
preceding such payment has been and for the period of six consecutive months
immediately following such payment is projected by the Borrower to be not less
than the greater of (1) 25% of the Total Commitment and (2) $25,000,000;
and


 


(I)              payments with
respect to Indebtedness made from the proceeds of a substantially concurrent
contribution to the equity of the Borrower (other than proceeds from an Equity
Cure).


 


(b)             Holdings and the Borrower will not,
and will not permit any Restricted Subsidiary, to amend, modify or waive any of
its rights under any agreement governing or relating to the Subordinated Notes,
the Initial PIK Convertible Notes, any Permitted Additional PIK Convertible
Notes, the Forward Purchase Contract or any other Indebtedness which is
subordinated to the Obligations to the extent any such amendment, modification
or waiver would be materially adverse to the Lenders. The Borrower will not
amend the terms of the Initial Secured Notes, any Permitted Additional Secured
Notes or any Permitted Junior Lien or Unsecured Notes in a manner that would
accelerate the date on which the Borrower is required to make any payment of
principal or interest or any other amount thereon.


 


10.8.          Limitations on Sale Leasebacks.
Holdings and the Borrower will not, and will not permit any of the Restricted
Subsidiaries to, enter into or effect any Sale Leasebacks, other than Permitted
Sale Leasebacks.


 


10.9.          Fixed Charge Coverage Ratio.
During any Minimum Availability Period, the Borrower will not permit the Fixed
Charge Coverage Ratio for the most recently ended Test Period prior to the
commencement of such Minimum Availability Period or for any Test Period ending
during such Minimum Availability Period to be less than 1.1 to 1.0.


 


For
purposes of determining compliance with this Section 10.9 only, any cash
common equity contribution (an “Equity Cure”) to the Borrower by
Holdings after the date on which financial statements are required to be
delivered for a Test Period in accordance with Section 9.1 and on or prior
to the day that is 10 days after such date, shall at the request of the
Borrower, be included in the calculation of Consolidated EBITDA solely for the
purposes of determining compliance with this Section 10.9 for such Test
Period and applicable subsequent Test Periods, provided that (a) in
each four fiscal quarter period, there shall be at least two fiscal quarters in
respect of which no Equity Cure is made and (b) the amount of any such
Equity Cure shall be no greater than the amount required to cause the Borrower
to be in compliance with this Section 10.9.


 


SECTION 11.          Events of Default


 


Upon
the occurrence of any of the following specified events (each an “Event of
Default”):


 


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11.1.          Payments. The Borrower shall (a) default
in the payment when due of any principal of the Loans or (b) default, and
such default shall continue for five or more days, in the payment when due of
any interest on the Loans or any Fees or any Unpaid Drawings or of any other
amounts owing hereunder or under any other Credit Document; or


 


11.2.          Representations, etc. Any
representation, warranty or statement made or deemed made by any Credit Party
herein or in any Credit Document or any certificate delivered or required to be
delivered pursuant hereto or thereto shall prove to be untrue in any material
respect on the date as of which made or deemed made; or


 


11.3.          Covenants. Any Credit Party
shall (a) (x) default in the due performance or observance by it of
any term, covenant or agreement contained in Section 9.1(f)(i) or Section 10
or (y) default in the due performance or observance by it of any term,
covenant or agreement contained in Section 9.1(e), Section 9.16 and Section 9.17
of this Agreement or Section 4.5(b) of the Security Agreement and
such default shall continue unremedied for a period of at least 5 Business Days
after receipt of written notice by the Borrower from the Administrative Agent,
the Security Agents or the Required Lenders or (b) default in the due
performance or observance by it of any term, covenant or agreement (other than
those referred to in Section 11.1 or 11.2 or clause (a) of this Section 11.3)
contained in this Agreement or any Credit Document and such default shall
continue unremedied for a period of at least 30 days after receipt of written
notice by the Borrower from the Administrative Agent or the Required Lenders;
or


 


11.4.          Default Under Other Agreements.
(a) Any of Holdings, the Borrower or any of the Restricted Subsidiaries
shall (i) default in any payment with respect to any Indebtedness (other
than the Obligations) in excess of $20,000,000 in the aggregate, for Holdings,
the Borrower and such Subsidiaries, beyond the period of grace, if any, provided
in the instrument or agreement under which such Indebtedness was created or (ii) default
in the observance or performance of any 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 holders of such Indebtedness (or a trustee or agent on
behalf of such holder or holders) to cause, any such Indebtedness to become due
(or to cause Holdings, the Borrower or any of its Restricted Subsidiaries to
purchase any such Indebtedness) prior to its stated maturity; or (b) without
limiting the provisions of clause (a) above, any such Indebtedness shall
be declared to be due and payable, or required to be prepaid other than by a
regularly scheduled required prepayment or as a mandatory prepayment, prior to
the stated maturity thereof or (c) the Forward Purchase Contract is
terminated prior to the settlement date or one or more conditions precedent to
the purchase of the Initial PIK Convertible Notes by Sealy Holding LLC pursuant
to the Forward Purchase Contract has not been satisfied or becomes impossible
to satisfy and such condition or conditions has not been waived by Sealy
Holding LLC; or


 


11.5.          Bankruptcy, etc. Holdings, the
Borrower or any Specified Subsidiary shall commence a voluntary case,
proceeding or action concerning itself under (a) Title 11 of the United
States Code entitled “Bankruptcy”, or (b) in the case of any Foreign
Subsidiary that is a Specified Subsidiary, any domestic or foreign law relating
to bankruptcy, insolvency reorganization or relief of debtors legislation of
its jurisdiction of incorporation, in each case as now or hereafter in effect,
or any successor thereto (collectively, the “Bankruptcy Code”); or an
involuntary


 


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case, proceeding or action
is commenced against any of Holdings, the Borrower or any Specified Subsidiary
and the petition is not controverted within 10 days after commencement of the
case, proceeding or action; or an involuntary case, proceeding or action is
commenced against any of Holdings, the Borrower or any Specified Subsidiary and
the petition is not dismissed within 60 days after commencement of the case,
proceeding or action; or a custodian (as defined in the Bankruptcy Code) receiver,
receiver manager, trustee or similar person is appointed for, or takes charge
of, all or substantially all of the property of any of Holdings, the Borrower
or any Specified Subsidiary; or any of Holdings, the Borrower or any Specified
Subsidiary commences any other proceeding or action under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction whether now or hereafter in
effect relating to any of Holdings, the Borrower or any Specified Subsidiary;
or there is commenced against any of Holdings, the Borrower, or any Specified
Subsidiary any such proceeding or action that remains undismissed for a period
of 60 days; or any of Holdings, the Borrower or any Specified Subsidiary is
adjudicated insolvent or bankrupt; or any order of relief or other order
approving any such case or proceeding or action is entered; or any of Holdings,
the Borrower or any Specified Subsidiary suffers any appointment of any
custodian receiver, receiver manager, trustee or the like for it or any
substantial part of its property to continue undischarged or unstayed for a
period of 60 days; or any of Holdings, the Borrower or any Specified Subsidiary
makes a general assignment for the benefit of creditors; or any corporate
action is taken by any of Holdings, the Borrower or any Specified Subsidiary
for the purpose of effecting any of the foregoing; or


 


11.6.          ERISA. (a) Any Plan shall
fail to satisfy the minimum funding standard required for any plan year or part
thereof or a waiver of such standard or extension of any amortization period is
sought or granted under Section 412 of the Code; any Plan is or shall have
been terminated or is the subject of termination proceedings under ERISA (including
the giving of written notice thereof); an event shall have occurred or a
condition shall exist in either case entitling the PBGC to terminate any Plan
or to appoint a trustee to administer any Plan (including the giving of written
notice thereof); any Plan shall have an accumulated funding deficiency (whether
or not waived); any of Holdings, the Borrower or any Subsidiary or any ERISA
Affiliate has incurred or is likely to incur a liability to or on account of a
Plan under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201
or 4204 of ERISA or Section 4971 or 4975 of the Code (including the giving
of written notice thereof); (b) there could result from any event or
events set forth in clause (a) of this Section 11.6 the imposition of
a lien, the granting of a security interest, or a liability, or the reasonable
likelihood of incurring a lien, security interest or liability; and (c) such
lien, security interest or liability will or would be reasonably likely to have
a Material Adverse Effect; or


 


11.7.          Guarantee. The Guarantees or
any material provision thereof shall cease to be in full force or effect or any
Guarantor thereunder or any Credit Party shall deny or disaffirm in writing any
Guarantor’s obligations under the Guarantee; or


 


11.8.          Pledge Agreement. The Pledge
Agreements or any material provision thereof shall cease to be in full force or
effect (other than pursuant to the terms hereof or thereof or as a result of
acts or omissions of the Administrative Agent or any Lender) or any pledgor
thereunder or any Credit Party shall deny or disaffirm in writing any pledgor’s
obligations under the Pledge Agreement; or


 


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11.9.          Security Agreement. The
Security Agreements or any material provision thereof shall cease to be in full
force or effect (other than pursuant to the terms hereof or thereof or as a
result of acts or omissions of the Administrative Agent or any Lender) or any
grantor thereunder or any Credit Party shall deny or disaffirm in writing any
grantor’s obligations under the Security Agreement; or


 


11.10.        Mortgages. Any Mortgage or any
material provision of any Mortgage relating to any material portion of the
Collateral shall cease to be in full force or effect (other than pursuant to the
terms hereof or thereof or as a result of acts or omissions of the
Administrative Agent or any Lender) or any mortgagor thereunder or any Credit
Party shall deny or disaffirm in writing any mortgagor’s obligations under any
Mortgage; or


 


11.11.        Subordination. The Obligations of
the Borrower, or the obligations of Holdings or any Subsidiaries pursuant to
the Guarantee, shall cease to constitute senior indebtedness under the
subordination provisions of any document or instrument evidencing the
Subordinated Notes or any other permitted subordinated Indebtedness or such
subordination provisions shall be invalidated or otherwise cease to be legal,
valid and binding obligations of the parties thereto, enforceable in accordance
with their terms; or


 


11.12.        Judgments. One or more judgments
or decrees shall be entered against the Borrower or any of the Restricted
Subsidiaries involving a liability of $20,000,000 or more in the aggregate for
all such judgments and decrees for the Borrower and the Restricted Subsidiaries
(to the extent not paid or fully covered by insurance provided by a carrier not
disputing coverage) and any such judgments or decrees shall not have been
satisfied, vacated, discharged or stayed or bonded pending appeal within 60
days from the entry thereof; or


 


11.13.        Change of Control. A Change of
Control shall occur;


 


then, and in any such event,
and at any time thereafter, if any Event of Default shall then be continuing,
the Administrative Agent shall, upon the written request of the Required Lenders,
by written notice to the Borrower, take any or all of the following actions,
without prejudice to the rights of the Administrative Agent or any Lender to
enforce its claims against the Borrower, except as otherwise specifically
provided for in this Agreement (provided that, if an Event of Default
specified in Section 11.5 shall occur with respect to the Borrower, the
result that would occur upon the giving of written notice by the Administrative
Agent as specified in clauses (i), (ii) and (iv) below shall occur
automatically without the giving of any such notice): (i) declare the
Total Commitment terminated, whereupon the Commitments and Swingline
Commitment, if any, of each Lender or the Swingline Lender, as the case may be,
shall forthwith terminate immediately and any Fees theretofore accrued shall
forthwith become due and payable without any other notice of any kind; (ii) declare
the principal of and any accrued interest and fees in respect of all Loans and
all Obligations owing hereunder and thereunder to be, whereupon the same shall
become, forthwith due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower; (iii) terminate
any Letter of Credit that may be terminated in accordance with its terms; (iv) exercise
rights and remedies under the Credit Documents, at law or in equity; and/or (v) direct
the Borrower to pay (and the Borrower agrees that upon receipt of such notice,
or upon the occurrence of an Event of Default specified in Section 11.5
with respect to the Borrower, it will pay) to the Administrative Agent, at its
Administrative


 


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Agent’s Office, such
additional amounts of cash, to be held as security for the Borrower’s
reimbursement obligations for Drawings that may subsequently occur thereunder,
equal to the aggregate Stated Amount of all Letters of Credit issued and then
outstanding.


 


SECTION 12.           The Agents


 


12.1.          Appointment. Each Lender hereby
irrevocably designates and appoints the Administrative Agent, Collateral Agent
and Co-Collateral Agent as the agents of such Lender under this Agreement and
the other Credit Documents, and each such Lender irrevocably authorizes the
Administrative Agent and the Security Agents, in their respective capacities,
to take such action on its behalf under the provisions of this Agreement and
the other Credit Documents and to exercise such powers and perform such duties
as are expressly delegated to such Agents by the terms of this Agreement and
the other Credit Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
this Agreement, no Agent shall 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
Credit Document or otherwise exist against any Agent. Neither the Joint Lead
Arrangers nor the Syndication Agent, in their respective capacities as such,
shall have any obligations, duties or responsibilities under this Agreement but
shall be entitled to all benefits of this Section 12.


 


12.2.          Delegation of Duties. The
Administrative Agent and each Security Agent may execute any of their
respective duties under this Agreement and the other Credit 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 and
the Security Agents shall not be responsible for the negligence or misconduct
of any of their respective agents or attorneys-in-fact selected by it with
reasonable care.


 


12.3.          Exculpatory Provisions. Neither
the Administrative Agent nor any Security Agent, nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or Affiliates shall
be (a) 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 Credit
Document (except for its or such Person’s own gross negligence or willful
misconduct) or (b) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by the Borrower or any
Guarantor or any officer thereof contained in this Agreement or any other
Credit Document or in any certificate, report, statement or other document
referred to or provided for in, or received by the Administrative Agent or any
Security Agent under or in connection with, this Agreement or any other Credit
Document or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Credit Document or for any
failure of the Borrower or any Guarantor to perform its obligations hereunder
or thereunder. Neither the Administrative Agent nor any Security Agent shall 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 Credit Document, or to inspect the properties,
books or records of the Borrower.


 


12.4.          Reliance by Administrative Agent
and Security Agents. The Administrative Agent and each Security Agent shall
be entitled to rely, and shall be fully protected in relying,


 


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upon any writing,
resolution, notice, consent, certificate, affidavit, letter, telecopy, telex or
teletype 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 Borrower), independent accountants and other experts
selected by the Administrative Agent or such Security Agent, as the case may
be. The Administrative Agent and each Security Agent may deem and treat the
Lender specified in the Register with respect to any amount owing hereunder 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. Neither the Administrative Agent nor any Security Agent shall be deemed
to have knowledge of any Secured Cash Management Agreement or Secured Hedge
Agreement unless and until it has received written notice thereof from the
applicable Hedge Bank or Cash Management Bank.


 


12.5.          Notice of Default. Neither the
Administrative Agent nor any Security Agent shall be deemed to have knowledge
or notice of the occurrence of any Default hereunder unless the Administrative
Agent or such Security Agent, as the case may be, has received notice from a
Lender or the Borrower referring to this Agreement, describing such 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.


 


12.6.          Non-Reliance on Administrative
Agent, Security Agents and Other Lenders. Each Lender expressly
acknowledges that neither the Administrative Agent nor any Security Agent, nor
any of their respective officers, directors, employees, agents,
attorneys-in-fact or Affiliates has made any representations or warranties to
it and that no act by the Administrative Agent or any Security Agent
hereinafter taken, including any review of the affairs of the Borrower or any
Guarantor, shall be deemed to constitute any representation or warranty by the
Administrative Agent or any Security Agent to any Lender. Each Lender
represents to the Administrative Agent and each Security Agent that it has,
independently and without reliance upon the Administrative Agent, any Security
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 Credit Parties 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, any
Security 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 Credit 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 Credit Parties.
Except for notices, reports and other documents expressly required to be
furnished to the Lenders by the Administrative Agent hereunder, the
Administrative Agent and the Security Agents shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, assets, operations, properties, financial condition,
prospects or creditworthiness of the Credit Parties that may come into the
possession of the Administrative Agent or any Security Agent or any of their
respective officers, directors, employees, agents, attorneys-in-fact or
Affiliates.


 


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12.7.          Indemnification. The Lenders
agree to indemnify the Administrative Agent and the Security Agents, each in
its capacity as such (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to their
Applicable Percentage in effect on the date on which indemnification is sought
(or, if indemnification is sought after the date upon which the Commitments
shall have terminated and the Total Credit Exposure shall have been paid in
full, ratably in accordance with their respective portions of the Total Credit
Exposure in effect immediately prior to such date), from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever that may at any
time (including at any time following the payment of the Loans) be imposed on,
incurred by or asserted against the Administrative Agent or any Security Agent
in any way relating to or arising out of, the Commitments, this Agreement, any
of the other Credit Documents or any documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby or any action
taken or omitted by the Administrative Agent or any Security Agent under or in
connection with any of the foregoing, provided that no Lender shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Administrative Agent’s or such Security Agent’s, as the case
may be, gross negligence or willful misconduct. The agreements in this Section 12.7
shall survive the payment of the Loans and all other amounts payable hereunder.


 


12.8.          Administrative Agent and Security
Agents in Their Individual Capacities. The Administrative Agent, the
Security Agents and their respective Affiliates may make loans to, accept
deposits from and generally engage in any kind of business with Parent and its
Subsidiaries as though the Administrative Agent and the Security Agents were
not the Administrative Agents and the Security Agents hereunder and under the
other Credit Documents. With respect to the Loans made by it, the
Administrative Agent and each Security Agent shall have the same rights and
powers under this Agreement and the other Credit Documents as any Lender and
may exercise the same as though it were not the Administrative Agent or a
Security Agent, and the terms “Lender” and “Lenders” shall include the
Administrative Agent and the Security Agents in their respective individual
capacities.


 


12.9.          Successor Agent. The
Administrative or any Security Agent may resign as Administrative Agent or
Security Agent, as the case may be, upon 20 days’ prior written notice to the
Lenders and the Borrower. If the Administrative Agent or any Security Agent
shall resign as Administrative Agent or Security Agent, as the case may be,
under this Agreement and the other Credit Documents, then the Required Lenders
shall appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall be approved by the Borrower (which approval shall not be
unreasonably withheld) unless an Event of Default has occurred and is
continuing under Section 11.1 or Section 11.5, whereupon such
successor agent shall succeed to the rights, powers and duties of the
Administrative Agent or a Security Agent, as the case may be, and the term “Administrative
Agent,” “Collateral Agent” or “Co-Collateral Agent,” as the case may be, shall
mean such successor agent effective upon such appointment and approval, and the
former Administrative Agent’s or Security Agents’ rights, powers and duties as
Administrative Agent, Collateral Agent or Co-Collateral Agent, as the case may
be, shall be terminated, without any other or further act or deed on the part
of such former Administrative Agent or Security Agent or any of the parties to
this Agreement or any holders of the Loans. After any retiring Administrative
Agent’s or Security Agent’s resignation as Administrative Agent or Security


 


97

















 


Agent, as the case may be,
the provisions of this Section 12 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Administrative Agent or
a Security Agent under this Agreement and the other Credit Documents.


 


12.10.        Withholding Tax. To the extent
required by any applicable law, the Administrative Agent may withhold from any
interest payment to any Lender an amount equivalent to any applicable
withholding tax. If the Internal Revenue Service or any authority of the United
States or other jurisdiction asserts a claim that the Administrative Agent did
not properly withhold tax from amounts paid to or for the account of any Lender
(because the appropriate form was not delivered, was not properly executed, or
because such Lender failed to notify the Administrative Agent of a change in
circumstances which rendered the exemption from, or reduction of, withholding
tax ineffective, or for any other reason other than the gross negligence or
willful misconduct of the Administrative Agent), such Lender shall indemnify
the Administrative Agent fully for all amounts paid, directly or indirectly, by
the Administrative Agent as tax or otherwise, including penalties and interest,
together with all expenses incurred, including legal expenses, allocated staff
costs and any out of pocket expenses.


 


12.11.        Reports. Each Lender hereby
agrees that (a) it has requested a copy of each Report prepared by or on
behalf of the Administrative Agent or the Security Agents; (b) the
Administrative Agent and the Security Agents (i) make no representation or
warranty, express or implied, as to the completeness or accuracy of any Report
or any of the information contained therein or any inaccuracy or omission
contained in or relating to a Report and (ii) shall not be liable for any
information contained in any Report; (c) the Reports are not comprehensive
audits or examinations, and that any Person performing any field examination
will inspect only specific information regarding the Credit Parties and will
rely significantly upon the Credit Parties’ books and records, as well as on
representations of the Credit Parties’ personnel and that the Administrative
Agent and the Security Agents undertake no obligation to update, correct or
supplement the Reports; (d) it will keep all Reports confidential and
strictly for its internal use, not share the Report with any other Person
except as otherwise permitted pursuant to this Agreement; and (e) without
limiting the generality of any other indemnification provision contained in
this Agreement, it will pay and protect, and indemnify, defend, and hold the
Administrative Agent, the Security Agents and any such other Person preparing a
Report harmless from and against, the claims, actions, proceedings, damages,
costs, expenses, and other amounts (including reasonable attorney fees)
incurred by as the direct or indirect result of any third parties who might
obtain all or part of any Report through the indemnifying Lender.


 


12.12.        Security Agents. All
determinations of the Security Agents under the Credit Documents shall be made
jointly by the Security Agents, provided that, in the event that the Security
Agents cannot agree on any matter to be determined by the Security Agents, the
determination shall be made by the individual Security Agent asserting the more
conservative credit judgment or declining to permit the requested action for
which consent is being sought by the Borrower, as applicable. This provision
shall be binding upon any successor Security Agent pursuant to Section 12.9.


 


98

















 


SECTION 13.           [Reserved]


 


SECTION 14.           Miscellaneous


 


14.1.          Amendments and Waivers.


 


(a)             Neither this Agreement nor any
other Credit Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this Section 14.1.
The Required Lenders may, or, with the written consent of the Required Lenders,
the Administrative Agent may, from time to time, (a) enter into with the
relevant Credit Party or Credit Parties written amendments, supplements or
modifications hereto and to the other Credit Documents for the purpose of
adding any provisions to this Agreement or the other Credit Documents or
changing in any manner the rights of the Lenders or of the Credit 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
Credit Documents or any Default and its consequences; provided, however,
that no such waiver and no such amendment, supplement or modification shall
directly (i) forgive any portion of any Loan or waive any required
prepayment or cash collateralization pursuant to Section 5.2(a) or
extend the final scheduled maturity date of any Loan or reduce the stated rate,
or forgive any portion, or extend the date for the payment, of any interest or
Fee payable hereunder (other than as a result of waiving the applicability of Section 2.8(c)),
or extend the final expiration date of any Lender’s Commitment or extend the
final expiration date of any Letter of Credit beyond the L/C Maturity Date (provided
that the Administrative Agent may make Protective Advances as set forth in Section 2.1),
or increase the aggregate amount of the Commitments of any Lender, or amend or
modify any provisions of Section 14.8(a), in each case without the written
consent of each Lender directly and adversely affected thereby, or (ii) amend,
modify or waive any provision of this Section 14.1 or reduce the
percentages specified in the definitions of the terms “Required Lenders”, “Required
Supermajority Lenders” or “Applicable Percentage” or consent to the assignment
or transfer by the Borrower of its rights and obligations under any Credit
Document to which it is a party (except as permitted pursuant to Section 10.3),
in each case without the written consent of each Lender directly and adversely
affected thereby, or (iii) amend, modify or waive any provision of Section 12
as it relates to the Administrative Agent without the written consent of the
then-current Administrative Agent or as it relates to the Security Agents
without the written consent of both of the then-current Security Agents, or (iv) amend,
modify or waive any provision of Section 2.3 relating to Letters of
Credit, Section 2.14 or Section 3 without the written consent of the
Letter of Credit Issuer, or (v) amend, modify or waive any provisions
hereof relating to Swingline Loans (including the applicable provisions of Section 2.14)
without the written consent of the Swingline Lender, or (vi) increase the
advance rates set forth in the definition of Borrowing Base or add new
categories of eligible assets, without the written consent of both of the
Security Agents and the Required Supermajority Lenders, or (vii) release
all or substantially all of the Guarantors under the Guarantee (except as
expressly permitted by the Guarantee) or, except as permitted in Section 14.1(b),
release all or substantially all of the Collateral under the Pledge Agreement,
the Security Agreement and the Mortgages, in each case without the prior
written consent of each Lender, or (viii) amend Section 2.9 so as to
permit Interest Period intervals greater than six months without regard to the
consent of each Lender, without the written consent of each Lender directly and
adversely affected thereby, or (ix) amend, modify or waive the application
of


 


99

















 


proceeds provisions of Section 2.5(b),
Section 5.2(a) or Section 5.3(c), without the written consent of
each Lender directly and adversely affected thereby, or (x) decrease the
amount or allocation of any optional or mandatory prepayment to be received by
any Lender holding any Loans without the written consent of such Lender, or
(xi) waive any condition set forth in Section 6 without the written
consent of each Initial Lender. Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the affected Lenders
and shall be binding upon the Borrower, such Lenders, the Administrative Agent,
the Collateral Agent and all future holders of the affected Loans. In the case
of any waiver, the Borrower, the Lenders, the Collateral Agent and the
Administrative Agent shall be restored to their former positions and rights
hereunder and under the other Credit Documents, and any Default waived shall be
deemed to be cured and not continuing, it being understood that no such waiver
shall extend to any subsequent or other Default or impair any right consequent
thereon.


 


(b)             Any Liens granted to the
Administrative Agent by the Credit Parties on any Collateral for the benefit of
the Secured Parties shall automatically be released (i) upon the Final
Date, (ii) constituting property being sold or disposed of (or property of
a Subsidiary Guarantor whose capital stock is being sold in a transaction that
will result in such Subsidiary Guarantor being released from the Guarantee in
accordance with the terms thereof) to the extent such sale or disposition is in
compliance with the terms of this Agreement and (iii) as required by the
Intercreditor Agreement. Additionally, the Administrative Agent is hereby
authorized in its sole discretion to release any Liens as required to effect
any sale or other disposition of such Collateral in connection with any
exercise of remedies of the Administrative Agent and the Lenders pursuant to Section 11.
Except as provided in the preceding sentence, the Administrative Agent will not
release any Liens on Collateral without the prior written authorization of the
Lenders as Section 14.1(a); provided that the Administrative Agent
may in its discretion, release its Liens on Collateral valued in the aggregate
not in excess of $2,000,000 during any calendar year without the prior written
authorization of any Lenders. Any such release shall not in any manner
discharge, affect, or impair the Obligations or any Liens (other than those
expressly being released) upon (or obligations of the Credit Parties in respect
of) all interests retained by the Credit Parties, including the proceeds of any
sale, all of which shall continue to constitute part of the Collateral. In
connection with any release of Liens under the Security Documents, the
Administrative Agent shall be protected in relying on a certificate of an
Authorized  Officer to the effect that
such release is permitted by this Section 14.1(b).


 


14.2.          Notices. All notices, requests
and demands to or upon the respective parties hereto to be effective shall be
in writing (including by facsimile transmission), and, unless otherwise
expressly provided herein, shall be deemed to have been duly given or made when
delivered, or three days after being deposited in the mail, postage prepaid,
or, in the case of tele-copy notice, when received, addressed as follows in the
case of the Borrower and the Administrative Agent, and in the case of the other
parties hereto to such other address as may be hereafter notified by the
respective parties hereto:


 


	
  The
  Borrower:

  	
  Sealy Mattress Company

  
	
   

  	
  One Office Parkway

  
	
   

  	
  Trinity, NC 27370

  
	
   

  	
  Attention: Kenneth L.
  Walker

  
	
   

  	
  Fax: 336-861-3786

  



 


100

















 


	
   

  	
  with a copy to

  
	
   

  	
   

  
	
   

  	
  Kohlberg Kravis
  Roberts & Co., L.P.

  
	
   

  	
  9 West 57th Street

  
	
   

  	
  Suite 4200

  
	
   

  	
  New York, NY 10019

  
	
   

  	
  Attention: Brian Carroll

  
	
   

  	
  Fax: 212-750-0003

  
	
   

  	
   

  
	
  The Administrative Agent
  or  Collateral Agent:

  	
  JPMorgan Chase Bank, N.A.

  
	
   

  	
  1111 Fannin St., Floor 10

  
	
   

  	
  Houston, TX 77002

  
	
   

  	
  Attention: Siraz Maknojia

  
	
   

  	
  Fax: (713) 750-2782

  
	
   

  	
   

  
	
   

  	
  with a copy to

  
	
   

  	
   

  
	
   

  	
  JPMorgan Chase Bank, N.A.,

  
	
   

  	
  270 Park Avenue, Floor 4

  
	
   

  	
  New York, New York 10017

  
	
   

  	
  Attention: Tony Yung

  
	
   

  	
  Fax: (212) 270-6637

  
	
   

  	
   

  
	
  The
  Co-Collateral Agent

  	
  General Electric Capital
  Corporation

  
	
   

  	
  299 Park Avenue

  
	
   

  	
  New York, New York 10171

  
	
   

  	
  Attention: Sealy Account
  Manager

  
	
   

  	
  Fax: (646) 428-7094

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  General Electric Capital
  Corporation

  
	
   

  	
  299 Park Avenue

  
	
   

  	
  New York, New York 10171

  
	
   

  	
  Attention: Counsel GE
  Global Sponsor Finance

  
	
   

  	
  Fax: 646-428-7295

  
	
   

  	
   

  
	
   

  	
  and

  
	
   

  	
   

  
	
   

  	
  Winston & Strawn
  LLP

  
	
   

  	
  200 Park Avenue

  
	
   

  	
  New York, New York 10166

  
	
   

  	
  Attention: William D.
  Brewer

  
	
   

  	
  Fax: 212-294-4700

  



 


101

















 


provided that any
notice, request or demand to or upon the Administrative Agent, the Security
Agents or the Lenders pursuant to Sections 2.3, 2.6, 2.9, 4.2 and 5.1 shall not
be effective until received.


 


14.3.          No Waiver; Cumulative Remedies.
No failure to exercise and no delay in exercising, on the part of the
Administrative Agent, Collateral Agent or any Lender, any right, remedy, power
or privilege hereunder or under the other Credit 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.


 


14.4.          Survival of Representations and
Warranties. All representations and warranties made hereunder, in the other
Credit 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 hereunder.


 


14.5.          Payment of Expenses and Taxes.
The Borrower agrees (a) to pay or reimburse the Agents for all their
reasonable out-of-pocket 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 Credit Documents and any other
documents prepared in connection herewith or therewith, and the consummation
and administration of this Agreement and the transactions contemplated hereby
and thereby, including the reasonable fees, disbursements and other charges of
counsel to the Agents, (b) to pay or reimburse each Lender, each Security
Agent and the Administrative Agent for all its reasonable and documented costs
and expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the other Credit Documents and any such other
documents, including the reasonable fees, disbursements and other charges of
counsel to each Lender, of counsel to the Security Agents and of counsel to the
Administrative Agent, (c) to pay, indemnify and hold harmless each Lender,
each Security Agent and the Administrative Agent from any and all recording and
filing fees and any and all liabilities with respect to, or resulting from any
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, delivery
or enforcement 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 otherwise in respect of, this Agreement, the other Credit
Documents and any such other documents, and (d) to pay, indemnify, and
hold harmless each Lender, each Security Agent, the Administrative Agent, their
respective Affiliates and their respective directors, officers, employees,
trustees, agents, attorneys-in-fact 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,
including reasonable and documented fees, disbursements and other charges of
counsel, with respect to the execution, delivery, enforcement, performance and
administration of this Agreement, the other Credit Documents and any such other
documents, including any of the foregoing relating to the violation of,
noncompliance with or liability under, any Environmental Law or any actual or
alleged presence of Hazardous Materials applicable to the operations of the
Borrower, any of its Subsidiaries or any of the Real Estate (all the foregoing
in this clause (d), collectively, the “indemnified liabilities”), provided
that the Borrower shall have no obligation hereunder to the Administrative
Agent, any Security


 


102

















 


Agent or any Lender nor any
of their respective directors, officers, employees and agents with respect to
indemnified liabilities arising from (i) the gross negligence or willful
misconduct of the party to be indemnified, (ii) a material breach of any
Credit Document by the party to be indemnified or (iii) disputes solely
among Lenders (in their capacities as such) and not involving any conduct of
any Credit Party. The agreements in this Section 14.5 shall survive
repayment of the Loans and all other amounts payable hereunder. Expenses being
reimbursed by the Borrower under this Section include, without limiting
the generality of the foregoing, but in each case subject to the limitations of
the foregoing, reasonable out-of-pocket costs and expenses incurred in
connection with:


 


(i)              subject to Section 9.16,
appraisals and insurance reviews;


 


(ii)             subject to Section 9.17,
field examinations and the preparation of Reports based on the reasonable fees
charged by a third party retained by the Security Agents or the internally
allocated reasonable fees for each Person employed by the Security Agents with
respect to each field examination;


 


(iii)            taxes, fees and
other charges for (A) lien and title searches and title insurance and (B) recording
the Security Documents, filing financing statements and continuations, and
other actions to perfect, protect, and continue the Administrative Agent’s
Liens;


 


(iv)            sums paid or
incurred to take any action required of any Credit Party under the Credit
Documents that such Credit Party fails to pay or take; and


 


(v)             forwarding loan
proceeds, collecting checks and other items of payment, and establishing and
maintaining the accounts and lock boxes, and reasonable costs and expenses of
preserving and protecting the Collateral.


 


All of the foregoing costs
and expenses may be charged to the Borrower as Revolving Credit Loans or to
another deposit account to the extent permitted by Section 5.3(d).


 


14.6.          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
the Letter of Credit Issuer that issues any Letter of Credit), except that (i) the
Borrower may not 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 the 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. Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby (including any Affiliate of the Letter of Credit Issuer that
issues any Letter of Credit), Participants (to the extent provided in paragraph
(c) of this Section) and, to the extent expressly contemplated hereby, the
Related Parties of each of the Administrative Agent, the Letter of Credit
Issuer and the Lenders) any legal or equitable right, remedy or claim under or
by reason of this Agreement.


 


103

















 


(b)             (i) Subject to the conditions
set forth in paragraph (b)(ii) below, any Lender may assign to one or more
assignees 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 be unreasonably
withheld; it being understood that, without limitation, the Borrower shall have
the right to withhold its consent to any assignment if, in order for such
assignment to comply with applicable law, the Borrower would be required to
obtain the consent of, or make any filing or registration with, any
Governmental Authority) of:


 


(A)            the Borrower, provided
that no consent of the Borrower shall be required for an assignment to a
Lender, an Affiliate of a Lender (unless increased costs would result therefrom
except if an Event of Default under Section 11.1 or Section 11.5 has
occurred and is continuing), an Approved Fund or, if an Event of Default under
Section 11.1 or Section 11.5 has occurred and is continuing,
any other assignee;


 


(B)             the Administrative
Agent, the Swingline Lender and the Letter of Credit Issuer; and


 


(C)             provided; however,
that, notwithstanding the foregoing or any other provision of this Agreement,
in no event shall Parent, Holdings, Borrower or any of their Subsidiaries be
permitted to be a Lender or a Participant hereunder.


 


(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
Commitment or Loans, the amount of the Commitment or Loans of the assigning
Lender subject to each such assignment (determined as of the date the
Assignment and Acceptance with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 and integral multiples
of $1,000,000 in excess thereof, or if less, all of such Lender’s remaining
Loans and Commitments unless each of the Borrower and the Administrative Agent
otherwise consents, provided that no such consent of the Borrower shall
be required if an Event of Default under Section 11.1 or Section 11.5
has occurred and is continuing; provided further that
contemporaneous assignments to a single assignee made by Affiliate Lenders
shall be aggregated for purposes of meeting the minimum assignment amount
requirements stated above;


 


(B)             each partial
assignment shall be made as an assignment of a proportionate part of all the
assigning Lender’s rights and obligations under this Agreement;


 


(C)             the parties to
each assignment shall execute and deliver to the Administrative Agent an
Assignment and Acceptance, together with a processing and recordation fee of
$3,500, provided that only one such fee shall be payable in the event of
simultaneous assignments to or from two or more Approved Funds; and


 


(D)            the assignee, if it
shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire in a form approved by the Administrative Agent
(the “Administrative Questionnaire”);


 


104














 


For
the purpose of this Section 14.6(b), the term “Approved Fund” has the
following meaning:


 


“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, advised
or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an
entity or an Affiliate of an entity that administers, advises or manages a
Lender.


 


(iii)          Subject to acceptance and recording
thereof pursuant to paragraph (b)(v) of this Section, from and after the
effective date specified in each Assignment and Acceptance, the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such Assignment and Acceptance, 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 Acceptance, be released from
its obligations under this Agreement (and, in the case of an Assignment and
Acceptance 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 2.10, 2.11, 3.5, 5.4 and 14.5) . Any
assignment or transfer by a Lender of rights or obligations under this
Agreement that does not comply with this Section 14.6 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
solely for this purpose as an agent of the Borrower, shall maintain at the
Administrative Agent’s Office a copy of each Assignment and Acceptance 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 any payment made by the Letter of Credit Issuer under any Letter
of Credit 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 Borrower, the Administrative Agent, the Letter of
Credit Issuer 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 Borrower, the Letter of Credit
Issuer 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 Acceptance 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 Acceptance 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)             (i) Any Lender may, without
the consent of the Borrower, the Administrative Agent, the Letter of Credit
Issuer or the Swingline Lender, sell participations to one or more banks or
other entities (each, a “Participant”) in all or a portion of such Lender’s
rights and 


 


105

















 


obligations under this
Agreement (including all or a portion of its Commitments and the Loans owing to
it), provided that (A) such Lender’s obligations under this
Agreement shall remain unchanged, (B) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (C) the Borrower, the Administrative Agent, the Letter of Credit
Issuer 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 or instrument 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 or any other Credit Document, provided that
such agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 14.1(a) that affects such
Participant. Subject to paragraph (c)(ii) of this Section, the Borrower
agrees that each Participant shall be entitled to the benefits of Sections
2.10, 2.11, 3.5 and 5.4 (subject to the requirements of such Sections) to the
same extent as if it were a Lender and had acquired its interest by assignment
pursuant to paragraph (b) of this Section. To the extent permitted by law,
each Participant also shall be entitled to the benefits of Section 14.8(b) as
though it were a Lender, provided such Participant agrees to be subject
to Section 14.8(a) as though it were a Lender.


 


(ii)           A Participant shall not be entitled
to receive any greater payment under Section 2.10 or 5.4 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower’s prior written consent (not to be
unreasonably withheld or delayed; it being understood that, without limitation,
the Borrower shall have the right to withhold its consent to any participation
if the Participant would be entitled, on the date of the sale of the
participation, to receive any greater payment under Section 2.10 or 5.4
than the applicable Lender would have been entitled to receive with respect to
the participation sold to such Participant).


 


(iii)          Each Lender that sells a participation
shall, acting solely for this purpose as an agent of the Borrower, 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 this Agreement (the “Participant Register”).
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. Any such Participant
Register shall be available for inspection by the Administrative Agent at any
reasonable time and from time to time upon reasonable prior notice.


 


(d)           Any Lender may, without the consent
of the Borrower or the Administrative Agent, 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, 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. In order to facilitate such pledge or
assignment, the Borrower hereby agrees that, upon request of any Lender at any
time and from time to time after the Borrower has made its initial Borrowing
hereunder, the Borrower shall provide to such


 


106

















 


Lender, at the Borrower’s
own expense, a promissory note, in form reasonably satisfactory to each Initial
Lender, as the case may be, evidencing the Revolving Credit Loans and Swingline
Loans, respectively, owing to such Lender.


 


(e)           Subject to compliance with Section 14.16,
the Borrower authorizes each Lender to disclose to any Participant, secured
creditor of such Lender or assignee (each, a “Transferee”) and any
prospective Transferee any and all Confidential Information (including any and
all financial information) in such Lender’s possession concerning the Borrower
and its Affiliates that has been delivered to such Lender by or on behalf of
the Borrower and its Affiliates pursuant to this Agreement or which has been
delivered to such Lender by or on behalf of the Borrower and its Affiliates in
connection with such Lender’s credit evaluation of the Borrower and its
Affiliates prior to becoming a party to this Agreement.


 


14.7.        Replacements of Lenders under Certain
Circumstances. The Borrower shall be permitted to replace any Lender that (a) requests
reimbursement for amounts owing pursuant to Section 2.10, 2.12, 3.5 or
5.4, (b) is affected in the manner described in Section 2.10(a)(iii) and
as a result thereof any of the actions described in such Section is
required to be taken, (c) becomes a Defaulting Lender, with a replacement
bank or other financial institution or (d) in connection with any proposed
amendment, waiver or consent requiring the consent of “each Lender” or “each
Lender affected thereby” pursuant to Section 14.1(a), does not consent
when the consent of the Required Lenders has been obtained, but the consent of
other remaining Lenders has not been obtained, 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) the Borrower shall repay (or the replacement bank or institution
shall purchase, at par) all Loans and other amounts (other than any disputed
amounts) pursuant to Section 2.8, 2.10, 2.11, 2.13, 3.3, 3.5, 4.1, 5.4 or
14.5, as the case may be, owing to such replaced Lender prior to the date of
replacement, (iv) the replacement bank or institution, if not already a
Lender, and the terms and conditions of such replacement, shall be reasonably
satisfactory to the Administrative Agent, (v) the replaced Lender shall be
obligated to make such replacement in accordance with the provisions of Section 14.6
(provided that the Borrower shall be obligated to pay the registration
and processing fee referred to therein) and (vi) any such replacement
shall not be deemed to be a waiver of any rights that the Borrower, the Administrative
Agent, the Collateral Agent or any other Lender shall have against the replaced
Lender.


 


14.8.        Adjustments; Set-off.


 


(a)           Except as otherwise provided herein,
if any Lender (a “benefited Lender”) shall at any time receive any
payment of all or part of its Loans, or interest thereon, 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 11.5,
or otherwise), in a greater proportion than any such payment to or collateral
received by any other Lender, if any, in respect of such other Lender’s Loans,
or interest thereon, such benefited Lender shall purchase for cash from the
other Lenders a participating interest in such portion of each such other
Lender’s Loan, or shall provide such other Lenders with the benefits of any
such collateral, or the proceeds thereof, as shall be necessary to cause such
benefited Lender to share the excess payment or benefits of such collateral or
proceeds 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 


 


107

















 


benefited Lender, such
purchase shall be rescinded, and the purchase price and benefits returned, to
the extent of such recovery, but without interest.


 


(b)           After the occurrence and during the
continuance of an Event of Default, in addition to any rights and remedies of
the Lenders provided by law, each Lender shall have the right, without prior
notice to the Borrower, any such notice being expressly waived by the Borrower
to the extent permitted by applicable law, upon any amount becoming due and
payable by the Borrower hereunder (whether at the stated maturity, by acceleration
or otherwise) to set-off and appropriate and apply against such amount 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 or any branch or agency
thereof to or for the credit or the account of the Borrower. Each Lender agrees
promptly to notify the Borrower and the Administrative Agent after any such
set-off and application made by such Lender, provided that the failure
to give such notice shall not affect the validity of such set-off and
application.


 


14.9.        Counterparts. This Agreement may
be executed by one or more of the parties to this Agreement on any number of
separate counterparts (including by facsimile or other electronic
transmission), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the copies of this Agreement
signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.


 


14.10.      Severability. Any provision of any
Credit Document 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.


 


14.11.      Integration. This Agreement and the
other Credit Documents represent the agreement of the Borrower, the
Administrative Agent, the Collateral Agent and the Lenders with respect to the
subject matter hereof, and there are no promises, undertakings, representations
or warranties by the Administrative Agent, the Collateral Agent or any Lender
relative to subject matter hereof not expressly set forth or referred to herein
or in the other Credit Documents.


 


14.12.      GOVERNING LAW. THIS AGREEMENT AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.


 


14.13.      Submission to Jurisdiction; Waivers.
Each Credit Party hereby irrevocably and unconditionally:


 


(a)           submits for itself
and its property in any legal action or proceeding relating to this Agreement
and the other Credit 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 City of New York, County of New York, State
of New


 


108

















 


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 the Borrower at its address set forth in Section 14.2
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 any special, exemplary, punitive or
consequential damages.


 


14.14.      Acknowledgments.
The Borrower hereby acknowledges that:


 


(a)           it has been advised
by counsel in the negotiation, execution and delivery of this Agreement and the
other Credit Documents;


 


(b)           neither the
Administrative Agent, any Security Agent nor any Lender has any fiduciary
relationship with or duty to the Borrower arising out of or in connection with
this Agreement or any of the other Credit Documents, and the relationship
between the Administrative Agent, the Security Agents and the Lenders, on one
hand, and the Borrower, 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 Credit Documents or otherwise exists by virtue
of the transactions contemplated hereby among the Lenders or among the Borrower
and the Lenders.


 


14.15.      WAIVERS
OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT, THE
COLLATERAL 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 CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.


 


14.16.      Confidentiality. The Administrative
Agent, each Security Agent and each Lender shall hold all non-public
information furnished by or on behalf of the Borrower in connection with such
Lender’s evaluation of whether to become a Lender hereunder or obtained by such
Lender, such Security Agent or the Administrative Agent pursuant to the requirements
of


 


109

















 


this Agreement (“Confidential
Information”), confidential in accordance with its customary procedure for
handling confidential information of this nature and (in the case of a Lender
that is a bank) in accordance with safe and sound banking practices and in any
event may make disclosure as required or requested by any governmental agency
or representative thereof or pursuant to legal process or to such Lender’s,
Security Agent’s or the Administrative Agent’s attorneys, or to any direct or
indirect contractual counterparty in swap agreements or such contractual
counterparty’s professional advisor (so long as such contractual counterparty
or professional advisor to such contractual party agrees to be bound by the
provisions of this Section 14.16.) or independent auditors or Affiliates, provided
that unless specifically prohibited by applicable law or court order, each
Lender, each Security Agent and the Administrative Agent shall notify the Borrower
of any request by any governmental agency or representative thereof (other than
any such request in connection with an examination of the financial condition
of such Lender by such governmental agency) for disclosure of any such
non-public information prior to disclosure of such information, and provided further
that in no event shall any Lender, Security Agent or the Administrative Agent
be obligated or required to return any materials furnished by the Borrower or
any Subsidiary of the Borrower. Each Lender, each Security Agent and the
Administrative Agent agrees that it will not provide to prospective Transferees
or to prospective direct or indirect contractual counterparties in swap
agreements to be entered into in connection with Loans made hereunder any of
the Confidential Information unless such Person is advises of and agrees to be
bound by the provisions of this Section 14.16.


 


14.17.        USA PATRIOT Act. Each Lender
hereby notifies the Borrower 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 Borrower, which information includes the name
and address of the Borrower and other information that will allow such Lender
to identify the Borrower in accordance with the Patriot Act.


 


[Signature
Pages Follow]


 


110

















 


IN WITNESS WHEREOF, each of the parties hereto has
caused a counterpart of this Agreement to be duly executed and delivered as of
the date first above written.


 


	
   

  	
  SEALY
  MATTRESS COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Kenneth L. Walker

  
	
   

  	
   

  	
  Name:

  	
  Kenneth
  L. Walker

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  	
   

  	
  General
  Counsel & Secretary

  



 


	
   

  	
  SEALY
  MATTRESS CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Kenneth L. Walker

  
	
   

  	
   

  	
  Name:

  	
  Kenneth
  L. Walker

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  	
   

  	
  General
  Counsel & Secretary

  



 


	
   

  	
  SEALY
  CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Kenneth L. Walker

  
	
   

  	
   

  	
  Name:

  	
  Kenneth
  L. Walker

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  	
   

  	
  General
  Counsel & Secretary

  



 

















 


	
   

  	
  JPMORGAN
  CHASE BANK, N.A.,

  
	
   

  	
  as
  Administrative Agent, Collateral Agent, Letter of Credit Issuer and as a
  Lender

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Tony Yung

  
	
   

  	
   

  	
  Name:

  	
  Tony
  Yung

  
	
   

  	
   

  	
  Title:
  

  	
  Vice
  President

  



 

















 


	
   

  	
  GENERAL
  ELECTRIC CAPITAL CORPORATION

  
	
   

  	
  as
  Co-Collateral Agent and a Lender

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Philip F. Carfora

  
	
   

  	
   

  	
  Name:

  	
  Philip
  F. Carfora

  
	
   

  	
   

  	
  Title:
  

  	
  Duly
  Authorized Signatory

  



 

















 


	
   

  	
  CITICORP
  NORTH AMERICA, INC. 

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Thomas M. Halsch

  
	
   

  	
   

  	
  Name:

  	
  Thomas
  M. Halsch

  
	
   

  	
   

  	
  Title:
  

  	
  Vice
  President

  



 

















 


	
   

  	
  MIZUHO
  CORPORATE BANK, LTD. 

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  William Getz

  
	
   

  	
   

  	
  Name:

  	
  William
  Getz

  
	
   

  	
   

  	
  Title:
  

  	
  Deputy
  General Manager

  



 














Schedule 1.1(a)


to Credit Agreement


 


MORTGAGED PROPERTIES


 


OWNED


 


	
   

  	
   

  	
  Company

  	
   

  	
  State

  	
   

  	
  Address

  
	
  1.

  	
   

  	
  Sealy Mattress Company

  	
   

  	
  AZ

  	
   

  	
  4802 W. Van Buren St.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Phoenix, AZ 85043

  
	
  2.

  	
   

  	
  Sealy Mattress Manufacturing

  	
   

  	
  CA

  	
   

  	
  1130 7th Street

  
	
   

  	
   

  	
  Company, Inc.

  	
   

  	
   

  	
   

  	
  Richmond, CA 94801

  
	
  3.

  	
   

  	
  The Ohio Mattress Company

  	
   

  	
  CO

  	
   

  	
  6275 Lake Shore Court

  
	
   

  	
   

  	
  Licensing and Components Group

  	
   

  	
   

  	
   

  	
  Colorado Springs, CO 80915

  
	
  4.

  	
   

  	
  Sealy Mattress Manufacturing

  	
   

  	
  CC

  	
   

  	
  12555 E. 39th Avenue

  
	
   

  	
   

  	
  Company, Inc.

  	
   

  	
   

  	
   

  	
  Denver, CO 80239

  
	
  5.

  	
   

  	
  Sealy Mattress Company of

  	
   

  	
  CT

  	
   

  	
  25 & 31 Hillside
  Avenue

  
	
   

  	
   

  	
  Albany, Inc.

  	
   

  	
   

  	
   

  	
  Watertown, CT 06779

  
	
  6.

  	
   

  	
  Sealy Mattress Company

  	
   

  	
  GA

  	
   

  	
  1705 Rockdale Ind. Blvd.
  NW

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Conyers, GA 30012

  
	
  7.

  	
   

  	
  The Ohio Mattress Company

  	
   

  	
  IN

  	
   

  	
  1132-1133 North Cullen
  Street

  
	
   

  	
   

  	
  Licensing and Components Group

  	
   

  	
   

  	
   

  	
  Rensselaer, IN 47978

  
	
  8.

  	
   

  	
  Sealy of Minnesota, Inc.

  	
   

  	
  MN

  	
   

  	
  825 Transfer Road

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  St. Paul, MN 55114

  
	
  9.

  	
   

  	
  Sealy Mattress Manufacturing

  	
   

  	
  NC

  	
   

  	
  700 S. State St.

  
	
   

  	
   

  	
  Company, Inc.

  	
   

  	
   

  	
   

  	
  at 7th Avenue

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Lexington, NC 27293

  
	
  10.

  	
   

  	
  Sealy, Inc.

  	
   

  	
  NC

  	
   

  	
  239 Sealy Drive

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  One Office Parkway

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Trinity, NC 27370

  
	
  11.

  	
   

  	
  Sealy Mattress Company, f/k/a

  	
   

  	
  OH

  	
   

  	
  1070 Lake Road

  
	
   

  	
   

  	
  Ohio Mattress Company

  	
   

  	
   

  	
   

  	
  Medina, OH 44258

  
	
  12.

  	
   

  	
  Sealy Mattress Manufacturing

  	
   

  	
  OR

  	
   

  	
  13635 N. Lombard St.

  
	
   

  	
   

  	
  Company, Inc.

  	
   

  	
   

  	
   

  	
  Portland, OR 97203

  
	
  13.

  	
   

  	
  The Ohio Mattress Company

  	
   

  	
  PA

  	
   

  	
  Magic Industrial Park

  
	
   

  	
   

  	
  Licensing and Components Group

  	
   

  	
   

  	
   

  	
  Delano, PA 18220

  
	
  14.

  	
   

  	
  Sealy Mattress Manufacturing

  	
   

  	
  PA

  	
   

  	
  R.D. #1 Rte. 322

  
	
   

  	
   

  	
  Company, Inc.

  	
   

  	
   

  	
   

  	
  Clarion, PA 16214

  
	
  15.

  	
   

  	
  Sealy Mattress Company of

  	
   

  	
  Puerto Rico

  	
   

  	
  El Comandante Industrial
  Center

  
	
   

  	
   

  	
  Puerto Rico

  	
   

  	
   

  	
   

  	
  #1 San Marcos

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Carolina, Puerto Rico
  00982

  
	
  16.

  	
   

  	
  Sealy Texas Management, Inc.

  	
   

  	
  TX

  	
   

  	
  6550 Wuliger Way

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  North Richland Hills, TX
  76180

  
	
  17.

  	
   

  	
  Sealy Texas Management, Inc.

  	
   

  	
  TX

  	
   

  	
  Highway Loop 290

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Brenham, TX 77833

  



 

















 


LEASED


 


	
   

  	
   

  	
  Company

  	
   

  	
  State

  	
   

  	
  Address

  
	
  18.

  	
   

  	
  Sealy Mattress Company of

  	
   

  	
  KS

  	
   

  	
  3100 Fairfax Traffic Way

  
	
   

  	
   

  	
  Kansas City, Inc.

  	
   

  	
   

  	
   

  	
  Kansas City, KS 66115

  
	
  19.

  	
   

  	
  The Ohio Mattress Company

  	
   

  	
  CO

  	
   

  	
  1779 South Academy Blvd

  
	
   

  	
   

  	
  Licensing and Components Group

  	
   

  	
   

  	
   

  	
  Colorado Springs 80915

  



 


2

















 


Schedule
1.1(b)


to Credit
Agreement


 


COMMITMENTS
OF LENDERS


 


	
  Lender

  	
   

  	
  Commitment

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  General Electric Capital Corporation

  	
   

  	
  $

  	
  40,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  JPMorgan Chase Bank, N.A.

  	
   

  	
  $

  	
  25,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Citicorp North America, Inc.

  	
   

  	
  $

  	
  25,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Mizuho Corporate Bank, Ltd.

  	
   

  	
  $

  	
  10,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  100,000,000

  	
   

  



 

















 


Schedule
1.1(c)


to
Credit Agreement


 


IMMATERIAL SUBSIDIARIES


 


A. Brandwein & Co.


Advanced Sleep Products


American Mattress Centers, Inc.


Sealy Components-Pads, Inc.


Sealy Mattress Company of
Memphis


Sealy Mattress Company of
Michigan, Inc.


Sealy Mattress Company of
S.W. Virginia


Sealy-Korea, Inc.


 

















 


Schedule 1.1(d)


to Credit Agreement


 


EXISTING LETTERS OF CREDIT


 


	
  Issuer

  	
   

  	
  LC Number

  	
   

  	
  Beneficiary

  	
   

  	
  Date

  	
   

  	
  Increase

  	
   

  	
  Decrease

  	
   

  	
  Adjusted

  Balance

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  JPMorgan

  	
   

  	
  SB0868491

  P-010195

  	
   

  	
  Hartford Fire Insurance Company

  	
   

  	
  05/18/1998

  	
   

  	
  $

  	
   700,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  06/01/2001

  	
   

  	
   

  	
   

  	
  $

  	
   300,000

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  01/13/2003

  	
   

  	
   

  	
   

  	
  $

  	
   200,000

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  10/17/2006

  	
   

  	
   

  	
   

  	
  $

  	
   100,000

  	
   

  	
  $

  	
   100,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  JPMorgan

  	
   

  	
  S868856

  P-010194

  	
   

  	
  Commissioner of NJ Environmental Protection

  	
   

  	
  08/25/1999

  	
   

  	
  $

  	
  3,869,683

  	
   

  	
   

  	
   

  	
  $

  	
   3,869,683

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  JPMorgan

  	
   

  	
  P-227810

  	
   

  	
  C N A ClaimPlus (05/31/03)

  	
   

  	
  07/01/2002

  	
   

  	
  $

  	
  1,398,933

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (formerly Transcontinental Casualty Company)

  	
   

  	
  09/01/2002

  	
   

  	
  $

  	
  1,398,933

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  12/02/2002

  	
   

  	
  $

  	
  1,398,933

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  03/01/2003

  	
   

  	
  $

  	
  1,398,933

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  06/04/2003

  	
   

  	
  $

  	
  1,250,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  09/01/2003

  	
   

  	
  $

  	
  1,250,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  12/01/2003

  	
   

  	
  $

  	
  1,250,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  03/01/2004

  	
   

  	
  $

  	
  1,250,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  05/03/2004

  	
   

  	
   

  	
   

  	
  $

  	
   (755,732

  	
  )

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  06/13/2007

  	
   

  	
   

  	
   

  	
  $

  	
   (1,780,000

  	
  )

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  07/10/2008

  	
   

  	
   

  	
   

  	
  $

  	
   (7,294,000

  	
  )

  	
  $

  	
   766,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  JPMorgan

  	
   

  	
  P245505

  	
   

  	
  RLI Insurance Company

  	
   

  	
  02/12/2004

  	
   

  	
  $

  	
   49,500

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  04/13/2009

  	
   

  	
  $

  	
   33,000

  	
   

  	
   

  	
   

  	
  $

  	
   82,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  JPMorgan

  	
   

  	
  P-249728

  SB 248642

  	
   

  	
  US Fidelity and Guaranty Co (Discove Re Mgrs, LTD)

  	
   

  	
  07/19/2004

  	
   

  	
  $

  	
  5,000,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  07/26/2005

  	
   

  	
  $

  	
  5,000,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  08/05/2005

  	
   

  	
  $

  	
   700,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  06/15/2006

  	
   

  	
  $

  	
  1,300,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  05/30/2007

  	
   

  	
   

  	
   

  	
  $

  	
   (500,000

  	
  )

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  05/28/2008

  	
   

  	
   

  	
   

  	
  $

  	
   (500,000

  	
  )

  	
  $

  	
   11,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  JPMorgan

  	
   

  	
  TPTS-236337

  	
   

  	
  Ohio Bureau of Workers’ Compensation

  	
   

  	
  02/14/2006

  	
   

  	
  $

  	
   462,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  01/18/2008

  	
   

  	
   

  	
   

  	
  $

  	
   (384,000

  	
  )

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  01/01/2009

  	
   

  	
  $

  	
   105,000

  	
   

  	
   

  	
   

  	
  $

  	
   183,000

  	
   

  



 














Schedule
8.12


to Credit
Agreement


 


SUBSIDIARIES


 


	
  Name of
  Subsidiary

  	
   

  	
  State/Jurisdiction of

  Incorporation/Formation

  	
   

  	
  Ownership Interest

  of Borrower

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The Ohio Mattress Company
  Licensing and Components Group

  	
   

  	
  Delaware

  	
   

  	
  100% directly

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress
  Manufacturing Company, Inc.

  	
   

  	
  Delaware

  	
   

  	
  100% indirectly through The Ohio Mattress Company Licensing and
  Components Group

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Technology LLC

  	
   

  	
  North Carolina

  	
   

  	
  100% indirectly through The Ohio Mattress Company Licensing and
  Components Group

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Kurlon Ltd. (inactive)

  	
   

  	
  India

  	
   

  	
  51.7% indirectly through The Ohio Mattress Company Licensing and
  Components Group

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy (Switzerland) GmbH

  	
   

  	
  Switzerland

  	
   

  	
  100% indirectly through The Ohio Mattress Company Licensing and
  Components Group

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy-Korea, Inc. (inactive)

  	
   

  	
  Delaware

  	
   

  	
  100% indirectly through The Ohio Mattress Company Licensing and
  Components Group

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  North American Bedding
  Company

  	
   

  	
  Ohio

  	
   

  	
  100% directly

  	
   

  



 

















 


	
  Name of
  Subsidiary

  	
   

  	
  State/Jurisdiction of

  Incorporation/Formation

  	
   

  	
  Ownership Interest

  of Borrower

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Company of
  Puerto Rico

  	
   

  	
  Ohio

  	
   

  	
  100% directly

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy, Inc.

  	
   

  	
  Ohio

  	
   

  	
  100% directly

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mattress Holdings
  International LLC

  	
   

  	
  Delaware

  	
   

  	
  100% indirectly through Sealy, Inc.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  American Mattress
  Centers, Inc. (inactive)

  	
   

  	
  North Carolina

  	
   

  	
  100% indirectly through Sealy, Inc.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Real
  Estate, Inc.

  	
   

  	
  North Carolina

  	
   

  	
  100% directly

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Company of
  Kansas City, Inc.

  	
   

  	
  Missouri

  	
   

  	
  100% directly

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy of Minnesota, Inc.

  	
   

  	
  Minnesota

  	
   

  	
  100% directly

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Texas
  Management, Inc.

  	
   

  	
  Texas

  	
   

  	
  100% directly

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Company of
  Michigan, Inc. (inactive)

  	
   

  	
  Michigan

  	
   

  	
  100% directly

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Company of
  Illinois

  	
   

  	
  Illinois

  	
   

  	
  100% directly

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A. Brandwein &
  Co. (inactive)

  	
   

  	
  Illinois

  	
   

  	
  100% indirectly through Sealy Mattress Company of Illinois

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy of Maryland and
  Virginia, Inc.

  	
   

  	
  Maryland

  	
   

  	
  100% directly

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Company of
  Albany, Inc.

  	
   

  	
  New York

  	
   

  	
  100% directly

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ohio-Sealy Mattress
  Manufacturing Co., Inc.

  	
   

  	
  Massachusetts

  	
   

  	
  100% directly

  	
   

  



 


2

















 


	
  Name of
  Subsidiary

  	
   

  	
  State/Jurisdiction of

  Incorporation/Formation

  	
   

  	
  Ownership Interest

  of Borrower

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ohio-Sealy Mattress
  Manufacturing Co.

  	
   

  	
  Georgia

  	
   

  	
  100% directly

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Western Mattress Company

  	
   

  	
  California

  	
   

  	
  100% directly

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy
  Components-Pads, Inc. (inactive)

  	
   

  	
  Delaware

  	
   

  	
  100% directly

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Company of
  S.W. Virginia (inactive)

  	
   

  	
  Virginia

  	
   

  	
  100% directly

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Advanced Sleep Products (inactive)

  	
   

  	
  California

  	
   

  	
  100% directly

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Company of
  Memphis (inactive)

  	
   

  	
  Tennessee

  	
   

  	
  100% directly

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Argentina Srl

  	
   

  	
  Argentina

  	
   

  	
  100% indirectly through The Ohio Mattress Company Licensing and
  Components Group

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Uruguay Srl

  	
   

  	
  Argentina

  	
   

  	
  100% indirectly through The Ohio Mattress Company Licensing and
  Components Group

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Cayman Islands (Inactive)

  	
   

  	
  Cayman Islands

  	
   

  	
  100% indirectly through The Ohio Mattress Company Licensing and
  Components Group

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mattress Holdings
  International B.V.

  	
   

  	
  Netherlands

  	
   

  	
  100% indirectly through The Ohio Mattress Company Licensing and
  Components Group

  	
   

  



 


3

















 


	
  Name of
  Subsidiary

  	
   

  	
  State/Jurisdiction of

  Incorporation/Formation

  	
   

  	
  Ownership Interest

  of Borrower

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Canada, Ltd.

  	
   

  	
  Alberta

  	
   

  	
  100% indirectly through The Ohio Mattress Company Licensing and
  Components Group

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Gestion Centurion Inc.

  	
   

  	
  Quebec

  	
   

  	
  100% indirectly through The Ohio Mattress Company Licensing and
  Components Group

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mattress Holding S.A.S. 

  	
   

  	
  France

  	
   

  	
  100% indirectly through The Ohio Mattress Company Licensing and Components
  Group

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sapsa Bedding S.A.S.

  	
   

  	
  France

  	
   

  	
  100% indirectly through The Ohio Mattress Company Licensing and
  Components Group

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sapsa Bedding Srl

  	
   

  	
  Italy

  	
   

  	
  100% indirectly through The Ohio Mattress Company Licensing and
  Components Group

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sapsa Bedding Sprl

  	
   

  	
  Belgium

  	
   

  	
  100% indirectly through The Ohio Mattress Company Licensing and Components
  Group

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sapsa Latex SL

  	
   

  	
  Spain

  	
   

  	
  100% indirectly through The Ohio Mattress Company Licensing and
  Components Group

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sapsa Bedding SL

  	
   

  	
  Spain

  	
   

  	
  100% indirectly through The Ohio Mattress Company Licensing and
  Components Group

  	
   

  



 


4

















 


	
  Name of
  Subsidiary

  	
   

  	
  State/Jurisdiction of

  Incorporation/Formation

  	
   

  	
  Ownership Interest

  of Borrower

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Company
  Mexico S de R.L. de C.V.

  	
   

  	
  Mexico

  	
   

  	
  100% indirectly through The Ohio Mattress Company Licensing and
  Components Group

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Colchones de Mexico
  S.A. de C.V.

  	
   

  	
  Mexico

  	
   

  	
  100% indirectly through The Ohio Mattress Company Licensing and
  Components Group

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Servicios de Mexico
  S.A. de C.V.

  	
   

  	
  Mexico

  	
   

  	
  100% indirectly through The Ohio Mattress Company Licensing and
  Components Group

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy (Switzerland) GmbH
  Finance Branch

  	
   

  	
  Guernsey, Channel Islands

  	
   

  	
  100% indirectly through The Ohio Mattress Company Licensing and
  Components Group

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy do Brasil Limitada

  	
   

  	
  Brazil

  	
   

  	
  100% indirectly through The Ohio Mattress Company Licensing and
  Components Group

  	
   

  



 


5

















 


Schedule
10.1


to Credit
Agreement


 


EFFECTIVE
DATE INDEBTEDNESS


 


	
  Facility

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Revolver Loan(1)

  	
   

  	
  $

  	
   58,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Senior Secured Term Loan A(2)

  	
   

  	
  $

  	
   270,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Senior Secured Term Loan E(3)

  	
   

  	
  $

  	
   107,108,753

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Senior Subordinated Debt(4)

  	
   

  	
  $

  	
   273,945,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Capital Leases:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Mountain Top-Latex facility

  	
   

  	
  $

  	
   13,471,725

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Orlando facility

  	
   

  	
  $

  	
   17,573,032

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Albany facility

  	
   

  	
  $

  	
   10,842,355

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Italy:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Debtor: Sapsa Bedding Srl; Lender: Banca Pop. Milano

  	
   

  	
  $

  	
   3,669,050

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Debtor: Sapsa Bedding Srl; Lender: Monte Paschi

  	
   

  	
  $

  	
   3,355,931

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Debtor: Sapsa Bedding Srl; Lender: Banca Regionale Europea

  	
   

  	
  $

  	
   582,522

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Debtor: Sapsa Bedding Srl; Lender: Cred. Bergamasco

  	
   

  	
  $

  	
   85,082

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Debtor: Sapsa Bedding Srl; Lender: MPS Merchant

  	
   

  	
  $

  	
   3,578,495

  	
   

  



 






(1) To be paid on the
Effective Date


 


(2) To be paid on the
Effective Date


 


(3) To be paid on the
Effective Date


 


(4) To be paid on the
Effective Date


 

















 


	
  Facility

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Debtor: Sapsa Bedding Srl; Lender: MPS Merchant

  	
   

  	
  $

  	
  2,857,128

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Debtor: Sapsa Bedding Srl; Lender: MPS Merchant

  	
   

  	
  $

  	
  3,058,827

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Debtor: Sapsa Bedding Srl; Lender: CA.RI Tortona

  	
   

  	
  $

  	
  354,930

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Debtor: Sapsa Bedding Srl; Lender: Banca Toscana

  	
   

  	
  $

  	
  42,309

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  France:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Debtor: Sapsa Bedding S.A.S.; Lender: Palatine

  	
   

  	
  $

  	
  1,807,711

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Debtor: Sapsa Bedding S.A.S.; Lender: BNP

  	
   

  	
  $

  	
  298,799

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Debtor: Sapsa Bedding S.A.S.; Lender: HSBC

  	
   

  	
  $

  	
  1,080,980

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Spain:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Debtor: Sapsa Latex, SL; Lenders: Sabadel and La Caixa

  	
   

  	
  $

  	
  11,786

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Argentina:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Debtor: Sealy Argentina Srl; Lender: Galicia

  	
   

  	
  $

  	
  369,159

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Debtor: Sealy Argentina Srl; Lender: Frances

  	
   

  	
  $

  	
  386,510

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Brazil:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Debtor: Sealy do Brasil Limitada; Lender: ABN Amro Bank (revolver
  line)

  	
   

  	
  $

  	
  558,790

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Mexico:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Company Mexico S de R.L. de C.V. Capital Lease

  	
   

  	
  $

  	
  10,470

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Puerto Rico:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Company of Puerto Rico Capital Lease

  	
   

  	
  $

  	
  24,573

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  U.S. insurance financing

  	
   

  	
  $

  	
  1,022,624

  	
   

  



 


7














Schedule 10.2


to Credit Agreement


 


EFFECTIVE DATE LIENS


 


Liens
securing obligations under the Existing Credit Agreement, which liens shall be
discharged on the Effective Date.


 


	
  Debtor

  	
   

  	
  Jurisdiction

  	
   

  	
  Type
  of

  filing found

  	
   

  	
  Secured

  Party

  	
   

  	
  Collateral

  	
   

  	
  Original

  File Date

  	
   

  	
  Original

  File Number

  	
   

  	
  Amdt.

  File Date

  	
   

  	
  Amdt. File Number

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  E Plus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  08/09/2005

  	
   

  	
  OH00092069842

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  E Plus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  09/05/2005

  	
   

  	
  OH00092069953

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  E Plus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  11/26/2005

  	
   

  	
  OH00095639915

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  E Plus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  01/06/2006

  	
   

  	
  20060060766

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  E Plus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  05/17/2006

  	
   

  	
  OH00102227487

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  E Plus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  05/17/2006

  	
   

  	
  OH00102227609

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  E Plus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  05/17/2006

  	
   

  	
  OH00102229512

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  E Plus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  05/17/2006

  	
   

  	
  OH00102229512

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  E Plus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  08/17/2006

  	
   

  	
  OH00105602719

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  E Plus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  09/12/2006

  	
   

  	
  OH00106404275

  	
   

  	
   

  	
   

  	
   

  



 

















 


	
  Debtor

  	
   

  	
  Jurisdiction

  	
   

  	
  Type
  of

  filing found

  	
   

  	
  Secured

  Party

  	
   

  	
  Collateral

  	
   

  	
  Original

  File Date

  	
   

  	
  Original

  File Number

  	
   

  	
  Amdt.

  File Date

  	
   

  	
  Amdt. File Number

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  E Plus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  09/12/2006

  	
   

  	
  OH00106404386

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  E Plus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  09/12/2006

  	
   

  	
  OH00106723766

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  E Plus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  12/04/2006

  	
   

  	
  OH00109491372

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  E Plus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  12/04/2006

  	
   

  	
  OH00109502963

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  E Plus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  12/04/2006

  	
   

  	
  OH00109503086

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  E Plus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  12/04/2006

  	
   

  	
  OH00109504765

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  E Plus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  12/04/2006

  	
   

  	
  OH00109504876

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  E Plus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  12/04/2006

  	
   

  	
  OH00109505000

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  E Plus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  12/04/2006

  	
   

  	
  OH00109505111

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  E Plus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  12/04/2006

  	
   

  	
  OH00109506901

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Company

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  Wells Fargo Financial Leasing, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  01/03/2007

  	
   

  	
  OH00110501863

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  Wells Fargo Financial Leasing, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  01/03/2007

  	
   

  	
  OH00110502097

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  Wells Fargo Financial Leasing, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  01/03/2007

  	
   

  	
  OH00110510973

  	
   

  	
   

  	
   

  	
   

  



 


2

















 


	
  Debtor

  	
   

  	
  Jurisdiction

  	
   

  	
  Type
  of

  filing found

  	
   

  	
  Secured

  Party

  	
   

  	
  Collateral

  	
   

  	
  Original

  File Date

  	
   

  	
  Original

  File Number

  	
   

  	
  Amdt.

  File Date

  	
   

  	
  Amdt. File Number

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  Wells Fargo Financial Leasing, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  01/03/2007

  	
   

  	
  OH00110514688

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  Wells Fargo Financial Leasing, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  01/03/2007

  	
   

  	
  OH00110514799

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  Wells Fargo Financial Leasing, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  01/03/2007

  	
   

  	
  OH00110515145

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  E Plus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  01/18/2007

  	
   

  	
  OH00111026563

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Company

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  General Electric Capital Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  02/24/2009

  	
   

  	
  OH00132944473

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Company of Albany, Inc.

  	
   

  	
  New York SOS

  	
   

  	
  UCC-1

  	
   

  	
  OCE Financial Services, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  04/17/2008

  	
   

  	
  200804175421515

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  De Lage Landen Financial Services, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  10/18/2005

  	
   

  	
  53316784

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  12/19/2005

  	
   

  	
  53927135

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  08/08/2006

  	
   

  	
  62735124

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  02/05/2007

  	
   

  	
  20070457787

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  OFC Capital Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  02/05/2007

  	
   

  	
  20070457787

  	
   

  	
  12/06/2007

  	
   

  	
  20074605571

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  02/05/2007

  	
   

  	
  20070457795

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  OFC Capital Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  02/05/2007

  	
   

  	
  20070457795

  	
   

  	
  12/06/2007

  	
   

  	
  20074610423

  



 


3

















 


	
  Debtor

  	
   

  	
  Jurisdiction

  	
   

  	
  Type
  of

  filing found

  	
   

  	
  Secured

  Party

  	
   

  	
  Collateral

  	
   

  	
  Original

  File Date

  	
   

  	
  Original

  File Number

  	
   

  	
  Amdt.

  File Date

  	
   

  	
  Amdt. File Number

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  02/05/2007

  	
   

  	
  20070459502

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  OFC Capital Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  02/05/2007

  	
   

  	
  20070459502

  	
   

  	
  12/06/2007

  	
   

  	
  20074611645

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  02/05/2007

  	
   

  	
  20070459510

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  OFC Capital Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  02/05/2007

  	
   

  	
  20070459510

  	
   

  	
  12/06/2007

  	
   

  	
  200704612890

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  02/05/2007

  	
   

  	
  20070459528

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  OFC Capital Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  02/05/2007

  	
   

  	
  20070459528

  	
   

  	
  12/06/2007

  	
   

  	
  20074613187

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  02/05/2007

  	
   

  	
  20070459536

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  OFC Capital Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  02/05/2007

  	
   

  	
  20070459536

  	
   

  	
  12/06/2007

  	
   

  	
  20074613583

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  02/05/2007

  	
   

  	
  20070459544

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  OFC Capital Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  02/05/2007

  	
   

  	
  20070459544

  	
   

  	
  12/06/2007

  	
   

  	
  20074613781

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  02/05/2007

  	
   

  	
  20070459569

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  OFC Capital Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  02/05/2007

  	
   

  	
  20070459569

  	
   

  	
  12/06/2007

  	
   

  	
  20074614136

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  02/05/2007

  	
   

  	
  20070459577

  	
   

  	
   

  	
   

  	
   

  



 


4

















 


	
  Debtor

  	
   

  	
  Jurisdiction

  	
   

  	
  Type
  of

  filing found

  	
   

  	
  Secured

  Party

  	
   

  	
  Collateral

  	
   

  	
  Original

  File Date

  	
   

  	
  Original

  File Number

  	
   

  	
  Amdt.

  File Date

  	
   

  	
  Amdt. File Number

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  05/29/2007

  	
   

  	
  20072001740

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  OFC Capital Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  05/29/2007

  	
   

  	
  20072001740

  	
   

  	
  12/06/2007

  	
   

  	
  20074606470

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  05/29/2007

  	
   

  	
  20072001757

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  OFC Capital Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  05/29/2007

  	
   

  	
  20072001757

  	
   

  	
  12/06/2007

  	
   

  	
  20074608914

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  05/29/2007

  	
   

  	
  20072001773

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  OFC Capital Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  05/29/2007

  	
   

  	
  20072001773

  	
   

  	
  12/06/2007

  	
   

  	
  20074610837

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  05/29/2007

  	
   

  	
  20072001781

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  OFC Capital Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  05/29/2007

  	
   

  	
  20072001781

  	
   

  	
  12/06/2007

  	
   

  	
  20074611215

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  06/22/2007

  	
   

  	
  20072377975

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  OFC Capital Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  06/22/2007

  	
   

  	
  20072377975

  	
   

  	
  12/06/2007

  	
   

  	
  20074614458

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  06/22/2007

  	
   

  	
  20072377983

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  OFC Capital Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  06/22/2007

  	
   

  	
  20072377983

  	
   

  	
  12/06/2007

  	
   

  	
  20074614672

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  06/22/2007

  	
   

  	
  20072378544

  	
   

  	
   

  	
   

  	
   

  



 


5














 


	
  Debtor

  	
   

  	
  Jurisdiction

  	
   

  	
  Type
  of

  filing found

  	
   

  	
  Secured

  Party

  	
   

  	
  Collateral

  	
   

  	
  Original

  File Date

  	
   

  	
  Original

  File Number

  	
   

  	
  Amdt.

  File Date

  	
   

  	
  Amdt. File Number

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  OFC Capital Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  06/22/2007

  	
   

  	
  20072378544

  	
   

  	
  12/06/2007

  	
   

  	
  20074614953

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  06/22/2007

  	
   

  	
  20072378551

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  06/22/2007

  	
   

  	
  20072378569

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  OFC Capital Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  06/22/2007

  	
   

  	
  20072378569

  	
   

  	
  12/06/2007

  	
   

  	
  20074615133

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  06/22/2007

  	
   

  	
  20072378577

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  OFC Capital Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  06/22/2007

  	
   

  	
  20072378577

  	
   

  	
  12/06/2007

  	
   

  	
  20074615323

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  06/22/2007

  	
   

  	
  20072378585

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  OFC Capital Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  06/22/2007

  	
   

  	
  20072378585

  	
   

  	
  12/06/2007

  	
   

  	
  20074615398

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  06/22/2007

  	
   

  	
  20072378601

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  OFC Capital Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  06/22/2007

  	
   

  	
  20072378601

  	
   

  	
  12/06/2007

  	
   

  	
  20074615505

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  12/03/2007

  	
   

  	
  20074554902

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  MB Financial Bank, N.A.

  	
   

  	
  Leased Equipment

  	
   

  	
  12/03/2007

  	
   

  	
  20074554902

  	
   

  	
  03/31/2008

  	
   

  	
  20081118296

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  12/03/2007

  	
   

  	
  20074554936

  	
   

  	
   

  	
   

  	
   

  



 


6

















 


	
  Debtor

  	
   

  	
  Jurisdiction

  	
   

  	
  Type
  of

  filing found

  	
   

  	
  Secured

  Party

  	
   

  	
  Collateral

  	
   

  	
  Original

  File Date

  	
   

  	
  Original

  File Number

  	
   

  	
  Amdt.

  File Date

  	
   

  	
  Amdt. File Number

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  MB Financial Bank, N.A.

  	
   

  	
  Leased Equipment

  	
   

  	
  12/03/2007

  	
   

  	
  20074554936

  	
   

  	
  03/31/2008

  	
   

  	
  20081118320

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  12/03/2007

  	
   

  	
  20074555164

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  12/03/2007

  	
   

  	
  20074555172

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  01/03/2008

  	
   

  	
  20080021723

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  MB Financial Bank, N.A.

  	
   

  	
  Leased Equipment

  	
   

  	
  01/03/2008

  	
   

  	
  20080021723

  	
   

  	
  03/31/2008

  	
   

  	
  20081117603

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  04/01/2008

  	
   

  	
  20081135423

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  05/30/2008

  	
   

  	
  20081849841

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  10/08/2008

  	
   

  	
  20083414784

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Amendment

   

  Amended Debtor’s name to Sealy Corporation 

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  10/08/2008

  	
   

  	
  20083414784

  	
   

  	
  11/12/2008

  	
   

  	
  20083778444

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  10/08/2008

  	
   

  	
  20083414792

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  SG Equipment Finance USA Corp.

  	
   

  	
  Leased Equipment

  	
   

  	
  10/08/2008

  	
   

  	
  20083414792

  	
   

  	
  10/23/2008

  	
   

  	
  20083579875

  



 


7

















 


	
  Debtor

  	
   

  	
  Jurisdiction

  	
   

  	
  Type
  of

  filing found

  	
   

  	
  Secured

  Party

  	
   

  	
  Collateral

  	
   

  	
  Original

  File Date

  	
   

  	
  Original

  File Number

  	
   

  	
  Amdt.

  File Date

  	
   

  	
  Amdt. File Number

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  03/12/2009

  	
   

  	
  20090798303

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Manufacturing Company, Inc.

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  Toyota Motor Credit Corporation

  	
   

  	
  Specific Equipment

  	
   

  	
  08/26/2004

  	
   

  	
  42446815

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Manufacturing Company.

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  De Lage Landen Financial Services, Inc.

  	
   

  	
  Specific Equipment

  	
   

  	
  02/24/2005

  	
   

  	
  50607904

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Manufacturing Company, Inc.

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  NMHG Financial Services, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  11/03/2006

  	
   

  	
  63853702

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Manufacturing Company, Inc.

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  Toyota Motor Credit Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  02/20/2007

  	
   

  	
  20070654151

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Manufacturing Company, Inc.

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  Thompson Tractor Co., Inc.

  	
   

  	
  Specific Equipment

  	
   

  	
  05/17/2007

  	
   

  	
  20071857076

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Manufacturing Company, Inc.

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  Toyota Motor Credit Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  12/10/2007

  	
   

  	
  20074655790

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Manufacturing Company, Inc.

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  Toyota Motor Credit Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  12/11/2007

  	
   

  	
  20074667902

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Manufacturing Company, Inc.

  	
   

  	
  North Carolina,
  Randolph County Superior Court

  	
   

  	
  Judgment

  	
   

  	
  Marie McGuinness Sartin

  	
   

  	
  Amount $760.13

  	
   

  	
  11/28/2001

  	
   

  	
  01M566

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy of Maryland and Virginia, Inc.

  	
   

  	
  Maryland SOS

  	
   

  	
  UCC-1

  	
   

  	
  NMGH Financial Services Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  07/15/2002

  	
   

  	
  181124960

  	
   

  	
   

  	
   

  	
   

  



 


8

















 


	
  Debtor

  	
   

  	
  Jurisdiction

  	
   

  	
  Type
  of

  filing found

  	
   

  	
  Secured

  Party

  	
   

  	
  Collateral

  	
   

  	
  Original

  File Date

  	
   

  	
  Original

  File Number

  	
   

  	
  Amdt.

  File Date

  	
   

  	
  Amdt. File Number

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy of Maryland and Virginia, Inc.

  	
   

  	
  Maryland SOS

  	
   

  	
  UCC-3 Continuation

  	
   

  	
  NMGH Financial Services Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  07/15/2002

  	
   

  	
  181124960

  	
   

  	
  05/16/2007

  	
   

  	
  181124960

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy, Inc.

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  C.J. Hodder Lumber Company, Inc.

  	
   

  	
  Consigned Inventory

  	
   

  	
  11/15/2001

  	
   

  	
  OH00041373199

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy, Inc.

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-3 Continuation

  	
   

  	
  C.J. Hodder Lumber Company, Inc.

  	
   

  	
  Consigned Inventory

  	
   

  	
  11/15/2001

  	
   

  	
  OH00041373199

  	
   

  	
  05/19/2006

  	
   

  	
  20061420310

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy, Inc.

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1 In Lieu

  	
   

  	
  C.J. Hodder Lumber Company, Inc.

  	
   

  	
  Consigned Inventory 

  

  In Lieu fo NY, Fl, TX and AZ UCCs into OH.

  	
   

  	
  12/20/2001

  	
   

  	
  OH00043030337

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy, Inc.

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-3
  Continuation

  	
   

  	
  C.J. Hodder
  Lumber Company, Inc.

  	
   

  	
  Consigned
  Inventory 

  

  In Lieu fo NY, Fl, TX and AZ UCCs into OH.

  	
   

  	
  12/20/2001

  	
   

  	
  OH00043030337

  	
   

  	
  06/22/2006

  	
   

  	
  20061740464

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy, Inc.

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1 In Lieu

  	
   

  	
  C.J. Hodder Lumber Company, Inc.

  	
   

  	
  Consigned Inventory

  

  In Lieu fo NY, Fl, TX and CA and MDUCCs into OH.

  	
   

  	
  12/20/2001

  	
   

  	
  OH00043030448

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy, Inc.

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-3 Continuation

  	
   

  	
  C.J. Hodder Lumber Company, Inc.

  	
   

  	
  Consigned Inventory 



  In Lieu fo NY, Fl, TX and CA and MDUCCs into OH.

  	
   

  	
  12/20/2001

  	
   

  	
  OH00043030448

  	
   

  	
  06/22/2006

  	
   

  	
  20061740366

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy, Inc.

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  C.J. Hodder Lumber Company, Inc.

  	
   

  	
  Consigned Inventory

  	
   

  	
  01/07/2002

  	
   

  	
  OH00043568841

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy, Inc.

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-3 Continuation

  	
   

  	
  C.J. Hodder Lumber Company, Inc.

  	
   

  	
  Consigned Inventory

  	
   

  	
  01/07/2002

  	
   

  	
  OH00043568841

  	
   

  	
  07/10/2006

  	
   

  	
  20061920414

  



 


9

















 


	
  Debtor

  	
   

  	
  Jurisdiction

  	
   

  	
  Type
  of

  filing found

  	
   

  	
  Secured

  Party

  	
   

  	
  Collateral

  	
   

  	
  Original

  File Date

  	
   

  	
  Original

  File Number

  	
   

  	
  Amdt.

  File Date

  	
   

  	
  Amdt. File Number

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy, Inc.

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  C.J. Hodder Lumber Company, Inc.

  	
   

  	
  Consigned Inventory

  	
   

  	
  01/25/2002

  	
   

  	
  OH00044472122

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy, Inc.

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC Correction

   

  Clerk entered wrogn Filing Type

  	
   

  	
  C.J. Hodder Lumber Company, Inc.

  	
   

  	
  Consigned Inventory

  	
   

  	
  01/25/2002

  	
   

  	
  OH00044472122

  	
   

  	
  01/31/2002

  	
   

  	
  20020320062

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy, Inc.

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-3 Continuation

  	
   

  	
  C.J. Hodder Lumber Company, Inc.

  	
   

  	
  Consigned Inventory

  	
   

  	
  01/25/2002

  	
   

  	
  OH00044472122

  	
   

  	
  07/27/2006

  	
   

  	
  20062090638

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IOS Capital

  	
   

  	
  Leased Equipment

  	
   

  	
  07/06/2005

  	
   

  	
  OH00091170755

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IOS Capital

  	
   

  	
  Leased Equipment

  	
   

  	
  09/06/2005

  	
   

  	
  OH00092994702

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IOS Capital

  	
   

  	
  Leased Equipment

  	
   

  	
  09/29/2005

  	
   

  	
  OH00093806170

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IOS Capital

  	
   

  	
  Leased Equipment

  	
   

  	
  11/04/2005

  	
   

  	
  OH00095191490

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IOS Capital

  	
   

  	
  Leased Equipment

  	
   

  	
  11/10/2005

  	
   

  	
  OH00095477244

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IOS Capital

  	
   

  	
  Leased Equipment

  	
   

  	
  11/10/2005

  	
   

  	
  OH00095477466

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IOS Capital

  	
   

  	
  Leased Equipment

  	
   

  	
  12/20/2005

  	
   

  	
  OH00096872021

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IOS Capital

  	
   

  	
  Leased Equipment

  	
   

  	
  01/27/2006

  	
   

  	
  OH00098156106

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IOS Capital

  	
   

  	
  Leased Equipment

  	
   

  	
  01/27/2006

  	
   

  	
  OH00098161490

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IOS Capital

  	
   

  	
  Leased Equipment

  	
   

  	
  03/15/2006

  	
   

  	
  OH00099777436

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IOS Capital

  	
   

  	
  Leased Equipment

  	
   

  	
  05/01/2006

  	
   

  	
  OH00101503886

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IOS Capital

  	
   

  	
  Leased Equipment

  	
   

  	
  05/01/2006

  	
   

  	
  OH00101505133

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IOS Capital

  	
   

  	
  Leased Equipment

  	
   

  	
  07/19/2006

  	
   

  	
  OH00104489736

  	
   

  	
   

  	
   

  	
   

  



 


10














 


	
  Debtor

  	
   

  	
  Jurisdiction

  	
   

  	
  Type
  of

  filing found

  	
   

  	
  Secured

  Party

  	
   

  	
  Collateral

  	
   

  	
  Original

  File Date

  	
   

  	
  Original

  File Number

  	
   

  	
  Amdt.

  File Date

  	
   

  	
  Amdt. File Number

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IOS Capital

  	
   

  	
  Leased Equipment

  	
   

  	
  11/15/2006

  	
   

  	
  OH00108848873

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IOS Capital

  	
   

  	
  Leased Equipment

  	
   

  	
  12/05/2006

  	
   

  	
  OH00109505777

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IOS Capital

  	
   

  	
  Leased Equipment

  	
   

  	
  01/06/2007

  	
   

  	
  OH00110651153

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IOS Capital

  	
   

  	
  Leased Equipment

  	
   

  	
  01/23/2007

  	
   

  	
  OH00111169545

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IOS Capital

  	
   

  	
  Leased Equipment

  	
   

  	
  03/26/2007

  	
   

  	
  OH00113202216

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IOS Capital

  	
   

  	
  Leased Equipment

  	
   

  	
  03/29/2007

  	
   

  	
  OH00113361505

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IOS Capital

  	
   

  	
  Leased Equipment

  	
   

  	
  06/13/2007

  	
   

  	
  OH00116162637

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IOS Capital

  	
   

  	
  Leased Equipment

  	
   

  	
  06/19/2007

  	
   

  	
  OH00116336666

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IKON Financial Svcs

  	
   

  	
  Leased Equipment

  	
   

  	
  07/19/2007

  	
   

  	
  OH00117392695

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IKON Financial Svcs

  	
   

  	
  Leased Equipment

  	
   

  	
  08/11/2007

  	
   

  	
  OH00118133850

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IKON Financial Svcs

  	
   

  	
  Leased Equipment

  	
   

  	
  09/01/2007

  	
   

  	
  OH00118723790

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IKON Financial Svcs

  	
   

  	
  Leased Equipment

  	
   

  	
  09/01/2007

  	
   

  	
  OH00118726948

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IKON Financial Svcs

  	
   

  	
  Leased Equipment

  	
   

  	
  09/26/2007

  	
   

  	
  OH00119475299

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IKON Financial Svcs

  	
   

  	
  Leased Equipment

  	
   

  	
  09/29/2007

  	
   

  	
  OH00119625480

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IKON Financial Svcs

  	
   

  	
  Leased Equipment

  	
   

  	
  10/04/2007

  	
   

  	
  OH00119805593

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IKON Financial Svcs

  	
   

  	
  Leased Equipment

  	
   

  	
  11/02/2007

  	
   

  	
  OH00120759931

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy, Inc.

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  Toyota Motor Credit Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  01/22/2008

  	
   

  	
  OH00123071714

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy, Inc.

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  Toyota Motor Credit Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  12/15/2008

  	
   

  	
  OH000131596615

  	
   

  	
   

  	
   

  	
   

  



 


11

















 


	
  Debtor

  	
   

  	
  Jurisdiction

  	
   

  	
  Type
  of

  filing found

  	
   

  	
  Secured

  Party

  	
   

  	
  Collateral

  	
   

  	
  Original

  File Date

  	
   

  	
  Original

  File Number

  	
   

  	
  Amdt.

  File Date

  	
   

  	
  Amdt. File Number

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy, Inc.

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  CCFA Financial, LLC

  	
   

  	
  Leased Agreement

  	
   

  	
  01/07/2009

  	
   

  	
  OH00132079791

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy, Inc.

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  Wachovia Bank

  	
   

  	
  Leased Agreement

  	
   

  	
  01/07/2009

  	
   

  	
  OH00132079791

  	
   

  	
  02/18/2009

  	
   

  	
  20090500172

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy, Inc.

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  ePlus Technology, Inc.

  	
   

  	
  Computer equipment

  	
   

  	
  02/27/2009

  	
   

  	
  OH00133024818

  	
   

  	
   

  	
   

  	
   

  



 


Liens in respect of Mountain Top-Latex facility
Capital Lease listed on Schedule 10.1


Liens in respect of Orlando facility Capital Lease
listed on Schedule 10.1 


Liens in respect of Albany facility Capital Lease
listed on Schedule 10.1


Liens on certain assets of Sapsa Bedding Srl in
respect of secured indebtedness listed on Schedule 10.1 


Liens on certain assets of Sealy Argentina Srl in
respect of secured indebtedness listed on Schedule 10.1 


Liens on certain assets of Sealy do Brasil Limitada in
respect of secured indebtedness listed on Schedule 10.1 


Liens in respect of Sealy Mattress Company Mexico S de
R.L. de C.V. Capital Lease listed on Schedule 10.1 


Liens in respect of Sealy Mattress Company of Puerto
Rico Capital Lease listed on Schedule 10.1


 


12

















 


Schedule 10.3(c)


to Credit Agreement


 


EFFECTIVE DATE PARENT ASSETS


 


Trademark License Agreement
by and between Pirelli & C. S.p.A. and Sealy Corporation dated January 2004,
as amended


 

















 


Schedule
10.5


to Credit
Agreement


 


EFFECTIVE
DATE INVESTMENTS


 


	
  Investor

  	
   

  	
  Amount of Investment

  	
   

  	
  Type of Investment

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The Ohio Mattress Company
  Licensing and Components Group

  	
   

  	
  50% JV interest in Sealy
  Korea Company

  	
   

  	
  equity

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The Ohio Mattress Company
  Licensing and Components Group

  	
   

  	
  50% JV interest in Sealy
  Asia (Singapore) Pte, Ltd.

  	
   

  	
  equity

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The Ohio Mattress Company
  Licensing and Components Group

  	
   

  	
  50% JV interest in Sealy
  Asia (Malaysia) Sdn Bhd

  	
   

  	
  equity

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The Ohio Mattress Company
  Licensing and Components Group

  	
   

  	
  50% JV interest in Sealy
  Asia (Hong Kong) Ltd

  	
   

  	
  equity

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The Ohio Mattress Company
  Licensing and Components Group

  	
   

  	
  50% JV interest in Sealy
  Taiwan Branch

  	
   

  	
  equity

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The Ohio Mattress Company
  Licensing and Components Group

  	
   

  	
  50% JV interest in Sealy
  New Zealand Limited

  	
   

  	
  equity

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The Ohio Mattress Company
  Licensing and Components Group

  	
   

  	
  50% JV interest in Sealy
  China (Holdings) Ltd. Hong Kong

  	
   

  	
  equity

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The Ohio Mattress Company
  Licensing and Components Group

  	
   

  	
  50% JV interest in Sealy
  China WOFE

  	
   

  	
  equity