Exhibit 4.1


 


EXECUTION VERSION


 


SEALY MATTRESS COMPANY,

as Company,


 


 


GUARANTORS NAMED HEREIN,

as Guarantors,



and



THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,

as Trustee and Notes Collateral Agent



Indenture


 


Dated as of May 29, 2009


 






 


10.875% Senior Secured Notes due 2016


 

















 


Sealy Mattress Company*



Reconciliation and tie between Trust Indenture Act 

of 1939 and Indenture, dated as of May 29, 2009


 


	
  Trust
  Indenture

  	
   

  	
   

  	
   

  
	
  Act
  Section

  	
   

  	
  Indenture Section

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  §
  310(a)(1)

  	
   

  	
  608

  	
   

  
	
  (a)(2)

  	
   

  	
  608

  	
   

  
	
  (a)(5)

  	
   

  	
  608

  	
   

  
	
  (b)

  	
   

  	
  609

  	
   

  
	
  §
  312(a)

  	
   

  	
  701

  	
   

  
	
  (b)

  	
   

  	
  702

  	
   

  
	
  (c)

  	
   

  	
  702

  	
   

  
	
  §
  313(a)

  	
   

  	
  703

  	
   

  
	
  (b)(1)

  	
   

  	
  102,
  1402

  	
   

  
	
  (b)(2)

  	
   

  	
  102,
  1402

  	
   

  
	
  (c)(1)

  	
   

  	
  102,
  703

  	
   

  
	
  (c)(2)

  	
   

  	
  102,
  703

  	
   

  
	
  §
  314(a)

  	
   

  	
  103,
  105, 106, 1009

  	
   

  
	
  (a)(4)

  	
   

  	
  1008

  	
   

  
	
  (b)

  	
   

  	
  1402

  	
   

  
	
  (c)(1)

  	
   

  	
  102

  	
   

  
	
  (c)(2)

  	
   

  	
  102

  	
   

  
	
  (c)(3)

  	
   

  	
  N/A

  	
   

  
	
  (d)

  	
   

  	
  1402

  	
   

  
	
  (e)

  	
   

  	
  103

  	
   

  
	
  (f)

  	
   

  	
  N/A

  	
   

  
	
  §
  315(a)

  	
   

  	
  601

  	
   

  
	
  (b)

  	
   

  	
  602

  	
   

  
	
  (c)

  	
   

  	
  601

  	
   

  
	
  (d)

  	
   

  	
  601

  	
   

  
	
  (e)

  	
   

  	
  601, 603

  	
   

  
	
  § 316(a)(last sentence)

  	
   

  	
  101 (“Outstanding”)

  	
   

  
	
  (a)(1)(A)

  	
   

  	
  502,
  512

  	
   

  
	
  (a)(1)(B)

  	
   

  	
  513

  	
   

  
	
  (b)

  	
   

  	
  508

  	
   

  
	
  (c)

  	
   

  	
  104(d)

  	
   

  
	
  §
  317(a)(1)

  	
   

  	
  503

  	
   

  
	
  (a)(2)

  	
   

  	
  504

  	
   

  
	
  (b)

  	
   

  	
  1003

  	
   

  
	
  §
  318(a)

  	
   

  	
  111

  	
   

  



 






*                                         This
reconciliation and tie shall not, for any purpose, be deemed to be a part of
this Indenture.


 

















 


TABLE
OF CONTENTS(1)


 


	
   

  	
   

  	
  Page

  
	
   

  
	
  ARTICLE ONE

  
	
   

  
	
  DEFINITIONS AND OTHER PROVISIONS

  
	
  OF GENERAL APPLICATION

  
	
   

  	
   

  	
   

  
	
  SECTION 101.

  	
  Definitions

  	
  1

  
	
  SECTION 102.

  	
  Compliance
  Certificates and Opinions

  	
  28

  
	
  SECTION 103.

  	
  Form of
  Documents Delivered to Trustee

  	
  29

  
	
  SECTION 104.

  	
  Acts of
  Holders

  	
  29

  
	
  SECTION 105.

  	
  Notices,
  Etc., to Trustee, Company, Any Guarantor and Agent

  	
  30

  
	
  SECTION 106.

  	
  Notice to
  Holders; Waiver

  	
  30

  
	
  SECTION 107.

  	
  Effect of
  Headings and Table of Contents

  	
  31

  
	
  SECTION 108.

  	
  Successors
  and Assigns

  	
  31

  
	
  SECTION 109.

  	
  Separability
  Clause

  	
  31

  
	
  SECTION 110.

  	
  Benefits
  of Indenture

  	
  31

  
	
  SECTION 111.

  	
  Governing
  Law

  	
  31

  
	
  SECTION 112.

  	
  Communication
  by Holders of Notes with Other Holders of Notes

  	
  31

  
	
  SECTION 113.

  	
  Legal
  Holidays

  	
  31

  
	
  SECTION 114.

  	
  No
  Personal Liability of Directors, Officers, Employees and Stockholders

  	
  31

  
	
  SECTION 115.

  	
  Trust
  Indenture Act Controls

  	
  32

  
	
  SECTION 116.

  	
  Counterparts

  	
  32

  
	
  SECTION 117.

  	
  USA
  Patriot Act

  	
  32

  
	
  SECTION 118.

  	
  Intercreditor
  Agreement Governs

  	
  32

  
	
  SECTION 119.

  	
  Waiver of
  Jury Trial

  	
  32

  
	
  SECTION 120.

  	
  Force
  Majeure

  	
  32

  
	
   

  	
   

  	
   

  
	
  ARTICLE TWO

  
	
   

  
	
  NOTE FORMS

  
	
   

  
	
  SECTION 201.

  	
  Forms
  Generally

  	
  33

  
	
  SECTION 202.

  	
  Form of
  Trustee’s Certificate of Authentication

  	
  33

  
	
  SECTION 203.

  	
  Restrictive
  Legends

  	
  34

  
	
  SECTION 204.

  	
  [INTENTIONALLY
  DELETED]

  	
  35

  
	
   

  	
   

  	
   

  
	
  ARTICLE THREE

  
	
   

  	
   

  
	
  THE NOTES

  
	
   

  	
   

  
	
  SECTION 301.

  	
  Title and
  Terms

  	
  35

  
	
  SECTION 302.

  	
  Denominations

  	
  36

  
	
  SECTION 303.

  	
  Execution,
  Authentication, Delivery and Dating

  	
  36

  
	
  SECTION 304.

  	
  Temporary
  Notes

  	
  37

  
	
  SECTION 305.

  	
  Registration,
  Registration of Transfer and Exchange

  	
  37

  
	
  SECTION 306.

  	
  Mutilated,
  Destroyed, Lost and Stolen Notes

  	
  38

  



 






(1)                                  This table of
contents shall not, for any purpose, be deemed to be a part of this Indenture.


 


i

















 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 307.

  	
  Payment
  of Interest; Interest Rights Preserved

  	
  38

  
	
  SECTION 308.

  	
  Persons
  Deemed Owners

  	
  39

  
	
  SECTION 309.

  	
  Cancellation

  	
  39

  
	
  SECTION 310.

  	
  Computation
  of Interest

  	
  40

  
	
  SECTION 311.

  	
  [INTENTIONALLY
  DELETED]

  	
  40

  
	
  SECTION 312.

  	
  Book-Entry
  and Transfer Provisions

  	
  40

  
	
  SECTION 313.

  	
  [INTENTIONALLY
  DELETED]

  	
  47

  
	
  SECTION 314.

  	
  [INTENTIONALLY
  DELETED]

  	
  47

  
	
  SECTION 315.

  	
  CUSIP
  Numbers

  	
  47

  
	
  SECTION 316.

  	
  Issuance
  of Additional Notes

  	
  47

  
	
   

  	
   

  	
   

  
	
  ARTICLE FOUR

  
	
   

  	
   

  	
   

  
	
  SATISFACTION AND DISCHARGE

  
	
   

  	
   

  	
   

  
	
  SECTION 401.

  	
  Satisfaction
  and Discharge of Indenture

  	
  47

  
	
  SECTION 402.

  	
  Application
  of Trust Money

  	
  49

  
	
   

  	
   

  	
   

  
	
  ARTICLE FIVE

  
	
   

  	
   

  
	
  REMEDIES

  
	
   

  	
   

  	
   

  
	
  SECTION 501.

  	
  Events of
  Default

  	
  49

  
	
  SECTION 502.

  	
  Acceleration
  of Maturity; Rescission and Annulment

  	
  51

  
	
  SECTION 503.

  	
  Collection
  of Indebtedness and Suits for Enforcement by Trustee

  	
  52

  
	
  SECTION 504.

  	
  Trustee
  May File Proofs of Claim

  	
  52

  
	
  SECTION 505.

  	
  Trustee
  May Enforce Claims Without Possession of Notes

  	
  53

  
	
  SECTION 506.

  	
  Application
  of Money Collected

  	
  53

  
	
  SECTION 507.

  	
  Limitation
  on Suits

  	
  53

  
	
  SECTION 508.

  	
  Unconditional
  Right of Holders to Receive Principal, Premium and Interest

  	
  54

  
	
  SECTION 509.

  	
  Restoration
  of Rights and Remedies

  	
  54

  
	
  SECTION 510.

  	
  Rights
  and Remedies Cumulative

  	
  54

  
	
  SECTION 511.

  	
  Delay or
  Omission Not Waiver

  	
  54

  
	
  SECTION 512.

  	
  Control
  by Holders

  	
  55

  
	
  SECTION 513.

  	
  Waiver of
  Past Defaults

  	
  55

  
	
  SECTION 514.

  	
  Waiver of
  Stay or Extension Laws

  	
  55

  
	
   

  	
   

  	
   

  
	
  ARTICLE SIX

  
	
   

  	
   

  	
   

  
	
  THE TRUSTEE

  
	
   

  
	
  SECTION 601.

  	
  Duties of
  the Trustee

  	
  55

  
	
  SECTION 602.

  	
  Notice of
  Defaults

  	
  56

  
	
  SECTION 603.

  	
  Certain
  Rights of Trustee

  	
  56

  
	
  SECTION 604.

  	
  Trustee
  Not Responsible for Recitals or Issuance of Notes

  	
  58

  
	
  SECTION 605.

  	
  May Hold
  Notes

  	
  58

  
	
  SECTION 606.

  	
  Money
  Held in Trust

  	
  58

  
	
  SECTION 607.

  	
  Compensation
  and Reimbursement

  	
  58

  
	
  SECTION 608.

  	
  Corporate
  Trustee Required; Eligibility

  	
  59

  
	
  SECTION 609.

  	
  Resignation
  and Removal; Appointment of Successor

  	
  59

  
	
  SECTION 610.

  	
  Acceptance
  of Appointment by Successor

  	
  60

  
	
  SECTION 611.

  	
  Merger,
  Conversion, Consolidation or Succession to Business

  	
  60

  
	
  SECTION 612.

  	
  Appointment
  of Authenticating Agent

  	
  61

  



 


ii

















 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE SEVEN

  
	
   

  	
   

  	
   

  
	
  HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY

  
	
   

  	
   

  	
   

  
	
  SECTION 701.

  	
  Company
  to Furnish Trustee Names and Addresses

  	
  62

  
	
  SECTION 702.

  	
  Disclosure
  of Names and Addresses of Holders

  	
  62

  
	
  SECTION 703.

  	
  Reports
  by Trustee

  	
  62

  
	
   

  	
   

  	
   

  
	
  ARTICLE EIGHT

  
	
   

  	
   

  	
   

  
	
  MERGER, CONSOLIDATION OR SALE OF ALL OR SUBSTANTIALLY ALL
  ASSETS

  
	
   

  	
   

  	
   

  
	
  SECTION 801.

  	
  Company
  May Consolidate, Etc., Only on Certain Terms

  	
  62

  
	
  SECTION 802.

  	
  Subsidiary
  Guarantors May Consolidate, Etc., Only on Certain Terms

  	
  63

  
	
  SECTION 803.

  	
  Successor
  Substituted

  	
  64

  
	
   

  	
   

  	
   

  
	
  ARTICLE NINE

  
	
   

  	
   

  	
   

  
	
  SUPPLEMENTAL INDENTURES

  
	
   

  	
   

  	
   

  
	
  SECTION 901.

  	
  Amendments
  or Supplements Without Consent of Holders

  	
  65

  
	
  SECTION 902.

  	
  Amendments,
  Supplements or Waivers with Consent of Holders

  	
  66

  
	
  SECTION 903.

  	
  Execution
  of Amendments, Supplements or Waivers

  	
  67

  
	
  SECTION 904.

  	
  Effect of
  Amendments, Supplements or Waivers

  	
  67

  
	
  SECTION 905.

  	
  Conformity
  with Trust Indenture Act

  	
  67

  
	
  SECTION 906.

  	
  Reference
  in Notes to Supplemental Indentures

  	
  67

  
	
  SECTION 907.

  	
  Notice of
  Supplemental Indentures

  	
  67

  
	
   

  	
   

  	
   

  
	
  ARTICLE TEN

  
	
   

  	
   

  	
   

  
	
  COVENANTS

  
	
   

  	
   

  	
   

  
	
  SECTION 1001.

  	
  Payment
  of Principal, Premium, if Any, and Interest

  	
  67

  
	
  SECTION 1002.

  	
  Maintenance
  of Office or Agency

  	
  67

  
	
  SECTION 1003.

  	
  Money for
  Notes Payments to Be Held in Trust

  	
  68

  
	
  SECTION 1004.

  	
  Corporate
  Existence

  	
  69

  
	
  SECTION 1005.

  	
  Payment
  of Taxes and Other Claims

  	
  69

  
	
  SECTION 1006.

  	
  Maintenance
  of Properties

  	
  69

  
	
  SECTION 1007.

  	
  Insurance

  	
  69

  
	
  SECTION 1008.

  	
  Statement
  by Officers as to Default

  	
  70

  
	
  SECTION 1009.

  	
  Reports
  and Other Information

  	
  70

  
	
  SECTION 1010.

  	
  Limitation
  on Restricted Payments

  	
  71

  
	
  SECTION 1011.

  	
  Limitation
  on Incurrence of Indebtedness and Issuance of Disqualified Stock and
  Preferred Stock

  	
  76

  
	
  SECTION 1012.

  	
  Limitation
  on Liens

  	
  80

  
	
  SECTION 1013.

  	
  Limitations
  on Transactions with Affiliates

  	
  81

  
	
  SECTION 1014.

  	
  Limitations
  on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries

  	
  82

  
	
  SECTION 1015.

  	
  Limitation
  on Guarantees of Indebtedness by Restricted Subsidiaries

  	
  83

  
	
  SECTION 1016.

  	
  [INTENTIONALLY
  DELETED]

  	
  85

  
	
  SECTION 1017.

  	
  Change of
  Control

  	
  85

  
	
  SECTION 1018.

  	
  Asset
  Sales

  	
  86

  
	
  SECTION 1019.

  	
  Waiver of
  Certain Covenants

  	
  90

  
	
  SECTION 1020.

  	
  Further
  Assurances and After-Acquired Property

  	
  90

  
	
  SECTION 1021.

  	
  Information
  Regarding Collateral

  	
  90

  



 


iii

















 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 1022.

  	
  Impairment
  of Security Interest

  	
  91

  
	
   

  	
   

  	
   

  
	
  ARTICLE ELEVEN

  
	
   

  	
   

  	
   

  
	
  REDEMPTION OF NOTES

  
	
   

  	
   

  	
   

  
	
  SECTION 1101.

  	
  Right of
  Redemption

  	
  91

  
	
  SECTION 1102.

  	
  Applicability
  of Article

  	
  92

  
	
  SECTION 1103.

  	
  Election
  to Redeem; Notice to Trustee

  	
  92

  
	
  SECTION 1104.

  	
  Selection
  by Trustee of Notes to Be Redeemed

  	
  92

  
	
  SECTION 1105.

  	
  Notice of
  Redemption

  	
  92

  
	
  SECTION 1106.

  	
  Deposit
  of Redemption Price

  	
  93

  
	
  SECTION 1107.

  	
  Notes
  Payable on Redemption Date

  	
  93

  
	
  SECTION 1108.

  	
  Notes
  Redeemed in Part

  	
  94

  
	
   

  	
   

  	
   

  
	
  ARTICLE TWELVE

  
	
   

  	
   

  	
   

  
	
  GUARANTEES

  
	
   

  	
   

  	
   

  
	
  SECTION 1201.

  	
  Guarantees

  	
  94

  
	
  SECTION 1202.

  	
  Severability

  	
  95

  
	
  SECTION 1203.

  	
  Restricted
  Subsidiaries

  	
  95

  
	
  SECTION 1204.

  	
  Ranking
  of Guarantee

  	
  95

  
	
  SECTION 1205.

  	
  Limitation
  of Guarantors’ Liability

  	
  96

  
	
  SECTION 1206.

  	
  Contribution

  	
  96

  
	
  SECTION 1207.

  	
  Subrogation

  	
  96

  
	
  SECTION 1208.

  	
  Reinstatement

  	
  96

  
	
  SECTION 1209.

  	
  Release
  of a Guarantor

  	
  96

  
	
  SECTION 1210.

  	
  Benefits
  Acknowledged

  	
  97

  
	
   

  	
   

  	
   

  
	
  ARTICLE THIRTEEN

  
	
   

  	
   

  	
   

  
	
  DEFEASANCE AND COVENANT DEFEASANCE

  
	
   

  	
   

  	
   

  
	
  SECTION 1301.

  	
  Company’s
  Option to Effect Legal Defeasance or Covenant Defeasance

  	
  97

  
	
  SECTION 1302.

  	
  Legal
  Defeasance and Discharge

  	
  97

  
	
  SECTION 1303.

  	
  Covenant
  Defeasance

  	
  97

  
	
  SECTION 1304.

  	
  Conditions
  to Legal Defeasance or Covenant Defeasance

  	
  98

  
	
  SECTION 1305.

  	
  Deposited
  Money and Government Securities to Be Held in Trust; Other Miscellaneous
  Provisions

  	
  99

  
	
  SECTION 1306.

  	
  Reinstatement

  	
  99

  
	
   

  	
   

  	
   

  
	
  ARTICLE FOURTEEN

  
	
   

  	
   

  	
   

  
	
  SECURITY

  
	
   

  	
   

  	
   

  
	
  SECTION 1401.

  	
  Collateral
  and Security Documents

  	
  100

  
	
  SECTION 1402.

  	
  Recordings
  and Opinions

  	
  100

  
	
  SECTION 1403.

  	
  Release
  of Collateral

  	
  101

  
	
  SECTION 1404.

  	
  Certificates
  of the Trustee

  	
  102

  
	
  SECTION 1405.

  	
  Suits to
  Protect the Collateral

  	
  102

  
	
  SECTION 1406.

  	
  Authorization
  of Receipt of Funds by the Trustee Under the Security Documents

  	
  102

  
	
  SECTION 1407.

  	
  Purchase
  Protected

  	
  102

  
	
  SECTION 1408.

  	
  Powers
  Exercisable by Receiver or Trustee

  	
  103

  



 


iv

















 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 1409.

  	
  Release
  upon Termination of the Company’s Obligations

  	
  103

  
	
  SECTION 1410.

  	
  Notes
  Collateral Agent

  	
  103

  
	
  SECTION 1411.

  	
  Designations

  	
  106

  
	
  SECTION 1412.

  	
  Compensation
  and Indemnification

  	
  107

  
	
  SECTION 1413.

  	
  Intercreditor
  Agreement, Security Agreement, Pledge Agreement and Other Security Documents

  	
  107

  
	
   

  	
   

  	
   

  
	
  ARTICLE FIFTEEN

  
	
   

  	
   

  	
   

  
	
  RANKING OF NOTE LIENS

  
	
   

  	
   

  	
   

  
	
  SECTION 1501.

  	
  Relative
  Rights

  	
  107

  



 


v

















 


EXHIBITS


 


EXHIBIT
A — Form of Note


EXHIBIT
B — Form of Certificate of Transfer


EXHIBIT
C — Form of Certificate of Exchange


EXHIBIT
D — Form of Certificate from Acquiring Institutional Investor


EXHIBIT
E — Form of Supplemental Indenture


EXHIBIT
F — Form of Incumbency Certificate


 


vi

















 


INDENTURE, dated as of May 29, 2009 (this “Indenture”),
among SEALY MATTRESS COMPANY, an Ohio corporation (the “Company”), having its
principal office at One Office Parkway, Trinity, North Carolina 27230, the
Company’s ultimate parent corporation, SEALY CORPORATION, a Delaware
corporation (“Parent”), the Company’s direct parent corporation, SEALY MATTRESS
CORPORATION, a Delaware corporation (“Holdings”), and certain of the Company’s
direct and indirect Domestic Subsidiaries, each named in the signature pages hereto
(each, a “Subsidiary Guarantor” and, together with Parent and Holdings, collectively,
the “Guarantors”), and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a
national banking association, as trustee (in such capacity, the “Trustee”) and
as collateral agent (in such capacity, the “Notes Collateral Agent”).


 


RECITALS
OF THE COMPANY


 


The Company has duly authorized the creation of an
issue of 10.875% Senior Secured Notes due 2016 issued on the date hereof (the “Notes”)
of substantially the tenor and amount hereinafter set forth, and to provide
therefor the Company has duly authorized the execution and delivery of this
Indenture.  As used herein, “Notes” shall
include any Additional Notes that are issued pursuant to this Indenture unless
the context otherwise requires.


 


Each Guarantor has duly authorized its Guarantee of
the Notes and to provide therefor each Guarantor has duly authorized the
execution and delivery of this Indenture.


 


All things necessary have been done to make the
Notes, when executed by the Company and authenticated and delivered hereunder
and duly issued by the Company, the valid and legally binding obligations of
the Company and to make this Indenture a valid and legally binding agreement of
the Company, in accordance with their and its terms.


 


All things necessary have been done to make the
Guarantees, upon execution and delivery of this Indenture, the valid
obligations of each Guarantor and to make this Indenture a valid and legally
binding agreement of each Guarantor, in accordance with their and its terms.


 


NOW,
THEREFORE, THIS INDENTURE WITNESSETH:


 


For and in consideration of the premises and the
purchase of the Notes by the Holders thereof, it is mutually covenanted and
agreed, for the equal and proportionate benefit of all Holders, as follows:


 


ARTICLE ONE



DEFINITIONS AND OTHER PROVISIONS

OF GENERAL APPLICATION


 


SECTION 101.                                       Definitions.


 


For all purposes of this Indenture, except as
otherwise expressly  provided or
unless the context otherwise requires:


 


(a)                                  the terms
defined in this Article have the meanings assigned to them in this
Article, and include the plural as well as the singular;


 


(b)                                 all other terms
used herein which are defined in the Trust Indenture Act, either directly or by
reference therein, have the meanings assigned to them therein, and the terms “cash
transaction” and “self-liquidating paper”, as used in TIA Section 311,
shall have the meanings assigned to them in the rules of the Commission
adopted under the Trust Indenture Act;


 


(c)                                  all accounting
terms not otherwise defined herein have the meanings assigned to them in accordance
with GAAP (as herein defined); and


 

















 


(d)                                 the words “herein”,
“hereof” and “hereunder” and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
subdivision.


 


“144A Global Note” means a Global Note substantially
in the form of Exhibit A hereto bearing the Global Note Legend and the
Private Placement Legend and deposited with or on behalf of, and registered in
the name of, the Depositary or its nominee that will be issued in a
denomination equal to the outstanding principal amount of the Notes sold in
reliance on Rule 144A.


 


“ABL Asset Sale Offer” has the meaning set forth in Section 1018.


 


“ABL Collateral” has the meaning assigned to the
term “ABL Priority Collateral” in the Intercreditor Agreement.


 


“ABL Secured Parties” has the meaning assigned to
the term “ABL Claimholders” in the Intercreditor Agreement.”


 


“Acquired Indebtedness”
means, with respect to any specified Person,


 


(1)                                  Indebtedness of
any other Person existing at the time such other Person is merged with or into
or became a Restricted Subsidiary of such specified Person, including, without
limitation, Indebtedness incurred in connection with, or in contemplation of,
such other Person merging with or into or becoming a Restricted Subsidiary of such
specified Person, and


 


(2)                                  Indebtedness
secured by a Lien encumbering any asset acquired by such specified Person.


 


“Act”, when used with respect to any Holder, has the
meaning specified in Section 104 of this Indenture.


 


“Additional
Convertible Notes” means (a) any additional convertible notes
(other than the Convertible Notes) issued after the original issuance of the
Convertible Notes that are substantially similar to the Convertible Notes and
are secured by any of the Collateral with Pari Passu Lien Priority relative to
the 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 Convertible Notes and (b) any Management
Notes.


 


“Additional Notes” has the meaning set forth in Section 316.


 


“Adjusted Net Assets” has the meaning specified in Section 1206
of this Indenture.


 


“Affiliate” of any specified Person means any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person.  For purposes of this definition, “control”
(including, with correlative meanings, the terms “controlling,” “controlled by”
and “under common control with”), as used with respect to any Person, shall
mean the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise.


 


“Affiliate Transaction” has the meaning specified in
Section 1013 of this Indenture.


 


“After-Acquired
Property” means any property of the Company or any Guarantor acquired
after the Issue Date that is intended to secure the Obligations under this
Indenture and the Notes pursuant to this Indenture and the Security Documents.


 


“Agent” means any Note Registrar, co-registrar,
Paying Agent or additional paying agent.


 


2














 


“Applicable Premium” means, with respect to any Note on any Redemption
Date, the greater of:


 


(1)                                1.0% of the principal
amount of the Note; or


 


(2)                                the
excess, if any, of:


 


(a)                                  the
present value at such redemption date of (i) the redemption price of the Note
at April 15, 2012 (such redemption price being set forth in the table
appearing in Section 1101), plus (ii) all
required interest payments due on the Note through April 15, 2012
(excluding accrued but unpaid interest to the Redemption Date), computed using
a discount rate equal to the Treasury Rate as of such Redemption Date plus 50
basis points; over


 


(b)                                 the
principal amount of the Note.


 


“Applicable Procedures” means, with respect to any transfer or exchange
of or for beneficial interests in any Global Note, the rules and
procedures of the Depositary, Euroclear and Clearstream that apply to such
transfer or exchange.


 


“Asset Sale” means:


 


(1)                                the sale, conveyance,
transfer or other disposition, whether in a single transaction or a series of
related transactions, of property or assets (including by way of a sale and
leaseback) of the Company, a Guarantor or any Restricted Subsidiary (each
referred to in this definition as a “disposition”), or


 


(2)                                the issuance or sale of
Equity Interests of the Company or any Restricted Subsidiary, whether in a
single transaction or a series of related transactions (other than preferred
stock of Restricted Subsidiaries issued in compliance with Section 1011),


 


in each case, other than:


 


(a)                                a disposition of Cash
Equivalents or obsolete or worn out equipment in the ordinary course of
business or inventory or goods held for sale in the ordinary course of business;


 


(b)                               the disposition of all
or substantially all of the assets of the Company in a manner permitted
pursuant to Article Eight or any disposition that constitutes a Change of
Control pursuant to this Indenture;


 


(c)                                the making of any
Restricted Payment or Permitted Investment that is permitted to be made, and is
made, under Section 1010;


 


(d)                               any disposition of assets
or issuance or sale of Equity Interests of any Restricted Subsidiary in any
transaction or series of transactions with an aggregate fair market value of
less than $2.5 million;


 


(e)                                any disposition of
property or assets or issuance of securities by a Restricted Subsidiary to the
Company or by the Company or a Restricted Subsidiary to a Restricted Subsidiary;


 


(f)                                  to the extent
allowable under Section 1031 of the Internal Revenue Code of 1986, any
exchange of like property (excluding any boot thereon) for use in a Similar Business;


 


(g)                               the lease, assignment or
sublease of any real or personal property in the ordinary course of business;


 


(h)                               any sale of Equity
Interests in, or Indebtedness or other securities of, an Unrestricted
Subsidiary (with the exception of Investments in Unrestricted Subsidiaries
acquired pursuant to clause (j) of the definition of Permitted Investments);


 


3

















 


(i)                                   foreclosures on
assets;


 


(j)                                   sales of accounts
receivable, or participations therein, in connection with any Receivables Facility;
and


 


(k)                                any financing
transaction with respect to property built or acquired by the Company or any
Restricted Subsidiary after the Issue Date, including, without limitation, sale
leasebacks and asset securitizations permitted by this Indenture.


 


“Asset Sale Offer” has the meaning specified in Section 1018 of
this Indenture.


 


“Asset Sale Proceeds Account”
means one or more deposit accounts or securities accounts holding the proceeds
of any sale or disposition of Notes Collateral.


 


“Authenticating Agent” has the meaning specified in Section 612 of
this Indenture.


 


“Bank Collateral Agent”
means JPMorgan Chase Bank, N.A., in its capacity as collateral agent under the
Credit Agreement, and any successor thereto in such capacity.


 


“Bank Lenders” means
the lenders or holders of Indebtedness issued under the Credit Agreement.


 


“Bankruptcy Law” means Title 11, United States Bankruptcy Code of 1978,
as amended, or any similar United States federal or state law relating to
bankruptcy, insolvency, receivership, winding-up, liquidation, reorganization
or relief of debtors or any amendment to, succession to or change in any such
law.


 


“Board of Directors” means, with respect to any Person, either the
board of directors of such Person or any duly authorized committee of such
board.


 


“Board Resolution” means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors and to be in full force and
effect on the date of such certification, and, if required by this Indenture,
delivered to the Trustee.


 


“Borrowing Base” means,
as of any date, an amount equal to the sum of (x) 85% of the book value of
the accounts receivable and (y) 65% of the book value of the inventory, in
each case of the Company and the Guarantors on a consolidated basis as of the
end of the most recently completed fiscal quarter preceding such date for which
internal financial statements are available.


 


“Business Day” means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in The City of New York
are authorized or obligated by law, regulation or executive order to close.


 


“Capital Stock” means:


 


(1)                                in the case of a
corporation, corporate stock,


 


(2)                                in the case of an
association or business entity, any and all shares, interests, participations,
rights or other equivalents (however designated) of corporate stock,


 


(3)                                in the case of a
partnership or limited liability company, partnership or membership interests
(whether general or limited), and


 


(4)                                any other interest or
participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.


 


4

















 


“Capitalized Lease Obligation” means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital
lease that would at such time be required to be capitalized and reflected as a
liability on a balance sheet (excluding the footnotes thereto) in accordance
with GAAP.


 


“Cash Equivalents” means:


 


(1)                                  United
States dollars,


 


(2)                                  pounds
sterling,


 


(3)                                  (a) euro,
or any national currency of any participating member state in the European Union
or (b) in the case of any Foreign Subsidiary that is a Restricted
Subsidiary, such local currencies held by them from time to time in the ordinary
course of business,


 


(4)                                  securities
issued or directly and fully and unconditionally guaranteed or insured by the
United States government or any agency or instrumentality thereof the
securities of which are unconditionally guaranteed as a full faith and credit
obligation of such government with maturities of 24 months or less from the
date of acquisition,


 


(5)                                  certificates
of deposit, time deposits and eurodollar time deposits with maturities of one
year or less from the date of acquisition, bankers’ acceptances with maturities
not exceeding one year and overnight bank deposits, in each case with any
commercial bank having capital and surplus in excess of $500.0 million,


 


(6)                                  repurchase
obligations for underlying securities of the types described in clauses (4) and
(5) above, entered into with any financial institution meeting the
qualifications specified in clause (5) above,


 


(7)                                  commercial
paper rated at least P-2 by Moody’s or at least A-2 by S&P and in each case
maturing within 12 months after the date of creation thereof,


 


(8)                                  investment
funds investing 95% of their assets in securities of the types described in
clauses (1) through (7) above,


 


(9)                                  readily
marketable direct obligations issued by any state of the United States of
America or any political subdivision thereof having one of the two highest
rating categories obtainable from either Moody’s or S&P with maturities of
24 months or less from the date of acquisition, and


 


(10)                            Indebtedness
or preferred stock issued by Persons with a rating of “A” or higher from
S&P or “A2” or higher from Moody’s with maturities of 12 months or less
from the date of acquisition.


 


Notwithstanding the foregoing, Cash Equivalents shall include amounts
denominated in currencies other than those set forth in clauses (1) through
(3) above; provided that such amounts are
converted into any currency listed in clauses (1) through (3) above,
as promptly as practicable and in any event within ten Business Days following
the receipt of such amounts.


 


“Change of Control” means the occurrence of any of the following:


 


(1)                                  the
sale, lease or transfer, in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Subsidiaries, taken as a
whole, to any Person other than a Permitted Holder; or


 


(2)                                  the
Company becomes aware of (by way of a report or any other filing pursuant Section 13(d) of
the Exchange Act, proxy, vote, written notice or otherwise) 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), 


 


5

















 


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 the Company or any of its
direct or indirect parents.


 


“Change of Control Offer” has the meaning specified in Section 1017
of this Indenture.


 


“Change of Control Payment” has the meaning specified in Section 1017
of this Indenture.


 


“Change of Control Payment Date” has the meaning specified in Section 1017
of this Indenture.


 


“Clearstream” means Clearstream Banking, Société Anonyme, and its successors.


 


“Collateral” means all the assets and properties subject to the Liens created
by the Security Documents.


 


“Commission” means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or, if at any time after
the execution of this Indenture such Commission is not existing and performing
the duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.


 


“Common Stock” means, with respect to any Person, any and all shares,
interests, participations and other equivalents (however designated, whether
voting or non-voting) of such Person’s common stock, whether now outstanding or
issued after the date of this Indenture, and includes, without limitation, all
series and classes of such common stock.


 


“Company” means the Person named as the “Company” in the first
paragraph of this Indenture, until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter “Company”
shall mean such successor Person.


 


“Company Request” or “Company Order” means a written request or order
signed in the name of the Company by its Chairman, its President, any Vice
President, its Treasurer or an Assistant Treasurer, and delivered to the
Trustee.


 


“consolidated” or “Consolidated” means, with respect to any Person, such
Person consolidated with its Restricted Subsidiaries, and shall not include any
Unrestricted Subsidiary.


 


“Consolidated Depreciation and Amortization Expense” means with respect
to any Person for any period, the total amount of depreciation and amortization
expense, including the amortization of deferred financing fees, of such Person
and its Restricted Subsidiaries for such period on a consolidated basis and
otherwise determined in accordance with GAAP.


 


“Consolidated Interest Expense” means, with respect to any Person for
any period, the sum, without duplication, of:


 


(a)                                  consolidated
interest expense of such Person and its Restricted Subsidiaries for such period,
to the extent such expense was deducted in computing Consolidated Net Income
(including amortization of original issue discount resulting from the issuance
of Indebtedness at less than par, non-cash interest payments (but excluding any
non-cash interest expense attributable to the movement in the mark to market
valuation of Hedging Obligations or other derivative instruments pursuant to
Financial Accounting Standards Board Statement No.133 “Accounting for
Derivative Instruments and Hedging Activities”), the interest component of
Capitalized Lease Obligations and net payments, if any, pursuant to interest
rate Hedging 


 


6

















 


Obligations, and excluding amortization of
deferred financing fees and any expensing of bridge or other financing fees),
and


 


(b)                                 consolidated
capitalized interest of such Person and its Restricted Subsidiaries for such
period, whether paid or accrued, less


 


(c)                                  interest
income for such period.


 


“Consolidated Net Income” means, with respect to any Person for any
period, the aggregate of the Net Income, of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, and otherwise determined
in accordance with GAAP; provided, however, that:


 


(1)                                  any
net after-tax extraordinary, non-recurring or unusual gains or losses (less all
fees and expenses relating thereto) or expenses (including, without limitation,
relating to severance, relocation and new product introductions) shall be
excluded,


 


(2)                                  the
Net Income for such period shall not include the cumulative effect of a change
in accounting principles during such period,


 


(3)                                  any
net after-tax income (loss) from disposed or discontinued operations and any
net after-tax gains or losses on disposal of disposed or discontinued
operations shall be excluded,


 


(4)                                  any
net after-tax gains or losses (less all fees and expenses relating thereto) attributable
to asset dispositions other than in the ordinary course of business, as
determined in good faith by the Board of Directors of the Company, shall be
excluded,


 


(5)                                  the
Net Income for such period of any Person that is not a Subsidiary, or is an Unrestricted
Subsidiary, or that is accounted for by the equity method of accounting, shall
be excluded; provided that Consolidated Net
Income of the Company shall be increased by the amount of dividends or distributions
or other payments that are actually paid in cash (or to the extent converted
into cash) to the referent Person or a Restricted Subsidiary thereof in respect
of such period,


 


(6)                                  solely
for the purpose of determining the amount available for Restricted Payments
under Section 1010(a)(4)(C), the Net Income for such period of any
Restricted Subsidiary (other than any Guarantor) shall be excluded if the
declaration or payment of dividends or similar distributions by that Restricted
Subsidiary of its Net Income is not at the date of determination wholly
permitted without any prior governmental approval (which has not been obtained)
or, directly or indirectly, by the operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule, or governmental
regulation applicable to such Restricted Subsidiary or its stockholders, unless
such restriction with respect to the payment of dividends or in similar
distributions has been legally waived, provided that Consolidated Net Income of
the Company shall be increased by the amount of dividends or other
distributions or other payments actually paid in cash (or to the extent
converted into cash) to the Company or a Restricted Subsidiary thereof in
respect of such period, to the extent not already included therein,


 


(7)                                  the
effect of the adjustments resulting from the application of purchase accounting
in relation to any acquisition that is consummated after the Issue Date, net of
taxes, shall be excluded,


 


(8)                                  any
net after-tax income (loss) from the early extinguishment of Indebtedness or
Hedging Obligations or other derivative instruments shall be excluded,


 


(9)                                  any
impairment charge or asset write-off pursuant to Financial Accounting Standards
Board Statement No. 142 and No. 144 and the amortization of
intangibles arising pursuant to No. 141 shall be excluded, and


 


7

















 


(10)                          any non-cash compensation
expense recorded from grants of stock appreciation or similar rights, stock
options or other rights to officers, directors or employees shall be excluded.


 


Notwithstanding the foregoing, for the purpose of Section 1010
only (other than clause (a)(4)(C)(4) thereof), there shall be excluded
from Consolidated Net Income any income arising from any sale or other disposition
of Restricted Investments made by the Company and the Restricted Subsidiaries,
any repurchases and redemptions of Restricted Investments from the Company and
the Restricted Subsidiaries, any repayments of loans and advances which
constitute Restricted Investments by the Company or any Restricted Subsidiary,
any sale of the stock of an Unrestricted Subsidiary or any distribution or
dividend from an Unrestricted Subsidiary, in each case only to the extent such
amounts increase the amount of Restricted Payments permitted under such covenant
pursuant to clause (a)(4)(C)(4) thereof.


 


“Consolidated Senior Secured Debt Ratio” means, as of any date of
determination, the ratio of (1) the sum of Lenders Debt plus the aggregate amount outstanding
under any Receivables Facility plus
the aggregate principal amount of the Notes plus
the aggregate principal amount (or accreted value) of any Other Pari Passu Lien
Obligations to (2) the Company’s EBITDA for the most recently ended four
full fiscal quarters for which internal financial statements are available
immediately preceding the date on which such event for which such calculation
is being made shall occur, in each case with such pro forma adjustments as are
appropriate and consistent with the pro
forma adjustment provisions set forth in the definition of “Fixed
Charge Coverage Ratio.”


 


“Contingent Obligations” means, with respect to any Person, any
obligation of such Person guaranteeing any leases, dividends or other
obligations that do not constitute Indebtedness (“primary obligations”) of any
other Person (the “primary obligor”) in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent,


 


(1)                                to purchase any such
primary obligation or any property constituting direct or indirect security
therefor,


 


(2)                                to advance or supply
funds:


 


(A)                              for
the purchase or payment of any such primary obligation, or


 


(B)                                to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, or


 


(3)                                to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment
of such primary obligation against loss in respect thereof.


 


“Convertible Notes”
means $177,132,000 aggregate principal amount of Parent and the Company’s 8%
convertible senior secured third lien notes due July 2016; provided that the covenants and other material terms in the
Convertible Notes are consistent with (i) the description of the
Convertible Notes contained in the Offering Memorandum and (ii) the description
of notes contained in the prospectus supplement filed by Parent and the Company
on May 27, 2009 relating to the offering of the Convertible Notes.


 


“Convertible Notes Collateral
Agent” means The Bank of New York Mellon Trust Company, N.A., in its
capacity as “Collateral Agent” under the indenture governing the Convertible
Notes and under the security documents related thereto, and any successor
thereto in such capacity.


 


“Convertible Notes Secured Parties” means the trustee under the
indenture governing the Convertible Notes, the Convertible Notes Collateral
Agent, each holder of Convertible Notes or any Additional Convertible Notes and
each other holder of, or obligee in respect of, any obligations in respect of
the Convertible Notes outstanding at such time, collectively.


 


8

















 


“Corporate Trust Office” means the principal corporate trust office of
the Trustee, at which at any particular time its corporate trust business shall
be administered, which office at the date of execution of this Indenture is
located at The Bank of New York Mellon Trust Company, N.A., 10161 Centurion
Parkway, Jacksonville, Florida 32256, except that with respect to presentation
of the Notes for payment or for registration of transfer or exchange, such term
shall mean the office or agency of the Trustee at which, at any particular
time, its corporate agency business shall be conducted.


 


“Corporation” includes corporations, associations, companies and
business trusts.


 


“Covenant Defeasance” has the meaning specified in Section 1303 of
this Indenture.


 


“Credit Agreement”
means the Credit Agreement dated as of May 13, 2009 among the Company, the
Guarantors, the various lenders and agents party thereto and J.P. Morgan Chase
Bank, N.A. as administrative agent, together with any amendments, supplements,
modifications, extensions, renewals, restatements or refundings thereof and any
indentures or credit facilities or commercial paper facilities with banks or
other institutional lenders or investors that replace, refund or refinance any
part of the loans, notes, other credit facilities or commitments thereunder,
including any such replacement, refunding or refinancing facility or indenture
that increases the amount borrowable thereunder, alters the maturity thereof or
adds Restricted Subsidiaries as additional borrowers or guarantors thereunder
and whether by the same or any other agent, lender or group of lenders.


 


 “Credit Facilities” means, with
respect to the Company, one or more debt facilities, including, without
limitation, the Credit Agreement or commercial paper facilities with banks or
other institutional lenders or investors or indentures providing for revolving
credit loans, term loans, receivables financing, including through the sale of
receivables to such lenders or to special purpose entities formed to borrow
from such lenders against receivables, letters of credit or other long-term
indebtedness, including any guarantees, collateral documents, instruments and
agreements executed in connection therewith, and any amendments, supplements,
modifications, extensions, renewals, restatements or refundings thereof and any
indentures or credit facilities or commercial paper facilities with banks or
other institutional lenders or investors that replace, refund or refinance any
part of the loans, notes, other credit facilities or commitments thereunder,
including any such replacement, refunding or refinancing facility or indenture
that increases the amount borrowable thereunder or alters the maturity therof.


 


“Custodian” means the Trustee, as custodian with respect to the Notes
in global form, or any successor entity thereto.


 


“Default” means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.


 


“Defaulted Interest” has the meaning specified in Section 307 of
this Indenture.


 


“Definitive Note” means a certificated Note registered in the name of
the Holder thereof and issued in accordance with Section 312 hereof,
substantially in the form of Exhibit A hereto except that such Note shall
not bear the Global Note Legend and shall not have the “Schedule of Exchanges
of Interests in the Global Note” attached thereto.


 


“Depositary” means The Depository Trust Company (“DTC”), its nominees
and their respective successors.


 


“Designated Non-cash Consideration” means the fair market value of
non-cash consideration received by the Company or a Restricted Subsidiary in
connection with an Asset Sale that is so designated as Designated Non-cash
Consideration pursuant to an Officers’ Certificate, setting forth the basis of
such valuation, executed by an executive vice president and the principal
financial officer of the Company, less the amount of cash or Cash Equivalents
received in connection with a subsequent sale of such Designated Non-cash Consideration.


 


“Designated Preferred Stock” means preferred stock of the Company or
any parent thereof (in each case other than Disqualified Stock) that is issued
for cash (other than to a Guarantor or a Restricted Subsidiary) 


 


9

















 


and is so designated as Designated Preferred Stock, pursuant to an
Officers’ Certificate executed by an executive vice president and the principal
financial officer of the Company or the applicable parent thereof, as the case
may be, on the issuance date thereof, the cash proceeds of which are excluded
from the calculation set forth in clause (a)(4)(C) of Section 1010.


 


“Discharge of ABL Obligations”
means the date on which the Lenders Debt has been paid in full, in cash, all
commitments to extend credit thereunder shall have been terminated and the Lenders
Debt is no longer secured by the ABL Collateral and Notes Collateral; provided that the Discharge of ABL
Obligations shall not be deemed to have occurred in connection with a
refinancing of such Lenders Debt with Indebtedness secured by such ABL Collateral
on a first-priority basis under an agreement that has been designated in
writing by the administrative agent under the Credit Facility so refinancing
the Credit Agreement and the Trustee in accordance with the terms of the
Intercreditor Agreement.


 


“Disqualified Stock” means, with respect to any Person, any Capital
Stock of such Person which, by its terms, or by the terms of any security into
which it is convertible or for which it is putable or exchangeable, or upon the
happening of any event, matures or is mandatorily redeemable, other than as a
result of a change of control or asset sale, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of the holder thereof,
other than as a result of a change of control or asset sale, in whole or in
part, in each case prior to the date 91 days after the earlier of the maturity
date of the Notes or the date the Notes are no longer outstanding; provided, however, that
if such Capital Stock is issued to any plan for the benefit of employees of the
Company or its Subsidiaries or by any such plan to such employees, such Capital
Stock shall not constitute Disqualified Stock solely because it may be required
to be repurchased by the Company or its Subsidiaries in order to satisfy
applicable statutory or regulatory obligations.


 


“Domestic Subsidiary” means, with respect to any Person, any Restricted
Subsidiary of such Person other than a Foreign Subsidiary.


 


“EBITDA” means, with respect to any Person for any period, the
Consolidated Net Income of such Person for such period plus (without duplication):


 


(a)                                  provision
for taxes based on income or profits, plus franchise or similar taxes, of such
Person for such period deducted in computing Consolidated Net Income, plus


 


(b)                                 Consolidated
Interest Expense of such Person for such period to the extent the same was
deducted in calculating such Consolidated Net Income, plus


 


(c)                                  Consolidated
Depreciation and Amortization Expense of such Person for such period to the
extent such depreciation and amortization were deducted in computing
Consolidated Net Income, plus


 


(d)                                 any
expenses or charges related to any Equity Offering, Permitted Investment,
acquisition, disposition, recapitalization or Indebtedness permitted to be
incurred by this Indenture (whether or not successful), including such fees,
expenses or charges related to the offering of the Notes and the Credit Facilities,
and deducted in computing Consolidated Net Income, plus


 


(e)                                  the
amount of any restructuring charge deducted in such period in computing Consolidated
Net Income, including any one-time costs incurred in connection with
acquisitions after the Issue Date, plus


 


(f)                                    any
other non-cash charges reducing Consolidated Net Income for such period,
excluding any such charge that represents an accrual or reserve for a cash
expenditure for a future period, plus


 


(g)                                 the
amount of any minority interest expense deducted in calculating Consolidated
Net Income (less the amount of any cash dividends paid to the holders of such
minority interests), plus


 


(h)                                 any
net gain or loss resulting from currency exchange risk Hedging Obligations, plus


 


10

















 


(i)                                     the
amount of management, monitoring, consulting and advisory fees and related expenses
paid to Kohlberg Kravis Roberts & Co. L.P. or any of its
Affiliates, plus


 


(j)                                     expenses
related to the implementation of enterprise resource planning system, less


 


(k)                                  non-cash
items increasing Consolidated Net Income of such Person for such period, excluding
any items which represent the reversal of any accrual of, or cash reserve for,
anticipated cash charges in any prior period.


 


“EMU” means economic and monetary union as contemplated in the Treaty
on European Union.


 


“Equity Interests” means Capital Stock and all warrants, options or
other rights to acquire Capital Stock, but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock.


 


“Equity Offering” means any public or private sale of Common Stock or
preferred stock of the Company or any of its direct or indirect parents
(excluding Disqualified Stock), other than


 


(1)                                  public
offerings with respect to the Company’s or any direct or indirect parent’s
Common Stock registered on Form S-8;


 


(2)                                  any
such public or private sale that constitutes an Excluded Contribution; and


 


(3)                                  any
sales to Parent or any of its Subsidiaries.


 


“euro” means the single currency of participating member states of the
EMU.


 


“Euroclear” means
Euroclear Bank S.A./N.V., as operator of the Euroclear system.


 


“Event of Default” has the meaning specified in Section 501 of
this Indenture.


 


“Excess ABL Proceeds” has the meaning specified in Section 1018 of
this Indenture.


 


“Excess Proceeds” has the meaning specified in Section 1018 of
this Indenture.


 


“Exchange Act” means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.


 


“Excluded Assets” means
the collective reference to (i) any interest in real property if the
greater of the cost and the book value of such interest is less than
$1,000,000; (ii) any property or asset only to the extent and for so long
as the grant of a security interest in such property or asset is prohibited by
any applicable law or requires a consent not obtained of any governmental
authority pursuant to applicable law; (iii) any right, title or interest
in any permit, license or contract held by the Company or any Guarantor or to
which the Company or any Guarantor is a party or any of its right, title or
interest thereunder, in each case only to the extent and for so long as the
terms of such permit, license or contract validly prohibits the creation by the
Company or a Guarantor, as applicable, of a security interest in such permit,
license or contract in favor of the Notes Collateral Agent (after giving effect
to Section 9-406, 9-407, 9-408 or 9-409 of the Uniform Commercial Code (or
any successor provisions) of any relevant jurisdiction or any other applicable
law (including Title 11 of the United States Code) or principles of
equity); (iv) Capital Stock of a Person that constitutes a Subsidiary
(other than a Wholly Owned Subsidiary) the pledge of which would violate a
contractual obligation to the owners of the other Capital Stock of such Person
that is binding on or relating to such Capital Stock; (v) any equipment or
real property (and proceeds thereof) of the Company or any Guarantor that is
subject to a purchase money Lien or Capitalized Lease Obligation permitted
under this Indenture to the extent the documents relating to such purchase
money Lien or Capitalized Lease Obligation would not permit such equipment or
real property (and proceeds thereof) to be subject to the Liens created under
the Security Documents; provided
that immediately upon the ineffectiveness, lapse or termination of any such
restriction, such equipment or real property shall cease to be an Excluded
Asset; (vi) assets of the Company or any Guarantor located 


 


11

















 


outside of the United States to the extent a Lien on such assets cannot
be created and perfected under United States federal or state law; and (vii) After-Acquired
Property subject to Permitted Liens described in clause (8) or (9) of
the definition of “Permitted Liens” so long as the documents governing such Permitted
Liens do not permit any other Liens on such After-Acquired Property; provided, however,
that Excluded Assets shall not include (a) any proceeds, substitutions or
replacements of any Excluded Assets referred to above (unless such proceeds,
substitutions or replacements would constitute Excluded Assets) or (b) any
asset which secures obligations with respect to the Lenders Debt.


 


“Excluded Contribution” means net cash proceeds, marketable securities
or Qualified Proceeds received by the Company from:


 


(a)                                  contributions
to its common equity capital, and


 


(b)                                 the
sale (other than to a Subsidiary of the Company or to any management equity
plan or stock option plan or any other management or employee benefit plan or
agreement of the Company) of Capital Stock (other than Disqualified Stock and
Designated Preferred Stock) of the Company,


 


in each case designated as Excluded Contributions pursuant to an
Officers’ Certificate executed by an executive vice president and the principal
financial officer of the Company on the date such capital contributions are
made or the date such Equity Interests are sold, as the case may be, which are
excluded from the calculation set forth in Section 1010(a)(4)(C).


 


“Existing Indebtedness” means Indebtedness of the Company or the
Restricted Subsidiaries in existence on the Issue Date, plus interest accruing
thereon.


 


“Fixed Charge Coverage Ratio” means, with respect to any Person for any
period, the ratio of EBITDA of such Person for such period to the Fixed Charges
of such Person for such period.  In the
event that the Company or any Restricted Subsidiary incurs, assumes,
guarantees, redeems, retires or extinguishes any Indebtedness (other than
reductions in amounts outstanding under revolving facilities unless accompanied
by a corresponding termination of commitment) or issues or redeems Disqualified
Stock or preferred stock subsequent to the commencement of the period for which
the Fixed Charge Coverage Ratio is being calculated but prior to the event for
which the calculation of the Fixed Charge Coverage Ratio is made (the “Calculation
Date”), then the Fixed Charge Coverage Ratio shall be calculated giving pro
forma effect to such incurrence, assumption, guarantee or redemption of
Indebtedness, or such issuance, redemption, retirement or extinguishment of
Disqualified Stock or preferred stock, as if the same had occurred at the
beginning of the applicable four-quarter period.


 


For purposes of making the computation referred to above, Investments,
acquisitions, dispositions, mergers, consolidations and disposed operations (as
determined in accordance with GAAP) that have been made by such Person or any
Restricted Subsidiary thereof during the four-quarter reference period or
subsequent to such reference period and on or prior to or simultaneously with
the Calculation Date shall be calculated on a pro forma basis assuming that all
such Investments, acquisitions, dispositions, mergers, consolidations and
disposed operations (and the change in any associated fixed charge obligations
and the change in EBITDA resulting therefrom) had occurred on the first day of
the four-quarter reference period.  If
since the beginning of such period any other Person (that subsequently became a
Restricted Subsidiary or was merged with or into such Person or any Restricted
Subsidiary thereof since the beginning of such period) shall have made any
Investment, acquisition, disposition, merger, consolidation or disposed
operation that would have required adjustment pursuant to this definition, then
the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect
thereto for such period as if such Investment, acquisition, disposition,
merger, consolidation or disposed operation had occurred at the beginning of
the applicable four-quarter period.


 


For purposes of this definition, whenever pro forma effect is to be
given to a transaction, the pro forma calculations shall be made in good faith
by a responsible financial or accounting officer of the Company.  If any Indebtedness bears a floating rate of
interest and is being given pro forma effect, the interest on such Indebtedness
shall be calculated as if the rate in effect on the Calculation Date had been
the applicable rate for the entire period (taking into account any Hedging
Obligations applicable to such Indebtedness). 
Interest on a Capitalized Lease


 


12














 


Obligation
shall be deemed to accrue at an interest rate reasonably determined by a
responsible financial or accounting officer of the Company to be the rate of
interest implicit in such Capitalized Lease Obligation in accordance with
GAAP.  For purposes of making the
computation referred to above, interest on any Indebtedness under a revolving
credit facility computed on a pro forma basis shall be computed based upon the
average daily balance of such Indebtedness during the applicable period.  Interest on Indebtedness that may optionally
be determined at an interest rate based upon a factor of a prime or similar
rate, a eurocurrency interbank offered rate, or other rate, shall be deemed to
have been based upon the rate actually chosen, or, if none, then based upon
such optional rate chosen as the Company may designate.


 


“Fixed Charges” means, with respect to any Person for any period, the
sum of


 


(a)                                  Consolidated
Interest Expense (excluding amounts for interest payments that are payment-in-kind
or any accretion to principal amount on the Convertible Notes of such Person
for such period),


 


(b)                                 all
cash dividend payments (excluding items eliminated in consolidation) on any
series of preferred stock (including any Designated Preferred Stock) or any
Refunding Capital Stock of such Person, and


 


(c)                                  all
cash dividend payments (excluding items eliminated in consolidation) on any
series of Disqualified Stock.


 


“Foreign Subsidiary” means, with respect to any Person, any Restricted
Subsidiary of such Person that is not organized or existing under the laws of
the United States, any state thereof or the District of Columbia.


 


“Forward Purchase Contract”
means that certain forward purchase contract relating to the Convertible Notes
among Parent, the Company and Sealy Holding LLC pursuant to which Sealy
Holding LLC shall post the Posted Cash on the Issue Date; provided that no cash interest can accrue
or be paid thereon after September 1, 2009.


 


“Funding Guarantor” has the meaning specified in Section 1206 of
this Indenture.


 


“GAAP” means generally
accepted accounting principles in the United States which are in effect on the
Issue Date.  At any time after the Issue
Date, the Company may elect to apply International Financial Reporting
Standards (“IFRS”) accounting principles in lieu of GAAP and, upon any such
election, references herein to GAAP shall thereafter be construed to mean IFRS
(except as otherwise provided in this Indenture); provided that any such election, once made, shall be
irrevocable; provided, further, that any calculation or
determination in this Indenture that requires the application of GAAP for
periods that include fiscal quarters ended prior to the Company’s election to
apply IFRS shall remain as previously calculated or determined in accordance
with GAAP.  The Company shall give notice
of any such election made in accordance with this definition to the Trustee and
the Holders of Notes.


 


“Global Note Legend” means the legend set forth in Section 203
hereof, which is required to be placed on all Global Notes issued under this
Indenture.


 


“Global Notes” means the Notes deposited with or on behalf of and
registered in the name of the Depositary or its nominee, substantially in the
form of Exhibit A hereto and that bears the Global Note Legend and that
has the “Schedule of Exchanges of Interests in the Global Note” attached
thereto, issued in accordance with Section 201 or 312(b)(3) hereof.


 


“Government Securities” means securities that are:


 


(a)                                  direct
obligations of the United States of America for the timely payment of which its
full faith and credit is pledged, or


 


13

















 


(b)                               obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of the
United States of America the timely payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States of
America,


 


which, in either case, are not callable or redeemable at the option of
the issuers thereof, and shall also include a depository receipt issued by a
bank (as defined in Section 3(a)(2) of the Securities Act), as custodian
with respect to any such Government Securities or a specific payment of
principal of or interest on any such Government Securities held by such
custodian for the account of the holder of such depository receipt; provided that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depository receipt from any amount received by the custodian in respect of
the Government Securities or the specific payment of principal of or interest
on the Government Securities evidenced by such depository receipt.


 


“guarantee” means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any Indebtedness
or other obligations.


 


“Guarantee” means the guarantee by any Guarantor of the Company’s
obligations under this Indenture.


 


“Guarantors” means Parent, Holdings and all Restricted Subsidiaries
that are Domestic Subsidiaries as of the Issue Date and any other Subsidiary of
the Company that executes a supplemental indenture to this Indenture providing
for a guarantee of payment of the Notes.


 


“Hedging Obligations” means, with respect to any Person, the
obligations of such Person under:


 


(1)                                currency exchange,
interest rate or commodity swap agreements, currency exchange, interest rate or
commodity cap agreements and currency exchange, interest rate or commodity
collar agreements and


 


(2)                                other agreements or
arrangements designed to protect such Person against fluctuations in currency
exchange, interest rates or commodity prices.


 


“Holder” means a holder of Notes.


 


“Holdings Guaranty” means the Guarantee by Holdings of the Company’s
obligations with respect to the Notes, including any Guarantee entered into
after the Issue Date.


 


“IAI Global Note” means a Global Note substantially in the form of Exhibit A
hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of and registered in the name of the Depositary or
its nominee that will initially be issued in a denomination equal to the
outstanding principal amount of the Notes sold to Institutional Accredited Investors.


 


“incur” has the meaning specified in Section 1011 of this Indenture.


 


“incurrence” has the meaning specified in Section 1011 of this
Indenture.


 


“Indebtedness” means, with respect to any Person,


 


(a)                                any indebtedness
(including principal and premium) of such Person, whether or not contingent:


 


(1)                                  in
respect of borrowed money;


 


14

















 


(2)                                  evidenced
by bonds, notes, debentures or similar instruments or letters of credit or
bankers’ acceptances (or, without double counting, reimbursement agreements in
respect thereof);


 


(3)                                  representing
the balance deferred and unpaid of the purchase price of any property
(including Capitalized Lease Obligations), except any such balance that
constitutes a trade payable or similar obligation to a trade creditor, in each
case accrued in the ordinary course of business; or


 


(4)                                  representing
any Hedging Obligations,


 


if and to the extent that any of the
foregoing Indebtedness (other than letters of credit and Hedging Obligations)
would appear as a liability upon a balance sheet (excluding the footnotes
thereto) of such Person prepared in accordance with GAAP;


 


(b)                               to the extent not
otherwise included, any obligation by such Person to be liable for, or to pay,
as obligor, guarantor or otherwise, on the Indebtedness of another Person,
other than by endorsement of negotiable instruments for collection in the
ordinary course of business; and


 


(c)                                to the extent not
otherwise included, Indebtedness of another Person secured by a Lien on any asset
owned by such Person, whether or not such Indebtedness is assumed by such
Person;


 


provided, however, that Contingent Obligations
incurred in the ordinary course of business shall be deemed not to constitute
Indebtedness; and obligations under or in respect of Receivables Facilities
shall not be deemed to constitute Indebtedness.


 


“Indenture” means this instrument as originally executed and as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this Indenture and any such supplemental indenture,
the provisions of the Trust Indenture Act that are deemed to be part of and govern
this instrument and any such supplemental indenture, respectively.


 


“Independent Financial Advisor” means an accounting, appraisal,
investment banking firm or consultant to Persons engaged in Similar Businesses
of nationally recognized standing that is, in the good faith judgment of the
Company, qualified to perform the task for which it has been engaged.


 


“Indirect Participant” means a Person who holds a beneficial interest
in a Global Note through a Participant.


 


“Initial Lien” has the meaning specified in Section 1012 of this
Indenture.


 


“Initial Purchasers” means J.P. Morgan Securities Inc., Citigroup
Global Markets Inc., Goldman, Sachs & Co., Credit Suisse Securities
(USA) Inc., KKR Capital Markets LLC and Mizuho Securities USA Inc.


 


“Insolvency or Liquidation Proceeding” means:


 


(a)                                any voluntary or
involuntary case or proceeding under the Bankruptcy Law with respect to the
Company or any Guarantor;


 


(b)                               any other voluntary or
involuntary insolvency, reorganization or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding
with respect to the Company or any Guarantor or with respect to a material
portion of their respective assets;


 


(c)                                any composition of
liabilities or similar arrangement relating to the Company or any Guarantor,
whether or not under a court’s jurisdiction or supervision;


 


15

















 


(d)                               any liquidation,
dissolution, reorganization or winding up of the Company or any Guarantor,
whether voluntary or involuntary, whether or not under a court’s jurisdiction
or supervision, and whether or not involving insolvency or bankruptcy; or


 


(e)                                any
general assignment for the benefit of creditors or any other marshalling of
assets and liabilities of the Company or any Guarantor.


 


“Institutional Accredited Investor” means an institution that is an “accredited
investor” as defined in Rule 501(a)(1), (2), (3) or (7) under
the Securities Act, who are not also QIBs.


 


“Intercreditor Agreement”
means the intercreditor agreement dated as of the Issue Date among the Bank
Collateral Agent, the Trustee, the Notes Collateral Agent, the Convertible
Notes Collateral Agent, the Company and each Guarantor, as it may be amended
from time to time in accordance with this Indenture.


 


“Interest Payment Date” means the Stated Maturity of an installment of
interest on the Notes.


 


“Investments” means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the form of loans
(including guarantees), advances or capital contributions (excluding accounts
receivable, trade credit, advances to customers, commission, travel and similar
advances to officers and employees, in each case made in the ordinary course of
business), purchases or other acquisitions for consideration of Indebtedness,
Equity Interests or other securities issued by any other Person and investments
that are required by GAAP to be classified on the balance sheet (excluding the
footnotes) of the Company in the same manner as the other investments included
in this definition to the extent such transactions involve the transfer of cash
or other property.  For purposes of the
definition of “Unrestricted Subsidiary” and Section 1010,


 


(1)                                “Investments” shall
include the portion (proportionate to the Company’s equity interest in such
Subsidiary) of the fair market value of the net assets of a Subsidiary of the
Company at the time that such Subsidiary is designated an Unrestricted
Subsidiary; provided, however,  that upon a redesignation of such Subsidiary as a Restricted
Subsidiary, the Company shall be deemed to continue to have a permanent “Investment”
in an Unrestricted Subsidiary in an amount (if positive) equal to:


 


(x)                                   the
Company’s “Investment” in such Subsidiary at the time of such redesignation less


 


(y)                                 the
portion (proportionate to the Company’s equity interest in such Subsidiary) of
the fair market value of the net assets of such Subsidiary at the time of such
redesignation; and


 


(2)                                any property
transferred to or from an Unrestricted Subsidiary shall be valued at its fair
market value at the time of such transfer, in each case as determined in good
faith by the Company.


 


“Issue Date” means May 29, 2009.


 


“Junior Lien Priority”
means, relative to specified Indebtedness, having a junior Lien priority on
specified Collateral and either subject to the Intercreditor Agreement on a
basis that is no more favorable than the provisions applicable to the holders
of Convertible Notes (in the case of ABL Collateral) or the holders of Lenders
Debt (in the case of Notes Collateral) or subject to intercreditor agreements
providing holders of Indebtedness with Junior Lien Priority at least the same
rights and obligations as the holders of Convertible Notes (in the case of ABL
Collateral) or the holders of Lenders Debt (in the case of the Notes
Collateral) have pursuant to the Intercreditor Agreement as to the specified
Collateral.  For the avoidance of doubt,
Indebtedness in respect of the Convertible Notes and Additional Convertible
Notes has Junior Lien Priority.


 


“Legal Defeasance” has the meaning specified in Section 1302 of
this Indenture.


 


“Lenders Debt” means
any (i) Indebtedness outstanding from time to time under the Credit Agreement,
(ii) any Indebtedness which has a first-priority security interest in the
ABL Collateral (subject to Permitted 


 


16

















 


Liens) and (iii) all
cash management Obligations and Hedging Obligations incurred with any Bank
Lender (or their affiliates).


 


“Lien” means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement
under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction;
provided that in no event shall an
operating lease be deemed to constitute a Lien.


 


 “Management Group” means 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 or other
executive officer of any of Parent, the Company or any Subsidiary of any such
company at such time.


 


“Management Notes”
means up to $25,000,000 aggregate principal amount of 8% convertible senior
secured third lien notes due 2016 of the Company, having terms and conditions
that are not less favorable to the Company than the 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 Convertible Notes.


 


“Maturity”, when used with respect to any Note, means the date on which
the principal of such Note or an installment of principal becomes due and
payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, notice of redemption or otherwise.


 


“Moody’s” means Moody’s Investors Service, Inc.


 


“Net Income” means, with respect to any Person, the net income (loss)
of such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends.


 


“Net Proceeds” means the aggregate cash proceeds received by the
Company, a Guarantor or any Restricted Subsidiary in respect of any Asset Sale,
including, without limitation, any cash received upon the sale or other
disposition of any Designated Non-cash Consideration received in any Asset
Sale, net of the direct costs relating to such Asset Sale and the sale or
disposition of such Designated Non-cash Consideration, including, without
limitation, legal, accounting and investment banking fees, and brokerage and
sales commissions, any relocation expenses incurred as a result thereof, taxes
paid or payable as a result thereof (after taking into account any available
tax credits or deductions and any tax sharing arrangements), amounts required
to be applied to the repayment of principal, premium, if any, and interest on
Indebtedness secured by a Lien permitted under this Indenture on assets that do
not constitute Collateral required (other than required by Section 1018(b))
to be paid as a result of such transaction and any deduction of appropriate
amounts to be provided by the Company as a reserve in accordance with GAAP
against any liabilities associated with the asset disposed of in such
transaction and retained by the Company after such sale or other disposition
thereof, including, without limitation, pension and other post-employment benefit
liabilities and liabilities related to environmental matters or against any
indemnification obligations associated with such transaction.


 


“Non-Conforming Plan of Reorganization” means any plan of
reorganization that grants any Noteholder Secured Party any right or benefit,
directly or indirectly, which right or benefit is prohibited at such time by
the provisions of the Intercreditor Agreement.


 


“Non-U.S. Person” means a Person who is not a U.S. Person.


 


“Note Register” and “Note Registrar” have the respective meanings
specified in Section 305.


 


“Noteholder Secured Parties” means, collectively, the Senior Secured
Noteholder Secured Parties and the Convertible Notes Secured Parties.


 


17

















 


“Notes” has the meaning stated in the first recital of this Indenture
and more particularly means any Notes authenticated and delivered under this
Indenture.  The Notes, including the Additional
Notes, shall be treated as a single class for all purposes of this Indenture,
and unless the context otherwise requires, all references to the Notes shall
include any Additional Notes.


 


“Notes Collateral” has
the meaning assigned to the term “Senior Secured Notes Priority Collateral” in
the Intercreditor Agreement.


 


“Notes Collateral Agent”
means The Bank of New York Mellon Trust Company, N.A., in its capacity as “Collateral
Agent” under this Indenture and under the Security Documents, and any successor
thereto in such capacity.


 


“Obligations” means any principal, interest (including any interest
accruing subsequent to the filing of a petition in bankruptcy, reorganization
or similar proceeding at the rate provided for in the documentation with
respect thereto, whether or not such interest is an allowed claim under
applicable state, federal or foreign law), penalties, fees, indemnifications,
reimbursements (including, without limitation, reimbursement obligations with
respect to letters of credit and banker’s acceptances), damages and other
liabilities, and guarantees of payment of such principal, interest, penalties,
fees, indemnifications, reimbursements, damages and other liabilities, payable
under the documentation governing any Indebtedness.


 


“Offering Memorandum” means the Offering Memorandum dated May 15,
2009 relating to the Notes.


 


“Officer” means the Chairman of the Board of Directors, the Chief
Executive Officer, the President, any Executive Vice President, Senior Vice
President or Vice President, the Treasurer or the Secretary of the Company.


 


“Officers’ Certificate” means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, or the principal accounting
officer of the Company that meets the requirements set forth in this Indenture.


 


“Opinion of Counsel” means, with respect to any Person, a written
opinion reasonably acceptable to the Trustee from legal counsel.  The counsel may be counsel for such Person,
including an employee of such Person.


 


“Other Pari Passu Lien Obligations”
means any Additional Notes and any other Indebtedness having Pari Passu Lien
Priority relative to the Notes with respect to the Notes Collateral, either
Pari Passu Lien Priority, Junior Lien Priority or no Lien with respect to the
ABL Collateral and substantially identical terms as the Notes (other than issue
price, interest rate, yield and redemption terms) and any Indebtedness that
refinances or refunds (or successive refinancings and refundings) any Notes or
Additional Notes and all obligations with respect to such Indebtedness; provided that such Indebtedness may (a) contain
terms and covenants that are, in the reasonable opinion of the Company, less
restrictive to the Company and the Restricted Subsidiaries than the terms and
covenants under the Notes; provided
that such Indebtedness has Pari Passu Lien Priority relative to the Notes; and (b) contain
terms and covenants that are more restrictive to the Company and its Restricted
Subsidiaries than the terms and covenants under the Notes so long as prior to
or substantially simultaneously with the issuance of any such Indebtedness the
Notes and this Indenture are amended to contain any such more restrictive terms
and covenants; provided, further,
that such Indebtedness shall have a Stated Maturity date that is the same as or
later than that of the Notes.


 


“Outstanding”, when used with respect to Notes, means, as of the date
of determination, all Notes theretofore authenticated and delivered under this
Indenture, except:


 


(i)                                     Notes
theretofore cancelled by the Trustee or delivered to the Trustee for cancellation;


 


(ii)                                  Notes,
or portions thereof, for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in 


 


18

















 


trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the Holders
of such Notes; provided that, if such Notes are
to be redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made;


 


(iii)                             Notes, except to the
extent provided in Sections 1302 and 1303, with respect to which the Company
has effected Legal Defeasance and/or Covenant Defeasance as provided in Article Thirteen;
and


 


(iv)                            Notes which have been paid
pursuant to Section 306 or in exchange for or in lieu of which other Notes
have been authenticated and delivered pursuant to this Indenture, other than
any such Notes in respect of which there shall have been presented to the
Trustee proof satisfactory to it that such Notes are held by a bona fide
purchaser in whose hands the Notes are valid obligations of the Company;


 


provided, however,  that in determining whether the Holders of the requisite
principal amount of Outstanding Notes have given any request, demand,
authorization, direction, consent, notice or waiver hereunder, and for the
purpose of making the calculations required by TIA Section 313, Notes
owned by the Company or any other obligor upon the Notes or any Affiliate of
the Company or such other obligor shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Trustee shall be protected in making
such calculation or in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Notes which a Responsible Officer of
the Trustee actually knows to be so owned shall be so disregarded.


 


“Parent Guaranty” means
the Guarantee by Parent of the Company’s obligations with respect to the notes,
including any Guarantee entered into after the Issue Date.


 


“Pari Passu Lien Priority”
means, relative to specified Indebtedness, having equal Lien priority on
specified Collateral and either subject to the Intercreditor Agreement on a
substantially identical basis as the holders of such specified Indebtedness or
subject to intercreditor agreements providing holders of the Indebtedness
intended to have Pari Passu Lien Priority with substantially the same rights
and obligations that the holders of such specified Indebtedness have pursuant
to the Intercreditor Agreement as to the specified Collateral.


 


“Participant” means, with respect to the Depositary, Euroclear or
Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and, with respect to DTC, shall include Euroclear
and Clearstream).


 


“Paying Agent” means any Person (including the Company acting as Paying
Agent) authorized by the Company to pay the principal of (and premium, if any)
or interest on any Notes on behalf of the Company.


 


“Permitted Asset Swap” means the concurrent purchase and sale or
exchange of Related Business Assets or a combination of Related Business Assets
and cash or Cash Equivalents between the Company or any of its Restricted
Subsidiaries and another Person; provided,  that any cash or Cash Equivalents received must be applied
in accordance with Section 1018.


 


“Permitted Holders” means Kohlberg Kravis Roberts & Co.  L.P., its Affiliates and the Management
Group.


 


“Permitted Investments” means:


 


(a)                                any Investment in the
Company or any Restricted Subsidiary;


 


(b)                               any Investment in cash
and Cash Equivalents;


 


(c)                                any Investment by the
Company or any Restricted Subsidiary of the Company in a Person that is engaged
in a Similar Business if as a result of such Investment;


 


(1)                                  such
Person becomes a Restricted Subsidiary, or


 


19

















 


(2)                                  such
Person, in one transaction or a series of related transactions, is merged,
consolidated or amalgamated with or into, or transfers or conveys substantially
all of its assets to, or is liquidated into, the Company or a Restricted
Subsidiary;


 


(d)                               any Investment in
securities or other assets not constituting cash or Cash Equivalents and
received in connection with an Asset Sale made pursuant to Section 1018,
or any other disposition of assets not constituting an Asset Sale;


 


(e)                                any Investment existing
on the Issue Date;


 


(f)                                  advances to employees
not in excess of $10.0 million outstanding at any one time, in the aggregate;


 


(g)                               any Investment acquired
by the Company or any Restricted Subsidiary


 


(1)                                  in
exchange for any other Investment or accounts receivable held by the Company or
any such Restricted Subsidiary in connection with or as a result of a
bankruptcy, workout, reorganization or recapitalization of the Company of such
other Investment or accounts receivable or


 


(2)                                  as
a result of a foreclosure by the Company or any Restricted Subsidiary with
respect to any secured Investment or other transfer of title with respect to
any secured Investment in default;


 


(h)                               Hedging Obligations
permitted under Section 1011(b)(11);


 


(i)                                   loans and advances
to officers, directors and employees for business-related travel expenses,
moving expenses and other similar expenses, in each case incurred in the
ordinary course of business;


 


(j)                                   any Investment in a
Similar Business having an aggregate fair market value, taken together with all
other Investments made pursuant to this clause (j) that are at that time
outstanding (without giving effect to the sale of an Unrestricted Subsidiary to
the extent the proceeds of such sale do not consist of cash and/or marketable
securities), not to exceed the greater of (x) $40.0 million and (y) 4.0%
of Total Assets at the time of such Investment (with the fair market value of
each Investment being measured at the time made and without giving effect to
subsequent changes in value);


 


(k)                                Investments the payment
for which consists of Equity Interests of the Company, or any of its direct or
indirect parents (exclusive of Disqualified Stock); provided, however,  that such
Equity Interests shall not increase the amount available for Restricted Payments
under Section 1010(a)(C);


 


(l)                                   guarantees of
Indebtedness permitted under Section 1011;


 


(m)                             any transaction to the
extent it constitutes an investment that is permitted and made in accordance
with Section 1013(b) (except transactions described in clauses (2),
(6), (7) and (11) thereof);


 


(n)                               Investments consisting
of purchases and acquisitions of inventory, supplies, material or equipment or
the licensing or contribution of intellectual property pursuant to joint marketing
arrangements with other Persons;


 


(o)                               additional Investments
having an aggregate fair market value, taken together with all other Investments
made pursuant to this clause (o) that are at that time outstanding
(without giving effect to the sale of an Unrestricted Subsidiary to the extent
the proceeds of such sale do not consist of cash and/or marketable securities),
not to exceed the greater of (x) $15.0 million and (y) 1.5% of Total
Assets at the 


 


20

















 


time of such Investment (with the fair market
value of each Investment being measured at the time made and without giving
effect to subsequent changes in value); and


 


(p)                                 Investments
relating to any special purpose wholly-owned subsidiary of the Company organized
in connection with a Receivables Facility that, in the good faith determination
of the Board of Directors of the Company, are necessary or advisable to effect
such Receivables Facility.


 


“Permitted Liens” means, with respect to any Person:


 


(1)                                  pledges
or deposits by such Person under workmen’s compensation laws, unemployment insurance
laws or similar legislation, or good faith deposits in connection with bids,
tenders, contracts (other than for the payment of Indebtedness) or leases to
which such Person is a party, or deposits to secure public or statutory obligations
of such Person or deposits of cash or U.S. 
government bonds to secure surety or appeal bonds to which such Person
is a party, or deposits as security for contested taxes or import duties or for
the payment of rent, in each case incurred in the ordinary course of business;


 


(2)                                  Liens
imposed by law, such as carriers’, warehousemen’s and mechanics’ Liens, in each
case for sums not yet due or being contested in good faith by appropriate
proceedings or other Liens arising out of judgments or awards against such
Person with respect to which such Person shall then be proceeding with an
appeal or other proceedings for review;


 


(3)                                  Liens
for taxes, assessments or other governmental charges not yet due or payable or
subject to penalties for nonpayment or which are being contested in good faith
by appropriate proceedings;


 


(4)                                  Liens
in favor of issuers of performance and surety bonds or bid bonds or with
respect to other regulatory requirements or letters of credit issued pursuant
to the request of and for the account of such Person in the ordinary course of
its business;


 


(5)                                  minor
survey exceptions, minor 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 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 Indebtedness and which do not in the aggregate
materially adversely affect the value of said properties or materially impair
their use in the operation of the business of such Person;


 


(6)                                  (A) Liens
securing Senior Indebtedness permitted to be incurred pursuant to Section 1011(a) hereof;
provided that any such
Indebtedness has Pari Passu Lien Priority relative to the Notes; provided further that at the time of
incurrence and after giving pro forma
effect thereto, the Consolidated Senior Secured Debt Ratio would be no greater
than 2.75 to 1.0 and (B) Liens securing Indebtedness pursuant to Section 1011(b)(5) hereof;
provided that Liens securing
Indebtedness incurred pursuant to Section 1011(b)(5) are solely on
acquired property or the assets of the acquired entity;


 


(7)                                  Liens
existing on the Issue Date (other than Liens in favor of secured parties under
the Credit Agreement and Convertible Notes);


 


(8)                                  Liens
on property or shares of stock of a Person at the time such Person becomes a Subsidiary;
provided, however,  such Liens are not created or incurred in connection with,
or in contemplation of, such other Person becoming such a subsidiary; provided, further, however, that such Liens may not extend to any other
property owned by the Company or any Restricted Subsidiary;


 


(9)                                  Liens
on property at the time the Company or a Restricted Subsidiary acquired the property,
including any acquisition by means of a merger or consolidation with or into
the Company or any Restricted Subsidiary; provided, however,  that such
Liens are not created or incurred in connection with, or in contemplation of,
such acquisition; provided, further, however, that the Liens may not extend to any other
property owned by the Company or any Restricted Subsidiary;


 


21

















 


(10)                            Liens
securing Indebtedness or other obligations of a Restricted Subsidiary owing to
the Company or another Restricted Subsidiary permitted to be incurred in accordance
with Section 1011 hereof;


 


(11)                            Liens
securing Hedging Obligations so long as the related Indebtedness is, and is
permitted under this Indenture to be, secured by a Lien on the same property
securing such Hedging Obligations;


 


(12)                            Liens
on specific items of inventory of other goods and proceeds of any Person
securing such Person’s obligations in respect of bankers’ acceptances issued or
created for the account of such Person to facilitate the purchase, shipment or
storage of such inventory or other goods;


 


(13)                            leases
and subleases of real property granted to others in the ordinary course of
business so long as such leases and subleases are subordinate in all respects
to the Liens granted and evidenced by the Security Documents and do not
materially interfere with the ordinary conduct of the business of the Company
or any of the Restricted Subsidiaries;


 


(14)                            Liens
arising from Uniform Commercial Code financing statement filings regarding operating
leases entered into by the Company and its Restricted Subsidiaries in the
ordinary course of business;


 


(15)                            Liens
in favor of the Company or any Guarantor;


 


(16)                            Liens
on equipment of the Company or any Restricted Subsidiary granted in the
ordinary course of business to the Company’s client at which such equipment is
located;


 


(17)                            Liens
on accounts receivable and related assets incurred in connection with a
Receivables Facility;


 


(18)                            Liens
to secure any refinancing, refunding, extension, renewal or replacement (or
successive refinancing, refunding, extensions, renewals or replacements) as a
whole, or in part, of any Indebtedness secured by any Lien referred to in the
foregoing clauses (6)(B), (7), (8), (9), (10), (11) and (15); provided, however,  that (x) such new Lien shall be limited to all or part
of the same property that secured the original Lien (plus improvements on such
property), (y) the Indebtedness secured by such Lien at such time is not
increased to any amount greater than the sum of (A) the outstanding
principal amount or, if greater, committed amount of the Indebtedness described
under clauses (6)(B), (7), (8), (9), (10), (11) and (15) at the time the
original Lien became a Permitted Lien under this Indenture, and (B) an
amount necessary to pay any fees and expenses, including premiums, related to
such refinancing, refunding, extension, renewal or replacement and (z) the
new Lien has no greater priority and the holders of the Indebtedness secured by
such Lien have no greater intercreditor rights relative to the Notes and
Holders thereof than the original Liens and the related Indebtedness;


 


(19)                            other
Liens securing obligations incurred in the ordinary course of business which
obligations do not exceed $50.0 million at any one time outstanding; provided that if such Liens attach to
Collateral, such Liens have Pari Passu Lien Priority relative to the Notes;


 


(20)                            Liens
securing Indebtedness Incurred pursuant to Section 1011(b)(1) hereof;
provided that (1) any such
Liens on Notes Collateral shall rank junior in priority to the Liens on the
Notes Collateral securing the Notes and (2) the holder of such Lien either
(x) is subject to an intercreditor agreement consistent with the
Intercreditor Agreement on the same basis as the ABL Secured Parties or (y) is
or agrees to become bound by the terms of the Intercreditor Agreement on the
same basis as the ABL Secured Parties;


 


(21)                            Liens
securing the Notes outstanding on the Issue Date, Refinancing Indebtedness with
respect to such Notes, the Parent Guaranty, the Holdings Guaranty and the
Subsidiary Guarantees relating thereto and any obligations with respect to such
Notes, Refinancing Indebtedness, Parent Guaranty, Holdings Guaranty and
Subsidiary Guarantees;


 


22














 


(22)                            Liens on the Notes
Collateral in favor of any collateral agent relating to such collateral agent’s
administrative expenses with respect to the Notes Collateral; and


 


(23)                            Liens to secure
Indebtedness of any Foreign Subsidiary permitted by Section 1011(b)(19)
hereof covering only the assets of such Foreign Subsidiary.


 


For purposes of determining compliance with
this definition, (A) Permitted Liens need not be incurred solely by
reference to one category of Permitted Liens described above but are permitted
to be incurred in part under any combination thereof and (B) in the event
that a Lien (or any portion thereof) meets the criteria of one or more of the
categories of Permitted Liens described above, the Company shall, in its sole
discretion, classify (but not reclassify) such item of Permitted Liens (or any
portion thereof) in any manner that complies with this definition and shall
only be required to include the amount and type of such item of Permitted Liens
in one of the above clauses and such Lien shall be treated as having been
incurred pursuant to only one of such clauses.


 


“Person” means any individual, corporation,
limited liability company, partnership, joint venture, association, joint stock
company, trust, unincorporated organization, government or any agency or
political subdivision thereof or any other entity.


 


“Pledge Agreement” means the pledge agreement
dated as of the Issue Date by and among the Notes Collateral Agent, the Company
and the Guarantors as the same may be amended or supplemented from time to time
in accordance with its terms.


 


“PIK
Interest” means interest payable entirely by increasing the principal
amount of such Indebtedness.


 


“Posted
Cash” means the cash posted by Sealy Holding LLC to the Company and
Parent on the Issue Date pursuant to the Forward Purchase Contract.


 


“Predecessor Note” of any particular Note
means every previous Note evidencing all or a portion of the same debt as that
evidenced by such particular Note; and, for the purposes of this definition,
any Note authenticated and delivered under Section 306 in exchange for a
mutilated Note or in lieu of a lost, destroyed or stolen Note shall be deemed
to evidence the same debt as the mutilated, lost, destroyed or stolen Note.


 


“Preferred Stock” means any Equity Interest
with preferential rights of payment of dividends or upon liquidation, dissolution,
or winding up.


 


“Private Placement Legend” has the meaning
specified in Section 203 of this Indenture.


 


“QIB” means a “qualified institutional buyer”
as defined in Rule 144A.


 


“Qualified Proceeds” means assets that are
used or useful in, or Capital Stock of any Person engaged in, a Similar
Business; provided that the fair market value of
any such assets or Capital Stock shall be determined by the Board of Directors
in good faith.


 


“Receivables Facility” means one or more
receivables financing facilities, as amended from time to time, the
Indebtedness of which is non-recourse (except for standard representations,
warranties, covenants and indemnities made in connection with such facilities)
to the Company and the Restricted Subsidiaries pursuant to which the Company
and/or any of its Restricted Subsidiaries sells its accounts receivable to a
Person that is not a Restricted Subsidiary.


 


“Receivables Fees” means distributions or
payments made directly or by means of discounts with respect to any
participation interest issued or sold in connection with, and other fees paid
to a Person that is not a Restricted Subsidiary in connection with, any
Receivables Facility.


 


23

















 


“Redemption Date”, when used with respect to
any Note to be redeemed, in whole or in part, means the date fixed for such redemption
by or pursuant to this Indenture.


 


“Redemption Price”, when used with respect to
any Note to be redeemed, means the price at which it is to be redeemed pursuant
to this Indenture.


 


 “Refinancing
Indebtedness” has the meaning specified in Section 1011 of this Indenture.


 


“Refunding Capital Stock” has the meaning
specified in Section 1010 of this Indenture.


 


“Regular Record Date” has the meaning
specified in Section 301 of this Indenture.


 


“Regulation S” means Regulation S under the
Securities Act.


 


“Regulation S Global Note” means a Global
Note substantially in the form of Exhibit A hereto bearing the Global Note
Legend and the Private Placement Legend and deposited with or on behalf of and
registered in the name of the Depositary or its nominee, issued in a
denomination equal to the outstanding principal amount of the Notes sold in reliance
on Rule 903 of Regulation S.


 


“Related Business Assets” means assets (other
than cash or Cash Equivalents) used or useful in a Similar Business, provided that any assets received by the Company or a
Restricted Subsidiary in exchange for assets transferred by the Company or a Restricted
Subsidiary shall not be deemed to be Related Business Assets if they consist of
securities of a Person, unless upon receipt of the securities of such Person,
such Person would become a Restricted Subsidiary.


 


“Responsible Officer”, when used with respect
to the Trustee, means any vice president, any assistant treasurer, any trust
officer or assistant trust officer, or any other officer of the Trustee
customarily performing functions similar to those performed by any of the
above-designated officers, and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject and who
shall have direct responsibility for the administration of this Indenture.


 


“Restricted Global Note” means a Global Note
bearing the Private Placement Legend.


 


“Restricted Investment” means an Investment
other than a Permitted Investment.


 


“Restricted Payments” has the meaning specified
in Section 1010 of this Indenture.


 


“Restricted Period” means the 40-day
distribution compliance period as defined in Regulation S.


 


“Restricted Subsidiary” means, at any time,
any direct or indirect Subsidiary of the Company (including any Foreign Subsidiary)
that is not then an Unrestricted Subsidiary; provided, however,  that upon the
occurrence of an Unrestricted Subsidiary ceasing to be an Unrestricted
Subsidiary, such Subsidiary shall be included in the definition of “Restricted
Subsidiary.”


 


“Retired Capital Stock” has the meaning
specified in Section 1010 of this Indenture.


 


“Rule 144” means Rule 144
promulgated under the Securities Act.


 


“Rule 144A” means Rule 144A under
the Securities Act.


 


“Rule 903” means Rule 903
promulgated under the Securities Act.


 


“Rule 904” means Rule 904
promulgated under the Securities Act.


 


24

















 


“S&P” means Standard and Poor’s Ratings
Group.


 


“Securities Act” means the Securities Act of
1933 and the rules and regulations of the Commission promulgated thereunder.


 


“Security Agreement” means the security
agreement dated as of the Issue Date among the Notes Collateral Agent, the
Company and the Guarantors as the same may be amended or supplemented from time
to time in accordance with its terms.


 


“Security
Documents” means the security agreements, pledge agreements, mortgages,
deeds of trust, deeds to secure debt, collateral assignments, control
agreements and related agreements (including, without limitation, finance
statements under the Uniform Commercial Code of the relevant states), as
amended, supplemented, restated, renewed, refunded, replaced, restructured,
repaid, refinanced or otherwise modified from time to time, creating the
security interests in the Collateral as contemplated by this Indenture.


 


“Senior Indebtedness” means:


 


(1)                                  all Indebtedness of
the Company or any Guarantor outstanding under the Credit Agreement (including
interest accruing on or after the filing of any petition in bankruptcy or for
reorganization of the Company or any Guarantor, regardless of whether or not a
claim for post-filing interest is allowed in such proceedings);


 


(2)                                  all Hedging
Obligations (and guarantees thereof) permitted to be incurred under the terms
of this Indenture;


 


(3)                                  any other
Indebtedness of the Company or any Guarantor permitted to be incurred under the
terms of this Indenture, unless the instrument under which such Indebtedness is
incurred expressly provides that it is on a parity with or subordinated in
right of payment to the Notes or any Subsidiary Guarantee; and


 


(4)                                  all Obligations with
respect to the items listed in the preceding clauses (1), (2) and (3).


 


“Senior Indebtedness” of any guarantor of the
Notes, including the Guarantors, has a correlative meaning.


 


“Senior Secured Noteholder Secured Parties”
means, collectively, the Trustee, the Notes Collateral Agent, each Holder, each
other holder of, or obligee in respect of any Obligations in respect of the
Notes and holders of Other Pari Passu Lien Obligations and each Authorized
Representative (as defined in the Security Agreement) thereto.


 


“Senior Subordinated Notes” means the Company’s
8.25% Senior Subordinated Notes due 2014 outstanding on the Issue Date.


 


“Significant Subsidiary” means any Restricted
Subsidiary that would be a “significant subsidiary” as defined in Article 1,
Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act,
as such regulation is in effect on the date hereof.


 


“Similar Business” means any business
conducted or proposed to be conducted by the Company and its Restricted
Subsidiaries on the date of this Indenture or any business that is similar,
reasonably related, incidental or ancillary thereto.


 


“Special Record Date” for the payment of any
Defaulted Interest means a date fixed by the Trustee pursuant to Section 307.


 


25

















 


“Stated Maturity”, when used with respect to
any Note or any installment of principal thereof or interest thereon, means the
date specified in such Notes as the fixed date on which the principal of such
Notes or such installment of principal or interest is due and payable.


 


“Subordinated Indebtedness” means:


 


(a)                                  with respect to the
Company, any Indebtedness of the Company which is by its terms subordinated in
right of payment to the Notes, and


 


(b)                                 with respect to any
Guarantor, any Indebtedness of such Guarantor which is by its terms subordinated
in right of payment to the Guarantee of such Guarantor.


 


“Subsidiary” means, with respect to any
Person,


 


(1)                                  any corporation,
association, or other business entity (other than a partnership, joint venture,
limited liability company or similar entity) of which more than 50% of the
total voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers
or trustees thereof is at the time of determination owned or controlled,
directly or indirectly, by such Person or one or more of the other Subsidiaries
of that Person or a combination thereof and


 


(2)                                  any partnership,
joint venture, limited liability company or similar entity of which;


 


(x)                                   more than 50% of the
capital accounts, distribution rights, total equity and voting interests or
general or limited partnership interests, as applicable, are owned or
controlled, directly or indirectly, by such Person or one or more of the other
Subsidiaries of that Person or a combination thereof whether in the form of
membership, general, special or limited partnership or otherwise, and


 


(y)                                 such Person or any
Restricted Subsidiary of such Person is a controlling general partner or otherwise
controls such entity.


 


“Subsidiary Guarantee” means the guarantee by
any Subsidiary Guarantor of the Company’s obligations under this Indenture.


 


“Subsidiary Guarantor” all of the Company’s
direct and indirect Domestic Subsidiaries existing on the Issue Date and any
other Subsidiary of the Company that executes a supplemental indenture to this
Indenture providing for a guarantee of payment of the Notes.


 


“Successor Company” has the meaning specified
in Section 801 of this Indenture.


 


“Successor Person” has the meaning specified
in Section 802 of this Indenture.


 


“Third
Lien Indebtedness” means any Indebtedness (other than Convertible Notes,
but including any Additional Convertible Notes) that is secured by the
Collateral with Pari Passu Lien Priority relative to the Convertible Notes or
is secured by some of the Collateral with Pari Passu Lien Priority relative to
the Convertible Notes and is not secured by the balance of the Collateral 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
Convertible Notes.


 


“Third Lien Indebtedness Secured Parties”
means each holder of Third Lien Indebtedness and each other holder of, or
obligee in respect of, any obligations in respect of Third Lien Indebtedness
outstanding at such time.


 


26

















 


 “Total
Assets” means the total assets of the Company and the Restricted Subsidiaries,
as shown on the most recent balance sheet of the Company.


 


“Treasury Rate” means, as of any redemption
date, the yield to maturity as of such redemption date of United States
Treasury securities with a constant maturity (as compiled and published in the
most recent Federal Reserve Statistical Release H.15 (519) that has become
publicly available at least two business days prior to the redemption date (or,
if such Statistical Release is no longer published, any publicly available
source of similar market data)) most nearly equal to the period from the
redemption date to April 15, 2012; provided, however,  that if the period
from the redemption date to April 15, 2012, is less than one year, the
weekly average yield on actually traded United States Treasury securities
adjusted to a constant maturity of one year shall be used.


 


“Trust Indenture Act” or “TIA” means the
Trust Indenture Act of 1939 as in force at the date as of which this Indenture
was executed, except as provided in Section 905.


 


“Trustee” means the Person named as the “Trustee”
in the first paragraph of this Indenture until a successor Trustee shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter “Trustee” shall mean such successor Trustee.


 


“Unrestricted Global Note” means a Global
Note that does not bear and is not required to bear the Private Placement
Legend.


 


“Unrestricted Subsidiary” means:


 


(1)                                  any Subsidiary of the
Company which at the time of determination is an Unrestricted Subsidiary (as
designated by the Board of Directors of the Company, as provided below), and


 


(2)                                  any Subsidiary of an
Unrestricted Subsidiary.


 


The Board of Directors of the Company may
designate any Subsidiary of the Company (including any existing Subsidiary and
any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary
unless such Subsidiary or any of its Subsidiaries owns any Equity Interests or
Indebtedness of, or owns or holds any lien on, any property of, the Company or
any Subsidiary of the Company (other than any Subsidiary of the Subsidiary to
be so designated), provided that


 


(a)                                  any Unrestricted
Subsidiary must be an entity of which shares of the Capital Stock or other
Equity Interests (including partnership interests) entitled to cast at least a
majority of the votes that may be cast by all shares or Equity Interests having
ordinary voting power for the election of directors or other governing body are
owned, directly or indirectly, by the Company,


 


(b)                                 such designation
complies with Section 1010, and


 


(c)                                  each of the
Subsidiary to be so designated and its Subsidiaries has not at the time of designation,
and does not thereafter, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable with respect to any Indebtedness pursuant
to which the lender has recourse to any of the assets of the Company or any
Restricted Subsidiary.


 


The Board of Directors of the Company may
designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that, immediately after giving effect to such
designation no Default or Event of Default shall have occurred and be
continuing and either:


 


(1)                                  the Company could
incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test described under Section 1011(a), or


 


27

















 


(2)                                  the Fixed Charge
Coverage Ratio for the Company and its Restricted Subsidiaries would be greater
than such ratio for the Company and its Restricted Subsidiaries immediately
prior to such designation, in each case on a pro forma basis taking into
account such designation.


 


Any such designation by the Board of
Directors of the Company shall be notified by the Company to the Trustee by
promptly filing with the Trustee a copy of the Board Resolution giving effect
to such designation and an Officers’ Certificate certifying that such
designation complied with the foregoing provisions.


 


“U.S. Person” means a U.S. Person as defined
in Rule 902(k) promulgated under the Securities Act.


 


“Vice President”, when used with respect to
the Company or the Trustee, means any vice president, whether or not designated
by a number or a word or words added before or after the title “vice president”.


 


“Voting Stock” of any Person as of any date
means the Capital Stock of such Person that is at the time entitled to vote in
the election of the Board of Directors of such Person.


 


“Weighted Average Life to Maturity” means,
when applied to any Indebtedness, Disqualified Stock or preferred stock, as the
case may be, at any date, the quotient obtained by dividing:


 


(1)                                  the sum of the
products of the number of years from the date of determination to the date of
each successive scheduled principal payment of such Indebtedness or redemption
or similar payment with respect to such Disqualified Stock or preferred stock
multiplied by the amount of such payment, by


 


(2)                                  the sum of all such
payments.


 


“Wholly Owned Restricted Subsidiary” means
any Wholly-Owned Subsidiary that is a Restricted Subsidiary.


 


 “Wholly
Owned Subsidiary” of any Person means a Subsidiary of such Person, 100% of the
outstanding Capital Stock or other ownership interests of which (other than
directors’ qualifying shares) shall at the time be owned by such Person or by
one or more Wholly Owned Subsidiaries of such Person.


 


SECTION 102.                    Compliance
Certificates and Opinions.


 


Upon any application or request by the
Company to the Trustee to take any action under any provision of this
Indenture, the Company shall furnish to the Trustee an Officers’ Certificate
stating that all conditions precedent, if any, provided for in this Indenture
(including any covenant compliance with which constitutes a condition precedent)
relating to the proposed action have been complied with and an Opinion of
Counsel stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with, except that in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.


 


Every certificate or opinion with respect to
compliance with a condition or covenant provided for in this Indenture (other
than pursuant to Section 1008(a)) shall include:


 


(1)                                  a
statement that each individual signing such certificate or opinion has read
such covenant or condition and the definitions herein relating thereto;


 


(2)                                  a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based;


 


28

















 


(3)                                  a
statement that, in the opinion of each such individual, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and


 


(4)                                  a
statement as to whether, in the opinion of each such individual, such condition
or covenant has been complied with.


 


SECTION 103.                    Form of
Documents Delivered to Trustee.


 


In any case where several matters are
required to be certified by, or covered by an opinion of, any specified Person,
it is not necessary that all such matters be certified by, or covered by the
opinion of, only one such Person, or that they be so certified or covered by
only one document, but one such Person may certify or give an opinion with
respect to some matters and one or more other such Persons as to other matters,
and any such Person may certify or give an opinion as to such matters in one or
several documents.


 


Any certificate or opinion of an officer of
the Company may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless such officer
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to the matters upon which his
certificate or opinion is based are erroneous. 
Any such certificate or opinion may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Company stating that the information with respect to
such factual matters is in the possession of the Company, unless such counsel
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to such matters are erroneous.


 


Where any Person is required to make, give or
execute two or more applications, requests, consents, certificates, statements,
opinions or other instruments under this Indenture, they may, but need not, be
consolidated and form one instrument.


 


SECTION 104.                    Acts of
Holders.


 


(a)                                  Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by Holders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agents duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is hereby expressly required, to the Company.  Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the “Act” of the Holders signing such instrument or instruments.  Proof of execution of any such instrument or
of a writing appointing any such agent shall be sufficient for any purpose of
this Indenture and conclusive in favor of the Trustee and the Company, if made
in the manner provided in this Section.


 


(b)                                 The
fact and date of the execution by any Person of any such instrument or writing
may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such
instrument or writing acknowledged to him the execution thereof.  Where such execution is by a signer acting in
a capacity other than his individual capacity, such certificate or affidavit
shall also constitute sufficient proof of authority.  The fact and date of the execution of any such
instrument or writing, or the authority of the Person executing the same, may
also be proved in any other manner that the Trustee deems sufficient.


 


(c)                                  The
principal amount and serial numbers of Notes held by any Person, and the date
of holding the same, shall be proved by the Note Register.


 


(d)                                 If
the Company shall solicit from the Holders any request, demand, authorization,
direction, notice, consent, waiver or other Act, the Company may, at its
option, by or pursuant to a Board Resolution, fix in advance a record date for
the determination of Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but the Company
shall have no obligation to do so.  Notwithstanding
TIA 


 


29

















 


Section 316(c), such record date shall
be the record date specified in or pursuant to such Board Resolution, which
shall be a date not earlier than the date 30 days prior to the first solicitation
of Holders generally in connection therewith and not later than the date such
solicitation is completed.  If such a
record date is fixed, such request, demand, authorization, direction, notice,
consent, waiver or other Act may be given before or after such record date, but
only the Holders of record at the close of business on such record date shall
be deemed to be Holders for the purposes of determining whether Holders of the
requisite proportion of Outstanding Notes have authorized or agreed or
consented to such request, demand, authorization, direction, notice, consent,
waiver or other Act, and for that purpose the Outstanding Notes shall be
computed as of such record date; provided that
no such authorization, agreement or consent by the Holders on such record date
shall be deemed effective unless it shall become effective pursuant to the
provisions of this Indenture not later than eleven months after the record
date.  Any request, demand, authorization,
direction, notice, consent, waiver or other Act of the Holder of any Note shall
bind every future Holder of the same Note and the Holder of every Note issued
upon the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the
Trustee, the Company or any Guarantor in reliance thereon, whether or not notation
of such action is made upon such Note.


 


SECTION 105.                    Notices,
Etc., to Trustee, Company, Any Guarantor and Agent.


 


Any request, demand, authorization, direction,
notice, consent, waiver or Act of Holders or other document provided or
permitted by this Indenture to be made upon, given or furnished to, or filed
with,


 


(1)                                  the
Trustee by any Holder or by the Company or any Guarantor shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing
(which may be via facsimile) to or with the Trustee at The Bank of New York
Mellon Trust Company, N.A., 10161 Centurion Parkway, Jacksonville, Florida
32256, Attention: Corporate Trust Administration Division, or


 


(2)                                  the
Company or any Guarantor by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
made, given, furnished or delivered in writing and mailed, first-class postage
prepaid, or delivered by recognized overnight courier, to the Company or such
Guarantor addressed to it at the address of its principal office specified in
the first paragraph, Attention: General Counsel, or at any other address
previously furnished in writing to the Trustee by the Company or such
Guarantor.


 


SECTION 106.                    Notice to
Holders; Waiver.


 


Where this Indenture provides for notice of
any event to Holders by the Company or the Trustee, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class postage prepaid, to each Holder affected by such event,
at his address as it appears in the Note Register, not later than the latest
date, and not earlier than the earliest date, prescribed for the giving of such
notice.  In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders.  Notices given by publication shall be deemed
given on the first date on which publication is made and notices given by
first-class mail, postage prepaid, shall be deemed given five calendar days
after mailing.


 


In case by reason of the suspension of or
irregularities in regular mail service or by reason of any other cause, it
shall be impracticable to mail notice of any event to Holders when such notice
is required to be given pursuant to any provision of this Indenture, then any
manner of giving such notice as shall be satisfactory to the Trustee shall be
deemed to be a sufficient giving of such notice for every purpose hereunder.


 


Where this Indenture provides for notice in
any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice.  Waivers
of notice by Holders shall be filed with the Trustee, but such filing shall not
be a condition precedent to the validity of any action taken in reliance upon
such waiver.


 


30

















 


SECTION 107.                    Effect of
Headings and Table of Contents.


 


The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.


 


SECTION 108.                    Successors
and Assigns.


 


All agreements of the Company in this
Indenture and the Notes will bind its successors.  All agreements of the Trustee in this
Indenture will bind its successors.  All
agreements of each Guarantor in this Indenture will bind its successors, except
as otherwise provided in Section 1209 hereof.  The provisions of Article Fourteen
relating to the Notes Collateral Agent shall inure to the benefit of such Notes
Collateral Agent.


 


SECTION 109.                    Separability
Clause.


 


In case any provision in this Indenture or in
the Notes shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.


 


SECTION 110.                    Benefits of
Indenture.


 


Nothing in this Indenture or in the Notes,
express or implied, shall give to any Person, other than the parties hereto,
any Paying Agent, any Notes Registrar and their successors hereunder, the
Holders and, with respect to any provisions hereof relating to the
subordination of the Notes or the rights of holders of Senior Indebtedness, the
holders of Senior Indebtedness, any benefit or any legal or equitable right,
remedy or claim under this Indenture.


 


SECTION 111.                    Governing
Law.


 


This Indenture, the Notes and any Guarantee
shall be governed by and construed in accordance with the laws of the State of
New York.  This Indenture is subject to
the provisions of the Trust Indenture Act that are referred to herein or are
otherwise required to be part of this Indenture and shall, to the extent
applicable, be governed by such provisions.


 


SECTION 112.                    Communication
by Holders of Notes with Other Holders of Notes.


 


Holders may communicate pursuant to Trust
Indenture Act Section 312(b) with other Holders with respect to their
rights under this Indenture or the Notes. 
The Company, the Trustee, the Notes Registrar and anyone else shall have
the protection of Trust Indenture Act Section 312(c).


 


SECTION 113.                    Legal
Holidays.


 


In any case where any Interest Payment Date,
Redemption Date or Stated Maturity or Maturity of any Note shall not be a
Business Day, then (notwithstanding any other provision of this Indenture or of
the Notes) payment of principal (or premium, if any) or interest need not be
made on such date, but may be made on the next succeeding Business Day with the
same force and effect as if made on the Interest Payment Date, Redemption Date,
or at the Stated Maturity or Maturity; provided that
no interest shall accrue for the period from and after such Interest Payment
Date, Redemption Date, Stated Maturity or Maturity, as the case may be.


 


SECTION 114.                    No Personal
Liability of Directors, Officers, Employees and Stockholders.


 


No director, officer, employee, incorporator
or stockholder of the Company or any Guarantor or any of their parent companies
shall have any liability for any obligations of the Company or the Guarantors under
the Notes, the Guarantees or this Indenture or for any claim based on, in
respect of, or by reason of such obligations or their creation.  Each Holder by accepting a Note and the
related Guarantee waives and releases all such liability.  The waiver and release are part of the
consideration for issuance of the Notes and the Guarantees.  Such waiver may 


 


31

















 


not be effective to waive liabilities under
the federal securities laws and it is the view of the Commission that such a
waiver is against public policy.


 


SECTION 115.                    Trust
Indenture Act Controls.


 


If any provision of this Indenture limits,
qualifies or conflicts with another provision which is required to be included
in this Indenture by the TIA, the provision required by the TIA shall control.  If any provision of this Indenture modifies
or excludes any provision of the TIA that may be so modified or excluded, the
latter provision shall be deemed to apply to this Indenture as so modified or
excluded, as the case may be.


 


SECTION 116.                    Counterparts.


 


This Indenture may be executed in any number
of counterparts, each of which shall be original; but such counterparts shall together
constitute but one and the same instrument.


 


SECTION 117.                    USA Patriot
Act.


 


The parties hereto acknowledge that in
accordance with Section 326 of the USA Patriot Act the Trustee and Agents,
like all financial institutions and in order to help fight the funding of
terrorism and money laundering, are required to obtain, verify, and record
information that identifies each person or legal entity that establishes a
relationship or opens an account.  The
parties to this Indenture agree that they will provide the Trustee and the
Agents with such information as they may request in order to satisfy the
requirements of the USA Patriot Act.


 


SECTION 118.                    Intercreditor
Agreement Governs.


 


Reference is made to the Intercreditor Agreement.  Each Holder, by its acceptance of a Note, (a) consents
to the subordination of Liens provided for in the Intercreditor Agreement, (b) agrees
that it will be bound by and will take no actions contrary to the provisions of
the Intercreditor Agreement and (c) authorizes and instructs the Trustee
and Notes Collateral Agent to enter into the Intercreditor Agreement as Trustee
and Notes Collateral Agent, respectively, and on behalf of such Holder.  The foregoing provisions are intended as an
inducement to the lenders under the Credit Agreement to extend credit and such
lenders are intended third party beneficiaries of such provisions and the
provisions of the Intercreditor Agreement.


 


SECTION 119.                    Waiver of
Jury Trial.


 


EACH OF THE COMPANY AND THE TRUSTEE HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING
TO THIS INDENTURE, THE NOTES OR THE TRANSACTION CONTEMPLATED HEREBY.


 


SECTION 120.                    Force
Majeure.


 


In no event shall the Trustee be responsible
or liable for any failure or delay in the performance of its obligations
hereunder arising out of or caused by, directly or indirectly, forces beyond
its control, including, without limitation, strikes, work stoppages, accidents,
acts of war or terrorism, civil or military disturbances, nuclear or natural
catastrophes or acts of God, and interruptions, loss or malfunctions of
utilities, communications or computer (software and hardware) services; it
being understood that the Trustee shall use reasonable efforts which are
consistent with accepted practices in the banking industry to resume
performance as soon as practicable under the circumstances.


 


32














 


ARTICLE TWO


 


NOTE FORMS


 


SECTION 201.                                       Forms
Generally.


 


The Notes shall be known and designated as “10.875%
Senior Secured Notes due 2016” of the Company. 
The Notes and the Trustee’s certificate of authentication shall be substantially
in the form of Exhibit A hereto. 
The Notes may have notations, legends or endorsements required by law,
stock exchange rule or usage.  Each
Note will be dated the date of its authentication.  The Notes shall be in minimum denominations
of $2,000 and any integral multiple of $1,000 in excess thereof.


 


The terms and provisions contained in the
Notes will constitute, and are hereby expressly made, a part of this Indenture
and the Company, the Guarantors and the Trustee, by their execution and
delivery of this Indenture, expressly agree to such terms and provisions and to
be bound thereby.  However, to the extent
any provision of any Note conflicts with the express provisions of this
Indenture, the provisions of this Indenture shall govern and be controlling.


 


Any definitive Notes shall be printed,
lithographed, typewritten or engraved on steel-engraved borders or may be
produced in any other manner, all as determined by the Officers of the Company
executing such Notes, as evidenced by their execution of such Notes.


 


Notes issued in global form will be
substantially in the form of Exhibit A hereto (including the Global Note
Legend thereon and the “Schedule of Exchanges of Interests in the Global Note”
attached thereto).  Notes issued in
definitive form will be substantially in the form of Exhibit A hereto (but
without the Global Note Legend thereon and without the “Schedule of Exchanges
of Interests in the Global Note” attached thereto).  Each Global Note will represent such of the
outstanding Notes as will be specified therein and each shall provide that it
represents the aggregate principal amount of outstanding Notes from time to
time endorsed thereon and that the aggregate principal amount of outstanding
Notes represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions.  Any endorsement of a Global Note to reflect
the amount of any increase or decrease in the aggregate principal amount of
outstanding Notes represented thereby will be made by the Trustee or the Custodian,
at the direction of the Trustee, in accordance with instructions given by the
Holder thereof as required by Section 312 hereof.


 


The provisions of the “Operating Procedures
of the Euroclear System” and “Terms and Conditions Governing Use of Euroclear”
and the “General Terms and Conditions of Clearstream Banking” and “Customer
Handbook” of Clearstream will be applicable to transfers of beneficial
interests in the Regulation S Global Note that are held by Participants through
Euroclear or Clearstream.


 


SECTION 202.                                       Form of
Trustee’s Certificate of Authentication.


 


The Trustee shall, upon receipt of a Company
Order, authenticate Notes for original issue that may be validly issued under
this Indenture, including any Additional Notes. 
The aggregate principal amount of Notes outstanding at any time may not
exceed the aggregate principal amount of Notes authorized for issuance by the
Company pursuant to one or more Company Orders, except as provided in Section 306
hereof.


 


The Trustee may appoint an authenticating
agent acceptable to the Company to authenticate Notes.  An authenticating agent may authenticate
Notes whenever the Trustee may do so. 
Each reference in this Indenture to authentication by the Trustee
includes authentication by such agent. 
An authenticating agent has the same rights as an Agent to deal with
Holders or an Affiliate of the Company.


 


Subject to Section 611, the Trustee’s
certificate of authentication shall be in substantially the following form:


 


TRUSTEE’S CERTIFICATE OF AUTHENTICATION.


 


33

















 


This is one of the Notes referred to in the
within-mentioned Indenture.


 


	
   

  	
   

  	
  THE BANK OF NEW YORK MELLON TRUST

  
	
   

  	
   

  	
  COMPANY, N.A.,

  
	
   

  	
   

  	
  as Trustee

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
  Authorized
  Signatory

  
						



 


SECTION 203.                                       Restrictive
Legends.


 


Each Restricted Global Note, Definitive Note
and Regulation S Global Note shall bear the following legend set forth below
(the “Private Placement Legend”) on the face thereof:


 


THIS SECURITY HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR
ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
SUCH REGISTRATION. THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF,
AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS
PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR
TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS ONE YEAR IN THE
CASE OF RULE 144A NOTES, AND 40 DAYS IN THE CASE OF REGULATION S NOTES AFTER
THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE
ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE ISSUER, (B) PURSUANT
TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY
BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT
OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE
MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT
THAT IS AN INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE SECURITY FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN
EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION
WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT
TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE ISSUER’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY
SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D), (E) OR (F) TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE
REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.


 


Each Global Note shall also bear the
following legend on the face thereof:


 


34

















 


UNLESS THIS CERTIFICATE IS PRESENTED, BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, TO THE COMPANY OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY OR SUCH OTHER REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL BECAUSE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.


 


TRANSFERS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE &
CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF
PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE
WITH THE RESTRICTIONS SET FORTH IN SECTION 312 OF THE INDENTURE.


 


Each Note issued hereunder that has more than a de minimis about of
original issue discount for U.S. Federal Income Tax purposes shall bear a
legend in substantially the following form:


 


THIS NOTE IS ISSUED WITH ORIGINAL ISSUE
DISCOUNT FOR PURPOSES OF SECTION 1271 ET SEQ. OF THE INTERNAL REVENUE
CODE.  A HOLDER MAY OBTAIN THE ISSUE
PRICE, AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE AND YIELD TO MATURITY FOR
SUCH NOTES BY SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION TO THE
ISSUER AT THE FOLLOWING ADDRESS:  SEALY
MATTRESS COMPANY, ONE OFFICE PARKWAY, TRINITY, NORTH CAROLINA 27370, ATTENTION:
GENERAL COUNSEL.


 


SECTION 204.                                       [INTENTIONALLY
DELETED].


 


ARTICLE THREE


 


THE NOTES


 


SECTION 301.                                       Title
and Terms.


 


The aggregate principal amount of Notes which
may be authenticated and issued under this Indenture is not limited; provided, however, that
any Additional Notes issued under this Indenture are issued in accordance with
Sections 303 and 1011 hereof, as part of the same series as the Notes.


 


The Notes shall be known and designated as
the “10.875% Senior Secured Notes due 2016” of the Company.  The Stated Maturity of the Notes shall be April 15,
2016, and the Notes shall bear interest at the rate of 10.875% per annum from May 29,
2009, or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, payable on October 15, 2009 and semi-annually
thereafter on April 15 and October 15 in each year and at said Stated
Maturity, until the principal thereof is paid or duly provided for and to the
Person in whose name the Note (or any predecessor Note) is registered at the
close of business on the April 1 and October 1 immediately preceding
such Interest Payment Date (each, a “Regular Record Date”).


 


The principal of (and premium, if any) and
interest on the Notes shall be payable at the office or agency of the Company
maintained for such purpose in The City and State of New York or, at the option
of the Company, payment of interest may be made by check mailed to the Holders
of the Notes at their respective addresses set forth in the Note Register of
Holders; provided that all payments of principal,
premium, if any, and interest, if any, with respect to Notes represented by one
or more Global Notes registered in the name of or held by Depositary or its
nominee will be made by wire transfer of immediately available funds to the
accounts specified by the


 


35

















 


Holder or Holders thereof.  Until otherwise designated by the Company,
the Company’s office or agency in New York shall be the office of the trustee
maintained for such purpose.


 


Holders shall have the right to require the
Company to purchase their Notes, in whole or in part, in the event of a Change
in Control pursuant to Section 1017. 
The Notes shall be subject to repurchase pursuant to an offer to
purchase as provided in Section 1018.


 


The Notes shall be redeemable as provided in Article Eleven.


 


The due and punctual payment of principal of,
premium, if any, and interest on the Notes payable by the Company is
irrevocably and unconditionally guaranteed, to the extent set forth herein, by
each of the Guarantors.


 


SECTION 302.                                       Denominations.


 


The Notes shall be issuable only in
registered form without coupons and only in minimum denominations of $2,000 and
any integral multiple of $1,000 in excess thereof.


 


SECTION 303.                                       Execution,
Authentication, Delivery and Dating.


 


The Notes shall be executed on behalf of the
Company by any two Officers.  The signature
of any Officer on the Notes may be manual or facsimile signatures of the
present or any future such authorized officer and may be imprinted or otherwise
reproduced on the Notes.


 


Notes bearing the manual or facsimile
signatures of individuals who were at any time the proper officers of the Company
shall bind the Company, notwithstanding that such individuals or any of them
have ceased to hold such offices prior to the authentication and delivery of
such Notes or did not hold such offices at the date of such Notes.


 


At any time and from time to time after the
execution and delivery of this Indenture, the Company may deliver Notes
executed by the Company to the Trustee for authentication, together with a
Company Order for the authentication and delivery of such Notes, and the
Trustee in accordance with such Company Order shall authenticate and deliver
such Notes.


 


On the Issue Date, the Company shall deliver
the Notes in the aggregate principal amount of $350,000,000 executed by the
Company to the Trustee for authentication, together with a Company Order for
the authentication and delivery of such Notes, directing the Trustee to
authenticate the Notes and certifying that all conditions precedent to the
issuance of Notes contained herein have been fully complied with, and the
Trustee in accordance with such Company Order shall authenticate and deliver
such Notes.  At any time and from time to
time after the Issue Date, the Company may deliver Additional Notes executed by
the Company to the Trustee for authentication, together with a Company Order
for the authentication and delivery of such Additional Notes, directing the
Trustee to authenticate the Additional Notes and certifying that the issuance
of such Additional Notes is in compliance with Article Ten hereof and that
all other conditions precedent to the issuance of Notes contained herein have
been fully complied with, and the Trustee in accordance with such Company Order
shall authenticate and deliver such Additional Notes.  In each case, the Trustee shall receive an
Officers’ Certificate and an Opinion of Counsel of the Company that it may
reasonably require in connection with such authentication of Notes.  Such order shall specify the amount of Notes
to be authenticated and the date on which the original issue of Notes is to be
authenticated.


 


Each Note shall be dated the date of its
authentication.


 


No Note shall be entitled to any benefit
under this Indenture or be valid or obligatory for any purpose unless there
appears on such Note a certificate of authentication substantially in the form
provided for herein duly executed by the Trustee by manual signature of an
authorized officer, and such certificate upon any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated and
delivered hereunder and is entitled to the benefits of this Indenture.


 


36

















 


In case the Company or any Guarantor,
pursuant to Article Eight, shall be consolidated or merged with or into
any other Person or shall convey, transfer, lease or otherwise dispose of its
properties and assets substantially as an entirety to any Person, and the
successor Person resulting from such consolidation, or surviving such merger,
or into which the Company or such Guarantor shall have been merged, or the Person
which shall have received a conveyance, transfer, lease or other disposition as
aforesaid, shall have executed a supplemental indenture hereto with the Trustee
pursuant to Article Eight, any of the Notes authenticated or delivered
prior to such consolidation, merger, conveyance, transfer, lease or other
disposition may, from time to time, at the request of the successor Person, be
exchanged for other Notes executed in the name of the successor Person with
such changes in phraseology and form as may be appropriate, but otherwise in
substance of like tenor as the Notes surrendered for such exchange and of like
principal amount; and the Trustee, upon Company Request of the successor
Person, shall authenticate and deliver Notes as specified in such request for
the purpose of such exchange.  If Notes
shall at any time be authenticated and delivered in any new name of a successor
Person pursuant to this Section in exchange or substitution for or upon
registration of transfer of any Notes, such successor Person, at the option of
the Holders but without expense to them, shall provide for the exchange of all
Notes at the time Outstanding for Notes authenticated and delivered in such new
name.


 


SECTION 304.                                       Temporary
Notes.


 


Pending the preparation of definitive Notes,
the Company may execute, and upon Company Order the Trustee shall authenticate
and deliver, temporary Notes which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Notes in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Notes may determine, as conclusively evidenced by their
execution of such Notes.


 


If temporary Notes are issued, the Company
will cause definitive Notes to be prepared without unreasonable delay.  After the preparation of definitive Notes,
the temporary Notes shall be exchangeable for definitive Notes upon surrender
of the temporary Notes at the office or agency of the Company designated for
such purpose pursuant to Section 1002, without charge to the Holder.  Upon surrender for cancellation of any one or
more temporary Notes, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Notes of authorized denominations. 
Until so exchanged, the temporary Notes shall in all respects be
entitled to the same benefits under this Indenture as definitive Notes.


 


SECTION 305.                                       Registration,
Registration of Transfer and Exchange.


 


The Company shall cause to be kept at the
Corporate Trust Office of the Trustee a register (the register maintained in
such office and in any other office or agency designated pursuant to Section 1002
being herein sometimes referred to as the “Note Register”) in which, subject to
such reasonable regulations as it may prescribe, the Company shall provide for
the registration of Notes and of transfers of Notes.  The Note Register shall be in written form or
any other form capable of being converted into written form within a reasonable
time.  At all reasonable times, the Note
Register shall be open to inspection by the Trustee.  The Trustee is hereby initially appointed as
note registrar (the “Note Registrar”) for the purpose of registering Notes and
transfers of Notes as herein provided.


 


Upon surrender for registration of transfer
of any Note at the office or agency of the Company designated pursuant to Section 1002,
the Company shall execute, and the Trustee shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more new Notes of
any authorized denomination or denominations of a like aggregate principal
amount.


 


At the option of the Holder, Notes may be
exchanged for other Notes of any authorized denomination and of a like
aggregate principal amount, upon surrender of the Notes to be exchanged at such
office or agency.  Whenever any Notes are
so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate
and deliver, the Notes which the Holder making the exchange is entitled to
receive.


 


37

















 


All Notes issued upon any registration of
transfer or exchange of Notes shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this Indenture,
as the Notes surrendered upon such registration of transfer or exchange.


 


Every Note presented or surrendered for
registration of transfer or for exchange shall (if so required by the Company
or the Note Registrar) be duly endorsed, or be accompanied by written
instruments of transfer, in form satisfactory to the Company and the Note
Registrar, duly executed by the Holder thereof or his attorney duly authorized
in writing.


 


No service charge shall be made for any
registration of transfer or exchange or redemption of Notes, but the Company
may require payment of a sum sufficient to cover any taxes, fees or other
governmental charge that may be imposed in connection with any registration of
transfer or exchange of Notes, other than exchanges pursuant to Sections 303,
304, 906, 1017, 1018 or 1108 not involving any transfer.


 


SECTION 306.                                       Mutilated,
Destroyed, Lost and Stolen Notes.


 


If (i) any mutilated Note is surrendered
to the Trustee, or (ii) the Company and the Trustee receive evidence to
their satisfaction of the destruction, loss or theft of any Note, and there is
delivered to the Company and the Trustee such security or indemnity as may be
required by them to save each of them harmless, then, in the absence of notice
to the Company or the Trustee that such Note has been acquired by a bona fide
purchaser, the Company shall execute and upon Company Order the Trustee shall
authenticate and deliver, in exchange for any such mutilated Note or in lieu of
any such destroyed, lost or stolen Note, a new Note of like tenor and principal
amount, bearing a number not contemporaneously outstanding.


 


In case any such mutilated, destroyed, lost
or stolen Note has become or is about to become due and payable, the Company in
its discretion may, instead of issuing a new Note, pay such Note.


 


Upon the issuance of any new Note under this
Section, the Company may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the Trustee) connected
therewith.


 


Every new Note issued pursuant to this Section in
lieu of any mutilated, destroyed, lost or stolen Note shall constitute an
original additional contractual obligation of the Company and each Guarantor,
whether or not the mutilated, destroyed, lost or stolen Note shall be at any
time enforceable by anyone, and shall be entitled to all benefits of this
Indenture equally and proportionately with any and all other Notes duly issued
hereunder.


 


The provisions of this Section are
exclusive and shall preclude (to the extent lawful) all other rights and
remedies with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Notes.


 


SECTION 307.                                       Payment
of Interest; Interest Rights Preserved.


 


Interest on any Note which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be
paid to the Person in whose name such Note (or one or more Predecessor Notes)
is registered at the close of business on the Regular Record Date for such
interest at the office or agency of the Company maintained for such purpose
pursuant to Section 1002; provided, however, that, subject to Section 301 hereof, each installment
of interest may at the Company’s option be paid by (i) mailing a check for
such interest, payable to or upon the written order of the Person entitled
thereto pursuant to Section 308, to the address of such Person as it appears
in the Note Register or (ii) transfer to an account located in the United
States maintained by the payee.


 


Any interest on any Note which is payable,
but is not punctually paid or duly provided for, on any Interest Payment Date
shall forthwith cease to be payable to the Holder on the Regular Record Date by
virtue of having been such Holder, and such defaulted interest and (to the
extent lawful) interest on such defaulted interest at the rate borne by the
Notes (such defaulted interest and interest thereon herein collectively called “Defaulted
Interest”) may be paid by the Company, at its election in each case, as
provided in clause (1) or (2) below:


 


38

















 


(1)                                  The
Company may elect to make payment of any Defaulted Interest to the Persons in
whose names the Notes (or their respective Predecessor Notes) are registered at
the close of business on a Special Record Date for the payment of such
Defaulted Interest, which shall be fixed in the following manner.  The Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each Note
and the date of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date of
the proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this clause provided.  Thereupon the Trustee shall fix a Special
Record Date for the payment of such Defaulted Interest which shall be not more
than 15 days and not less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of the
notice of the proposed payment.  The
Trustee shall promptly notify the Company of such Special Record Date, and in
the name and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to be
given in the manner provided for in Section 106, not less than 10 days
prior to such Special Record Date. 
Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been so given, such Defaulted Interest
shall be paid to the Persons in whose names the Notes (or their respective
Predecessor Notes) are registered at the close of business on such Special
Record Date and shall no longer be payable pursuant to the following clause
(2).


 


(2)                                  The
Company may make payment of any Defaulted Interest in any other lawful manner
not inconsistent with the requirements of any securities exchange on which the
Notes may be listed, and upon such notice as may be required by such exchange,
if, after notice given by the Company to the Trustee of the proposed payment
pursuant to this clause, such manner of payment shall be deemed practicable by
the Trustee.


 


Subject to the foregoing provisions of this
Section, each Note delivered under this Indenture upon registration of transfer
of or in exchange for or in lieu of any other Note shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Note.


 


SECTION 308.                                       Persons
Deemed Owners.


 


Prior to the due presentment of a Note for
registration of transfer, the Company, any Guarantor, the Trustee and any agent
of the Company or the Trustee may treat the Person in whose name such Note is
registered as the owner of such Note for the purpose of receiving payment of
principal of (and premium, if any) and (subject to Sections 305 and 307)
interest on such Note and for all other purposes whatsoever, whether or not
such Note be overdue, and none of the Company, the Trustee or any agent of the
Company or the Trustee shall be affected by notice to the contrary.


 


SECTION 309.                                       Cancellation.


 


All Notes surrendered for payment,
redemption, registration of transfer or exchange shall, if surrendered to any
Person other than the Trustee, be delivered to the Trustee and shall be
promptly cancelled by it.  The Company
may at any time deliver to the Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Company may have acquired in
any manner whatsoever, and may deliver to the Trustee (or to any other Person
for delivery to the Trustee) for cancellation any Notes previously authenticated
hereunder which the Company has not issued and sold, and all Notes so delivered
shall be promptly cancelled by the Trustee. 
If the Company shall so acquire any of the Notes, however, such
acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Notes unless and until the same are
surrendered to the Trustee for cancellation. 
No Notes shall be authenticated in lieu of or in exchange for any Notes
cancelled as provided in this Section, except as expressly permitted by this
Indenture.  All cancelled Notes held by
the Trustee shall be disposed of by the Trustee in accordance with its
customary procedures unless by Company Order the Company shall direct that
cancelled Notes be returned to it.


 


39

















 


SECTION 310.                                       Computation
of Interest.


 


Interest on the Notes shall be computed on the
basis of a 360-day year of twelve 30-day months.


 


SECTION 311.                                       [INTENTIONALLY
DELETED].


 


SECTION 312.                                       Book-Entry
and Transfer Provisions.


 


(a)                                  Transfer
and Exchange of Global Notes.  A
Global Note may not be transferred except as a whole by the Depositary to a
nominee of the Depositary, by a nominee of the Depositary to the Depositary or
to another nominee of the Depositary, or by the Depositary or any such nominee
to a successor Depositary or a nominee of such successor Depositary.  All Global Notes will be exchanged by the
Company for Definitive Notes if:


 


(1)                                  the
Depositary (a) notifies the Company that it is unwilling or unable to
continue as depositary for the Global Notes or (b) has ceased to be a
clearing agency registered under the Exchange Act and, in either case, the
Company fails to appoint a successor depositary;


 


(2)                                  the
Company, at its option, notifies the Trustee in writing that it elects to cause
the issuance of the Definitive Notes; or


 


(3)                                  there
has occurred and is continuing a Default or Event of Default with respect to
the Notes.


 


Upon the occurrence of either of the
preceding events in (1) or (2) above, Definitive Notes shall be
issued in such names as the Depositary shall instruct the Trustee.  Global Notes also may be exchanged or replaced,
in whole or in part, as provided in Sections 304 and 306 hereof.  Every Note authenticated and delivered in exchange
for, or in lieu of, a Global Note or any portion thereof, pursuant to this
Sections 304 or 306 hereof, shall be authenticated and delivered in the form
of, and shall be, a Global Note.  A
Global Note may not be exchanged for another Note other than as provided in
this Section 312(a), however, beneficial interests in a Global Note may be
transferred and exchanged as provided in Section 312(b) or (c) hereof.


 


(b)                                 Transfer
and Exchange of Beneficial Interests in the Global Notes.  The transfer and exchange of beneficial
interests in the Global Notes will be effected through the Depositary, in accordance
with the provisions of this Indenture and the Applicable Procedures.  Beneficial interests in the Restricted Global
Notes will be subject to restrictions on transfer comparable to those set forth
herein to the extent required by the Securities Act.  Transfers of beneficial interests in the Global
Notes also will require compliance with either subparagraph (1) or (2) below,
as applicable, as well as one or more of the other following subparagraphs, as
applicable:


 


(1)                                  Transfer of Beneficial Interests in the Same Global Note.  Beneficial interests in any Restricted
Global Note may be transferred to Persons who take delivery thereof in the form
of a beneficial interest in the same Restricted Global Note in accordance with
the transfer restrictions set forth in the Private Placement Legend; provided, however, that
prior to the expiration of the Restricted Period, transfers of beneficial interests
in the Regulation S Global Note may not be made to a U.S. Person or for the
account or benefit of a U.S. Person (other than an Initial Purchaser).  Beneficial interests in any Unrestricted
Global Note may be transferred to Persons who take delivery thereof in the form
of a beneficial interest in an Unrestricted Global Note.  No written orders or instructions shall be
required to be delivered to the Note Registrar to effect the transfers
described in this Section 312(b)(1).


 


(2)                                  All Other Transfers and Exchanges of Beneficial Interests in Global
Notes.  In connection with all
transfers and exchanges of beneficial interests that are not subject to Section 312(b)(1) above,
the transferor of such beneficial interest must deliver to the Note Registrar either:


 


(A)                              both:


 


40

















 


(x)       a written order from a
Participant or an Indirect Participant given to the Depositary in accordance
with the Applicable Procedures directing the Depositary to credit or cause to
be credited a beneficial interest in another Global Note in an amount equal to
the beneficial interest to be transferred or exchanged; and


 


(y)                                 instructions
given in accordance with the Applicable Procedures containing information
regarding the Participant account to be credited with such increase; or


 


(B)                                both:


 


(x)       a written order from a
Participant or an Indirect Participant given to the Depositary in accordance
with the Applicable Procedures directing the Depositary to cause to be issued a
Definitive Note in an amount equal to the beneficial interest to be transferred
or exchanged; and


 


(y)                                 instructions
given by the Depositary to the Note Registrar containing information regarding
the Person in whose name such Definitive Note shall be registered to effect the
transfer or exchange referred to in (A) above.


 


Upon
satisfaction of all of the requirements for transfer or exchange of beneficial
interests in Global Notes contained in this Indenture and the Notes or
otherwise applicable under the Securities Act, the Trustee shall adjust the
principal amount of the relevant Global Note(s) pursuant to Section 312(g) hereof.


 


(3)                                  Transfer of Beneficial Interests to Another Restricted Global
Note.  A beneficial interest
in any Restricted Global Note may be transferred to a Person who takes delivery
thereof in the form of a beneficial interest in another Restricted Global Note
if the transfer complies with the requirements of Section 312(b)(2) above
and:


 


(A)                              if
the transferee will take delivery in the form of a beneficial interest in the
144A Global Note, then the transferor must deliver to the Note Registrar a
certificate in the form of Exhibit B hereto, including the certifications
in item (1) thereof;


 


(B)                                if
the transferee will take delivery in the form of a beneficial interest in) the Regulation S Global Note, then the
transferor must deliver to the Note Registrar a certificate in the form of Exhibit B
hereto, including the certifications in item (2) thereof; and


 


(C)                                if
the transferee will take delivery in the form of a beneficial interest in the
IAI Global Note, then the transferor must deliver to the Note Registrar a
certificate in the form of Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3)(d) thereof, if
applicable.


 


(4)                                  Transfer and
Exchange of Beneficial Interests in a Restricted Global Note for Beneficial
Interests in an Unrestricted Global Note.  A beneficial interest in any Restricted
Global Note may be exchanged by any holder thereof for a beneficial interest in
an Unrestricted Global Note or transferred to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global Note if
the exchange or transfer complies with the requirements of Section 312(b)(2) above
and:


 


(A)                              such transfer is effected
pursuant to a shelf registration statement; or


 


(B)                                the Note Registrar
receives the following:


 


(x)                                   if
the holder of such beneficial interest in a Restricted Global Note proposes to
exchange such beneficial interest for a beneficial interest in an Unrestricted
Global Note, a certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (1)(a) thereof; or


 


41

















 


(y)                                 if
the holder of such beneficial interest in a Restricted Global Note proposes to
transfer such beneficial interest to a Person who shall take delivery thereof
in the form of a beneficial interest in an Unrestricted Global Note, a
certificate from such holder in the form of Exhibit B hereto, including
the certifications in item (4) thereof;


 


and, in each such case set forth in this
subparagraph (B), if the Note Registrar so requests or if the Applicable Procedures
so require, an Opinion of Counsel in form reasonably acceptable to the Note
Registrar to the effect that such exchange or transfer is in compliance with
the Securities Act and that the restrictions on transfer contained herein and
in the Private Placement Legend are no longer required in order to maintain
compliance with the Securities Act.


 


If any such transfer is effected pursuant to subparagraph (A) or (B) above
at a time when an Unrestricted Global Note has not yet been issued, the Company
shall issue and, upon receipt of a Company Order in accordance with Section 202
hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in
an aggregate principal amount equal to the aggregate principal amount of
beneficial interests transferred pursuant to subparagraph (A) or (B) above.


 


(c)                                  Transfer
or Exchange of Beneficial Interests for Definitive Notes.  Beneficial interests in an Unrestricted
Global Note cannot be exchanged for, or transferred to Persons who take delivery
thereof in the form of, a beneficial interest in a Restricted Global Note.


 


(1)                                  Beneficial Interests in Restricted Global Notes to Restricted
Definitive Notes.  If any
holder of a beneficial interest in a Restricted Global Note proposes to
exchange such beneficial interest for a Restricted Definitive Note or to
transfer such beneficial interest to a Person who takes delivery thereof in the
form of a Restricted Definitive Note, then, upon receipt by the Note Registrar
of the following documentation:


 


(A)                              if
the holder of such beneficial interest in a Restricted Global Note proposes to
exchange such beneficial interest for a Restricted Definitive Note, a
certificate from such holder in the form of Exhibit C hereto, including
the certifications in item (2)(a) thereof;


 


(B)                                if
such beneficial interest is being transferred to a QIB in accordance with Rule 144A,
a certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (1) thereof;


 


(C)                                if
such beneficial interest is being transferred to a Non-U.S. Person in an offshore
transaction in accordance with Rule 903 or Rule 904, a certificate to
the effect set forth in Exhibit B hereto, including the certifications in
item (2) thereof;


 


(D)                               if
such beneficial interest is being transferred pursuant to an exemption from the
registration requirements of the Securities Act in accordance with Rule 144,
a certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(a) thereof;


 


(E)                                 if
such beneficial interest is being transferred to an Institutional Accredited Investor
in reliance on an exemption from the registration requirements of the
Securities Act other than those listed in subparagraphs (B) through (D) above,
a certificate to the effect set forth in Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel required by item (3)(d) thereof,
if applicable;


 


(F)                                 if
such beneficial interest is being transferred to the Company or any of its Subsidiaries,
a certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(b) thereof; or


 


(G)                                if
such beneficial interest is being transferred pursuant to an effective registration
statement under the Securities Act, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(c) thereof,


 


42














 


the
Trustee shall cause the aggregate principal amount of the applicable Global
Note to be reduced accordingly pursuant to Section 312(g) hereof, and
the Company shall execute and the Trustee shall authenticate and deliver to the
Person designated in the instructions a Definitive Note in the appropriate
principal amount.  Any Definitive Note
issued in exchange for a beneficial interest in a Restricted Global Note pursuant
to this Section 312(c) shall be registered in such name or names and
in such authorized denomination or denominations as the holder of such
beneficial interest shall instruct the Note Registrar through instructions from
the Depositary and the Participant or Indirect Participant.  The Trustee shall deliver such Definitive
Notes to the Persons in whose names such Notes are so registered.  Any Definitive Note issued in exchange for a
beneficial interest in a Restricted Global Note pursuant to this Section 312(c)(1) shall
bear the Private Placement Legend and shall be subject to all restrictions on
transfer contained therein.


 


(2)                                  Beneficial
Interests in Restricted Global Notes to Unrestricted Definitive Notes.  A holder of a beneficial
interest in a Restricted Global Note may exchange such beneficial interest for
an Unrestricted Definitive Note or may transfer such beneficial interest to a
Person who takes delivery thereof in the form of an Unrestricted Definitive
Note only if:


 


(A)                              such transfer
is effected pursuant to a shelf registration statement; or


 


(B)                               the Note
Registrar receives the following:


 


(x)                                  if the holder of such
beneficial interest in a Restricted Global Note proposes to exchange such
beneficial interest for an Unrestricted Definitive Note, a certificate from
such holder in the form of Exhibit C hereto, including the certifications
in item (1)(b) thereof; or


 


(y)                                 if the holder
of such beneficial interest in a Restricted Global Note proposes to transfer
such beneficial interest to a Person who shall take delivery thereof in the
form of an Unrestricted Definitive Note, a certificate from such holder in the
form of Exhibit B hereto, including the certifications in item (4) thereof;


 


and, in each such case set forth in this subparagraph (B), if the Note
Registrar so requests or if the Applicable Procedures so require, an Opinion of
Counsel in form reasonably acceptable to the Note Registrar to the effect that
such exchange or transfer is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private Placement Legend
are no longer required in order to maintain compliance with the Securities Act.


 


(3)                                  Beneficial
Interests in Unrestricted Global Notes to Unrestricted Definitive Notes.  If any holder of a
beneficial interest in an Unrestricted Global Note proposes to exchange such
beneficial interest for a Definitive Note or to transfer such beneficial
interest to a Person who takes delivery thereof in the form of a Definitive
Note, then, upon satisfaction of the conditions set forth in Section 312(b)(2) hereof,
the Trustee will cause the aggregate principal amount of the applicable Global
Note to be reduced accordingly pursuant to Section 312(g) hereof, and
the Company will execute and the Trustee will authenticate and deliver to the
Person designated in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a beneficial
interest pursuant to this Section 312(c)(3) will be registered in
such name or names and in such authorized denomination or denominations as the
holder of such beneficial interest requests through instructions to the Note
Registrar from or through the Depositary and the Participant or Indirect
Participant. The Trustee will deliver such Definitive Notes to the Persons in
whose names such Notes are so registered. Any Definitive Note issued in exchange
for a beneficial interest pursuant to this Section 312(c)(3) will not
bear the Private Placement Legend.


 


(d)                                 Transfer and
Exchange of Definitive Notes for Beneficial Interests.


 


(1)                                  Restricted
Definitive Notes to Beneficial Interests in Restricted Global Notes.  If any Holder of a
Restricted Definitive Note proposes to exchange such Note for a beneficial
interest in a Restricted Global Note or to transfer such Restricted Definitive
Notes to a Person who takes delivery thereof in the form of a beneficial
interest in a Restricted Global Note, then, upon receipt by the Note Registrar
of the following documentation:


 


43

















 


(A)                              if the Holder
of such Restricted Definitive Note proposes to exchange such Note for a
beneficial interest in a Restricted Global Note, a certificate from such Holder
in the form of Exhibit C hereto, including the certifications in item (2)(b) thereof;


 


(B)                                if such
Restricted Definitive Note is being transferred to a QIB in accordance with Rule 144A,
a certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (1) thereof;


 


(C)                                if such
Restricted Definitive Note is being transferred to a Non-U.S. Person in an offshore
transaction in accordance with Rule 903 or Rule 904, a certificate to
the effect set forth in Exhibit B hereto, including the certifications in
item (2) thereof;


 


(D)                               if such
Restricted Definitive Note is being transferred pursuant to an exemption from
the registration requirements of the Securities Act in accordance with Rule 144,
a certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(a) thereof;


 


(E)                                 if such
Restricted Definitive Note is being transferred to an Institutional Accredited
Investor in reliance on an exemption from the registration requirements of the
Securities Act other than those listed in subparagraphs (B) through (D) above,
a certificate to the effect set forth in Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel required by item (3)(d) thereof,
if applicable;


 


(F)                                 if such
Restricted Definitive Note is being transferred to the Company or any of its Subsidiaries,
a certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(b) thereof; or


 


(G)                               if such
Restricted Definitive Note is being transferred pursuant to an effective
registration statement under the Securities Act, a certificate to the effect
set forth in Exhibit B hereto, including the certifications in item (3)(c) thereof,
the Trustee will cancel the Restricted Definitive Note, increase or cause to be
increased the aggregate principal amount of, in the case of clause (A) above,
the appropriate Restricted Global Note, in the case of clause (B) above,
the 144A Global Note, in the case of clause (C) above, the Regulation S
Global Note, and in all other cases, the IAI Global Note.


 


(2)                                  Restricted
Definitive Notes to Beneficial Interests in Unrestricted Global Notes.  A Holder of a Restricted
Definitive Note may exchange such Note for a beneficial interest in an
Unrestricted Global Note or transfer such Restricted Definitive Note to a
Person who takes delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note only if:


 


(A)                              such transfer
is effected pursuant to a shelf registration statement; or


 


(B)                               the Note
Registrar receives the following:


 


(x)                                  if the Holder of such
Definitive Notes proposes to exchange such Notes for a beneficial interest in
the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (1)(c) thereof; or


 


(y)                                 if the Holder
of such Definitive Notes proposes to transfer such Notes to a Person who shall
take delivery thereof in the form of a beneficial interest in the Unrestricted
Global Note, a certificate from such Holder in the form of Exhibit B
hereto, including the certifications in item (4) thereof;


 


and, in each such case set forth in this
subparagraph (B), if the Note Registrar so requests or if the Applicable Procedures
so require, an Opinion of Counsel in form reasonably acceptable to the Note
Registrar to the effect that such exchange or transfer is in compliance with
the Securities Act and that the restrictions on transfer contained herein and
in the Private Placement Legend are no longer required in order to maintain
compliance with the Securities Act.


 


44

















 


Upon satisfaction of the
conditions of any of the subparagraphs in this Section 312(d)(2), the Trustee
will cancel the Definitive Notes and increase or cause to be increased the
aggregate principal amount of the Unrestricted Global Note.


 


(3)                                 Unrestricted
Definitive Notes to Beneficial Interests in Unrestricted Global Notes.  A Holder of an Unrestricted
Definitive Note may exchange such Note for a beneficial interest in an
Unrestricted Global Note or transfer such Definitive Notes to a Person who
takes delivery thereof in the form of a beneficial interest in an Unrestricted
Global Note at any time. Upon receipt of a request for such an exchange or
transfer, the Trustee will cancel the applicable Unrestricted Definitive Note
and increase or cause to be increased the aggregate principal amount of one of
the Unrestricted Global Notes.


 


(e)                                  Transfer and
Exchange of Definitive Notes for Definitive Notes.  Upon request by a Holder of Definitive Notes
and such Holder’s compliance with the provisions of this Section 312(e),
the Note Registrar will register the transfer or exchange of Definitive
Notes.  Prior to such registration of
transfer or exchange, the requesting Holder must present or surrender to the
Note Registrar the Definitive Notes duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the Note Registrar duly
executed by such Holder or by its attorney, duly authorized in writing.  In addition, the requesting Holder must
provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section 312(e).


 


(1)                                  Restricted
Definitive Notes to Restricted Definitive Notes.  Any Restricted Definitive
Note may be transferred to and registered in the name of Persons who take
delivery thereof in the form of a Restricted Definitive Note if the Note
Registrar receives the following:


 


(A)                              if the transfer
will be made pursuant to Rule 144A, then the transferor must deliver a certificate
in the form of Exhibit B hereto, including the certifications in item (1) thereof;


 


(B)                               if the transfer
will be made pursuant to Rule 903 or Rule 904, then the transferor
must deliver a certificate in the form of Exhibit B hereto, including the
certifications in item (2) thereof; and


 


(C)                               if the transfer
will be made pursuant to any other exemption from the registration requirements
of the Securities Act, then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications, certificates and
Opinion of Counsel required by item (3) thereof, if applicable.


 


(2)                                  Restricted
Definitive Notes to Unrestricted Definitive Notes.  Any Restricted Definitive
Note may be exchanged by the Holder thereof for an Unrestricted Definitive Note
or transferred to a Person or Persons who take delivery thereof in the form of
an Unrestricted Definitive Note if:


 


(1)                                  any such
transfer is effected pursuant to a shelf registration statement; or


 


(2)                                  the Note
Registrar receives the following:


 


(x)                                  if the Holder of such
Restricted Definitive Notes proposes to exchange such Notes for an Unrestricted
Definitive Note, a certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (1)(d) thereof; or


 


(y)                                 if the Holder
of such Restricted Definitive Notes proposes to transfer such Notes to a Person
who shall take delivery thereof in the form of an Unrestricted Definitive Note,
a certificate from such Holder in the form of Exhibit B hereto, including
the certifications in item (4) thereof;


 


and, in each such case set forth in this subparagraph (2), if the Note
Registrar so requests, an Opinion of Counsel in form reasonably acceptable to
the Note Registrar to the effect that such exchange or transfer is in
compliance with 


 


45

















 


the Securities Act and that the restrictions on transfer contained
herein and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.


 


(3)                                  Unrestricted
Definitive Notes to Unrestricted Definitive Notes.  A Holder of Unrestricted
Definitive Notes may transfer such Notes to a Person who takes delivery thereof
in the form of an Unrestricted Definitive Note. Upon receipt of a request to
register such a transfer, the Note Registrar shall register the Unrestricted
Definitive Notes pursuant to the instructions from the Holder thereof.


 


(f)                                    [INTENTIONALLY
DELETED].


 


(g)                                 Cancellation
and/or Adjustment of Global Notes.  At such time as all beneficial interests in a
particular Global Note have been exchanged for Definitive Notes or a particular
Global Note has been redeemed, repurchased or canceled in whole and not in
part, each such Global Note will be returned to or retained and canceled by the
Trustee in accordance with Section 309 hereof.  At any time prior to such cancellation, if
any beneficial interest in a Global Note is exchanged for or transferred to a
Person who will take delivery thereof in the form of a beneficial interest in
another Global Note or for Definitive Notes, the principal amount of Notes
represented by such Global Note will be reduced accordingly and an endorsement
will be made on such Global Note by the Trustee or by the Depositary at the
direction of the Trustee to reflect such reduction; and if the beneficial
interest is being exchanged for or transferred to a Person who will take
delivery thereof in the form of a beneficial interest in another Global Note,
such other Global Note will be increased accordingly and an endorsement will be
made on such Global Note by the Trustee or by the Depositary at the direction
of the Trustee to reflect such increase.


 


(h)                                 General
Provisions Relating to Transfers and Exchanges.


 


(1)                                 To permit
registrations of transfers and exchanges, the Company will execute and the
Trustee will authenticate Global Notes and Definitive Notes upon receipt of an
Company Order in accordance with Section 202 hereof or at the Note
Registrar’s request.


 


(2)                                 No service
charge will be made to a Holder of a beneficial interest in a Global Note or to
a Holder of a Definitive Note for any registration of transfer or exchange, but
the Company may require payment of a sum sufficient to cover any transfer tax
or similar governmental charge payable in connection therewith (other than any
such transfer taxes or similar governmental charge payable upon exchange or
transfer pursuant to Sections 304, 903, 1017, 1018 and 1107 hereof.


 


(3)                                 The Note
Registrar will not be required to register the transfer of or exchange of any
Note selected for redemption in whole or in part, except the unredeemed portion
of any Note being redeemed in part.


 


(4)                                 All Global
Notes and Definitive Notes issued upon any registration of transfer or exchange
of Global Notes or Definitive Notes will be the valid obligations of the
Company, evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Global Notes or Definitive Notes surrendered upon such registration
of transfer or exchange.


 


(5)                                 Neither the
Note Registrar nor the Company will be required:


 


(A)                             to issue, to
register the transfer of or to exchange any Notes during a period beginning at
the opening of business 15 days before the day of mailing of a notice of
redemption of Notes under Section 1104 hereof and ending at the close of
business on the day of such mailing;


 


(B)                               to register the
transfer of or to exchange any Note selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed in part; or


 


(C)                               to register the
transfer of or to exchange a Note between a record date and the next succeeding
interest payment date.


 


46

















 


(6)                                 Prior to due
presentment for the registration of a transfer of any Note, the Trustee, any
Agent and the Company may deem and treat the Person in whose name any Note is
registered as the absolute owner of such Note for the purpose of receiving
payment of principal of and interest on such Notes and for all other purposes,
and none of the Trustee, any Agent or the Company shall be affected by notice
to the contrary.


 


(7)                                 The Trustee
will authenticate Global Notes and Definitive Notes in accordance with the
provisions of Section 202 hereof.


 


(8)                                 All
certifications, certificates and Opinions of Counsel required to be submitted
to the Note Registrar pursuant to this Section 312 to effect a
registration of transfer or exchange may be submitted by facsimile.


 


(9)                                 The Trustee
shall have no obligation or duty to monitor, determine or inquire as to compliance
with any restrictions on transfer imposed under this Indenture or under
applicable law with respect to any transfer of any interest in any Note
(including any transfers between or among Depositary Participants or beneficial
owners of interests in any Global Note) other than to require delivery of such
certificates and other documentation or evidence as are expressly required by,
and to do so if and when expressly required by the terms of, this Indenture,
and to examine the same to determine compliance as to form with the express
requirements hereof.


 


(10)                           Neither the
Trustee nor any Agent shall have any responsibility for any actions taken or
not taken by the Depositary.


 


SECTION 313.                                       [INTENTIONALLY
DELETED].


 


SECTION 314.                                       [INTENTIONALLY
DELETED].


 


SECTION 315.                                       CUSIP Numbers.


 


The Company in issuing the Notes may use “CUSIP”
numbers (if then generally in use) in addition to serial numbers, and, if so,
the Trustee shall use such “CUSIP” numbers in addition to serial numbers in notices
of redemption, repurchase or other notices to Holders as a convenience to
Holders; provided that any such notice may state
that no representation is made as to the correctness of such CUSIP numbers
either as printed on the Notes or as contained in any notice of a redemption or
repurchase and that reliance may be placed only on the serial or other
identification numbers printed on the Notes, and any such redemption or
repurchase shall not be affected by any defect in or omission of such numbers.  The Company will promptly notify the Trustee
in writing of any change in the CUSIP numbers.


 


SECTION 316.                                       Issuance of
Additional Notes.


 


The Company may, subject to Section 1011 of
this Indenture, issue additional Notes having identical terms and conditions to
the Notes issued on the Issue Date (the “Additional Notes”).  The Notes issued on the Issue Date and any
Additional Notes subsequently issued shall be treated as a single class for all
purposes under this Indenture.


 


ARTICLE FOUR



SATISFACTION AND DISCHARGE


 


SECTION 401.                                       Satisfaction
and Discharge of Indenture.


 


This Indenture shall upon Company Request cease to
be of further effect (except as to surviving rights of registration of transfer
or exchange of Notes expressly provided for herein or pursuant hereto) and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture when:


 


47

















 


(1)                                  either


 


(a)                                  all Notes
theretofore authenticated and delivered (other than (i) Notes which have
been destroyed, lost or stolen and which have been replaced or paid as provided
in Section 306 and (ii) Notes for whose payment money has theretofore
been deposited in trust with the Trustee or any Paying Agent or segregated and
held in trust by the Company and thereafter repaid to the Company or discharged
from such trust, as provided in Section 1003) have been delivered to the
Trustee for cancellation; or


 


(b)                                 all such Notes
not theretofore delivered to the Trustee for cancellation


 


(i)                           have become due
and payable by reason of the making of a notice of redemption pursuant to Section 1105
or otherwise, or


 


(ii)                        will become due
and payable at their Stated Maturity within one year, or


 


(iii)                     are to be called for
redemption within one year under arrangements satisfactory to the Trustee for
the giving of notice of redemption by the Trustee in the name, and at the
expense, of the Company,


 


and
the Company or any Guarantor, in the case of (i), (ii) or (iii) above,
has irrevocably deposited or caused to be deposited with the Trustee as trust
funds in trust solely for the benefit of the Holders, cash in U.S. dollars,
non-callable Government Securities, or a combination thereof, in such amounts
as will be sufficient without consideration of any reinvestment of interest to
pay and discharge the entire indebtedness on such Notes not theretofore
delivered to the Trustee for cancellation, for principal (and premium, if any)
and interest to the date of such deposit (in the case of Notes which have
become due and payable) or to the Stated Maturity or Redemption Date, as the
case may be;


 


(2)                                  no Default or Event of
Default (other than that resulting from borrowing funds to be applied to make
such deposit) with respect to this Indenture or the Notes shall have occurred
and be continuing on the date of such deposit or shall occur as a result of
such deposit and such deposit shall not result in a breach or violation of, or
constitute a default under, any other instrument to which the Company or any
Guarantor is a party or by which the Company or any Guarantor is bound;


 


(3)                                  the Company has paid or
caused to be paid all sums payable by it under this Indenture;


 


(4)                                  the Company has delivered
irrevocable instructions to the Trustee under this Indenture to apply the
deposited money toward the payment of such Notes at the Stated Maturity or the
Redemption Date, as the case may be; and


 


(5)                                  the Company has delivered to
the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating
that all conditions precedent herein to the satisfaction and discharge of this
Indenture have been complied with.


 


Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company to the Trustee under Section 607,
the obligations of the Company to any Authenticating Agent under Section 612
and, if money or Government Securities shall have been deposited with the
Trustee pursuant to subclause (b) of clause (1) of this Section, the
obligations of the Trustee under Section 402 and the last paragraph of Section 1003
shall survive such satisfaction and discharge.


 


48

















 


SECTION 402.                                       Application of Trust Money.


 


Subject to the provisions of the last paragraph of Section 1003,
all money or Government Securities deposited with the Trustee pursuant to Section 401
shall be held in trust and applied by it, in accordance with the provisions of
the Notes and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal (and
premium, if any) and interest for whose payment such money or Government
Securities has been deposited with the Trustee; but such money or Government
Securities need not be segregated from other funds except to the extent
required by law.


 


If the Trustee or Paying Agent is unable to apply
any money or Government Securities in accordance with Section 401 by
reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Company’s and any Guarantor’s obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit
had occurred pursuant to Section 401 until such time as the Trustee or
Paying Agent is permitted to apply all such money or Government Securities in
accordance with Section 401; provided that
if the Company has made any payment of principal of, premium, if any, or
interest on any Notes because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money or Government Securities held by the
Trustee or Paying Agent.


 


ARTICLE FIVE



REMEDIES


 


SECTION 501.                                       Events of
Default.


 


“Event of Default”, wherever used herein, means one
of the following events (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):


 


(1)                                 default in
payment when due and payable, upon redemption, acceleration or otherwise, of
principal of, or premium, if any, on the Notes issued under this Indenture;


 


(2)                                 default for 30
days or more in the payment when due of interest on or with respect to the
Notes issued under this Indenture;


 


(3)                                 failure by the
Company or any Subsidiary Guarantor for 30 days after receipt of written notice
given by the Trustee or the Holders of at least 30% in principal amount of the
Notes then outstanding and issued under this Indenture to comply with any of
its other agreements in this Indenture, the Security Documents, the
Intercreditor Agreement or the Notes;


 


(4)                                 default under
any mortgage, indenture or instrument under which there is issued or by which
there is secured or evidenced any Indebtedness for money borrowed by the
Company or any Restricted Subsidiary or the payment of which is guaranteed by
the Company or any Restricted Subsidiary, other than Indebtedness owed to the
Company or a Restricted Subsidiary, whether such Indebtedness or guarantee now
exists or is created after the issuance of the Notes, if both


 


(A)                              such default
either (x) results from the failure to pay any such Indebtedness at its
stated final maturity (after giving effect to any applicable grace periods) or (y) relates
to an obligation other than the obligation to pay principal of any such
Indebtedness at its stated final maturity and results in the holder or holders
of such Indebtedness causing such Indebtedness to become due prior to its
stated maturity and


 


49

















 


(B)                                the principal
amount of such Indebtedness, together with the principal amount of any other
such Indebtedness in default for failure to pay principal at stated final
maturity (after giving effect to any applicable grace periods), or the maturity
of which has been so accelerated, aggregate $25.0 million or more at any one
time outstanding;


 


(5)                                  failure by the
Company or any Significant Subsidiary to pay final judgments aggregating in
excess of $25.0 million, which final judgments remain unpaid, undischarged and
unstayed for a period of more than 60 days after such judgment becomes final,
and in the event such judgment is covered by insurance, an enforcement
proceeding has been commenced by any creditor upon such judgment or decree
which is not promptly stayed;


 


(6)                                  any of the
following events with respect to the Company or any Significant Subsidiary:


 


(A)                              the Company or
any Significant Subsidiary pursuant to or within the meaning of any Bankruptcy
Law


 


(i)                                     commences a voluntary case;


 


(ii)                                  consents to the entry of an
order for relief against it in an involuntary case;


 


(iii)                               consents to the appointment
of a Custodian of it or for any substantial part of its property; or


 


(iv)                              takes any comparable action
under any foreign laws relating to insolvency; or


 


(B)                                a court of
competent jurisdiction enters an order or decree under any Bankruptcy Law that:


 


(i)                                     is for relief against the
Company or any Significant Subsidiary in an involuntary case;


 


(ii)                                  appoints a Custodian of the
Company or any Significant Subsidiary or for any substantial part of its
property; or


 


(iii)                               orders the winding up or
liquidation of the Company or any Significant Subsidiary;


 


and
the order or decree remains unstayed and in effect for 60 days;


 


(7)                                 the Guarantee
of any Significant Subsidiary shall for any reason cease to be in full force
and effect or be declared null and void or any responsible officer of any
Guarantor that is a Significant Subsidiary, as the case may be, denies that it
has any further liability under its Guarantee or gives notice to such effect,
other than by reason of the termination of this Indenture or the release of any
such Guarantee in accordance with this Indenture;


 


(8)                                 any security
interest and Lien purported to be created by any Security Document with respect
to any Collateral, individually or in the aggregate, having a fair market value
in excess of $25.0 million shall cease to be in full force and effect, or
shall cease to give the Notes Collateral Agent, for the benefit of the
applicable Senior Secured Noteholder Secured Parties, the Liens, rights, powers
and privileges purported to be created and granted thereby (including a
perfected first-priority security interest in and Lien on, all of the Notes
Collateral thereunder and a perfected second-priority security interest in and
Lien on, all of the ABL Collateral thereunder (in each case, except as
otherwise expressly provided in this Indenture, the Security Documents and the
Intercreditor Agreement)) in favor of the Notes Collateral 


 


50

















 


Agent,
for a period of 30 days after notice, or shall be asserted by the Company,
Parent, Holdings or any Subsidiary Guarantor to not be, a valid, perfected, first-priority
(in the case of the Notes Collateral) or second-lien (in the case of the ABL
Collateral) (in each case, except as otherwise expressly provided in this
Indenture, the Security Documents or the Intercreditor Agreement) security
interest in or Lien on the Collateral covered thereby; except to the extent
that any such loss of perfection or priority results from the failure of the
Trustee to make filings, renewals and continuations (or other equivalent
filings) or take other appropriate action or the failure of the Trustee to
maintain possession of certificates actually delivered to it representing
securities pledged under the Security Documents; or


 


(9)                                 the Forward
Purchase Contract is terminated prior to the settlement date or one or more
conditions precedent to the purchase of the 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.


 


SECTION 502.                                       Acceleration of
Maturity; Rescission and Annulment.


 


If an Event of Default (other than an Event of
Default specified in Section 501(6) above) occurs and is continuing,
then and in every such case the Trustee or the Holders of at least 30% in principal
amount of the Outstanding Notes issued under this Indenture may declare the
principal, premium, if any, interest and any other monetary obligations on all
the Outstanding Notes to be due and payable immediately, by a notice in writing
to the Company (and to the Trustee if given by Holders).


 


Upon the effectiveness of such declaration, such
principal and interest will be due and payable immediately.  Notwithstanding the foregoing, if an Event of
Default specified in Section 501(6) above occurs and is continuing,
then the principal amount of all Outstanding Notes shall ipso facto become and
be immediately due and payable without any notice, declaration or other act on
the part of the Trustee or any Holder.


 


At any time after a declaration of acceleration has
been made and before a judgment or decree for payment of the money due has been
obtained by the Trustee as hereinafter provided in this Article, the Holders of
a majority in aggregate principal amount of the Outstanding Notes, by written
notice to the Company and the Trustee, may rescind and annul such declaration
and its consequences if:


 


(a)                                 the Company has
paid or deposited with the Trustee a sum sufficient to pay:


 


(A)                              all overdue
interest on all Outstanding Notes,


 


(B)                                all unpaid
principal of (and premium on) any Outstanding Notes which has become due
otherwise than by such declaration of acceleration, and interest on such unpaid
principal at the rate borne by the Notes,


 


(C)                                to the extent
that payment of such interest is lawful, interest on overdue interest at the
rate borne by the Notes, and


 


(D)                               all sums paid
or advanced by the Trustee hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel; and


 


(b)                                 Events of
Default, other than the non-payment of amounts of principal of (or premium, if
any, on) or interest on Notes which have become due solely by such declaration
of acceleration, have been cured or waived as provided in Section 513, no
such rescission shall affect any subsequent default or impair any right consequent
thereon.


 


Notwithstanding the preceding paragraph, in the
event of any Event of Default specified in Section 501(4) above, such
Event of Default and all consequences thereof (excluding any resulting payment
default) shall be annulled, waived and rescinded, automatically and without any
action by the Trustee or the Holders, if within 20 days after such Event of Default
arose,


 


51

















 


(x)                                  the
Indebtedness or guarantee that is the basis for such Event of Default has been
discharged, or


 


(y)                                 the holders thereof have
rescinded or waived the acceleration, notice or action (as the case may be)
giving rise to such Event of Default, or


 


(z)                                   if the default that is the
basis for such Event of Default has been cured.


 


Upon a determination by the Company that the Credit
Agreement is no longer in effect, the Company shall promptly give to the
Trustee written notice thereof, which notice shall be countersigned by the
Agent.  Unless and until the Trustee
shall have received such written notice with respect to the Credit Agreement,
the Trustee, subject to the TIA Sections 315(a) through 315(d), shall be
entitled in all respects to assume that the Credit Agreement is in effect
(unless a Responsible Officer of the Trustee shall have actual knowledge to the
contrary).


 


SECTION 503.                                       Collection of Indebtedness and Suits for Enforcement
by Trustee.


 


The Company covenants that
if:


 


(a)                                  default is made
in the payment of any installment of interest on any Note when such interest becomes
due and payable and such default continues for a period of 30 days, or


 


(b)                                 default is made
in the payment of the principal of (or premium on) any Note at the Maturity
thereof,


 


the Company will, upon demand of the Trustee,
pay to the Trustee for the benefit of the Holders of such Notes, the whole
amount then due and payable on such Notes for principal (and premium, if any)
and interest, and interest on any overdue principal (and premium, if any) and,
to the extent that payment of such interest shall be legally enforceable, upon
any overdue installment of interest, at the rate borne by the Notes, and, in
addition thereto, such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.


 


If the Company fails to pay such amounts forthwith
upon such demand, the Trustee, in its own name as trustee of an express trust,
may institute a judicial proceeding for the collection of the sums so due and unpaid,
may prosecute such proceeding to judgment or final decree and may enforce the
same against the Company, any Guarantor or any other obligor upon the Notes and
collect the moneys adjudged or decreed to be payable in the manner provided by
law out of the property of the Company, any Guarantor or any other obligor upon
the Notes, wherever situated.


 


If an Event of Default occurs and is continuing, the
Trustee may in its discretion proceed to protect and enforce its rights and the
rights of the Holders under this Indenture and the Guarantees by such
appropriate judicial proceedings as the Trustee shall deem necessary to protect
and enforce any such rights, including seeking recourse against any Guarantor,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy, including but without limitation, seeking recourse
against any Guarantor.


 


SECTION 504.                                       Trustee May File Proofs
of Claim.


 


In case of the pendency of any receivership,
insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial proceeding relative to the Company or any other
obligor including any Guarantor, upon the Notes or the property of the Company
or of such other obligor or their creditors, and subject to the Intercreditor
Agreement, the Trustee (irrespective of whether the principal of the Notes
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal, premium, if any, or interest)
shall be entitled and empowered, by intervention in such proceeding or
otherwise,


 


52














 


(i)                             to file and
prove a claim for the whole amount of principal (and premium, if any) and interest
owing and unpaid in respect of the Notes and to file such other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and of the
Holders allowed in such judicial proceeding, and


 


(ii)                          to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same;


 


and any custodian, receiver, assignee,
trustee, liquidator, sequestrator or similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay the Trustee any amount due it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and any other amounts due the Trustee under Section 607.


 


Nothing herein contained shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on behalf
of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.


 


SECTION 505.                                         Trustee May Enforce
Claims Without Possession of Notes.


 


All rights of action and claims under this Indenture
or the Notes may be prosecuted and enforced by the Trustee without the
possession of any of the Notes or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name and as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Holders in respect of which such judgment has
been recovered.


 


SECTION 506.                                         Application of
Money Collected.


 


Subject to the Intercreditor Agreement with respect
to the proceeds of any ABL Collateral, any money collected by the Trustee pursuant
to this Article shall be applied in the following order, at the date or
dates fixed by the Trustee and, in case of the distribution of such money on
account of principal (or premium, if any) or interest, upon presentation of the
Notes and the notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:


 


FIRST:  To the payment of all amounts due the Trustee
under Section 607 and the Notes Collateral Agent under Section 1412;


 


SECOND:  To the payment of the amounts then due and
unpaid for principal of (and premium, if any) and interest on the Notes in
respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the amounts
due and payable on such Notes for principal (and premium, if any) and interest,
respectively; and


 


THIRD:  The balance, if any, to the Company or any
other obligor on the Notes, as their interests may appear or as a court of
competent jurisdiction may direct in writing; provided
that all sums due and owing to the Holders and the Trustee have been paid in
full as required by this Indenture.


 


SECTION 507.                                         Limitation on
Suits.


 


No Holder of any Notes shall have any right to
institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless:


 


53

















 


(1)                                 
such Holder has previously given written notice to the Trustee of a continuing
Event of Default;


 


(2)                                 
the Holders of not less than 30% in principal amount of the Outstanding
Notes shall have made written request to the Trustee to institute proceedings
in respect of such Event of Default in its own name as Trustee hereunder;


 


(3)                                 
such Holder or Holders have offered to the Trustee indemnity reasonably
satisfactory to it against the costs, expenses and liabilities to be incurred
in compliance with such request;


 


(4)                                 
the Trustee for 30 days after its receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and


 


(5)                                 
no direction inconsistent with such written request has been given to
the Trustee during such 30-day period by the Holders of a majority or more in
principal amount of the Outstanding Notes;


 


it being understood and intended that no one
or more Holders shall have any right in any manner whatever by virtue of, or by
availing of, any provision of this Indenture or the Guarantees to affect,
disturb or prejudice the rights of any other Holders, or to obtain or to seek
to obtain priority or preference over any other Holders or to enforce any right
under this Indenture or the Guarantees, except in the manner herein provided
and for the equal and ratable benefit of all the Holders (it being further
understood that the Trustee does not have an affirmative duty to ascertain
whether or not such actions or forbearances are unduly prejudicial to such Holders).


 


SECTION 508.                                         Unconditional
Right of Holders to Receive Principal, Premium and Interest.


 


Notwithstanding any other provision in this
Indenture, the Holder of any Note shall have the right, which is absolute and
unconditional, to receive payment, as provided herein (including, if applicable,
Article Eleven) and in such Note of the principal of (and premium, if any)
and (subject to Section 307) interest on such Note on the respective
Stated Maturities expressed in such Note (or, in the case of redemption, on the
Redemption Date) and to institute suit for the enforcement of any such payment,
and such rights shall not be impaired without the consent of such Holder.


 


SECTION 509.                                         Restoration of
Rights and Remedies.


 


If the Trustee or any Holder has instituted any
proceeding to enforce any right or remedy under this Indenture or the Guarantees
and such proceeding has been discontinued or abandoned for any reason, or has
been determined adversely to the Trustee or to such Holder, then and in every
such case, subject to any determination in such proceeding, the Company, any
Guarantor, any other obligor of the Notes, the Trustee and the Holders shall be
restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall
continue as though no such proceeding had been instituted.


 


SECTION 510.                                         Rights and
Remedies Cumulative.


 


Except as otherwise provided with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes in the
last paragraph of Section 306, no right or remedy herein conferred upon or
reserved to the Trustee or to the Holders is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or
otherwise.  The assertion or employment
of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.


 


SECTION 511.                                         Delay or
Omission Not Waiver.


 


No delay or omission of the Trustee or of any Holder
of any Note to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event 


 


54

















 


of Default or an acquiescence
therein.  Every right and remedy given by
this Article or by law to the Trustee or to the Holders may be exercised
from time to time, and as often as may be deemed expedient, by the Trustee or by
the Holders, as the case may be.


 


SECTION 512.                                         Control by
Holders.


 


The Holders of not less than a majority in principal
amount of the Outstanding Notes shall have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred on the Trustee, provided
that:


 


(1)                                 
such direction shall not be in conflict with any rule of law or
with this Indenture,


 


(2)                                 
subject to Section 315 of the Trust Indenture Act, the Trustee may
take any other action deemed proper by the Trustee which is not inconsistent
with such direction, and


 


(3)                                 
the Trustee need not take any action which might involve it in personal
liability or be unjustly prejudicial to the Holders not consenting.


 


SECTION 513.                                         Waiver of Past
Defaults.


 


Subject to Sections 508 and 902 and the last
paragraph of Section 502, the Holders of not less than a majority in principal
amount of the Outstanding Notes may on behalf of the Holders of all such Notes
waive any past Default hereunder and its consequences, except a continuing
Default or Event of Default (1) in respect of the payment of interest on,
premium, if any, or the principal of any such Note held by a non-consenting
Holder, or (2) in respect of a covenant or provision hereof which under Article Nine
cannot be modified or amended without the consent of the Holder of each
Outstanding Note affected.


 


Upon any such waiver, such Default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Indenture, but no such waiver shall extend to
any subsequent or other Default or Event of Default or impair any right
consequent thereon.


 


SECTION 514.                                         Waiver of Stay
or Extension Laws.


 


Each of the Company, the Guarantors and any other
obligor on the Notes covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and each of the Company, the Guarantors
and any other obligor on the Notes (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law and covenants
that it will not hinder, delay or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.


 


ARTICLE SIX



THE TRUSTEE


 


SECTION 601.                                         Duties of the
Trustee.


 


(a)                                    Except during
the continuance of a Default or an Event of Default,


 


(1)                                 
the Trustee undertakes to perform such duties and only such duties as
are specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and


 


55

















 


(2)                                 
in the absence of bad faith or willful misconduct on its part, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this Indenture;
but in the case of any such certificates or opinions specifically required by
any provision hereof to be provided to it, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to the requirements
of this Indenture, but not to verify the contents thereof.


 


(b)                                   In case a
Default or an Event of Default has occurred and is continuing of which a Responsible
Officer of the Trustee has actual knowledge or of which written notice of such
Default or Event of Default shall have been given to the Trustee by the
Company, any other obligor of the Notes or by any Holder, the Trustee shall
exercise such of the rights and powers vested in it by this Indenture, and use
the same degree of care and skill in their exercise, as a prudent Person would
exercise or use under the circumstances in the conduct of such Person’s own
affairs.


 


(c)                                    No provision of
this Indenture shall be construed to relieve the Trustee from liability for its
own negligent action, its own negligent failure to act, or its own willful
misconduct, except that


 


(1)                                 
this paragraph (c) shall not be construed to limit the effect of
paragraph (a) of this Section;


 


(2)                                 
the Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts;


 


(3)                                 
the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of the
Holders of a majority in aggregate principal amount of the Outstanding Notes
relating to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Indenture; and


 


(4)                                 
no provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.


 


(d)                                   Whether or not
therein expressly so provided, every provision of this Indenture relating to
the conduct or affecting the liability of or affording protection to the
Trustee shall be subject to the provisions of this Section.


 


SECTION 602.                                         Notice of
Defaults.


 


Within thirty days after the earlier of receipt from
the Company of notice of the occurrence of any Default or Event of Default
hereunder or the date when such Default or Event of Default becomes known to
the Trustee, the Trustee shall transmit, in the manner and to the extent
provided in TIA Section 313(c), notice of such Default or Event of Default
hereunder known to the Trustee, unless such Default or Event of Default shall
have been cured or waived; provided, however, that, except in the case of a
Default or Event of Default in the payment of the principal of (or premium, if
any, on) or interest on any Note, the Trustee shall be protected in withholding
such notice if and so long as a trust committee of Responsible Officers of the
Trustee in good faith determine that the withholding of such notice is in the
interest of the Holders.


 


SECTION 603.                                         Certain Rights
of Trustee.


 


Subject to the provisions of TIA Sections 315(a) through
315(d):


 


(1)                                 
the Trustee may conclusively rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, 


 


56

















 


consent,
order, bond, debenture, note, other evidence of indebtedness or other paper or
document (whether in original or facsimile form) believed by it to be genuine
and to have been signed or presented by the proper party or parties;


 


(2)                                 
any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;


 


(3)                                 
whenever in the administration of this Indenture the Trustee shall deem
it desirable that a matter be proved or established prior to taking, suffering
or omitting any action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, rely
upon an Officers’ Certificate;


 


(4)                                 
the Trustee may consult with counsel of its own selection and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;


 


(5)                                 
the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders pursuant to this Indenture, unless such Holders shall have offered
to the Trustee reasonable security or indemnity satisfactory to it against the
costs, expenses, losses and liabilities which might be incurred by it in
compliance with such request or direction;


 


(6)                                 
the Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or attorney
at the expense of the Company and shall incur no liability of any kind by
reason of such inquiry or investigation;


 


(7)                                 
the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder;


 


(8)                                 
the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture;


 


(9)                                 
the rights, privileges, protections, immunities and benefits given to
the Trustee, including, without limitation, its right to be indemnified, are
extended to, and shall be enforceable by, the Trustee in each of its capacities
hereunder, and each agent, custodian and other Person employed to act
hereunder;


 


(10)                              the Trustee may
request that the Company deliver an Officers’ Certificate substantially in the Form of
Exhibit F hereto setting forth the names of individuals and/or titles of
officers authorized at such time to take specified actions pursuant to this
Indenture, which Officers’ Certificate may be signed by any person authorized
to sign an Officers’ Certificate, including any person specified as so
authorized in any such certificate previously delivered and not superseded; and


 


(11)                              in no event
shall the Trustee be responsible or liable for special, indirect, or
consequential loss or damage of any kind whatsoever (including, but not limited
to, loss of profit) irrespective of whether the Trustee has been advised of the
likelihood of such loss or damage and regardless of the form of action.


 


The Trustee shall not be required to expend or risk
its own funds or otherwise incur any financial liability in the performance of
any of its duties hereunder, or in the exercise of any of its rights or powers
if it shall 


 


57

















 


have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it.


 


SECTION 604.                                         Trustee Not
Responsible for Recitals or Issuance of Notes.


 


The recitals contained herein and in the Notes,
except for the Trustee’s certificates of authentication, shall be taken as the
statements of the Company, and the Trustee assumes no responsibility for their
correctness.  The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Notes, except that the Trustee represents that it is duly authorized to execute
and deliver this Indenture, authenticate the Notes and perform its obligations
hereunder and that the statements made by it in a “Statement of Eligibility” on
Form T-1 supplied to the Company are true and accurate, subject to the
qualifications set forth therein.  The
Trustee shall not be accountable for the use or application by the Company of
Notes or the proceeds thereof.


 


SECTION 605.                                         May Hold
Notes.


 


The Trustee, any Paying Agent, any Note Registrar or
any other agent of the Company or of the Trustee, in its individual or any
other capacity, may become the owner or pledgee of Notes and, subject to TIA Sections
310(b) and 311, may otherwise deal with the Company with the same rights
it would have if it were not the Trustee, Paying Agent, Note Registrar or such
other agent; provided, however,
that, if it acquires any conflicting interest, it must eliminate such conflict
within 90 days, apply to the Commission for permission to continue or resign.


 


SECTION 606.                                         Money Held in
Trust.


 


Money held by the Trustee in trust hereunder need
not be segregated from other funds except to the extent required by law.  The Trustee shall be under no liability for
interest on any money received by it hereunder except as otherwise agreed in
writing with the Company.


 


SECTION 607.                                         Compensation
and Reimbursement.


 


The Company agrees:


 


(1)                                 
to pay to the Trustee from time to time such compensation as shall be
agreed in writing between the Company and the Trustee for all services rendered
by it hereunder (which compensation shall not be limited by any provision of
law in regard to the compensation of a trustee of an express trust);


 


(2)                                 
except as otherwise expressly provided herein, to reimburse the Trustee
upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of this
Indenture (including the reasonable compensation and the expenses and disbursements
of its agents and counsel), except any such expense, disbursement or advance as
shall be determined to have been caused by its own negligence or willful misconduct;
and


 


(3)                                 
to indemnify the Trustee and any predecessor Trustee for, and to hold
it harmless against, any and all loss, liability, claim, damage or expense,
including taxes (other than the taxes based on the income of the Trustee)
incurred without negligence or willful misconduct on its part, arising out of
or in connection with the acceptance or administration of this trust, including
the costs and expenses of defending itself against any claim regardless of
whether the claim is asserted by the Company, a Guarantor, a Holder or any
other Person or liability in connection with the exercise or performance of any
of its powers or duties hereunder.


 


The obligations of the Company under this Section to
compensate the Trustee, to pay or reimburse the Trustee for expenses,
disbursements and advances and to indemnify and hold harmless the Trustee shall
constitute additional indebtedness hereunder and shall survive the satisfaction
and discharge of this Indenture and resignation or removal of the Trustee.  As security for the performance of such obligations
of the Company, the Trustee 


 


58

















 


shall have a claim prior to
the Notes upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the payment of principal of (and premium, if
any) or interest on particular Notes.


 


When the Trustee incurs expenses or renders services
in connection with an Event of Default specified in Section 501(6), the
expenses (including the reasonable charges and expenses of its counsel) of and
the compensation for such services are intended to constitute expenses of
administration under any applicable Federal or State bankruptcy, insolvency or
other similar law.


 


The provisions of this Section shall survive
the termination of this Indenture.


 


SECTION 608.                                         Corporate
Trustee Required; Eligibility.


 


There shall be at all times a Trustee hereunder
which shall be eligible to act as Trustee under TIA Sections 310(a)(1), (2) and
(5) and shall have a combined capital and surplus of at least
$150,000,000.  If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of Federal, State, territorial or District of Columbia supervising
or examining authority, then for the purposes of this Section, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published.  If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section,
it shall resign immediately in the manner and with the effect hereinafter
specified in this Article.


 


SECTION 609.                                         Resignation and
Removal; Appointment of Successor.


 


(a)                                    No resignation
or removal of the Trustee and no appointment of a successor Trustee pursuant to
this Article shall become effective until the acceptance of appointment by
the successor Trustee in accordance with the applicable requirements of Section 610.


 


(b)                                   The Trustee may
resign at any time by giving written notice thereof to the Company.  Upon receiving such notice of resignation,
the Company shall promptly appoint a successor trustee by written instrument executed
by authority of the Board of Directors, a copy of which shall be delivered to
the resigning Trustee and a copy to the successor trustee.  If the instrument of acceptance by a
successor Trustee required by Section 610 shall not have been delivered to
the Trustee within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition, at the expense of the Company, any court of
competent jurisdiction for the appointment of a successor Trustee.


 


(c)                                    The Trustee may
be removed at any time by Act of the Holders of not less than a majority in
principal amount of the Outstanding Notes, delivered to the Trustee and to the
Company.  If the instrument of acceptance
by a successor Trustee required by Section 610 shall not have been delivered
to the Trustee within 30 days after the giving of such notice of resignation,
the resigning Trustee may petition, at the expense of the Company, any court of
competent jurisdiction for the appointment of a successor Trustee.


 


(d)                                   If at any time:


 


(1)                                 
the Trustee shall fail to comply with the provisions of TIA Section 310(b) after
written request therefor by the Company or by any Holder who has been a bona
fide Holder of a Note for at least six months, or


 


(2)                                 
the Trustee shall cease to be eligible under Section 608 and shall
fail to resign after written request therefor by the Company or by any Holder
who has been a bona fide Holder of a Note for at least six months, or


 


(3)                                 
the Trustee shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver of the Trustee or of its property shall be
appointed or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation, then, in any such case, (i) the Company, by a Board
Resolution, may remove the Trustee, or (ii) subject


 


59

















 


to
TIA Section 315(e), any Holder who has been a bona fide Holder of a Note
for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.


 


(e)                                    If the Trustee
shall resign, be removed or become incapable of acting, or if a vacancy shall
occur in the office of Trustee for any cause, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee.  If, within one year after such resignation,
removal or incapability, or the occurrence of such vacancy, a successor Trustee
shall be appointed by Act of the Holders of a majority in principal amount of
the Outstanding Notes delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the successor Trustee and supersede the successor Trustee
appointed by the Company.  If no
successor Trustee shall have been so appointed by the Company or the Holders
and accepted appointment in the manner hereinafter provided, any Holder who has
been a bona fide Holder of a Note for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee.


 


(f)                                      The Company
shall give notice of each resignation and each removal of the Trustee and each
appointment of a successor Trustee to the Holders in the manner provided for in
Section 106.  Each notice shall
include the name of the successor Trustee and the address of its Corporate
Trust Office.


 


SECTION 610.                                         Acceptance of
Appointment by Successor.


 


(a)                                    Every successor
Trustee appointed hereunder shall execute, acknowledge and deliver to the Company
and to the retiring Trustee an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee; but, on request of the Company or the successor Trustee,
such retiring Trustee shall, upon payment of its charges, execute and deliver
an instrument transferring to such successor Trustee all the rights, powers and
trusts of the retiring Trustee and shall duly assign, transfer and deliver to
such successor Trustee all property and money held by such retiring Trustee
hereunder.  Upon request of any such
successor Trustee, the Company shall execute any and all instruments for more
fully and certainly vesting in and confirming to such successor Trustee all such
rights, powers and trusts.


 


(b)                                   Upon request of
any such successor Trustee, the Company shall execute any and all instruments
for more fully and certainly vesting in and confirming to such successor
Trustee all rights, powers and trusts referred to in paragraph (a) of this
Section.


 


(c)                                    No successor
Trustee shall accept its appointment unless at the time of such acceptance such
successor Trustee shall be qualified and eligible under this Article.


 


SECTION 611.                                         Merger,
Conversion, Consolidation or Succession to Business.


 


Any corporation into which the Trustee may be merged
or converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided such corporation shall be otherwise qualified and eligible
under this Article, without the execution or filing of any paper or any further
act on the part of any of the parties hereto. 
In case any Notes shall have been authenticated, but not delivered, by
the Trustee then in office, any successor by merger, conversion or
consolidation to such authenticating Trustee may adopt such authentication and
deliver the Notes so authenticated with the same effect as if such successor
Trustee had itself authenticated such Notes. 
In case at that time any of the Notes shall not have been authenticated,
any successor Trustee may authenticate such Notes either in the name of any
predecessor hereunder or in the name of the successor Trustee.  In all such cases such certificates shall
have the full force and effect which this Indenture provides for the
certificate of authentication of the Trustee shall have; provided,
however, that the right to adopt the
certificate of authentication of any predecessor Trustee or to authenticate
Notes in the name of any predecessor Trustee shall apply only to its successor
or successors by merger, conversion or consolidation.


 


60

















 


SECTION 612.                                         Appointment of
Authenticating Agent.


 


At any time when any of the Notes remain
Outstanding, the Trustee may appoint an Authenticating Agent or Agents with
respect to the Notes which shall be authorized to act on behalf of the Trustee
to authenticate Notes and the Trustee shall give written notice of such
appointment to all Holders of Notes with respect to which such Authenticating
Agent will serve, in the manner provided for in Section 106.  Notes so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder.  Any such appointment shall be evidenced by an
instrument in writing signed by a Responsible Officer of the Trustee, and a
copy of such instrument shall be promptly furnished to the Company.  Wherever reference is made in this Indenture
to the authentication and delivery of Notes by the Trustee or the Trustee’s
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent.  Each
Authenticating Agent shall be acceptable to the Company and shall at all times
be a corporation organized and doing business under the laws of the United
States of America, any state thereof or the District of Columbia, authorized
under such laws to act as Authenticating Agent, having a combined capital and
surplus of not less than $150,000,000 and subject to supervision or examination
by Federal or state authority.  If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of said supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. 
If at any time an Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect specified in this Section.


 


Any corporation into which an Authenticating Agent
may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which
such Authenticating Agent shall be a party, or any corporation succeeding to
all or substantially all the corporate agency or corporate trust business of an
Authenticating Agent, shall continue to be an Authenticating Agent, provided such corporation shall be otherwise eligible under
this Section, without the execution or filing of any paper or any further act
on the part of the Trustee or the Authenticating Agent.


 


An Authenticating Agent may resign at any time by
giving written notice thereof to the Trustee and to the Company.  The Trustee may at any time terminate the
agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. 
Upon receiving such a notice of resignation or upon such a termination,
or in case at any time such Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, the Trustee may appoint a
successor Authenticating Agent which shall be acceptable to the Company and
shall give written notice of such appointment to all Holders of Notes, in the
manner provided for in Section 106. 
Any successor Authenticating Agent upon acceptance of its appointment
hereunder shall become vested with all the rights, powers and duties of its
predecessor hereunder, with like effect as if originally named as an
Authenticating Agent.  No successor Authenticating
Agent shall be appointed unless eligible under the provisions of this Section.


 


The Company agrees to pay to each Authenticating
Agent from time to time such compensation for its services under this Section as
shall be agreed in writing between the Company and such Authenticating Agent.


 


If an appointment is made pursuant to this Section,
the Notes may have endorsed thereon, in addition to the Trustee’s certificate
of authentication, an alternate certificate of authentication in the following
form:


 


This is one of the Notes designated therein referred
to in the within-mentioned Indenture.


 


	
   

  	
  THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  as Authenticating Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  as Authorized Officer

  



 


61

















 


ARTICLE SEVEN



HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY


 


SECTION 701.                                         Company to
Furnish Trustee Names and Addresses.


 


The Company will furnish or cause to be furnished to
the Trustee


 


(a)                                    semiannually,
not more than 10 days after each Regular Record Date, a list, in such form as
the Trustee may reasonably require, of the names and addresses of the Holders
as of such Regular Record Date; and


 


(b)                                   at such other
times as the Trustee may reasonably request in writing, within 30 days after
receipt by the Company of any such request, a list of similar form and content
to that in paragraph (a) hereof as of a date not more than 15 days prior
to the time such list is furnished; provided, however, that if and so long as the Trustee shall be the
Note Registrar, no such list need be furnished.


 


SECTION 702.                                         Disclosure of
Names and Addresses of Holders.


 


Every Holder of Notes, by receiving and holding the
same, agrees with the Company and the Trustee that none of the Company or the
Trustee or any agent of either of them shall be held accountable by reason of
the disclosure of any such information as to the names and addresses of the
Holders in accordance with TIA Section 312, regardless of the source from
which such information was derived, and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a request made under
TIA Section 312(b).


 


SECTION 703.                                         Reports by
Trustee.


 


Within 60 days after May 15 of each year
commencing with the first May 15 after the first issuance of Notes
pursuant to this Indenture, the Trustee shall transmit to the Holders of Notes
(with a copy to the Company at the Place of Payment), in the manner and to the
extent provided in TIA Section 313(c), a brief report dated as of such May 15
if required by TIA Section 313(a).


 


ARTICLE EIGHT



MERGER, CONSOLIDATION OR SALE OF ALL OR SUBSTANTIALLY ALL ASSETS


 


SECTION 801.                                         Company May Consolidate,
Etc., Only on Certain Terms.


 


The Company may not consolidate or merge with or
into or wind up into (whether or not the Company is the surviving corporation),
or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially
all of its properties or assets in one or more related transactions, to any
Person unless:


 


(1)                                 
the Company is the surviving corporation or the Person formed by or
surviving any such consolidation or merger (if other than the Company) or to
which such sale, assignment, transfer, lease, conveyance or other disposition
will have been made is a corporation organized or existing under the laws of
the United States, any state thereof, the District of Columbia, or any
territory thereof (such Person, as the case may be, being herein called the “Successor
Company”);


 


(2)                                 
the Successor Company, if other than the Company, expressly assumes all
the obligations of the Company under this Indenture, the Security Documents and
the Notes pursuant to supplemental indentures or other documents or instruments
in form reasonably satisfactory to the Trustee;


 


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(3)                                 immediately
after such transaction no Default or Event of Default exists;


 


(4)                                 immediately
after giving pro forma effect to such transaction, as if such transaction had
occurred at the beginning of the applicable four-quarter period,


 


(A)                              the
Successor Company would be permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 1011(a) or


 


(B)                                the
Fixed Charge Coverage Ratio for the Successor Company and the Restricted
Subsidiaries would be greater than such Ratio for Parent and its subsidiaries
immediately prior to such transaction;


 


(5)                                 each
Guarantor, unless it is the other party to the transactions described above, in
which case Section 802(2) below shall apply, shall have by supplemental
indenture confirmed that its Guarantee shall apply to such Person’s obligations
under this Indenture and the Notes;


 


(6)                                 the
Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion
of Counsel, each stating that such consolidation, merger or transfer and such
supplemental indentures, if any, comply with this Indenture and, if a
supplemental indenture or any supplement to any Security Document is required
in connection with such transaction, such supplement shall comply with the
applicable provisions of this Indenture;


 


(7)                                 to
the extent any assets of the Person which is merged or consolidated with or
into the Successor Company are assets of the type which would constitute
Collateral under the Security Documents, the Successor Company shall take such
action as may be reasonably necessary to cause such property and assets to be
made subject to the Lien of the Security Documents in the manner and to the
extent required in this Indenture or any of the Security Documents and shall
take all reasonably necessary action so that such Lien is perfected to the
extent required by the Security Documents; and


 


(8)                                 the
Collateral owned by or transferred to the Successor Company shall:


 


(A)                              continue
to constitute Collateral under this Indenture and the Security Documents,


 


(B)                                be
subject to the Lien in favor of the Notes Collateral Agent for the benefit of
the Trustee and the Holders, and


 


(C)                                not
be subject to any Lien other than Permitted Liens.


 


The Successor Company shall succeed to, and
be substituted for the Company under this Indenture and the Notes.  Notwithstanding clauses (3) and (4) above,


 


(a)                                 any
Restricted Subsidiary may consolidate with, merge into or transfer all or part
of its properties and assets to the Company; and


 


(b)                                the
Company may merge with an Affiliate incorporated solely for the purpose of
reincorporating the guarantor or the Company in another State of the United
States so long as the amount of Indebtedness of the Company and the Restricted
Subsidiaries is not increased thereby.


 


SECTION 802.                                       Subsidiary
Guarantors May Consolidate, Etc., Only on Certain Terms.


 


Subject to Section 1015(b), each
Subsidiary Guarantor shall not, and the Company shall not permit any Subsidiary
Guarantor to, consolidate or merge with or into or wind up into (whether or not
such Subsidiary Guarantor is the surviving corporation), or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
properties or assets in one or more related transactions to, any Person unless:


 


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(A)                              (1) 
such Subsidiary Guarantor is the surviving corporation or the Person formed by
or surviving any such consolidation or merger (if other than such Subsidiary
Guarantor) or to which such sale, assignment, transfer, lease, conveyance or
other disposition will have been made is a corporation organized or existing
under the laws of the United States, any state thereof, the District of
Columbia, or any territory thereof (such Subsidiary Guarantor or such Person,
as the case may be, being herein called the “Successor Person”);


 


(2)                                  the
Successor Person, if other than such Subsidiary Guarantor, expressly assumes
all the obligations of such Subsidiary Guarantor under this Indenture and such
Subsidiary Guarantor’s Guarantee pursuant to supplemental indentures or other
documents or instruments in form reasonably satisfactory to the Trustee;


 


(3)                                  immediately
after such transaction no Default or Event of Default exists;


 


(4)                                  the
Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that such consolidation, merger or transfer
and such supplemental indentures, amendments, supplements or other instruments
relating to the Security Documents, if any, comply with this Indenture, if a
supplemental indenture or any supplement to any Security Document is required
in connection with such transaction, such supplement shall comply with the
applicable provisions of this Indenture;


 


(5)                                  to
the extent any assets of the Person which is merged or consolidated with or
into the Successor Company are assets of the type which would constitute
Collateral under the Security Documents, the Successor Company shall take such
action as may be reasonably necessary to cause such property and assets to be
made subject to the Lien of the Security Documents in the manner and to the
extent required in this Indenture or any of the Security Documents and shall
take all reasonably necessary action so that such Lien is perfected to the
extent required by the Security Documents; and


 


(6)                                  the
Collateral owned by or transferred to the Successor Person shall:


 


(i)                                     continue
to constitute Collateral under this Indenture and the Security Documents,


 


(ii)                                  be
subject to the Lien in favor of the Notes Collateral Agent for the benefit of
the Trustee and the Holders, and


 


(iii)                               not
be subject to any Lien other than Permitted Liens; or


 


(B)                                the
transaction is made in compliance with Section 1018.


 


Subject to Section 1015(b) hereof,
the Successor Person shall succeed to, and be substituted for, such Subsidiary
Guarantor under this Indenture and such Subsidiary Guarantor’s Guarantee.  Notwithstanding the foregoing, any Subsidiary
Guarantor may merge into or transfer all or part of its properties and assets
to another Subsidiary Guarantor or the Company.


 


SECTION 803.                                       Successor
Substituted.


 


Upon any consolidation or merger, or any
sale, assignment, conveyance, transfer, lease or disposition of all or substantially
all of the assets of the Company or any Guarantor in accordance with Sections
801 and 802 hereof, the successor Person formed by such consolidation or into
which the Company or such Guarantor, as the case may be, is merged or the
successor Person to which such sale, assignment, conveyance, transfer, lease or
disposition is made, shall succeed to, and be substituted for, and may exercise
every right and power of, the Company or such Guarantor, as the case may be,
under this Indenture and/or the Guarantees, as the case may be, with the same
effect as if such successor Person had been named as the Company or such
Guarantor, as the case may be, herein and/or the Guarantees, as the case may
be.  When a successor Person assumes all
obligations of its predecessor hereunder, the Notes or the Guarantees, as the
case may be, such predecessor shall be released from all obligations; 


 


64

















 


provided
that in the event of a transfer or lease, the predecessor shall not be released
from the payment of principal and interest or other obligations on the Notes or
the Guarantees, as the case may be.


 


ARTICLE NINE


 


SUPPLEMENTAL INDENTURES


 


SECTION 901.                                       Amendments
or Supplements Without Consent of Holders.


 


Without the consent of any Holders, the
Company, any Guarantor (with respect to a Guarantee or this Indenture to which
it is a party), when authorized by Board Resolutions of their respective Board
of Directors, and the Trustee, at any time and from time to time, may amend or
supplement this Indenture, any Guarantee, the Notes, the Security Documents or
the Intercreditor Agreement, in form satisfactory to the Trustee, for any of
the following purposes:


 


(1)                                  to
cure any ambiguity, omission, mistake, defect or inconsistency;


 


(2)                                  to
provide for uncertificated Notes in addition to or in place of certificated
Notes;


 


(3)                                  to
comply with Article Eight hereof;


 


(4)                                  to
evidence the succession of another Person to the Company or to any Guarantor
and to provide the assumption of the Company’s or such Guarantor’s obligations
to Holders;


 


(5)                                  to
make any change that would provide any additional rights or benefits to the
Holders or that does not adversely affect the rights under this Indenture of
any such Holder;


 


(6)                                  to
add covenants for the benefit of the Holders or to surrender any right or power
conferred in this Indenture upon the Company;


 


(7)                                  to
comply with requirements of the Commission in order to effect or maintain the
qualification of this Indenture under the Trust Indenture Act;


 


(8)                                  to
evidence and provide for the acceptance and appointment under this Indenture of
a successor Trustee pursuant to the requirements of Sections 609 and 610;


 


(9)                                  to
provide for the issuance of exchange notes or private exchange notes, which are
identical to exchange notes except that they are not freely transferrable;


 


(10)                            to
add a Guarantor under this Indenture or the Security Documents or to release
Parent’s Guarantee or to add additional assets as Collateral or to release
assets as Collateral pursuant to a termination permitted by this Indenture;


 


(11)                            to
conform the text of this Indenture, the Security Documents, the Intercreditor
Agreement, the Guarantees or the Notes to any provision of the “Description of
notes” section of the Offering Memorandum to the extent that such provision in
the “Description of notes” was intended to be a verbatim recitation of a
provision of this Indenture, the Security Documents, the Intercreditor
Agreement, the Guarantees or the Notes;


 


(12)                            in
the case of the Intercreditor Agreement, in order to subject the security
interests in the Collateral in respect of any Other Pari Passu Lien Obligations
and Lenders Debt to the terms of the Intercreditor Agreement, in each case to
the extent the incurrence of such Indebtedness, and the grant of all Liens on
the Collateral held for the benefit of such Indebtedness were permitted
hereunder; or


 


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(13)                            to
secure Other Pari Passu Lien Obligations permitted to be incurred pursuant to
this Indenture by Liens ranking pari passu with the Liens securing the Notes
and the Guarantees.


 


SECTION 902.                                       Amendments,
Supplements or Waivers with Consent of Holders.


 


With the consent of the Holders of not less
than a majority in principal amount of the Outstanding Notes, by Act of said
Holders delivered to the Company and the Trustee, the Company, any Guarantor
(with respect to any Guarantee or this Indenture to which it is a party), when
authorized by Board Resolutions of their respective Board of Directors, and the
Trustee may amend or supplement this Indenture, the Security Documents, the
Intercreditor Agreement, any Guarantee or the Notes for the purpose of adding
any provisions hereto or thereto, changing in any manner or eliminating any of
the provisions or of modifying in any manner the rights of the Holders hereunder
or thereunder and any existing Default, Event of Default or compliance with any
provision of this Indenture or the Notes may be waived with the consent of the
Holders of not less than a majority in principal amount of the Outstanding
Notes, other than Notes beneficially owned by the Company or its Affiliates
(including, without limitation, consents obtained in connection with a purchase
of or tender offer or exchange offer for Notes); provided,
however, that no such amendment, supplement
or waiver shall, without the consent of the Holder of each Outstanding Note affected
thereby:


 


(1)                                  reduce
the principal amount of Notes whose Holders must consent to an amendment,
supplement or waiver,


 


(2)                                  reduce
the principal of or change the Maturity of any such Note or alter or waive the
provisions with respect to the redemption of the Notes (other than Sections
1017 and 1018),


 


(3)                                  reduce
the rate of or change the time for payment of interest on any Note,


 


(4)                                  waive
a Default or Event of Default in the payment of principal of or premium, if
any, or interest on the Notes issued under this Indenture, except a rescission
of acceleration of the Notes by the Holders of at least a majority in aggregate
principal amount of such Notes and a waiver of the payment default that
resulted from such acceleration, or in respect of a covenant or provision
contained in this Indenture or any guarantee which cannot be amended or
modified without the consent of all Holders,


 


(5)                                  make
any Note payable in money other than that stated in such Notes,


 


(6)                                  make
any change in Section 513 or the rights of Holders to receive payments of
principal of or premium, if any, or interest on the Notes,


 


(7)                                  make
any change in these amendment, supplement and waiver provisions,


 


(8)                                  impair
the right of any Holder to receive payment of principal of, or interest on such
Holder’s Notes on or after the due dates therefor or to institute suit for the
enforcement of any payment on or with respect to such Holder’s Notes,


 


(9)                                  make
any change in any Security Document, any Intercreditor Agreement or the provisions
in this Indenture dealing with the Collateral or the Security Documents or the
application of trust proceeds of the Collateral that would adversely affect the
Holders in any material respect or release all or substantially all of the
Collateral from the Liens of the Security Documents (except as permitted by the
terms of this Indenture, the Security Documents and the Intercreditor
Agreement) or change or alter the priority of the security interests in the
Collateral, or


 


(10)                            make
any change to or modify the ranking of the Notes that would adversely affect
the Holders.


 


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SECTION 903.                                       Execution
of Amendments, Supplements or Waivers.


 


In executing, or accepting the additional
trusts created by, any amendment, supplement or waiver permitted by this Article or
the modifications thereby of the trusts created by this Indenture, the Trustee
shall be provided with, and shall be fully protected in relying upon, an
Officers’ Certificate and Opinion of Counsel stating that the execution of such
amendment, supplement or waiver is authorized or permitted by this
Indenture.  The Trustee may, but shall
not be obligated to, enter into any such amendment, supplement or waiver which
affects the Trustee’s own rights, duties or immunities under this Indenture or
otherwise.


 


SECTION 904.                                       Effect
of Amendments, Supplements or Waivers.


 


Upon the execution of any supplemental
indenture under this Article, this Indenture shall be modified in accordance
therewith, and such amendment, supplement or waiver shall form a part of this
Indenture for all purposes; and every Holder of Notes theretofore or thereafter
authenticated and delivered hereunder shall be bound thereby.


 


SECTION 905.                                       Conformity
with Trust Indenture Act.


 


Every supplemental indenture executed
pursuant to the Article shall conform to the requirements of the Trust
Indenture Act as then in effect.


 


SECTION 906.                                       Reference
in Notes to Supplemental Indentures.


 


Notes authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and
shall if required by the Trustee, bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental indenture.  If the Company shall so determine, new Notes
so modified as to conform, in the opinion of the Trustee and the Company, to
any such supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding Notes.


 


SECTION 907.                                       Notice
of Supplemental Indentures.


 


Promptly after the execution by the Company,
any Guarantor and the Trustee of any supplemental indenture pursuant to the provisions
of Section 902, the Company shall give notice thereof to the Holders of
each Outstanding Note affected, in the manner provided for in Section 106,
setting forth in general terms the substance of such supplemental indenture.


 


ARTICLE TEN


 


COVENANTS


 


SECTION 1001.                                 Payment
of Principal, Premium, if Any, and Interest.


 


The Company covenants and agrees for the
benefit of the Holders that it will duly and punctually pay the principal of
(and premium, if any) and interest on the Notes in accordance with the terms of
the Notes and this Indenture.


 


SECTION 1002.                                 Maintenance
of Office or Agency.


 


The Company will maintain in the Borough of
Manhattan, The City of New York, an office or agency where Notes may be
presented or surrendered for payment, where Notes may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Notes and this Indenture may be served.  The designated office of the Trustee shall be
such office or agency of the Company, unless the Company shall designate and
maintain some other office or agency for one or more of such purposes.  The Company will give prompt written notice
to the Trustee of any change in the location of any such office or agency.  If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish 


 


67

















 


the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office of the Trustee, and the
Company hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.


 


The Company may also from time to time
designate one or more other offices or agencies (in or outside of the Borough
of Manhattan, The City of New York) where the Notes may be presented or surrendered
for any or all such purposes and may from time to time rescind any such
designation; provided, however,
that no such designation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in the Borough of Manhattan,
The City of New York for such purposes. 
The Company will give prompt written notice to the Trustee of any such
designation or rescission and any change in the location of any such other
office or agency.


 


SECTION 1003.                                 Money
for Notes Payments to Be Held in Trust.


 


If the Company shall at any time act as its
own Paying Agent, it will, on or before each due date of the principal of (or
premium, if any) or interest on any of the Notes, segregate and hold in trust
for the benefit of the Persons entitled thereto a sum sufficient to pay the
principal of (or premium, if any) or interest so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein provided and
will promptly notify the Trustee of its action or failure so to act.


 


Whenever the Company shall have one or more
Paying Agents for the Notes, it will, on or before each due date of the
principal of (or premium, if any) or interest on any Notes, deposit with a
Paying Agent a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest, and (unless such
Paying Agent is the Trustee) the Company will promptly notify the Trustee of
such action or any failure so to act.


 


The Company will cause each Paying Agent
(other than the Trustee) to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will:


 


(1)                                  hold
all sums held by it for the payment of the principal of (and premium, if any)
or interest on Notes in trust for the benefit of the Persons entitled thereto
until such sums shall be paid to such Persons or otherwise disposed of as
herein provided;


 


(2)                                  give
the Trustee notice of any default by the Company (or any other obligor upon the
Notes) in the making of any payment of principal (and premium, if any) or interest;
and


 


(3)                                  at
any time during the continuance of any such default, upon the written request
of the Trustee, forthwith pay to the Trustee all sums so held in trust by such
Paying Agent.


 


The Company may at any time, for the purpose
of obtaining the satisfaction and discharge of this Indenture or for any other
purpose, pay, or by Company Order direct any Paying Agent to pay, to the
Trustee all sums held in trust by the Company or such Paying Agent, such sums
to be held by the Trustee upon the same trusts as those upon which such sums
were held by the Company or such Paying Agent; and, upon such payment by any
Paying Agent to the Trustee, such Paying Agent shall be released from all further
liability with respect to such sums.


 


Any money deposited with the Trustee or any
Paying Agent, or then held by the Company, in trust for the payment of the
principal of (or premium, if any) or interest on any Note and remaining
unclaimed for two years after such principal, premium or interest has become
due and payable shall be paid to the Company on Company Request, or (if then
held by the Company) shall be discharged from such trust; and the Holder of
such Note shall thereafter, as an unsecured general creditor, look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
Trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, shall at the expense of the Company cause
to be published once, in a newspaper published in the English language,
customarily published on each Business Day and of general circulation in the 


 


68

















 


Borough of
Manhattan, The City of New York, notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.


 


SECTION 1004.                                 Corporate
Existence.


 


Subject to Article Eight, the Company
will do or cause to be done all things necessary to preserve and keep in full
force and effect the corporate existence and that of each Restricted Subsidiary
and the corporate rights (charter and statutory) and franchises of the Company
and each Restricted Subsidiary; provided, however, that the Company shall not be required to preserve
any such right or franchise if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and its Subsidiaries as a whole.


 


SECTION 1005.                                 Payment
of Taxes and Other Claims.


 


The Company will pay or discharge or cause to
be paid or discharged, before the same shall become delinquent, (a) all
taxes, assessments and governmental charges levied or imposed upon the Company
or any Subsidiary or upon the income, profits or property of the Company or any
Subsidiary and (b) all lawful claims for labor, materials and supplies,
which, if unpaid, might by law become a lien upon the property of the Company
or any Subsidiary; provided, however, that the Company shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith
by appropriate proceedings and for which appropriate reserves, if necessary (in
the good faith judgment of management of the Company) are being maintained in
accordance with GAAP.


 


SECTION 1006.                                 Maintenance
of Properties.


 


The Company will cause all properties owned
by the Company or any Restricted Subsidiary or used or held for use in the
conduct of its business or the business of any Restricted Subsidiary to be
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment and will cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of the Company may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
provided, however,
that nothing in this Section shall prevent the Company from discontinuing
the maintenance of any of such properties if such discontinuance is, in the
judgment of the Company, desirable in the conduct of its business or the business
of any Restricted Subsidiary.


 


SECTION 1007.                                 Insurance.


 


(a)                                  The
Company will at all times keep all of its and its Subsidiaries properties which
are of an insurable nature insured with insurers, believed by the Company to be
responsible, against loss or damage to the extent that property of similar
character is usually so insured by corporations similarly situated and owning
like properties.


 


(b)                                 The Company and Guarantors (i) will
cause any insurance policies covering any Collateral to be endorsed or
otherwise amended to include a customary lender’s loss payable endorsement, in
form and substance reasonably satisfactory to the Trustee, which endorsement
shall provide that, from and after the Issue Date, if the insurance carrier
shall have received written notice from the Trustee of the occurrence of an
Event of Default, the insurance carrier shall pay all proceeds otherwise
payable to the Company and the Guarantors under such policies directly to the
Trustee; (ii) will cause all such policies to provide that neither the
Company, the Trustee nor any other party shall be a coinsurer thereunder and to
contain a “Replacement Cost Endorsement,” without any deduction for
depreciation, and such other provisions as the Trustee may reasonably require
from time to time to protect their interests; deliver original or certified
copies of all such policies to the Trustee; cause each such policy to provide
that it shall not be canceled, modified or not renewed (x) by reason of
nonpayment of premium upon not less than 10 days’ prior written notice thereof
by the insurer to the Trustee (giving the Trustee the right to cure defaults in
the payment of premiums) or (y) for any other reason upon not less than 30
days’ prior written notice thereof by the insurer to the Trustee; and (iii) will
deliver to the Trustee, prior to the cancellation, modification or 


 


69

















 


nonrenewal of any such policy of insurance, a
draft copy of a renewal or replacement policy (or other evidence of renewal of
a policy previously delivered to the Trustee) and reasonably promptly
thereafter deliver a duplicate original copy of such policy together with evidence
satisfactory to the Trustee of payment of the premium therefor.


 


(c)                                  The Company and the
Guarantors will notify the Trustee promptly whenever any separate insurance
concurrent in form or contributing in the event of loss with that required to
be maintained under this covenant is taken out by the Company or any Guarantor,
and promptly deliver to the Trustee a duplicate original copy of such policy or
policies.


 


SECTION 1008.                                 Statement
by Officers as to Default.


 


(a)                                  The
Company will deliver to the Trustee within 120 days after the end of each
fiscal year, an Officers’ Certificate stating that a review of the activities
of the Company and its Restricted Subsidiaries during the preceding quarter or
the preceding fiscal year, as the case may be, has been made under the
supervision of the signing officers with a view to determining whether it has
kept, observed, performed and fulfilled, and has caused each of its Restricted
Subsidiaries to keep, observe, perform and fulfill its obligations under this
Indenture and further stating, as to each such officer signing such certificate,
that, to the best of his or her knowledge, the Company during such preceding
quarter or the preceding fiscal year, as the case may be, has kept, observed,
performed and fulfilled, and has caused each of its Restricted Subsidiaries to
keep, observe, perform and fulfill each and every such covenant contained in
this Indenture and no Default or Event of Default occurred during such quarter
or year, as the case may be, and at the date of such certificate there is no
Default or Event of Default which has occurred and is continuing or, if such
signers do know of such Default or Event of Default, the certificate shall
describe its status, with particularity and that, to the best of his or her
knowledge, no event has occurred and remains by reason of which payments on the
account of the principal of or interest, if any, on the Notes is prohibited or
if such event has occurred, a description of the event and what action each is
taking or proposes to take with respect thereto.  The Officers’ Certificate shall also notify
the Trustee should the Company elect to change the manner in which it fixes its
fiscal year-end.  For purposes of this Section 1008(a),
such compliance shall be determined without regard to any period of grace or
requirement of notice under this Indenture.


 


(b)                                 (i) When
any Default or Event of Default has occurred and is continuing under this Indenture,
or (ii) if the trustee for or the holder of any other evidence of
Indebtedness of the Company or any Restricted Subsidiary gives any notice or
takes any other action with respect to a claimed default (other than with respect
to Indebtedness in the principal amount of less than $25,000,000), the Company
shall deliver to the Trustee by registered or certified mail or facsimile
transmission an Officers’ Certificate specifying such event, notice or other
action within five Business Days of its occurrence.


 


SECTION 1009.                                 Reports
and Other Information.


 


The Company shall file with the Commission
(and make available to the Trustee and Holders (without exhibits), without cost
to each Holder, within 15 days after it files with the Commission):


 


(1)                                  within
90 days (or the successor time period then in effect under the rules and
regulations of the Exchange Act) after the end of each fiscal year, annual
reports on Form 10-K, or any successor or comparable form, containing the
information required to be contained therein, or required in such successor or
comparable form;


 


(2)                                  within
45 days (or the successor time period then in effect under the rules and
regulations of the Exchange Act) after the end of each of the first three
fiscal quarters of each fiscal year, reports on Form 10-Q, containing the
information required to be contained therein, or any successor or comparable
form;


 


(3)                                  promptly
from time to time after the occurrence of an event required to be therein reported,
such other reports on Form 8-K, or any successor or comparable form; and


 


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(4)                                  any
other information, documents and other reports which the Company would be required
to file with the Commission if it were subject to Section 13 or 15(d) of
the Exchange Act; provided that the Company shall
not be so obligated to file such reports with the Commission if the Commission
does not permit such filing, in which event the Company shall make available
such information to prospective purchasers of the Notes, in addition to providing
such information to the Trustee and the Holders in each case within 15 days
after the time the Company would be required to file such information with the
Commission, if it were subject to Sections 13 or 15(d) of the Exchange
Act; provided, further,
that nothing herein shall be construed so as to require the Company to include
in such reports any information specified in Rule 3-16 of Regulation S-X
..


 


Delivery of such reports, information and
documents to the Trustee is for informational purposes only and the Trustee’s
receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Company’s compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers’ Certificates).


 


For so long as Parent is a Guarantor of the
Notes, this Indenture will permit the Company to satisfy its obligations under
this Section 1009 with respect to financial information relating to the
Company by furnishing financial information relating to Parent; provided that the same is accompanied by consolidating information
that explains in reasonable detail the differences between the information
relating to Parent, on the one hand, and the information relating to the
Company and the Restricted Subsidiaries on a standalone basis, on the other
hand.


 


SECTION 1010.                                 Limitation
on Restricted Payments.


 


(a)                                 The
Company shall not, and shall not permit any Restricted Subsidiary to, directly
or indirectly:


 


(1)                                 declare
or pay any dividend or make any distribution on account of the Company’s or any
Restricted Subsidiary’s Equity Interests, including any dividend or
distribution payable in connection with any merger or consolidation other than:


 


(A)                              dividends
or distributions by the Company payable in Equity Interests (other than
Disqualified Stock) of the Company or in options, warrants or other rights to
purchase such Equity Interests; or


 


(B)                                dividends
or distributions by a Restricted Subsidiary so long as, in the case of any
dividend or distribution payable on or in respect of any class or series of
securities issued by a Restricted Subsidiary other than a Wholly Owned
Subsidiary, the Company or a Restricted Subsidiary receives at least its pro
rata share of such dividend or distribution in accordance with its Equity
Interests in such class or series of securities;


 


(2)                                 purchase,
redeem, defease or otherwise acquire or retire for value any Equity Interests
of the Company or any direct or indirect parent of the Company, including in
connection with any merger or consolidation;


 


(3)                                 make
any principal payment on, or redeem, repurchase, defease or otherwise acquire
or retire for value in each case, prior to any scheduled repayment, sinking
fund payment or maturity, any Convertible Notes, any Additional Convertible
Notes or Subordinated Indebtedness, or return any portion of the Posted Cash
other than


 


(x)                                   Indebtedness
permitted under clauses (8) and (9) of Section 1011(b) or


 


(y)                                 the
purchase, repurchase or other acquisition of Subordinated Indebtedness purchased
in anticipation of satisfying a sinking fund obligation, principal installment
or final maturity, in each case due within one year of the date of purchase,
repurchase or acquisition; or


 


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(4)                                 make
any Restricted Investment;


 


(all such payments and other actions set forth in clauses (1) through
(4) above being collectively referred to as “Restricted Payments”),
unless, at the time of such Restricted Payment:


 


(A)                             no
Default or Event of Default shall have occurred and be continuing or would
occur as a consequence thereof;


 


(B)                               immediately
after giving effect to such transaction on a pro forma basis, the Company could
incur $1.00 of additional Indebtedness under Section 1011(a); and


 


(C)                               such
Restricted Payment, together with the aggregate amount of all other Restricted
Payments made by the Company and its Restricted Subsidiaries after the Issue
Date (including Restricted Payments permitted by clauses (1), (2) (with
respect to the payment of dividends on Refunding Capital Stock pursuant to
clause (B) thereof only), (5), (6)(A) and (9) of Section 1010(b),
but excluding all other Restricted Payments permitted by Section 1010(b)),
is less than the sum of:


 


(1)                                 50%
of the Consolidated Net Income of the Company for the period (taken as one
accounting period) from the beginning of the first fiscal quarter commencing
after the Issue Date, to the end of the Company’s most recently ended fiscal
quarter for which internal financial statements are available at the time of
such Restricted Payment, or, in the case such Consolidated Net Income for such
period is a deficit, minus 100% of such deficit, plus


 


(2)                                 100%
of the aggregate net cash proceeds and the fair market value, as determined in
good faith by the Board of Directors, of marketable securities or other
property received by the Company since immediately after the Issue Date (other
than net cash proceeds to the extent such net cash proceeds have been used to
incur Indebtedness, Disqualified Stock or preferred stock pursuant to Section 1011(b)(14)
from the issue or sale of:


 


(x)                                  Equity
Interests of the Company, including Retired Capital Stock (as defined below),
but excluding cash proceeds and the fair market value, as determined in good
faith by the Board of Directors, of marketable securities or other property
received from the sale of:


 


(A)                              Equity
Interests to members of management, directors or consultants of the Company,
any direct or indirect parent of the Company and the Company’s Subsidiaries
after the Issue Date to the extent such amounts have been applied to Restricted
Payments made in accordance with Section 1010(b)(4) and


 


(B)                                Designated
Preferred Stock


 


and to the extent
actually contributed to the Company, Equity Interests of the Company’s direct
or indirect parents (excluding contributions of the proceeds from the sale of
Designated Preferred Stock of such corporations) or


 


(y)                                debt
securities of the Company that have been converted into such Equity Interests
of the Company or its direct or indirect parents; provided,
however, that this clause (2) shall
not include the proceeds from (a) Refunding Capital Stock (as defined below),
(b) Equity Interests or converted debt securities of the Company sold to a
Restricted Subsidiary or the Company, as the case may be, (c) Disqualified
Stock or debt securities that have been converted into Disqualified Stock or (d) Excluded
Contributions, plus


 


(3)                                 100%
of the aggregate amount of cash and the fair market value, as determined in
good faith by the Board of Directors, of marketable securities or other
property contributed to


 


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the capital of the Company
following the Issue Date (other than net cash proceeds to the extent such net
cash proceeds have been used to incur Indebtedness, Disqualified Stock or
preferred stock pursuant to Section 1011(b)(14)) (other than by a
Restricted Subsidiary and other than by any Excluded Contributions), plus


 


(4)                                 100%
of the aggregate amount received in cash and the fair market value, as determined
in good faith by the Board of Directors, of marketable securities or other
property received by the Company or a Restricted Subsidiary by means of


 


(A)                              the
sale or other disposition (other than to the Company or a Restricted
Subsidiary) of Restricted Investments made by the Company and its Restricted
Subsidiaries and repurchases and redemptions of such Restricted Investments
from the Company and its Restricted Subsidiaries and repayments of loans or
advances which constitute Restricted Investments by the Company and its
Restricted Subsidiaries, in each case after the Issue Date, or


 


(B)                                the
sale (other than to the Company or a Restricted Subsidiary) of the stock of an
Unrestricted Subsidiary (other than in each case to the extent the Investment
in such Unrestricted Subsidiary was made by the Company or a Restricted Subsidiary
pursuant to clause (10) of Section 1010(b) or to the extent such
Investment constituted a Permitted Investment) or a dividend or distribution
from an Unrestricted Subsidiary in each case after the Issue Date: plus


 


(5)                                 in
the case of the redesignation of an Unrestricted Subsidiary as a Restricted
Subsidiary, the fair market value of the Investment in such Unrestricted
Subsidiary, as determined by the Board of Directors in good faith or if, in the
case of an Unrestricted Subsidiary, such fair market value may exceed $25.0
million, in writing by an independent investment banking firm of nationally
recognized standing, at the time of the redesignation of such Unrestricted
Subsidiary as a Restricted Subsidiary, other than an Unrestricted Subsidiary to
the extent the Investment in such Unrestricted Subsidiary was made by the
Company or a Restricted Subsidiary pursuant to clause (10) of Section 1010(b) or
to the extent such Investment constituted a Permitted Investment.


 


(b)                                The
foregoing provisions shall not prohibit:


 


(1)                                 the
payment of any dividend or distribution within 60 days after the date of
declaration thereof, if at the date of declaration such payment would have
complied with the provisions of this Indenture;


 


(2)                                 (A) the
redemption, repurchase, retirement or other acquisition of any Equity Interests
of the Company (“Retired Capital Stock”) or Subordinated Indebtedness of the
Company or a Subsidiary Guarantor, or any Equity Interests of any direct or
indirect parent of the Company, in exchange for, or out of the proceeds of the
substantially concurrent sale (other than to a Restricted Subsidiary) of,
Equity Interests of Parent (in each case, other than any Disqualified Stock) (“Refunding
Capital Stock”) and (B) if immediately prior to the retirement of Retired
Capital Stock, the Company and the Restricted Subsidiaries would have had a
Fixed Charge Coverage Ratio of at least 2.00 to 1.00, the declaration and
payment of dividends on the Refunding Capital Stock (other than Refunding
Capital Stock the proceeds of which were used to redeem, repurchase, retire or
otherwise acquire any Equity Interests of any direct or indirect parent of the
Company) in an aggregate amount per year no greater than the aggregate amount
of dividends per annum that was declarable and payable on such Retired Capital
Stock immediately prior to such retirement;


 


(3)                                 the
redemption, repurchase or other acquisition or retirement of the Convertible
Notes, Additional Convertible Notes and Subordinated Indebtedness of the
Company or a Subsidiary Guarantor made by exchange for, or out of the proceeds
of the substantially concurrent sale of, new Indebtedness of the Company or a
Subsidiary Guarantor, as the case may be, which is incurred in compliance with Section 1011
so long as


 


73

















 


(A)                              the
principal amount of such new Indebtedness does not exceed the principal amount
of the Convertible Notes, Additional Convertible Notes or Subordinated
Indebtedness being so redeemed, repurchased, acquired or retired for value,
plus the amount of any reasonable premium required to be paid under the terms
of the instrument governing the Convertible Notes, Additional Convertible Notes
or Subordinated Indebtedness being so redeemed, repurchased, acquired or
retired and any reasonable fees and expenses incurred in connection with the
issuance of such new Indebtedness,


 


(B)                                in
the case of Convertible Notes and Additional Convertible Notes, such Indebtedness
has Pari Passu Lien Priority relative to the Convertible Notes and in the case
of Subordinated Indebtedness, such Indebtedness is subordinated to the Notes or
the applicable Guarantee at least to the same extent as such Subordinated
Indebtedness so purchased, exchanged, redeemed, repurchased, acquired or
retired for value,


 


(C)                                such
Indebtedness has a final scheduled maturity date equal to or later than the
final scheduled maturity date of the Convertible Notes, Additional Convertible
Notes or Subordinated Indebtedness being so redeemed, repurchased, acquired or
retired and


 


(D)                               such
Indebtedness has a Weighted Average Life to Maturity equal to or greater than
the remaining Weighted Average Life to Maturity of the Convertible Notes,
Additional Convertible Notes or Subordinated Indebtedness being so redeemed,
repurchased, acquired or retired;


 


(4)                                 a
Restricted Payment to pay for the repurchase, retirement or other acquisition
or retirement for value of common Equity Interests of the Company or any of its
direct or indirect parents or any Management Notes held by any future, present
or former employee, director or consultant of the Company, any of its
Subsidiaries or any of its direct or indirect parents pursuant to any
management equity plan or stock option plan or any other management or employee
benefit plan or agreement; provided, however, that the aggregate Restricted Payments made under
this clause (4) do not exceed in any calendar year $10.0 million (with
unused amounts in any calendar year being carried over to succeeding calendar
years subject to a maximum (without giving effect to the following proviso) of
$25.0 million in any calendar year); provided further that
such amount in any calendar year may be increased by an amount not to exceed


 


(A)                              the
cash proceeds from the sale of Equity Interests (other than Disqualified Stock)
of the Company and, to the extent contributed to the Company, Equity Interests
of any of the Company’s direct or indirect parents, in each case to members of
management, directors or consultants of the Company, any of its Subsidiaries or
any of its direct or indirect parents that occurred after the Issue Date, to
the extent the cash proceeds from the sale of such Equity Interests have not
otherwise been applied to the payment of Restricted Payments by virtue of Section 1010(a)(C);
plus


 


(B)                                the
cash proceeds of key man life insurance policies received by the Company and
its Restricted Subsidiaries after the Issue Date; less


 


(C)                                the
amount of any Restricted Payments previously made pursuant to clauses (A) and
(B) of this Section 1010(b)(4);


 


(5)                                 the
declaration and payment of dividends to holders of any class or series of
Disqualified Stock of the Company or any other Restricted Subsidiary issued in
accordance with the covenant described under Section 1011 to the extent
such dividends are included in the definition of Fixed Charges;


 


(6)                                 (A) the
declaration and payment of dividends to holders of any class or series of Designated
Preferred Stock (other than Disqualified Stock) issued by the Company after the
Issue Date; provided that the aggregate amount of
dividends paid pursuant to this clause (A) shall not exceed the aggregate
amount of cash actually received by the Company from the sale of such
Designated Preferred Stock; or


 


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(B)                               the
declaration and payment of dividends to a direct or indirect parent of the
Company, the proceeds of which will be used to fund the payment of dividends to
holders of any class or series of Designated Preferred Stock (other than
Disqualified Stock) of such parent issued after the Issue Date, provided that the amount of dividends paid pursuant to this
clause (B) shall not exceed the aggregate amount of cash actually
contributed to the Company from the sale of such Designated Preferred Stock;


 


provided, however, in the case of each of (A) and (B) of
this clause (6), that for the most recently ended four full fiscal quarters for
which internal financial statements are available immediately preceding the
date of issuance of such Designated Preferred Stock, after giving effect to
such issuance on a pro forma basis, the Company and the Restricted Subsidiaries
would have had a Fixed Charge Coverage Ratio of at least 2.00 to 1.00;


 


(7)                                 Investments
in Unrestricted Subsidiaries having an aggregate fair market value, taken together
with all other Investments made pursuant to this clause (7) that are at
the time outstanding, without giving effect to the sale of an Unrestricted
Subsidiary to the extent the proceeds of such sale do not consist of cash
and/or marketable securities, not to exceed $25.0 million at the time of such
Investment (with the fair market value of each Investment being measured at the
time made and without giving effect to subsequent changes in value);


 


(8)                                 repurchases
of Equity Interests deemed to occur upon exercise of stock options or warrants
if such Equity Interests represent a portion of the exercise price of such
options or warrants;


 


(9)                                 the
payment of dividends on the Company’s Common Stock after the Issue Date, of up
to 6% per annum of the net proceeds received by or contributed to the Company
in any public offering, other than public offerings with respect to Parent’s
Common Stock registered on Form S-8 and other than any public sale
constituting an Excluded Contribution;


 


(10)                           Investments
that are made with Excluded Contributions;


 


(11)                           other
Restricted Payments in an aggregate amount taken together with all other Restricted
Payments made pursuant to this clause (11) not to exceed $30.0 million;


 


(12)                           the
declaration and payment of dividends by the Company to, or the making of loans
to, its direct parent in amounts required for either of their respective direct
or indirect parents to pay:


 


(A)                              franchise
taxes and other fees, taxes and expenses required to maintain their corporate
existence,


 


(B)                                federal,
state and local income taxes, to the extent such income taxes are attributable
to the income of the Company and the Restricted Subsidiaries and, to the extent
of the amount actually received from its Unrestricted Subsidiaries, in amounts
required to pay such taxes to the extent attributable to the income of such
Unrestricted Subsidiaries,


 


(C)                                customary
salary, bonus and other benefits payable to officers and employees of any
direct or indirect parent of the Company to the extent such salaries, bonuses
and other benefits are attributable to the ownership or operation of the
Company and the Restricted Subsidiaries, and


 


(D)                               general
corporate overhead expenses of any direct or indirect parent of the Company to
the extent such expenses are attributable to the ownership or operation of the
Company and the Restricted Subsidiaries;


 


(13)                           distributions
or payments of Receivables Fees;


 


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(14)                           return
of a portion of the Posted Cash to Sealy Holding LLC solely upon issuance
of the Convertible Notes and solely to the extent of and with the net cash
proceeds received by the Company from the issuance and sale of Convertible
Notes to persons other than Sealy Holding LLC;


 


(15)                           the
redemption, repurchase or other acquisition or retirement of the Senior Subordinated
Notes;


 


(16)                           the
repurchase, redemption or other acquisition or retirement for value of any Convertible
Notes, Additional Convertible Notes or Subordinated Indebtedness required
pursuant to the provisions similar to those described under Sections 1017 and
1018 hereof; provided that there is a concurrent
or prior Change of Control Offer or Asset Sale Offer, as applicable, and all
Notes tendered by holders of the Notes in connection with such Change of
Control Offer or Asset Sale Offer, as applicable, have been repurchased, redeemed
or acquired for value; and


 


(17)                           the
repurchase, redemption or other acquisition or retirement for value of any Convertible
Notes or Additional Convertible Notes made in exchange for Parent’s Common
Stock pursuant to the indenture governing the Convertible Notes and Additional
Convertible Notes;


 


provided, however, that at the time of, and after giving effect to,
any Restricted Payment permitted under clauses (5), (6), (11) and (15) of this Section 1010(b),
no Default or Event of Default shall have occurred and be continuing or would
occur as a consequence thereof.


 


(c)                                 As
of the time of issuance of the Notes, all of the Company’s Subsidiaries shall
be Restricted Subsidiaries.  The Company
shall not permit any Unrestricted Subsidiary to become a Restricted Subsidiary
except pursuant to the last sentence of the definition of “Unrestricted
Subsidiary” in Section 101 of this Indenture.  For purposes of designating any Restricted
Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by the
Company and its Restricted Subsidiaries (except to the extent repaid) in the
Subsidiary so designated shall be deemed to be Restricted Payments in an amount
determined as set forth in the last sentence of the definition of “Investment.”  Such designation will be permitted only if a
Restricted Payment in such amount would be permitted at such time, whether
pursuant to Section 1010(a) or under clauses (7), (10) or (11)
of Section 1010(b), or pursuant to the definition of “Permitted
Investments,” and if such Subsidiary otherwise meets the definition of an
Unrestricted Subsidiary.  Unrestricted
Subsidiaries shall not be subject to any of the restrictive covenants set forth
in this Indenture.  Notwithstanding
anything to the contrary, the Company will not and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, return any portion of the
Posted Cash except pursuant to clause (14) above.


 


SECTION 1011.                                 Limitation
on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred
Stock.


 


(a)                                 The
Company shall not, and shall not permit any Restricted Subsidiary to, directly
or indirectly, create, incur, issue, assume, guarantee or otherwise become
directly or indirectly liable, contingently or otherwise, (collectively, “incur”
and collectively, an “incurrence”) with respect to any Indebtedness (including
Acquired Indebtedness) and the Company shall not issue any shares of
Disqualified Stock and shall not permit any Restricted Subsidiary to issue any
shares of Disqualified Stock or preferred stock; provided,
however, that the Company may incur
Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified
Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired
Indebtedness), issue shares of Disqualified Stock and issue shares of preferred
stock, if the Fixed Charge Coverage Ratio for Parent and its subsidiaries, most
recently ended four full fiscal quarters for which internal financial
statements are available immediately preceding the date on which such
additional Indebtedness is incurred or such Disqualified Stock or preferred
stock is issued would have been at least 2.00 to 1.00, determined on a pro
forma basis (including a pro forma application of the net proceeds therefrom),
as if the additional Indebtedness had been incurred, or the Disqualified Stock
or preferred stock had been issued, as the case may be, and the application of
proceeds therefrom had occurred at the beginning of such four-quarter period; provided that the amount of Indebtedness (other than
Acquired Indebtedness), Disqualified Stock and preferred stock that may be
incurred pursuant to the foregoing by Restricted Subsidiaries that are not
Guarantors of the Notes shall not exceed $35.0 million at any one time outstanding.


 


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(b)                                The
foregoing limitations shall not apply to:


 


(1)                                 the
incurrence of Indebtedness of the Company or any of the Restricted Subsidiaries
under Credit Facilities in an aggregate amount at any time outstanding not to
exceed the greater of (i) $125.0 million and (ii) the Borrowing Base
at the date of such incurrence;


 


(2)                                 unsecured
obligations to Sealy Holding LLC under the Forward Purchase Contract in an
amount not to exceed the Posted Cash (and any PIK Interest in respect thereof),
solely to the extent that the Convertible Notes have not been issued;


 


(3)                                 the
incurrence by the Company and any Guarantor of Indebtedness represented by (i) the
Notes (including any Guarantee) (other than any Additional Notes), (ii) the
Convertible Notes (including any PIK Interest and any guarantee thereof) and (iii) any
Management Notes;


 


(4)                                 Existing
Indebtedness (other than Indebtedness described in clauses (1) and (3) above);


 


(5)                                 Indebtedness
(including Capitalized Lease Obligations), Disqualified Stock and preferred
stock incurred by the Company or any of its Restricted Subsidiaries, to finance
the purchase, lease or improvement of property (real or personal) or equipment
that is used or useful in a Similar Business, whether through the direct
purchase of assets or the Capital Stock of any Person owning such assets, in an
aggregate principal amount which, when aggregated with the principal amount of
all other Indebtedness, Disqualified Stock and preferred stock then outstanding
and incurred pursuant to this clause (5) and including all Refinancing
Indebtedness incurred to refund, refinance or replace any other Indebtedness,
Disqualified Stock and preferred stock incurred pursuant to this clause (5), does
not exceed the greater of (x) $60.0 million and (y) 6.0% of Total Assets;


 


(6)                                 Indebtedness
incurred by the Company or any Restricted Subsidiary constituting reimbursement
obligations with respect to letters of credit issued in the ordinary course of
business, including without limitation letters of credit in respect of workers’
compensation claims, or other Indebtedness with respect to reimbursement type
obligations regarding workers’ compensation claims; provided,
however, that upon the drawing of such
letters of credit or the incurrence of such Indebtedness, such obligations are
reimbursed within 30 days following such drawing or incurrence;


 


(7)                                 Indebtedness
arising from agreements of the Company or a Restricted Subsidiary providing for
indemnification, adjustment of purchase price or similar obligations, in each
case, incurred or assumed in connection with the disposition of any business,
assets or a Subsidiary, other than guarantees of Indebtedness incurred by any
Person acquiring all or any portion of such business, assets or a Subsidiary
for the purpose of financing such acquisition; provided
that the maximum assumable liability in respect of all such Indebtedness shall
at no time exceed the gross proceeds including non-cash proceeds (the fair market
value of such non-cash proceeds being measured at the time received and without
giving effect to any subsequent changes in value) actually received by the
Company and the Restricted Subsidiaries in connection with such disposition;


 


(8)                                 Indebtedness
of the Company to a Restricted Subsidiary; provided that
any such Indebtedness owing to a non-Guarantor is subordinated in right of
payment to the Notes; provided further that
any subsequent issuance or transfer of any Capital Stock or any other event
which results in any such Restricted Subsidiary ceasing to be a Restricted
Subsidiary or any other subsequent transfer of any such Indebtedness (except to
the Company or another Restricted Subsidiary) shall be deemed, in each case to
be an incurrence of such Indebtedness not permitted by this clause (8);


 


(9)                                 Indebtedness
of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that:


 


(A)                              any
such Indebtedness is made pursuant to an intercompany note and


 


77

















 


(B)                                if
a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not the
Company or a Guarantor such Indebtedness is subordinated in right of payment to
the Guarantee of such Guarantor; provided further that
any subsequent transfer of any such Indebtedness (except to the Company or
another Restricted Subsidiary) shall be deemed, in each case to be an incurrence
of such Indebtedness not permitted by this clause (9);


 


(10)                           shares
of preferred stock of a Restricted Subsidiary issued to the Company or another
Restricted Subsidiary; provided that
any subsequent issuance or transfer of any Capital Stock or any other event
which results in any such Restricted Subsidiary ceasing to be a Restricted
Subsidiary or any other subsequent transfer of any such shares of preferred
stock (except to the Company or another Restricted Subsidiary) shall be deemed
in each case to be an issuance of such shares of preferred stock not permitted
by this clause (10);


 


(11)                           Hedging
Obligations (excluding Hedging Obligations entered into for speculative purposes)
for the purpose of limiting:


 


(A)                              interest
rate risk with respect to any Permitted Indebtedness; or


 


(B)                                exchange
rate risk with respect to any currency exchange; or


 


(C)                                commodity
risk;


 


(12)                           obligations
in respect of performance, bid, appeal and surety bonds and completion guarantees
provided by the Company or any Restricted Subsidiary in the ordinary course of
business;


 


(13)                           Indebtedness
of any Guarantor in respect of such Guarantor’s Guarantee;


 


(14)                           Indebtedness,
Disqualified Stock and preferred stock of the Company or any Restricted
Subsidiary not otherwise permitted hereunder in an aggregate principal amount
or liquidation preference which, when aggregated with the principal amount and
liquidation preference of all other Indebtedness, Disqualified Stock and preferred
stock then outstanding and incurred pursuant to this clause (14), does not at
any one time outstanding exceed the sum of:


 


(x)                                   $125.0
million; and


 


(y)                                 100%
of the net cash proceeds received by the Company since immediately after the Issue
Date from the issue or sale of Equity Interests of the Company or cash
contributed to the capital of the Company (in each case other than proceeds of
Disqualified Stock or sales of Equity Interests to the Company or any of its
Subsidiaries) as determined in accordance with clauses (C)(2) and (C)(3) of
Section 1010(a) to the extent such net cash proceeds or cash have not
been applied pursuant to such clauses to make Restricted Payments or to make
other investments, payments or exchanges pursuant to Section 1010(b) or
to make Permitted Investments (other than Permitted Investments specified in
clauses (a) and (c) of the definition thereof);


 


provided, further, however, that
the aggregate amount of Indebtedness, Disqualified Stock and preferred stock
incurred by Restricted Subsidiaries (other than Guarantors) pursuant to this
clause (14) may not exceed $50.0 million outstanding at any one time (it being
understood that any Indebtedness, Disqualified Stock or preferred stock
incurred pursuant to this clause (14) shall cease to be deemed incurred or outstanding
for purposes of this clause (14) but shall be deemed incurred for the purposes
of Section 1011(a) from and after the first date on which the Company
or such Restricted Subsidiary could have incurred such Indebtedness,
Disqualified Stock or preferred stock under Section 1011(a) without
reliance on this clause (14);


 


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(15)                           (A) 
any guarantee by the Company or a Guarantor of Indebtedness or other
obligations of any Restricted Subsidiary so long as the incurrence of such
Indebtedness incurred by such Restricted Subsidiary is permitted under the
terms of this Indenture, or


 


(B)                               any
guarantee by a Restricted Subsidiary of Indebtedness of the Company, provided that such guarantee is incurred in accordance with Section 1015;


 


(16)                           the
incurrence by the Company or any Restricted Subsidiary of Indebtedness, Disqualified
Stock or preferred stock which serves to refund or refinance any Indebtedness,
Disqualified Stock or preferred stock incurred as permitted under Section 1011
(a) and clauses (3) and (4) above, this clause (16) and clause
(17) below or any Indebtedness, Disqualified Stock or preferred stock issued to
so refund or refinance such Indebtedness, Disqualified Stock or preferred stock
including additional Indebtedness, Disqualified Stock or preferred stock
incurred to pay premiums, defeasance costs and fees in connection therewith
(the “Refinancing Indebtedness”) prior to its respective maturity; provided,
however, that such Refinancing Indebtedness


 


(A)                              has
a Weighted Average Life to Maturity at the time such Refinancing Indebtedness
is incurred which is not less than the remaining Weighted Average Life to
Maturity of the Notes, in the case of Refinancing Indebtedness refinancing the
Senior Subordinated Notes, or in all other cases, of the Indebtedness,
Disqualified Stock or preferred stock being refunded or refinanced,


 


(B)                                to
the extent such Refinancing Indebtedness refinances (i) the Senior Subordinates
Notes and related guarantees, such Refinancing Indebtedness is pari passu or subordinated in right of payment to the Notes
and Guarantees, (ii) Indebtedness subordinated or pari passu in
right of payment to the Notes or any Guarantee of the Notes (other than the
Senior Subordinated Notes or related guarantees), such Refinancing Indebtedness
is subordinated or pari passu in
right of payment to the Notes or such Gaurantee at least to the same extent as
the Indebtedness being refinanced or refunded or (iii) Disqualified Stock
or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or
preferred stock, respectively, and


 


(C)                                shall
not include (x) Indebtedness, Disqualified Stock or preferred stock of a
Subsidiary that refinances Indebtedness, Disqualified Stock or preferred stock
of the Company, (y) Indebtedness, Disqualified Stock or preferred stock of
a Subsidiary that is not a Guarantor that refinances Indebtedness, Disqualified
Stock or preferred stock of a Guarantor, or (z) Indebtedness, Disqualified
Stock or preferred stock of the Company or a Restricted Subsidiary that
refinances Indebtedness, Disqualified Stock or preferred stock of an Unrestricted
Subsidiary;


 


(17)                           Indebtedness,
Disqualified Stock or preferred stock of Persons that are acquired by the
Company or any Restricted Subsidiary or merged into the Company or a Restricted
Subsidiary in accordance with the terms of this Indenture; provided that
such Indebtedness, Disqualified Stock or preferred stock is not incurred in
contemplation of such acquisition or merger; provided
further that after giving effect to such acquisition or merger,
either


 


(A)                              the
Company would be permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in Section 1011(a) or


 


(B)                                the
Fixed Charge Coverage Ratio is greater than immediately prior to such acquisition
or merger;


 


(18)                           Indebtedness
arising from the honoring by a bank or other financial institution of a check,
draft or similar instrument drawn against insufficient funds in the ordinary
course of business, provided that
such Indebtedness is extinguished within two Business Days of its incurrence;


 


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(19)                           Indebtedness
of Foreign Subsidiaries in an aggregate amount not to exceed $15.0 million
at any time outstanding; provided
that Indebtedness under this clause (19) may be incurred under any Credit
Facility;


 


(20)                           Indebtedness
of the Company or any Restricted Subsidiary supported by a letter of credit
issued pursuant to the Credit Agreement, in a principal amount not in excess of
the stated amount of such letter of credit; and


 


(21)                           Indebtedness
of the Company or any Restricted Subsidiary consisting of (i) the financing
of insurance premiums or (ii) take-or-pay obligations contained in supply
arrangements, in each case, in the ordinary course of business.


 


(c)                                 For
purposes of determining compliance with this Section 1011, in the event
that an item of Indebtedness, Disqualified Stock or Preferred Stock meets the
criteria of more than one of the categories of permitted Indebtedness,
Disqualified Stock or Preferred Stock described in clauses (1) or (3) through
(21) of this Section 1011(b) or is entitled to be incurred pursuant
to Section 1011(a), the Company shall, in its sole discretion, classify or
reclassify such item of Indebtedness in any manner that complies with this Section 1011
and such item of Indebtedness, Disqualified Stock or Preferred Stock shall be
treated as having been incurred pursuant to only one of such clauses of this Section 1011(b) or
pursuant to Section 1011(a) except as otherwise set forth in clause
(14) of this Section 1011(b). 
Accrual of interest, the accretion of accreted value and the payment of
interest in the form of additional Indebtedness, Disqualified Stock or
Preferred Stock shall not be deemed to be an incurrence of Indebtedness,
Disqualified Stock or Preferred Stock for purposes of this Section 1011.


 


(d)                                For
purposes of determining compliance with any U.S. dollar-denominated restriction
on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount
of Indebtedness denominated in a foreign currency shall be calculated based on
the relevant currency exchange rate in effect on the date such Indebtedness was
incurred, in the case of term debt, or first committed, in the case of
revolving credit debt; provided that
if such Indebtedness is incurred to refinance other Indebtedness denominated in
a foreign currency, and such refinancing would cause the applicable U.S. dollar
denominated restriction to be exceeded if calculated at the relevant currency
exchange rate in effect on the date of such refinancing, such U.S.
dollar-denominated restriction shall be deemed not to have been exceeded so
long as the principal amount of such refinancing Indebtedness does not exceed
the principal amount of such Indebtedness being refinanced.


 


(e)                                 The
principal amount of any Indebtedness incurred to refinance other Indebtedness,
if incurred in a different currency from the Indebtedness being refinanced,
shall be calculated based on the currency exchange rate applicable to the
currencies in which such respective Indebtedness is denominated that is in
effect on the date of such refinancing.


 


(f)                                   The
Company shall not, and shall not permit any Guarantor to directly or
indirectly, incur any Indebtedness (including Acquired Indebtedness) that is
subordinated or junior in right of payment to any Indebtedness of the Company
or such Guarantor, as the case may be, unless such Indebtedness is expressly
subordinated in right of payment to the Notes or such Guarantor’s Guarantee to
the extent in the same manner as such Indebtedness is subordinated in right of
payment to other Indebtedness of the Company or such Guarantor, as the case may
be.


 


(g)                                (x) Unsecured
Indebtedness shall not be treated as subordinated or junior to secured Indebtedness
merely because it is unsecured and (y) Senior Indebtedness shall not be
treated as subordinated or junior to any other Senior Indebtedness merely
because it has a junior priority with respect to the same collateral.


 


SECTION 1012.                                 Limitation
on Liens.


 


The Company shall not, and shall not permit
any of its Restricted Subsidiaries to, create, incur, assume or otherwise cause
or suffer to exist or become effective any Lien that secures obligations under
any Indebtedness or any related Guarantees (the “Initial Lien”) of any kind
upon any of their property or assets, now owned or hereafter acquired, except:


 


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(1)                                  in
the case of Initial Liens on any Collateral, any Initial Lien if (i) such
Initial Lien expressly has Junior Lien Priority on the Collateral relative to
the Notes; or (ii) such Initial Lien is a Permitted Lien; and


 


(2)                                  in
the case of any other asset or property, any Initial Lien if (i) the Notes
are equally and ratably secured with (or on a senior basis to, in the case such
Initial Lien secures any Subordinated Indebtedness) the obligations secured by
such Initial Lien or (ii) such Initial Lien is a Permitted Lien.


 


Any Lien created for the benefit of the
Holders pursuant to clause (2) of the preceding paragraph shall
provide by its terms that such Lien shall be automatically and unconditionally
released and discharged upon the release and discharge of the Initial Lien,
which release and discharge in the case of any sale of any such asset or property
shall not affect any Lien that the Notes Collateral Agent may have on the
proceeds from such sale.


 


SECTION 1013.                                 Limitations
on Transactions with Affiliates.


 


(a)                                  The
Company shall not, and shall not permit any Restricted Subsidiary to, make any
payment to, or sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or purchase any property or assets from, or enter into
or make or amend any transaction, contract, agreement, understanding, loan,
advance or guarantee with, or for the benefit of, any Affiliate of the Company
(each of the foregoing, an “Affiliate Transaction”)  involving
aggregate payments or consideration in excess of $5.0 million, unless:


 


(1)                                  such
Affiliate Transaction is on terms that are not materially less favorable to the
Company or the relevant Restricted Subsidiary than those that would have been
obtained in a comparable transaction by the Company or such Restricted
Subsidiary with an unrelated Person; and


 


(2)                                  the
Company delivers to the Trustee with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving aggregate payments or
consideration in excess of $10.0 million, a resolution adopted by the majority
of the Board of Directors approving such Affiliate Transaction and set forth in
an Officers’ Certificate certifying that such Affiliate Transaction complies
with clause (1) above.


 


(b)                                 The
foregoing provisions will not apply to the following:


 


(1)                                  transactions
between or among the Company and/or any of the Restricted Subsidiaries;


 


(2)                                  Restricted
Payments permitted by Section 1010 and the definition of “Permitted Investments”;


 


(3)                                  the
payment of management, consulting, monitoring and advisory fees and related expenses
to Kohlberg Kravis Roberts & Co. L.P. and its Affiliates in an
aggregate amount in any fiscal year not to exceed an amount approved by the
disinterested members of the Board of Directors;


 


(4)                                  the
payment of reasonable and customary fees paid to, and indemnities provided on behalf
of, officers, directors, employees or consultants of the Company, any of its
direct or indirect parents or any Restricted Subsidiary;


 


(5)                                  payments
by the Company or any Restricted Subsidiary to Kohlberg Kravis Roberts &
Co. L.P., and its Affiliates made for any financial advisory, financing,
underwriting or placement services or in respect of other investment banking
activities, including, without limitation, in connection with acquisitions or
divestitures which payments are approved by a majority of the Board of
Directors of the Company in good faith;


 


(6)                                  transactions
in which the Company or any Restricted Subsidiary, as the case may be, delivers
to the Trustee a letter from an Independent Financial Advisor stating that such
transaction is fair to the Company or such Restricted Subsidiary from a
financial point of view or meets the requirements of Section 1013(a)(1);


 


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(7)                                  payments
or loans (or cancellation of loans) to employees or consultants of the Company,
any of its direct or indirect parents or any Restricted Subsidiary which are
approved by a majority of the Board of Directors of the Company in good faith;


 


(8)                                  any
agreement as in effect as of the Issue Date (including the Forward Purchase Contract),
or any amendment thereto (so long as any such amendment is not disadvantageous
to the holders in any material respect);


 


(9)                                  the
existence of, or the performance by the Company or any of its Restricted Subsidiaries
of its obligations under the terms of, any stockholders agreement (including
any registration rights agreement or purchase agreement related thereto) to
which it is a party as of the Issue Date and any similar agreements which it
may enter into thereafter; provided, however, that the existence of, or the performance by the
Company or any Restricted Subsidiary of obligations under any future amendment
to any such existing agreement or under any similar agreement entered into
after the Issue Date shall only be permitted by this clause (9) to the
extent that the terms of any such amendment or new agreement are not otherwise
disadvantageous to the Holders in any material respect;


 


(10)                            the
issuance of Convertible Notes or any Management Notes;


 


(11)                            transactions
with customers, clients, suppliers, or purchasers or sellers of goods or services,
in each case in the ordinary course of business and otherwise in compliance
with the terms of this Indenture which are fair to the Company and the
Restricted Subsidiaries, in the reasonable determination of the Board of
Directors of the Company or the senior management thereof, or are on terms at
least as favorable as might reasonably have been obtained at such time from an
unaffiliated party;


 


(12)                            the
issuance of Equity Interests (other than Disqualified Stock) of the Company to
any Permitted Holder or to any director, officer, employee or consultant; and


 


(13)                            sales
of accounts receivable, or participations therein, in connection with any Receivables
Facility.


 


SECTION 1014.                                 Limitations
on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries.


 


The Company shall not, and shall not permit
any Restricted Subsidiary to, directly or indirectly, create or otherwise cause
or suffer to exist or become effective any consensual encumbrance or consensual
restriction on the ability of any such Restricted Subsidiary to:


 


(a)                                  (1) pay
dividends or make any other distributions to the Company or any Restricted Subsidiary
on its Capital Stock or, with respect to any other interest or participation
in, or measured by, its profits, or (2) pay any Indebtedness owed to the
Company or any Restricted Subsidiary;


 


(b)                                 make
loans or advances to the Company or any Restricted Subsidiary; or


 


(c)                                  sell,
lease or transfer any of its properties or assets to the Company or any
Restricted Subsidiary,


 


except (in each case) for such
encumbrances or restrictions existing under or by reason of:


 


(1)                                  contractual
encumbrances or restrictions in effect on the Issue Date, including, without
limitation, pursuant to the Credit Agreement and its related documentation and
the Senior Subordinated Notes and the indenture governing the Senior
Subordinated Notes;


 


(2)                                  this
Indenture, the Notes, the Convertible Notes and any Third Lien Indebtedness and
the indentures related thereto;


 


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(3)           purchase money
obligations for property acquired in the ordinary course of business that
impose restrictions of the nature discussed in clause (c) above on the
property so acquired;


 


(4)           applicable law or
any applicable rule, regulation or order;


 


(5)           any agreement or
other instrument of a Person acquired by the Company or any Restricted
Subsidiary in existence at the time of such acquisition (but not created in
contemplation thereof), which encumbrance or restriction is not applicable to
any Person, or the properties or assets of any Person, other than the Person,
or the property or assets of the Person, so acquired;


 


(6)           contracts for the
sale of assets, including, without limitation, customary restrictions with
respect to a Subsidiary pursuant to an agreement that has been entered into for
the sale or disposition of all or substantially all of the Capital Stock or
assets of such Subsidiary that impose restrictions on the assets to be sold;


 


(7)           secured Indebtedness
otherwise permitted to be incurred pursuant to Sections 1011 and 1012 that
limit the right of the debtor to dispose of the assets securing such Indebtedness;


 


(8)           restrictions on cash
or other deposits or net worth imposed by customers under contracts entered
into in the ordinary course of business;


 


(9)           other Indebtedness,
Disqualified Stock or preferred stock of Foreign Subsidiaries permitted to be
incurred subsequent to the Issue Date pursuant to Section 1011 that impose
restrictions solely on the Foreign Subsidiaries party thereto;


 


(10)         customary provisions
in joint venture agreements and other similar agreements relating solely to
such joint venture;


 


(11)         customary provisions
contained in leases and other agreements entered into in the ordinary course of
business;


 


(12)         any encumbrances or
restrictions of the type referred to in clauses (a), (b) and (c) above
imposed by any amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings of the contracts,
instruments or obligations referred to in clauses (1) through (11) above; provided that such amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or refinancings are,
in the good faith judgment of the Board of Directors of the Company no more
restrictive with respect to such encumbrance and other restrictions than those
prior to such amendment, modification, restatement, renewal, increase,
supplement, refunding, replacement or refinancing; and


 


(13)         restrictions created
in connection with any Receivables Facility that, in the good faith determination
of the Board of Directors of the Company, are necessary or advisable to effect
such Receivables Facility.


 


SECTION 1015.           Limitation on Guarantees of Indebtedness by Restricted
Subsidiaries.


 


(a)           The Company shall not permit any Restricted Subsidiary
that is a Domestic Subsidiary, other than a Guarantor or a special-purpose
Restricted Subsidiary formed in connection with Receivables Facilities, to
guarantee the payment of any Indebtedness of the Company or any other Guarantor
unless:


 


(1)           such Restricted
Subsidiary simultaneously executes and delivers supplemental indentures to this
Indenture providing for a guarantee of payment of the Notes by such Restricted
Subsidiary, except if such Indebtedness is by its express terms subordinated in
right of payment to the Notes or such Guarantor’s Guarantee of the Notes, any
such guarantee of such Restricted Subsidiary with respect to such Indebtedness
shall be subordinated in right of payment to such Restricted Subsidiary’s
Guarantee with respect to the 


 


83





















 


Notes
substantially to the same extent as such Indebtedness is subordinated in right
of payment to the Notes;


 


(2)           such Restricted
Subsidiary waives and shall not in any manner whatsoever claim or take the benefit
or advantage of, any rights of reimbursement, indemnity or subrogation or any
other rights against the Company or any other Restricted Subsidiary as a result
of any payment by such Restricted Subsidiary under its guarantee; and


 


(3)           such Restricted
Subsidiary shall deliver to the Trustee an Opinion of Counsel to the effect
that


 


(A)          such Guarantee of the
Notes has been duly executed and authorized, and


 


(B)           such Guarantee of
the Notes constitutes a valid, binding and enforceable obligation of such
Restricted Subsidiary, except insofar as enforcement thereof may be limited by
bankruptcy, insolvency or similar laws (including, without limitation, all laws
relating to fraudulent transfers) and except insofar as enforcement thereof is
subject to general principles of equity;


 


provided that this Section 1015(a) shall
not be applicable to any guarantee of any Restricted Subsidiary


 


(x)            that
existed at the time such Person became a Restricted Subsidiary and was not
incurred in connection with, or in contemplation of, such Person becoming a
Restricted Subsidiary; or


 


(y)           of
Senior Indebtedness and any refunding, refinancing or replacement thereof, in
each case to the extent it is not incurred pursuant to a registered offering of
securities under the Securities Act or a private placement of securities
(including under Rule 144A) pursuant to an exemption from the registration
requirements of the Securities Act, which private placement provides for
registration rights under the Securities Act.


 


(b)           Notwithstanding the foregoing and the other provisions of
this Indenture, any Guarantee by a Restricted Subsidiary of the Notes shall
provide by its terms that it shall be automatically and unconditionally
released and discharged:


 


(1)           upon any sale,
exchange or transfer (by merger or otherwise) of all of the Company’s Capital
Stock in such Guarantor (including any sale, exchange or transfer following
which the applicable Guarantor is no longer a Restricted Subsidiary) or all or
substantially all the assets of such Guarantor, which sale, exchange or
transfer is made in compliance with the applicable provisions of this Indenture,


 


(2)           upon the release or
discharge of the guarantee by such Restricted Subsidiary which resulted in the
creation of such Guarantee, except a discharge or release by or as a result of
payment under such guarantee,


 


(3)           if such Subsidiary
Guarantor is designated as an Unrestricted Subsidiary or otherwise ceases to be
a Restricted Subsidiary, in each case in accordance with the provisions of this
Indenture, upon effectiveness of such designation or when it first ceases to be
a Restricted Subsidiary, respectively; or


 


(4)           if the Company
exercises its legal defeasance option or its covenant defeasance option as
described under Article Thirteen hereof or if its obligations under this
Indenture are discharged in accordance with the terms of this Indenture.


 


(c)           Notwithstanding any other provisions of this Indenture,
Parent may be released from all of its obligations under its Guarantee and
shall cease to be a Guarantor for all purposes under this Indenture, including
without limitation Article Twelve, at the option of the Company and Parent
at any time following the Issue Date.


 


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SECTION 1016.           [INTENTIONALLY DELETED]


 


SECTION 1017.           Change of Control.


 


(a)           If a Change of Control occurs, the Company shall make an
offer to purchase all of the Notes pursuant to the offer described below (the “Change
of Control Offer”) at a price in cash (the “Change of Control Payment”) equal
to 101% of the aggregate principal amount thereof plus accrued and unpaid
interest to the date of purchase, subject to the right of Holders of record on
the relevant record date to receive interest due on the relevant Interest
Payment Date.  Within 30 days following
any Change of Control, the Company shall send notice of such Change of Control
Offer by first class mail, with a copy to the Trustee, to each Holder to the
address of such Holder appearing in the Note Register with a copy to the
Trustee or otherwise in accordance with the procedures of DTC, with the following
information:


 


(1)           a Change of Control
Offer is being made pursuant to this Section 1017 and that all Notes
properly tendered pursuant to such Change of Control Offer will be accepted for
payment;


 


(2)           the purchase price
and the purchase date, which will be no earlier than 30 days nor later than 60
days from the date such notice is mailed (the “Change of Control Payment Date”);


 


(3)           any Note not
properly tendered will remain outstanding and continue to accrue interest;


 


(4)           unless the Company
defaults in the payment of the Change of Control Payment, all Notes accepted
for payment pursuant to the Change of Control Offer will cease to accrue
interest on the Change of Control Payment Date;


 


(5)           Holders electing to
have any Notes purchased pursuant to a Change of Control Offer will be required
to surrender the Notes, with the form entitled “Option of Holder to Elect
Purchase” on the reverse of the Notes completed, to the Paying Agent specified
in the notice at the address specified in the notice prior to the close of
business on the third business day preceding the Change of Control Payment
Date;


 


(6)           Holders will be
entitled to withdraw their tendered Notes and their election to require the
Company to purchase such Notes, provided that
the Paying Agent receives, not later than the close of business on the last day
of the Change of Control Offer period, a telegram, telex, facsimile transmission
or letter setting forth the name of the Holder of the Notes, the principal
amount of Notes tendered for purchase, and a statement that such Holder is
withdrawing his tendered Notes and his election to have such Notes purchased;


 


(7)           if such notice is
mailed prior to the occurrence of a Change of Control, stating that the Change
of Control Offer is conditional on the occurrence of such Change of Control;
and


 


(8)           that Holders whose
Notes are being purchased only in part will be issued new Notes equal in
principal amount to the unpurchased portion of the Notes surrendered, which
unpurchased portion must be equal to $2,000 in principal amount or an integral
multiple of $1,000 in excess thereof.


 


(b)           While the Notes are in global form and the Company makes
an offer to purchase all of the Notes pursuant to the Change of Control Offer,
a Holder may exercise its option to elect for the purchase of the Notes through
the facilities of Depositary, Euroclear and Clearstream Banking, subject to
their rules and regulations.


 


(c)           Prior to complying with the provisions of this Section 1017,
but in any event within 30 days following a Change of Control, the Company
shall either repay all its outstanding Senior Indebtedness that prohibits it
from repurchasing Notes in a Change of Control Offer or obtain the requisite
consents, if any, under any outstanding Senior Indebtedness in each case
necessary to permit the repurchase of the Notes required by this Section 1017,
provided that the failure to repay such
Indebtedness or obtain such consent shall not affect the obligation to make a
Change of Control Offer.


 


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(d)           The Company shall not be required to make a Change of
Control Offer following a Change of Control if a third party makes the Change
of Control Offer in the manner, at the times and otherwise in compliance with
the requirements set forth in this Indenture applicable to a Change of Control
Offer made by the Company and purchases all notes validly tendered and not withdrawn
under such Change of Control Offer.  Notwithstanding
anything to the contrary herein, a Change of Control Offer may be made in
advance of a Change of Control, conditional upon such Change of Control.


 


(e)           The Company shall comply with the requirements of Section 14(e) under
the Exchange Act and any other securities laws and regulations thereunder to
the extent such laws or regulations are applicable in connection with the
repurchase of the Notes pursuant to a Change of Control Offer.  To the extent that the provisions of any
securities laws or regulations conflict with the provisions of this Indenture,
the Company shall comply with the applicable securities laws and regulations
and shall not be deemed to have breached its obligations described in this Indenture
by virtue thereof.


 


(f)            On the Change of Control Payment Date, the Company shall,
to the extent permitted by law,


 


(1)           accept for payment
all Notes or portions thereof properly tendered pursuant to the Change of Control
Offer,


 


(2)           deposit with the
Paying Agent an amount equal to the aggregate Change of Control Payment in respect
of all Notes or portions thereof so tendered, and


 


(3)           deliver, or cause to
be delivered, to the Trustee for cancellation the Notes so accepted together
with an Officers’ Certificate stating that such Notes or portions thereof have
been tendered to and purchased by the Company.


 


(g)           The Paying Agent shall promptly mail to each Holder the
Change of Control Payment for such Notes, and the Trustee will promptly
authenticate and mail to each Holder a new Note equal in principal amount to
any unpurchased portion of the Notes surrendered, if any; provided,
that each such new Note shall be in a principal amount of $2,000 or an integral
multiple of $1,000 in excess thereof. 
The Company shall publicly announce the results of the Change of Control
Offer on or as soon as practicable after the Change of Control Payment Date.


 


SECTION 1018.           Asset Sales.


 


(a)           The Company shall not, and shall not permit Holdings or
any Restricted Subsidiary to, cause, make or suffer to exist an Asset Sale of
any assets that do not constitute ABL Collateral, unless:


 


(1)           Holdings, the
Company or such Restricted Subsidiary, as the case may be, receives consideration
at the time of such Asset Sale at least equal to the fair market value (as
determined in good faith by the Company) of the assets sold or otherwise
disposed of;


 


(2)           except in the case
of a Permitted Asset Swap, at least 75% of the consideration therefor received
by Holdings, the Company or such Restricted Subsidiary, as the case may be, is
in the form of cash or Cash Equivalents;


 


(3)           to the extent that
any consideration received by Holdings, the Company or a Restricted Subsidiary
in such Asset Sale constitute securities or other assets that constitute
Collateral, such securities or other assets, including the assets of any Person
that becomes a Guarantor as a result of such transaction, are concurrently with
their acquisition added to the Collateral securing the Notes; and


 


(4)           the Net Proceeds
from any such Asset Sale of Notes Collateral is paid directly by the purchaser
thereof to the Notes Collateral Agent to be held in trust in an Asset Sale
Proceeds Account for application in accordance with this Section 1018.


 


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Notwithstanding the foregoing provisions of the
above paragraph, Holdings, the Company and the Restricted Subsidiaries shall
not be required to cause any Net Proceeds to be held in an Asset Sale Proceeds
Account in accordance with clause (4) of the above paragraph except
to the extent the aggregate Net Proceeds from all Asset Sales of Notes
Collateral which are not held in an Asset Sale Proceeds Account, or have not
been previously applied in accordance with the provisions of the following
paragraphs relating to the application of Net Proceeds from Asset Sales of
Notes Collateral, exceeds $5.0 million.


 


Within 365 days after Holdings’, the Company’s
or a Restricted Subsidiary’s receipt of the Net Proceeds of any Asset Sale
covered by this clause (a), Holdings, the Company or such Restricted
Subsidiary, at its option, may apply the Net Proceeds from such Asset Sale:


 


(1)           to
make one or more offers to the Holders of the Notes (and, at the option of the
Company, the holders of Other Pari Passu Lien Obligations) to purchase Notes
(and such Other Pari Passu Lien Obligations) pursuant to and subject to the
conditions contained this Indenture (each, an “Asset Sale Offer”); provided,
however, that in connection with
any prepayment, repayment or purchase of Indebtedness pursuant to this
clause (1), Holdings, the Company or such Restricted Subsidiary shall
permanently retire such Indebtedness and shall cause the related loan
commitment (if any) to be permanently reduced in an amount equal to the principal
amount so prepaid, repaid or purchased; provided
further that if Holdings, the Company or such Restricted Subsidiary
shall so reduce any Other Pari Passu Lien Obligations, the Company shall
equally and ratably reduce Indebtedness under the Notes by making an offer to
all Holders of notes to purchase at a purchase price equal to 100% of the
principal amount thereof, plus accrued and unpaid interest and additional
interest, if any, the pro rata principal amount of the Notes, such offer to be
conducted in accordance with the procedures set forth below for an Asset Sale
Offer but without any further limitation in amount;


 


(2)           to
an investment in (a) any one or more businesses; provided that such Investment in any
business is in the form of the acquisition of Capital Stock and results in the
Company or a Restricted Subsidiary, as the case may be, owning an amount of the
Capital Stock of such business such that it constitutes a Restricted
Subsidiary, (b) capital expenditures or (c) acquisitions of other assets,
in each of (a), (b) and (c), used or useful in a Similar Business; provided, further,
that such investment is concurrently added to the Notes Collateral securing the
Notes;


 


(3)           to
an Investment in (a) any one or more businesses, provided that
such investment in any business is in the form of the acquisition of Capital
Stock and results in the Company or a Restricted Subsidiary, as the case may
be, owning an amount of the Capital Stock of such business such that it
constitutes a Restricted Subsidiary, (b) properties or (c) other
assets that, in each of (a), (b) and (c) replace the businesses,
properties and assets that are the subject of such Asset Sale; provided further that such Investment is concurrently added
to the Notes Collateral securing the Notes; or


 


(4)           to
the extent such Net Proceeds are not from Asset Sales of Collateral, to
permanently reduce Indebtedness of a Restricted Subsidiary that is not a
Guarantor, other than Indebtedness owed to the Company, a Guarantor or another
Restricted Subsidiary.


 


Any Net Proceeds from the Asset Sales covered by
this clause (a) that are not invested or applied as provided and
within the time period set forth in the first sentence of the immediately
preceding paragraph shall be deemed to constitute “Excess Proceeds.”  When the aggregate amount of Excess Proceeds
exceeds $15.0 million, the Company shall make an Asset Sale Offer to all
Holders, and, if required by the terms of any Other Pari Passu Lien
Obligations, to the holders of such Other Pari Passu Lien Obligations, to
purchase the maximum principal amount of Notes and such Other Pari Passu Lien
Obligations, that are $2,000 or an integral multiple of $1,000 in excess
thereof that may be purchased out of the Excess Proceeds at an offer price in
cash in an amount equal to 100% of the principal amount thereof, plus accrued
and unpaid interest, if any, to the date fixed for the closing of such offer,
in accordance with the procedures set forth in this Indenture.  The Company shall commence an Asset Sale
Offer with respect to Excess Proceeds within ten business days after the date
that Excess Proceeds exceeds $15.0 million by mailing the notice required
pursuant to the terms of this Indenture, with a copy to the Trustee.  To the extent that the aggregate amount of Notes
and such Other Pari Passu Lien Obligations tendered pursuant to an Asset Sale
Offer is less 


 


87

















 


than the Excess Proceeds,
the Company may use any remaining Excess Proceeds for general corporate purposes,
subject to other covenants contained in this Indenture.  If the aggregate principal amount of Notes or
the Other Pari Passu Lien Obligations surrendered by such holders thereof
exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and
such Other Pari Passu Lien Obligations to be purchased on a pro rata basis based on the accreted value or principal
amount of the Notes or such Other Pari Passu Lien Obligations tendered.  Upon completion of any such Asset Sale Offer,
the amount of Excess Proceeds shall be reset at zero.  After the Company or any Restricted Subsidiary
has applied the Net Proceeds from any Asset Sale of any Notes Collateral as
provided in, and within the time periods required by, this paragraph (a),
the balance of such Net Proceeds, if any, from such Asset Sale of Notes
Collateral shall be released by the Notes Collateral Agent to the Company or
such Restricted Subsidiary for use by the Company or such Restricted Subsidiary
for any purpose not prohibited by the terms of this Indenture.


 


(b)           The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly consummate an Asset Sale of ABL
Collateral unless:


 


(1)           the
Company or such Restricted Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the fair market
value (as determined in good faith by the Company) of the assets sold or otherwise
disposed of;


 


(2)           except
in the case of a Permitted Asset Swap, at least 75% of the consideration
therefor received by the Company or such Restricted Subsidiary, as the case may
be, is in the form of cash or Cash Equivalents; and


 


(3)           to
the extent that any consideration received by the Company and the Restricted
Subsidiaries in such Asset Sale constitute securities or other assets that
constitute Collateral, such securities or other assets, including the assets of
any Person that becomes a Guarantor as a result of such transaction, are
concurrently with their acquisition added to the Collateral securing the Notes.


 


Within 365 days after the Company’s or
Restricted Subsidiary’s receipt of the Net Proceeds from such Asset Sale, the
Company or such Restricted Subsidiary may at its option do any one or more of
the following:


 


(1)           permanently
reduce (x) any Indebtedness under the Credit Agreement or any Indebtedness
of the Company or a Guarantor that in each case is secured by a Lien on the ABL
Collateral that is prior to the Lien on the ABL Collateral in favor of Holders
or (y) any Indebtedness of a Restricted Subsidiary that is not a
Subsidiary Guarantor (and, in the case of revolving obligations under
clauses (x) or (y), to correspondingly reduce commitments with
respect thereto), in each case other than Indebtedness owed to the Company or a
Subsidiary of the Company;


 


(2)           make
an investment in (a) any one or more businesses; provided
that such investment in any business is in the form of the acquisition of
Capital Stock and results in the Company or a Restricted Subsidiary, as the
case may be, owning an amount of the Capital Stock of such business such that
it constitutes a Restricted Subsidiary, (b) capital expenditures or (c) acquisitions
of other assets, in each of (a), (b) and (c), used or useful in a Similar
Business; provided, further,
that such investment is concurrently added to the Collateral securing the
Notes; and/or


 


(3)           make an investment
in (a) any one or more businesses; provided that
such investment in any business is in the form of the acquisition of Capital
Stock and results in the Company or a Restricted Subsidiary, as the case may
be, owning an amount of the Capital Stock of such business such that it constitutes
a Restricted Subsidiary, (b) properties or (c) other assets that, in
each of (a), (b) and (c) replace the businesses, properties and
assets that are the subject of such Asset Sale; provided,
further, that such investment is concurrently added to the Collateral securing
the Notes.


 


Any Net Proceeds from an Asset Sale of ABL
Collateral that are not invested or applied as provided and within the time
period set forth in the first sentence of the immediately preceding paragraph
shall be deemed to constitute “Excess ABL Proceeds.”  When the aggregate amount of Excess ABL
Proceeds exceeds 


 


88

















 


$15.0 million, the
Company shall make an offer to all Holders, and, if required by the terms of
any Other Pari Passu Lien Obligations, to the holders of such Other Pari Passu
Lien Obligations (an “ABL Asset Sale Offer”), to purchase the maximum principal
amount of Notes and such Other Pari Passu Lien Obligations, that is $2,000 or
an integral multiple of $1,000 in excess thereof that may be purchased out of
the Excess ABL Proceeds at an offer price in cash in an amount equal to 100% of
the principal amount thereof, plus accrued and unpaid interest, if any, to the
date fixed for the closing of such offer, in accordance with the procedures set
forth in this Indenture.  The Company
shall commence an ABL Asset Sale Offer with respect to Excess ABL Proceeds
within ten business days after the date that Excess ABL Proceeds exceeds
$15.0 million by mailing the notice required pursuant to the terms of this
Indenture, with a copy to the Trustee. 
To the extent that the aggregate amount of Notes and such Other Pari
Passu Lien Obligations tendered pursuant to an ABL Asset Sale Offer is less
than the Excess ABL Proceeds, the Company may use any remaining Excess ABL
Proceeds for general corporate purposes, subject to other covenants contained
in this Indenture.  If the aggregate principal
amount of Notes or the Other Pari Passu Lien Obligations surrendered by such
holders thereof exceeds the amount of Excess ABL Proceeds, the Trustee shall
select the Notes and such Other Pari Passu Lien Obligations to be purchased on
a pro rata basis based on the accreted
value or principal amount of the Notes or such Other Pari Passu Lien
Obligations tendered.  Upon completion of
any such ABL Asset Sale Offer, the amount of Excess ABL Proceeds shall be reset
at zero.


 


(c)           Pending the final application of any Net Proceeds pursuant
to clause (b) of this Section 1018, the Company or the
applicable Restricted Subsidiary may apply such Net Proceeds temporarily to
reduce Indebtedness outstanding under a revolving credit facility or otherwise
invest such Net Proceeds in any manner not prohibited by this Indenture.


 


(d)           For the purposes of this Section 1018, any sale by
Holdings, the Company or a Restricted Subsidiary of the Capital Stock of the
Company or a Restricted Subsidiary that owns assets constituting Notes Collateral
or ABL Collateral shall be deemed to be sale of such Notes Collateral or ABL
Collateral (or, in the event of a Restricted Subsidiary that owns assets that
include any combination of Notes Collateral and ABL Collateral a separate sale
of each of such Notes Collateral and ABL Collateral).  In the event of any such sale (or a sale of
assets that includes any combination of Notes Collateral and ABL Collateral),
the proceeds received by Holdings, the Company and the Restricted Subsidiaries
in respect of such sale shall be allocated to the Notes Collateral and ABL
Collateral in accordance with their respective fair market values, which shall
be determined by the Board of Directors of the Company or, at the Company’s
election, an independent third party.  In
addition, for purposes of this Section 1018, any sale by the Company or
any Restricted Subsidiary of the Capital Stock of any Person that owns only ABL
Collateral shall not be subject to paragraph (a) above, but rather
shall be subject to paragraph (b) above.


 


(e)           For purposes of this Section 1018, the following are
deemed to be cash or Cash Equivalents:


 


(1)           any
liabilities (as shown on the Company’s, or such Restricted Subsidiary’s, most
recent balance sheet or in the notes thereto) of the Company or any Restricted
Subsidiary that have Pari Passu Lien Priority or superior Lien priority on the
Collateral relative to the Notes, that are assumed by the transferee of any
such assets and for which the Company and all Restricted Subsidiaries have been
validly released by all creditors in writing;


 


(2)           any
securities received by the Company, a Guarantor or such Restricted Subsidiary
from such transferee that are converted by the Company or such Restricted
Subsidiary into cash (to the extent of the cash received) within 180 days
following the closing of such Asset Sale; and


 


(3)           any
Designated Non-cash Consideration received by the Company or any Restricted Subsidiary
in such Asset Sale having an aggregate fair market value, taken together with
all other Designated Non-cash Consideration received pursuant to this
clause (3) that is at that time outstanding, not to exceed the
greater of (x) $50.0 million and (y) 5.0% of Total Assets at the
time of the receipt of such Designated Non-cash Consideration, with the fair
market value of each item of Designated Non-cash Consideration being measured
at the time received and without giving effect to subsequent changes in value.


 


89

















 


(f)            The Company shall comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent such laws or regulations are applicable in connection with the
repurchase of the Notes pursuant to an Asset Sale Offer or ABL Asset Sale
Offer.  To the extent that the provisions
of any securities laws or regulations conflict with the provisions of this
Indenture, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations described
in this Indenture by virtue thereof.  If
less than all of the Notes or such Other Pari Passu Lien Obligations are to be
redeemed, Section 1107 shall apply.


 


SECTION 1019.           Waiver of Certain Covenants.


 


The Company and the Restricted Subsidiaries may omit
in any particular instance to comply with any term, provision or condition set
forth in or Sections 1004 through 1008, inclusive, if before or after the time
for such compliance the Holders of at least a majority in principal amount of the
Outstanding Notes, by Act of such Holders, waive such compliance in such
instance with such term, provision or condition, but no such waiver shall
extend to or affect such term, provision or condition except to the extent so expressly
waived, and, until such waiver shall become effective, the obligations of the
Company and the duties of the Trustee in respect of any such term, provision or
condition shall remain in full force and effect.


 


SECTION 1020.           Further Assurances and After-Acquired Property.


 


(a)           The Company and each Guarantor shall execute any and all
further documents, financing statements, agreements and instruments, and take
all further action that may be required under applicable law, or that the Notes
Collateral Agent may reasonably request, in order to grant, preserve, protect
and perfect the validity and priority of the security interests and Liens
created or intended to be created by the Security Documents in the
Collateral.  In addition, from time to
time, the Company will promptly secure the obligations under this Indenture,
Security Documents and Intercreditor Agreement by pledging or creating, or
causing to be pledged or created, perfected security interests and Liens with
respect to the Collateral.  Such security
interests and Liens will be created under the Security Documents and other
security agreements, mortgages, deeds of trust and other instruments and
documents in form and substance reasonably satisfactory to the Trustee, and the
Company shall deliver or cause to be delivered to Trustee all such instruments
and documents (including certificates, legal opinions, title insurance policies
and lien searches) as the Trustee shall reasonably request to evidence
compliance with this covenant.  The
Company agrees to provide such evidence as the Trustee shall reasonably request
as to the perfection and priority status of each such security interest and
Lien.


 


(b)           In furtherance
of the foregoing, promptly following the acquisition by the Company or any
Guarantor of any After-Acquired Property, the Company or such Guarantor shall
execute and deliver such mortgages, deeds of trust, security instruments,
financing statements and certificates and opinions of counsel as shall be
reasonably necessary to vest in the Notes Collateral Agent a perfected security
interest in such After-Acquired Property and to have such After-Acquired
Property added to the Notes Collateral or the ABL Collateral, as applicable,
and thereupon all provisions of this Indenture and the Security Documents
relating to the Notes Collateral or the ABL Collateral, as applicable, shall be
deemed to relate to such After-Acquired Property to the same extent and with
the same force and effect.


 


SECTION 1021.           Information Regarding Collateral.


 


(a)           The Company will furnish to the Notes
Collateral Agent, with respect to the Company or any Guarantor, prompt written
notice of any change in such Person’s (i) name, (ii) jurisdiction of
organization or formation, (iii) identity or corporate structure or (iv) Organizational
Identification Number.  The Company and
the Guarantors will agree not to effect or permit any change referred to in the
preceding sentence unless all filings have been made under the Uniform
Commercial Code or otherwise that are required in order for the Notes
Collateral Agent to continue at all times following such change to have a
valid, legal and perfected security interest in all the Collateral.  The Company also agrees promptly to notify
the Notes Collateral Agent if any material portion of the Collateral is
damaged, destroyed or condemned.


 


90

















 


(b)           Each year, at the time of delivery of
the annual financial statements with respect to the preceding fiscal year, the
Company shall deliver to the Trustee a certificate of a financial officer
setting forth the information required pursuant to the schedules required by
the Security Documents or confirming that there has been no change in such
information since the date of the prior annual financial statements.


 


SECTION 1022.           Impairment of Security Interest.


 


Subject
to the rights of the holders of Permitted Liens, the Company will not, and will
not permit any of its Restricted Subsidiaries to, take or knowingly or
negligently omit to take, any action which action or omission would reasonably
be expected to have the result of materially impairing the security interest
with respect to the Collateral for the benefit of Noteholder Secured Parties,
subject to limited exceptions.  The
Company shall not amend, modify or supplement, or permit or consent to any
amendment, modification or supplement of, the Security Documents in any way
that would be adverse to the Holders of the Notes in any material respect,
except as permitted by Article Nine or Fourteen, the Security Documents or
the Intercreditor Agreement.


 


ARTICLE ELEVEN



REDEMPTION OF NOTES


 


SECTION 1101.           Right of Redemption.


 


(a)           Except as set forth below, the Notes are not redeemable at
the Company’s option until April 15, 2012. 
From and after April 15, 2012, the Company may redeem the Notes, in
whole or in part, upon not less than 30 nor more than 60 days’ prior notice by
first class mail, postage prepaid, with a copy to the Trustee, to each Holder
of Notes to the address of such Holder appearing in the Note Register at the
Redemption Prices (expressed as percentages of principal amount) set forth
below, plus accrued and unpaid interest thereon, if any, to the applicable Redemption
Date, subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant Interest Payment Date, if redeemed during
the twelve-month period beginning on April 15 of each of the years indicated
below:


 




	
  Year

  	
   

  	
  Percentage

  	
   

  
	
  2012

  	
   

  	
  108.156

  	
  %

  
	
  2013

  	
   

  	
  105.438

  	
  %

  
	
  2014

  	
   

  	
  102.719

  	
  %

  
	
  2015 and thereafter

  	
   

  	
  100.000

  	
  %

  






 


(b)           In addition to the optional redemption of the Notes in
accordance with the provisions of the preceding paragraph, at any time prior to
April 15, 2011, the Company may, at its option, redeem up to 40% of the aggregate
principal amount of Notes issued under this Indenture at a redemption price
equal to 110.875% of the aggregate principal amount thereof, plus accrued and
unpaid interest thereon, if any, to the Redemption Date, subject to the right
of Holders of record on the relevant record date to receive interest due on the
relevant Interest Payment Date, with the net proceeds of one or more Equity
Offerings of the Company or any direct or indirect parent of the Company to the
extent such net proceeds are contributed to the Company; provided that
at least 60% of the sum of the aggregate principal amount of Notes remains
outstanding immediately after the occurrence of each such redemption; provided further that each such redemption occurs within 90
days of the date of closing of each such Equity Offering.


 


(c)           Additionally, during any 12-month period commencing on the
Issue Date, the Company will be entitled at its option to redeem up to 10% of
the aggregate principal amount of the Notes issued under this Indenture at a redemption
price equal to 103.000% of the aggregate principal amount thereof, plus accrued
interest thereon, if any, to the Redemption Date, subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant Interest Payment Date.  Notice
of any such redemption must be mailed by first-class mail to each Holder’s
registered address, not less than 30 or more than 60 days prior to the
redemption date.


 


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(d)           At any time prior to April 15, 2012, the Company may
also redeem all or a part of the Notes, upon not less than 30 nor more than 60
days’ prior notice mailed by first-class mail to each Holder’s registered
address, at a redemption price equal to 100% of the principal amount of Notes
redeemed plus the Applicable Premium as of, and accrued and unpaid interest, if
any, to the Redemption Date, subject to the rights of Holders on the relevant record
date to receive interest due on the relevant Interest Payment Date.


 


(e)           Notice of redemption upon any Equity Offering or in connection
with a transaction (or series of related transactions) that constitute a Change
of Control may, at the Company’s option and discretion, be subject to one or
more conditions precedent, including, but not limited to, completion of an
Equity Offering or Change of Control, as the case may be.


 


SECTION 1102.           Applicability of Article.


 


Redemption of Notes at the election of the Company
or otherwise, as permitted or required by any provision of this Indenture,
shall be made in accordance with such provision and this Article.


 


SECTION 1103.           Election to Redeem; Notice to Trustee.


 


The election of the Company to redeem any Notes
pursuant to Section 1101 above shall be evidenced by a Board
Resolution.  In case of any redemption at
the election of the Company, the Company shall, at least 60 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date and of
the principal amount of Notes to be redeemed and shall deliver to the Trustee
such documentation and records as shall enable the Trustee to select the Notes
to be redeemed pursuant to Section 1104.


 


SECTION 1104.           Selection by Trustee of Notes to Be Redeemed.


 


If less than all of the Notes or such Other Pari
Passu Lien Obligations are to be redeemed at any time, selection of such Notes
for redemption, will be made by the Trustee in compliance with the requirements
of the principal national securities exchange, if any, on which such Notes are
listed, or, if such Notes are not so listed, on a pro rata basis or by lot or
such similar method in accordance with the procedures of DTC; provided that no Notes of $2,000 or less shall be purchased
or redeemed in part.


 


Notices of purchase or redemption shall be mailed by
first class mail, postage prepaid, at least 30 but not more than 60 days before
the purchase or redemption date to each Holder of Notes to be purchased or redeemed
at such Holder’s registered address.  If
any Note is to be purchased or redeemed in part only, any notice of purchase or
redemption that relates to such Note shall state the portion of the principal
amount thereof that has been or is to be purchased or redeemed.


 


A new Note in principal amount equal to the
unpurchased or unredeemed portion of any Note purchased or redeemed in part
will be issued in the name of the Holder thereof upon cancellation of the
original Note.  On and after the purchase
or Redemption Date, unless the Company defaults in payment of the purchase or
Redemption Price, interest shall cease to accrue on Notes or portions thereof
purchased or called for redemption.


 


SECTION 1105.           Notice of Redemption.


 


Notice of redemption shall be given in the manner
provided for in Section 106 not less than 30 nor more than 45 days prior
to the Redemption Date, to each Holder to be redeemed.  Except as set forth in Section 1101(e),
notices of redemption may not be conditional.


 


All notices of redemption shall state:


 


(1)           the Redemption Date,


 


92














 


(2)           the Redemption Price
and the amount of accrued interest to the Redemption Date payable as provided
in Section 1107, if any,


 


(3)           if less than all
Outstanding Notes are to be redeemed, the identification (and, in the case of a
partial redemption, the principal amounts) of the particular Notes to be
redeemed,


 


(4)           in case any Note is
to be redeemed in part only, the notice which relates to such Note shall state
that on and after the Redemption Date, upon surrender of such Note, the holder
will receive, without charge, a new Note or Notes of authorized denominations
for the principal amount thereof remaining unredeemed,


 


(5)           that on the
Redemption Date the Redemption Price (and accrued interest, if any, to the
Redemption Date payable as provided in Section 1107) will become due and
payable upon each such Note, or the portion thereof, to be redeemed, and that
interest thereon will cease to accrue on and after said date,


 


(6)           the place or places
where such Notes are to be surrendered for payment of the Redemption Price and
accrued interest, if any,


 


(7)           the name and address
of the Paying Agent,


 


(8)           that Notes called
for redemption must be surrendered to the Paying Agent to collect the Redemption
Price,


 


(9)           the CUSIP number,
and that no representation is made as to the accuracy or correctness of the
CUSIP number, if any, listed in such notice or printed on the Notes,


 


(10)         the paragraph of the
Notes pursuant to which the Notes are to be redeemed; and


 


(11)         any condition to such
redemption.


 


Notice of redemption of Notes to be redeemed at the
election of the Company shall be given by the Company or, at the Company’s
request, by the Trustee in the name and at the expense of the Company.


 


SECTION 1106.           Deposit of Redemption Price.


 


Prior to any Redemption Date, the Company shall
deposit with the Trustee or with a Paying Agent (or, if the Company is acting
as its own Paying Agent, segregate and hold in trust as provided in Section 1003)
an amount of money sufficient to pay the Redemption Price of, and accrued
interest, if any, on, all the Notes which are to be redeemed on that date.


 


SECTION 1107.           Notes Payable on Redemption Date.


 


Notice of redemption having been given as aforesaid,
the Notes so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified (together with accrued interest,
if any, to the Redemption Date)(except as provided in Section 1101(e)),
and from and after such date (unless the Company shall default in the payment
of the Redemption Price and accrued interest) such Notes shall cease to bear
interest.  Upon surrender of any such
Note for redemption in accordance with said notice, such Note shall be paid by
the Company at the Redemption Price, together with accrued interest, if any, to
the Redemption Date; provided, however, that installments of interest whose Stated Maturity
is on or prior to the Redemption Date shall be payable to the Holders of such
Notes, or one or more Predecessor Notes, registered as such at the close of
business on the relevant Record Dates according to their terms and the
provisions of Section 307.


 


If any Note called for redemption shall not be so
paid upon surrender thereof for redemption, the principal (and premium, if any)
shall, until paid, bear interest from the Redemption Date at the rate borne by
the Notes.


 


93

















 


SECTION 1108.           Notes Redeemed in Part.


 


Any Note which is to be redeemed only in part
(pursuant to the provisions of this Article) shall be surrendered at the office
or agency of the Company maintained for such purpose pursuant to Section 1002
(with, if the Company or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by, the Holder thereof or such Holder’s attorney duly
authorized in writing), and the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Note without service charge, a
new Note or Notes, of any authorized denomination as requested by such Holder,
in aggregate principal amount equal to and in exchange for the unredeemed
portion of the principal of the Note so surrendered.


 


ARTICLE TWELVE



GUARANTEES


 


SECTION 1201.           Guarantees.


 


Each Guarantor hereby jointly and severally,
unconditionally and irrevocably guarantees the Notes and obligations of the
Company hereunder and thereunder, and guarantees to each Holder of a Note
authenticated and delivered by the Trustee, and to the Trustee on behalf of
such Holder, that:  (a) the principal
of (and premium, if any) and interest on the Notes will be paid in full when
due, whether at Stated Maturity, by acceleration or otherwise (including,
without limitation, the amount that would become due but for the operation of
the automatic stay under Section 362(a) of the Bankruptcy Law),
together with interest on the overdue principal, if any, and interest on any
overdue interest, to the extent lawful, and all other obligations of the
Company to the Holders or the Trustee hereunder or thereunder will be paid in
full or performed, all in accordance with the terms hereof and thereof; and (b) in
case of any extension of time of payment or renewal of any Notes or of any such
other obligations, the same shall be paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at Stated Maturity,
by acceleration or otherwise, subject, however, in the case of clauses (a) and
(b) above, to the limitation set forth in Section 1205 hereof.


 


Each Guarantor hereby agrees that its obligations
hereunder shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder with respect to any
provisions hereof or thereof, any release of any other Guarantor, the recovery
of any judgment against the Company, any action to enforce the same or any
other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a Guarantor.


 


Each Guarantor hereby waives (to the extent
permitted by law) the benefits of diligence, presentment, demand for payment,
filing of claims with a court in the event of insolvency or bankruptcy of the
Company, any right to require a proceeding first against the Company or any
other Person, protest, notice and all demands whatsoever and covenants that the
Guarantee of such Guarantor shall not be discharged as to any Note except by
complete performance of the obligations contained in such Note, this Indenture
and such Guarantee.  Each Guarantor
acknowledges that the Guarantee is a guarantee of payment and not of
collection.  Each of the Guarantors
hereby agrees that, in the event of a default in payment of principal (or
premium, if any) or interest on such Note, whether at its Stated Maturity, by
acceleration, purchase or otherwise, legal proceedings may be instituted by the
Trustee on behalf of, or by, the Holder of such Note, subject to the terms and
conditions set forth in this Indenture, directly against each of the Guarantors
to enforce such Guarantor’s Guarantee without first proceeding against the
Company or any other Guarantor.  Each
Guarantor agrees that if, after the occurrence and during the continuance of an
Event of Default, the Trustee or any of the Holders are prevented by applicable
law from exercising their respective rights to accelerate the Maturity of the
Notes, to collect interest on the Notes, or to enforce or exercise any other
right or remedy with respect to the Notes, such Guarantor shall pay to the
Trustee for the account of the Holder, upon demand therefor, the amount that
would otherwise have been due and payable had such rights and remedies been permitted
to be exercised by the Trustee or any of the Holders.


 


If any Holder or the Trustee is required by any
court or otherwise to return to the Company or any Guarantor, or any custodian,
trustee, liquidator or other similar official acting in relation to either the
Company or 


 


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any Guarantor, any amount
paid by any of them to the Trustee or such Holder, the Guarantee of each of the
Guarantors, to the extent theretofore discharged, shall be reinstated in full
force and effect.  Each Guarantor further
agrees that, as between each Guarantor, on the one hand, and the Holders and
the Trustee on the other hand, (x) subject to this Article Twelve,
the Maturity of the obligations guaranteed hereby may be accelerated as
provided in Article Five hereof for the purposes of the Guarantee of such
Guarantor notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the obligations guaranteed hereby, and (y) in
the event of any acceleration of such obligation as provided in Article Five
hereof, such obligations (whether or not due and payable) shall forthwith
become due and payable by each Guarantor for the purpose of the Guarantee of
such Guarantor.


 


Each Guarantee shall remain in full force and effect
and continue to be effective should any petition be filed by or against the
Company for liquidation, reorganization, should the Company become insolvent or
make an assignment for the benefit of creditors or should a receiver or trustee
be appointed for all or any significant part of the Company’s assets, and
shall, to the fullest extent permitted by law, continue to be effective or be
reinstated, as the case may be, if at any time payment and performance of the
Notes are, pursuant to applicable law, rescinded or reduced in amount, or must
otherwise be restored or returned by any obligee on the Notes, whether as a “voidable
preference”, “fraudulent transfer” or otherwise, all as though such payment or
performance had not been made.  In the
event that any payment or any part thereof, is rescinded, reduced, restored or
returned, the Notes shall, to the fullest extent permitted by law, be
reinstated and deemed reduced only by such amount paid and not so rescinded, reduced,
restored or returned.


 


SECTION 1202.           Severability.


 


In case any provision of any Guarantee shall be invalid,
illegal or unenforceable, the validity, legality, and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.


 


SECTION 1203.           Restricted Subsidiaries.


 


(a)              The Company
shall cause any Restricted Subsidiary required to guarantee payment of the
Notes pursuant to the terms and provisions of Section 1015 to (i) execute
and deliver to the Trustee any amendment or supplement to this Indenture in
accordance with the provisions of Article Nine of this Indenture pursuant
to which such Restricted Subsidiary shall guarantee all of the obligations on
the Notes, whether for principal, premium, if any, interest (including interest
accruing after the filing of, or which would have accrued but for the filing
of, a petition by or against the Company under Bankruptcy Law, whether or not
such interest is allowed as a claim after such filing in any proceeding under
such law) and other amounts due in connection therewith (including any fees, expenses and
indemnities), on a senior secured basis, (ii) deliver to such Trustee an
Opinion of Counsel reasonably satisfactory to such Trustee to the effect that
such amendment or supplement has been duly executed and delivered by such
Restricted Subsidiary and is in compliance with the terms of this Indenture and
(iii) execute and deliver a supplement or such comparable documentation to
become a Grantor or Pledgor to the Security Agreement, Pledge Agreement and the
other Security Documents and to take all actions to cause the Lien created by
the Security Documents to be duly perfected to the extent required by such
agreement.  Upon the execution of any
such amendment or supplement, the obligations of the Guarantors and any such
Restricted Subsidiary under their respective Guarantees shall become joint and
several and each reference to the “Guarantor” in this Indenture shall, subject to Section 1208,
be deemed to refer to all Guarantors, including such Restricted
Subsidiary.  Such Guarantee shall be
released in accordance with Section 803 and Section 1015(b).


 


SECTION 1204.           Ranking of Guarantee.


 


The Guarantee issued by any Guarantor shall be a
senior obligation of such Guarantor and will be secured by a
first-priority lien on the Notes Collateral owned by such Guarantor and by a
second-priority lien on the ABL Collateral owned by such Guarantor.  The Guarantees shall: (a) rank equally
in right of payment with all existing and future Senior Indebtedness of the
Guarantor, (b) be senior in right of payment to all existing and future Subordinated
Indebtedness of each Guarantor, (c) be effectively senior to the guarantee
of the Convertible Notes and any future Third Lien Indebtedness by such
Guarantor to the extent of the value of the Collateral, (d) be effectively
senior to the guarantee of the Credit Agreement by such Guarantor to the extent
of the value of the Notes Collateral 


 


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owned by such Guarantor, (e) be
effectively subordinated to the guarantee of such Guarantor under the Credit
Agreement to the extent of the value of the ABL Collateral owned by such
Guarantor and (f) be structurally subordinated to Indebtedness and other
liabilities of Subsidiaries of such Guarantor that do not Guarantee the Notes.


 


SECTION 1205.           Limitation of Guarantors’ Liability.


 


Each Guarantor and by its acceptance hereof each
Holder confirms that it is the intention of all such parties that the guarantee
by each such Guarantor pursuant to its Guarantee not constitute a fraudulent
transfer or conveyance for purposes of the Bankruptcy Law, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
federal or state law or the provisions of its local law relating to fraudulent
transfer or conveyance.  To effectuate
the foregoing intention, the Holders and each such Guarantor hereby irrevocably
agree that the obligations of such Guarantor under its Guarantee shall be
limited to the maximum amount that will not, after giving effect to all other
contingent and fixed liabilities of such Guarantor and after giving effect to
any collections from or payments made by or on behalf of any other Guarantor in
respect of the obligations of such other Guarantor under its Guarantee or
pursuant to this Section 1205, result in the obligations of such Guarantor
under its Guarantee constituting such fraudulent transfer or conveyance.


 


SECTION 1206.           Contribution.


 


In order to provide for just and equitable
contribution among the Guarantors, the Guarantors agree, inter se, that in the
event any payment or distribution is made by any Guarantor (a “Funding
Guarantor”) under a Guarantee, such Funding Guarantor shall be entitled to a
contribution from all other Guarantors in a pro rata amount based on the
Adjusted Net Assets (as defined below) of each Guarantor (including the Funding
Guarantor) for all payments, damages and expenses incurred by that Funding
Guarantor in discharging the Company’s obligations with respect to the Notes or
any other Guarantor’s obligations with respect to the Guarantee of such
Guarantor.  “Adjusted Net Assets” of such
Guarantor at any date shall mean the lesser of (x) the amount by which the
fair value of the property of such Guarantor exceeds the total amount of
liabilities, including, without limitation, contingent liabilities (after
giving effect to all other fixed and contingent liabilities incurred or assumed
on such date), but excluding liabilities under the Guarantee of such Guarantor
at such date and (y) the amount by which the present fair salable value of
the assets of such Guarantor at such date exceeds the amount that will be
required to pay the probable liability of such Guarantor on its debts (after
giving effect to all other fixed and contingent liabilities incurred or assumed
on such date), excluding debt in respect of the Guarantee of such Guarantor, as
they become absolute and matured.


 


SECTION 1207.           Subrogation.


 


Each Guarantor shall be subrogated to all rights of
Holders against the Company in respect of any amounts paid by any Guarantor
pursuant to the provisions of Section 1201; provided,
however, that, if an Event of Default
has occurred and is continuing, no Guarantor shall be entitled to enforce or
receive any payments arising out of, or based upon, such right of subrogation
until all amounts then due and payable by the Company under this Indenture or
the Notes shall have been paid in full.


 


SECTION 1208.           Reinstatement.


 


Each Guarantor hereby agrees (and each Person who
becomes a Guarantor shall agree) that the Guarantee provided for in Section 1201
shall continue to be effective or be reinstated, as the case may be, if at any
time, payment, or any part thereof, of any obligations or interest thereon is rescinded
or must otherwise be restored by a Holder to the Company upon the bankruptcy or
insolvency of the Company or any Guarantor.


 


SECTION 1209.           Release of a Guarantor.


 


Concurrently with the discharge of the Notes under Section 401,
the Legal Defeasance of the Notes under Section 1302 hereof, or the
Covenant Defeasance of the Notes under Section 1303 hereof, the Guarantors
shall be released from all their obligations under their Guarantees under this Article Twelve.  Any Guarantor shall be released from all its
obligations under its Guarantee in accordance with Section 803 and Section 1015(b).


 


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SECTION 1210.           Benefits Acknowledged.


 


Each Guarantor acknowledges that it will receive
direct and indirect benefits from the financing arrangements contemplated by
this Indenture and from its guarantee and waivers pursuant to its Guarantees
under this Article Twelve.


 


ARTICLE THIRTEEN



DEFEASANCE AND COVENANT DEFEASANCE


 


SECTION 1301.           Company’s Option to Effect Legal Defeasance or Covenant
Defeasance.


 


The Company may, at its option by Board Resolution,
at any time, with respect to the Notes, elect to have either Section 1302
or Section 1303 be applied to all Outstanding Notes upon compliance with
the conditions set forth below in this Article Thirteen.


 


SECTION 1302.           Legal Defeasance and Discharge.


 


Upon the Company’s exercise under Section 1301
of the option applicable to this Section 1302, each of the Company and the
Guarantors shall be deemed to have been discharged from its respective
obligations with respect to all Outstanding Notes on the date the conditions
set forth in Section 1304 are satisfied (hereinafter, “Legal Defeasance”).  For this purpose, such Legal Defeasance means
that each of the Company and the Guarantors shall be deemed to have paid and
discharged the entire indebtedness represented by the Outstanding Notes, which
shall thereafter be deemed to be “Outstanding” only for the purposes of Section 1305
and the other Sections of this Indenture referred to in (A) and (B) below,
and to have satisfied all its other obligations under such Notes and this
Indenture insofar as such Notes are concerned (and the Trustee, at the expense
of the Company, shall execute proper instruments acknowledging the same),
except for the following which shall survive until otherwise terminated or
discharged hereunder: (A) the rights of Holders of Outstanding Notes to
receive payments in respect of the principal of (and premium, if any, on) and
interest on such Notes when such payments are due, solely out of the trust described
in Section 1304, (B) the Company’s obligations with respect to such
Notes under Sections 304, 305, 306, 1002 and 1003, (C) the rights, powers,
trusts, duties and immunities of the Trustee hereunder, and the obligations of
each of the Company and the Guarantors in connection therewith and (D) this
Article Thirteen.  Subject to compliance
with this Article Thirteen, the Company may exercise its option under this
Section 1302 notwithstanding the prior exercise of its option under Section 1303
with respect to the Notes.


 


SECTION 1303.           Covenant Defeasance.


 


Upon the Company’s exercise under Section 1301
of the option applicable to this Section 1303, each of the Company and the
Guarantors shall be released from its respective obligations under any covenant
contained in Sections 801, 802 and in Sections 1005, 1006, 1007, 1009 through
1022 with respect to the Outstanding Notes on and after the date the conditions
set forth below are satisfied (hereinafter, “Covenant Defeasance”), and the
Notes shall thereafter be deemed not to be “Outstanding” for the purposes of
any direction, waiver, consent or declaration or Act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed “Outstanding” for all other purposes hereunder.  For this purpose, such Covenant Defeasance
means that, with respect to the Outstanding Notes, the Company or any
Guarantor, as applicable, may omit to comply with and shall have no liability
in respect of any term, condition or limitation set forth in any such covenant,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such covenant or by reason of any reference in any such covenant to any
other provision herein or in any other document and such omission to comply
shall not constitute a Default or an Event of Default under Sections 501(3),
501(4), 501(5) and 501(7) and, with respect to only any Significant
Subsidiary and not the Company, Section 501(6), but, except as specified
above, the remainder of this Indenture and such Notes shall be unaffected
thereby.


 


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SECTION 1304.           Conditions to Legal Defeasance or Covenant Defeasance.


 


The following shall be the conditions to application
of either Section 1302 or Section 1303 to the Outstanding Notes:


 


(1)           The Company shall
irrevocably have deposited or caused to be deposited with the Trustee (or
another trustee satisfying the requirements of Section 608 who shall agree
to comply with the provisions of this Article Thirteen applicable to it)
as trust funds in trust for the purpose of making the following payments,
specifically pledged as security for, and dedicated solely to the benefit of
the Holders of such Notes; (A) cash in U.S. dollars, or (B) non-callable
Government Securities, or (C) a combination thereof, in such amounts as
will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge, and which shall be applied by
the Trustee (or other qualifying trustee) to pay and discharge, the principal
of (and premium, if any) and interest on the Outstanding Notes on the Stated Maturity
(or Redemption Date, if applicable) of such principal (and premium, if any or,
interest due on the Notes; provided that
the Trustee shall have been irrevocably instructed to apply such cash or the proceeds
of such Government Securities to said payments with respect to the Notes.  Before such a deposit, the Company may give
to the Trustee, in accordance with Section 1103 hereof, a notice of its
election to redeem all of the Outstanding Notes at a future date in accordance
with Article Eleven hereof, which notice shall be irrevocable.  Such irrevocable redemption notice, if given,
shall be given effect in applying the foregoing;


 


(2)           in the case of Legal
Defeasance, the Company shall have delivered to the Trustee an Opinion of
Counsel in the United States reasonably acceptable to the Trustee confirming
that, subject to customary assumptions and exclusions,


 


(A)          the Company has
received from, or there has been published by, the United States Internal Revenue
Service a ruling, or


 


(B)           since the issuance
of the Notes, there has been a change in the applicable U.S. Federal income tax
law, in either case to the effect that, and based thereon such Opinion of Counsel
in the United States shall confirm that, subject to customary assumptions and
exclusions, the Holders of the Outstanding Notes will not recognize income,
gain or loss for U.S. Federal income tax purposes as a result of such Legal
Defeasance and will be subject to U.S. Federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if such
Legal Defeasance had not occurred;


 


(3)           in the case of
Covenant Defeasance, the Company shall have delivered to the Trustee an Opinion
of Counsel in the United States reasonably acceptable to the Trustee confirming
that, subject to customary assumptions and exclusions, the Holders of the
Outstanding Notes will not recognize income, gain or loss for U.S. Federal income
tax purposes as a result of such Covenant Defeasance and will be subject to
U.S. Federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Covenant Defeasance had not occurred;


 


(4)           no Default or Event
of Default (other than that resulting from borrowing funds to be applied to
make such deposit) shall have occurred and be continuing on the date of such
deposit;


 


(5)           such Legal
Defeasance or Covenant Defeasance shall not result in a breach or violation of,
or constitute a default under the Credit Agreement or any other material
agreement or instrument (other than this Indenture) to which, the Company or
any Guarantor is a party or by which the Company or any Guarantor is bound;


 


(6)           the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that, as of
the date of such opinion and subject to customary assumptions and exclusions
following the deposit, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors’ rights generally under any applicable U.S. Federal or state law, and
that the 


 


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Trustee
has a perfected security interest in such trust funds for the ratable benefit
of the Holders of the Outstanding Notes;


 


(7)           the Company shall
have delivered to the Trustee an Officers’ Certificate stating that the deposit
was not made by the Company with the intent of defeating, hindering, delaying
or defrauding any creditors of the Company or any Guarantor or others; and


 


(8)           the Company shall
have delivered to the Trustee an Officers’ Certificate and an Opinion of
Counsel in the United States (which Opinion of Counsel may be subject to
customary assumptions and exclusions) each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance, as the case may be, have been complied with.


 


SECTION 1305.           Deposited Money and Government Securities to Be Held in
Trust; Other Miscellaneous Provisions.


 


Subject to the provisions of the last paragraph of Section 1003,
all cash and Government Securities (including the proceeds thereof) deposited
with the Trustee (or other qualifying trustee, collectively for purposes of
this Section 1305, the “Trustee”) pursuant to Section 1304 in respect
of the Outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Holders of
such Notes of all sums due and to become due thereon in respect of principal
(and premium, if any) and interest, but such money or Government Securities
need not be segregated from other funds except to the extent required by law.


 


The Company shall pay and indemnify the Trustee
against any tax, fee or other charge imposed on or assessed against the
Government Securities deposited pursuant to Section 1304 or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the Outstanding Notes.


 


Anything in this Article Thirteen to the
contrary notwithstanding, the Trustee shall deliver or pay to the Company from
time to time upon Company Request any money or Government Securities held by it
as provided in Section 1304 which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, are in excess of the amount
thereof which would then be required to be deposited to effect an equivalent
Legal Defeasance or Covenant Defeasance, as applicable, in accordance with this
Article.


 


SECTION 1306.           Reinstatement.


 


If the Trustee or any Paying Agent is unable to
apply any money or Government Securities in accordance with Section 1305
by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, then the
Company’s and each Guarantor’s obligations under this Indenture and the Outstanding
Notes shall be revived and reinstated as though no deposit had occurred
pursuant to Section 1302 or 1303, as the case may be, until such time as
the Trustee or Paying Agent is permitted to apply all such money or Government
Securities in accordance with Section 1305; provided,
however, that if the Company makes any
payment of principal of (or premium, if any) or interest on any Note following
the reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of such Notes to receive such payment from the money or
Government Securities held by the Trustee or Paying Agent.


 


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ARTICLE FOURTEEN



SECURITY


 


SECTION 1401.           Collateral and Security Documents.


 


(a)              The due and punctual payment
of the principal of and interest on the Notes when and as the same shall be due
and payable, whether on an Interest Payment Date, at maturity, by acceleration,
repurchase, redemption or otherwise, and interest on the overdue principal of
and interest on the Notes and performance of all other obligations of the
Company and the Guarantors to the Holders, the Trustee or the Notes Collateral
Agent under this Indenture, the Notes, the Intercreditor Agreement and the
Security Documents, according to the terms hereunder or thereunder, shall be
secured as provided in the Security Documents, which define the terms of the Liens
that secure the obligations, subject to the terms of the Intercreditor
Agreement.  The Trustee and the Company
hereby acknowledge and agree that the Notes Collateral Agent holds the
Collateral in trust for the benefit of the Noteholder Secured Parties, in each
case pursuant to the terms of the Security Documents and the Intercreditor
Agreement.  Each Holder, by accepting a
Note, consents and agrees to the terms of the Security Documents (including the
provisions providing for the possession, use, release and foreclosure of
Collateral) and the Intercreditor Agreement as the same may be in effect or may
be amended from time to time in accordance with their terms and this Indenture
and the Intercreditor Agreement, and authorizes and directs the Notes Collateral
Agent to enter into the Security Documents and the Intercreditor Agreement and
to perform its obligations and exercise its rights thereunder in accordance
therewith; provided, however,
that if any of the provisions of the Security Documents limit, qualify or
conflict with the duties imposed by the provisions of the TIA, the TIA shall
control.  The Company shall deliver to
the Notes Collateral Agent copies of all documents pursuant to the Security Documents,
and will do or cause to be done all such acts and things as may be reasonably
required by the next sentence of this Section 1401, to assure and confirm
to the Notes Collateral Agent the security interest in the Collateral contemplated
hereby, by the Security Documents or any part thereof, as from time to time
constituted, so as to render the same available for the security and benefit of
this Indenture and of the Notes secured hereby, according to the intent and
purposes herein expressed.  The Company
shall, and shall cause the Subsidiaries of the Company to, use its commercially
reasonable efforts to take any and all actions reasonably required to cause the
Security Documents to create and maintain, as security for the Obligations, a
valid and enforceable perfected Lien and security interest in and on all of the
Collateral (subject to the terms of the Intercreditor Agreement), in favor of
the Notes Collateral Agent for the benefit of the Noteholder Secured
Parties.  The Company shall, and shall
cause the Subsidiaries of the Company to, and each Subsidiary shall, make all
filings (including filings of continuation statements and amendments to
financing statements that may be necessary to continue the effectiveness of
such financing statements) and take all other actions as are necessary or
required by the Security Documents to maintain (at the sole cost and expense of
the Company and its Subsidiaries) the security interest created by the Security
Documents in the Collateral (other than with respect to any Collateral the
security interest in which is not required to be perfected under the Security
Documents) as a perfected security interest with the priority set forth in the
Intercreditor Agreement and subject only to Permitted Liens.


 


SECTION 1402.           Recordings and Opinions.


 


(a)           To the extent applicable, the Company will cause TIA
§ 313(b), relating to reports, TIA § 314(d), relating to the release
of property or securities subject to the Lien of the Security Documents and TIA
§ 314(b), to be complied with.


 


(b)           Any release of Collateral permitted by Section 1403
hereof will be deemed not to impair the Liens under this Indenture, the
Security Agreement, the Pledge Agreement and the other Security Documents in
contravention thereof.  Any certificate
or opinion required by TIA § 314(d) shall be made by an officer or
legal counsel, as applicable, of the Company except in cases where TIA
§ 314(d) requires that such certificate or opinion be made by an
independent Person, which Person will be an independent engineer, appraiser or
other expert selected by or reasonably satisfactory to the Trustee.


 


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(c)           Notwithstanding anything to the contrary in this Section 1402,
the Company will not be required to comply with all or any portion of TIA
§ 314(d) if it reasonably determines that under the terms of TIA
§ 314(d) or any interpretation or guidance as to the meaning thereof
of the SEC and its staff, including “no action” letters or exemptive orders,
all or any portion of TIA § 314(d) is inapplicable to any release or
series of releases of Collateral. 
Without limiting the generality of the foregoing, the Company and the
Guarantors may, subject to the other provisions of this Indenture, among other
things, without any release or consent by the Noteholder Secured Parties, conduct
ordinary course activities with respect to the Collateral, including, without
limitation, (i) selling or otherwise disposing of, in any transaction or
series of related transactions, any property subject to the Lien of the
Security Documents that has become worn out, defective, obsolete or not used or
useful in the business;  (ii) abandoning,
terminating, canceling, releasing or making alterations in or substitutions of
any leases or contracts subject to the Lien of this Indenture or any of the
Security Documents; (iii) surrendering or modifying any franchise, license
or permit subject to the Lien of the Security Documents that it may own or under
which it may be operating; (iv) altering, repairing, replacing, changing
the location or position of and adding to its structures, machinery, systems,
equipment, fixtures and appurtenances; (v) granting a license of any
intellectual property; (vi) selling, transferring or otherwise disposing
of inventory in the ordinary course of business; (vii) collecting accounts
receivable in the ordinary course of business as permitted by Section 1018;
(viii) making cash payments (including for the repayment of Indebtedness
or interest) from cash that is at any time part of the Collateral in the
ordinary course of business that are not otherwise prohibited by this Indenture
and the Security Documents; and (ix) abandoning any intellectual property
that is no longer used or useful in the Company’s business.


 


SECTION 1403.           Release of Collateral.


 


(a)           Subject to Sections 1402(b) and
1404 hereof, Collateral may be released from the Lien and security interest
created by the Security Documents at any time or from time to time in
accordance with the provisions of the Security Documents, the Intercreditor
Agreement or as provided hereby.  The
Company and the Guarantors will be entitled to a release of property and other
assets included in the Collateral from the Liens securing the Notes and the
Guarantees, and the Trustee (subject to its receipt of an Officer’s Certificate
and Opinion of Counsel as provided below) shall release, or instruct the Notes
Collateral Agent to release, as applicable, the same from such Liens as the
Company’s sole cost and expense, under one or more of the following
circumstances:


 


(1)           to enable the
Company or any Guarantor to sell, exchange or otherwise dispose of any of the
Collateral to the extent not prohibited under Section 1018;


 


(2)           the release of
Excess ABL Proceeds or Excess Proceeds that remain unexpended after the
conclusion of an ABL Asset Sale Offer or Asset Sale Offer, as the case may be,
conducted in accordance with the terms of this Indenture;


 


(3)           in the case of a
Guarantor that is released from its Guarantee with respect to the Notes, the
release of the property and assets of such Guarantor;


 


(4)           pursuant to an
amendment or waiver in accordance with Article Nine of this Indenture; or


 


(5)           if the Notes have
been discharged or defeased pursuant to Article Four or Article Thirteen.


 


(b)           Upon receipt of an Officers’
Certificate and an Opinion of Counsel certifying that all conditions precedent
under this Indenture and the Security Documents (and TIA Section 314(d)),
if any, to such release have been met and any necessary or proper instruments
of termination, satisfaction or release prepared by the Company, the Trustee
shall, or shall cause the Notes Collateral Agent to, execute, deliver or
acknowledge (at the Company’s expense) such instruments or releases to evidence
the release of any Collateral permitted to be released pursuant to this
Indenture or the Security Documents or the Intercreditor Agreement.  Neither the Trustee nor the Notes Collateral
Agent shall be liable for any such release undertaken in good faith in reliance
upon any such Officers’ Certificate or Opinion of Counsel, and notwithstanding
any term hereof or in any Security Document to the contrary, the Trustee and
Notes Collateral Agent shall not be under any obligation to release any such
Lien and 


 


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security interest, or execute and deliver any such
instrument of release, satisfaction or termination, unless and until it
receives such Officers’ Certificate and Opinion of Counsel.


 


SECTION 1404.           Certificates of the Trustee.


 


In the
event that the Company wishes to release Collateral in accordance with this
Indenture, the Security Documents and the Intercreditor Agreement at a time
when the Trustee is not itself also the Notes Collateral Agent and the Company
has delivered the certificates and documents required by the Security Documents
and Section 1403 hereof, if TIA § 314(d) is applicable to such
releases (the applicability of which will be established to the reasonable
satisfaction of the Trustee), the Trustee will determine whether it has
received all documentation required by TIA § 314(d) in connection
with such release (which determination may be based upon the Opinion of Counsel
hereafter described) and, based on an Opinion of Counsel pursuant to Section 102,
will deliver a certificate to the Notes Collateral Agent setting forth such
determination.  The Trustee, however,
shall have no duty to confirm the legality, genuineness, accuracy, contents or
validity of such documents (or any signature appearing therein), its sole duty
being to certify its receipt of such documents which, on their face (and
assuming that they are what they purport to be), conform to § 314(d) of
the TIA.


 


SECTION 1405.           Suits to Protect the Collateral.


 


Subject
to the provisions of Article Six hereof and the Intercreditor Agreement,
the Trustee in its sole discretion and without the consent of the Holders, on
behalf of the Holders, may or may direct the Notes Collateral Agent to take all
actions it deems necessary or appropriate in order to:


 


(a)           enforce any of the terms of the Security Documents; and


 


(b)           collect and receive any and all amounts payable in respect
of the obligations hereunder.


 


Subject
to the provisions of the Security Documents and the Intercreditor Agreement,
the Trustee shall have power to institute and to maintain such suits and
proceedings as it may deem expedient to prevent any impairment of the
Collateral by any acts which may be unlawful or in violation of any of the Security
Documents or this Indenture, and such suits and proceedings as the Trustee, in
its sole discretion, may deem expedient to preserve or protect its interests
and the interests of the Holders in the Collateral (including power to
institute and maintain suits or proceedings to restrain the enforcement of or
compliance with any legislative or other governmental enactment, rule or
order that may be unconstitutional or otherwise invalid if the enforcement of,
or compliance with, such enactment, rule or order would impair the Lien on
the Collateral or be prejudicial to the interests of the Holders or the
Trustee). Nothing in this Section 1405 shall be considered to impose any
such duty or obligation to act on the part of the Trustee.


 


SECTION 1406.                                      Authorization
of Receipt of Funds by the Trustee Under the Security Documents.


 


Subject
to the provisions of the Intercreditor Agreement, the Trustee is authorized to
receive any funds for the benefit of the Holders distributed under the Security
Documents, and to make further distributions of such funds to the Holders
according to the provisions of this Indenture.


 


SECTION 1407.           Purchase Protected.


 


In no
event shall any purchaser in good faith of any property purported to be released
hereunder be bound to ascertain the authority of the Notes Collateral Agent or
the Trustee to execute the release or to inquire as to the satisfaction of any
conditions required by the provisions hereof for the exercise of such authority
or to see to the application of any consideration given by such purchaser or
other transferee; nor shall any purchaser or other transferee of any property
or rights permitted by this Article Fourteen to be sold be under any
obligation to ascertain or inquire into the authority of the Company or the
applicable Guarantor to make any such sale or other transfer.


 


102














 


SECTION 1408.           Powers Exercisable by Receiver or
Trustee.


 


In case the Collateral shall be in the possession of
a receiver or trustee, lawfully appointed, the powers conferred in this Article Fourteen
upon the Company or a Guarantor with respect to the release, sale or other
disposition of such property may be exercised by such receiver or trustee, and
an instrument signed by such receiver or trustee shall be deemed the equivalent
of any similar instrument of the Company or a Guarantor or of any officer or officers
thereof required by the provisions of this Article Fourteen; and if the
Trustee shall be in the possession of the Collateral under any provision of
this Indenture, then such powers may be exercised by the Trustee.


 


SECTION 1409.           Release upon Termination of the
Company’s Obligations.


 


In the event that the Company delivers to the
Trustee, in form and substance reasonably acceptable to it, an Officers’
Certificate certifying that (i) payment in full of the principal of, together
with accrued and unpaid interest (including additional interest, if any) on,
the Notes and all other Obligations under this Indenture, the Guarantees and
the Security Documents that are due and payable at or prior to the time such
principal, together with accrued and unpaid interest, are paid or (ii) the
Company shall have exercised its Legal Defeasance option or its Covenant
Defeasance option, in each case in compliance with the provisions of Article Thirteen,
the Trustee shall deliver to the Company and the Notes Collateral Agent a
notice stating that the Trustee, on behalf of the Holders, disclaims and gives
up any and all rights it has in or to the Collateral (other than with respect
to funds held by the Trustee pursuant to Article Thirteen), and any rights
it has under the Security Documents, and upon receipt by the Notes Collateral
Agent of such notice, the Notes Collateral Agent shall be deemed not to hold a
Lien in the Collateral on behalf of the Trustee and shall do or cause to be
done all acts reasonably necessary to release such Lien as soon as is reasonably
practicable.


 


SECTION 1410.           Notes Collateral Agent.


 


(a)           The Trustee and each of the Holders
by acceptance of the Notes hereby designates and appoints the Notes Collateral
Agent as its agent under this Indenture, the Security Agreement, the Pledge
Agreement, the Security Documents and the Intercreditor Agreement and the
Trustee and each of the Holders by acceptance of the Notes hereby irrevocably
authorizes the Notes Collateral Agent to take such action on its behalf under
the provisions of this Indenture, the Security Agreement, the Pledge Agreement,
the Security Documents and the Intercreditor Agreement and to exercise such
powers and perform such duties as are expressly delegated to the Notes
Collateral Agent by the terms of this Indenture, the Security Agreement, the
Pledge Agreement, the Security Documents and the Intercreditor Agreement,
together with such powers as are reasonably incidental thereto.  The Notes Collateral Agent agrees to act as
such on the express conditions contained in this Section 1410.  The provisions of this Section 1410 are
solely for the benefit of the Notes Collateral Agent and none of the Trustee,
any of the Holders nor the Company or any of the Guarantors shall have any
rights as a third party beneficiary of any of the provisions contained herein
other than as expressly provided in Section 1403.  Notwithstanding any provision to the contrary
contained elsewhere in this Indenture, the Security Agreement, the Pledge
Agreement, the Security Documents and the Intercreditor Agreement, the Notes
Collateral Agent shall not have any duties or responsibilities, except those expressly
set forth herein, nor shall the Notes Collateral Agent have or be deemed to
have any fiduciary relationship with the Trustee, any Holder or the Company or
any Guarantor, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Indenture, the Security
Agreement, the Pledge Agreement, the Security Documents and the Intercreditor
Agreement or otherwise exist against the Notes Collateral Agent.  Without limiting the generality of the
foregoing sentence, the use of the term “agent” in this Indenture with reference
to the Notes Collateral Agent is not intended to connote any fiduciary or other
implied (or express) obligations arising under agency doctrine of any
applicable law.  Instead, such term is
used merely as a matter of market custom, and is intended to create or reflect
only an administrative relationship between independent contracting
parties.  Except as expressly otherwise
provided in this Indenture, the Notes Collateral Agent shall have and may use
its sole discretion with respect to exercising or refraining from exercising
any discretionary rights or taking or refraining from taking any actions which
the Notes Collateral Agent is expressly entitled to take or assert under this
Indenture, the Security Agreement, the Pledge Agreement, the Security Documents
and the Intercreditor Agreement, including the exercise of remedies pursuant to
Article Five, and any action so taken or not taken shall be deemed
consented to by the Trustee and the Holders.


 


103

















 


(b)           The Notes Collateral Agent may
execute any of its duties under this Indenture, the Security Documents or the
Intercreditor Agreement by or through agents, employees or attorneys-in-fact
and shall be entitled to advice of counsel concerning all matters pertaining to
such duties.  The Notes Collateral Agent
shall not be responsible for the negligence or misconduct of any agent,
employee or attorney-in-fact that it selects as long as such selection was made
without negligence or willful misconduct.


 


(c)           None of the Notes Collateral Agent or
any of its agents or employees shall (i) be liable for any action taken or
omitted to be taken by any of them under or in connection with this Indenture
or the transactions contemplated hereby (except for its own negligence or
willful misconduct) or under or in connection with the Security Agreement, the
Pledge Agreement, any Security Document or Intercreditor Agreement or the
transactions contemplated thereby (except for its own negligence or willful
misconduct), or (ii) be responsible in any manner to the Trustee or any
Holder for any recital, statement, representation, warranty, covenant or
agreement made by the Company or any Guarantor, contained in this or any Indenture,
or in any certificate, report, statement or other document referred to or
provided for in, or received by the Notes Collateral Agent under or in
connection with, this or any other Indenture, the Security Agreement, the
Pledge Agreement, the Security Documents or the Intercreditor Agreement, or the
validity, effectiveness, genuineness, enforceability or sufficiency of this or
any other Indenture, the Security Agreement, the Pledge Agreement, the Security
Documents or the Intercreditor Agreement, or for any failure of the Company or
any Guarantor or any other party to this Indenture, the Security Agreement, the
Pledge Agreement, the Security Documents or the Intercreditor Agreement to
perform its obligations hereunder or thereunder.  None of the Notes Collateral Agent or any of
its agents or employees shall be under any obligation to the Trustee or any
Holder to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this or any other Indenture, the
Security Agreement, the Pledge Agreement, the Security Documents or the
Intercreditor Agreement or to inspect the properties, books or records of the
Company or any Guarantor.


 


(d)           The Notes Collateral Agent shall be
entitled to rely, and shall be fully protected in relying, upon any writing,
resolution, notice, consent, certificate, affidavit, letter, telegram, facsimile,
telex or telephone message, statement 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, without limitation, counsel to the Company or any Guarantor),
independent accountants and other experts and advisors selected by the Notes
Collateral Agent.  The Notes Collateral
Agent shall be fully justified in failing or refusing to take any action under
this or any other Indenture, the Security Documents or the Intercreditor
Agreement unless it shall first receive such advice or concurrence of the
Trustee as it deems appropriate and, if it so requests, it shall first be
indemnified to its satisfaction by the Holders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action.  The Notes
Collateral Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this or any other Indenture, the Security
Documents or the Intercreditor Agreement in accordance with a request or consent
of the Trustee and such request and any action taken or failure to act pursuant
thereto shall be binding upon all of the Holders.


 


(e)           The Notes Collateral Agent shall not
be deemed to have knowledge or notice of the occurrence of any Default or Event
of Default, unless the Notes Collateral Agent shall have received written
notice from the Trustee or the Company referring to this Indenture, describing
such Default or Event of Default and stating that such notice is a “notice of
default.”  The Notes Collateral Agent
shall take such action with respect to such Default or Event of Default as may
be requested by the Trustee in accordance with Article Five (subject to Section 1410);
provided, however,
that unless and until the Notes Collateral Agent has received any such request,
the Notes Collateral Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable.


 


(f)            The Bank of New York Mellon Trust
Company, N.A. and its Affiliates (and any successor Notes Collateral Agent and
its Affiliates) may make loans to, issue letters of credit for the account of,
accept deposits from, acquire equity interests in and generally engage in any
kind of banking, trust, financial advisory, underwriting, or other business
with the Company and the Guarantors as though it was not the Notes Collateral
Agent hereunder and without notice to or consent of the Trustee.  The Trustee and the Holders acknowledge that,
pursuant to such activities, The Bank of New York Mellon Trust Company, N.A. or
its Affiliates (and any successor Notes Collateral Agent and its Affiliates)
may receive information regarding the Company and the Guarantors (including 


 


104

















 


information that may be subject to
confidentiality obligations in favor of the Company and the Guarantors) and acknowledge
that the Notes Collateral Agent shall not be under any obligation to provide
such information to the Trustee or the Holders. 
Nothing herein shall impose or imply any obligation on the part of The
Bank of New York Mellon Trust Company, N.A. (or any successor Notes Collateral
Agent) to advance funds.


 


(g)           The Notes Collateral Agent may resign
at any time upon thirty (30) days prior written notice to the Trustee and the
Company, such resignation to be effective upon the acceptance of a successor
agent to its appointment as Notes Collateral Agent.  If the Notes Collateral Agent resigns under
this Indenture, the Trustee, subject to the consent of the Company (which shall
not be unreasonably withheld and which shall not be required during a
continuing Event of Default), shall appoint a successor Notes Collateral
Agent.  If no successor notes collateral
agent is appointed prior to the intended effective date of the resignation of
the Notes Collateral Agent (as stated in the notice of resignation), the Notes
Collateral Agent may appoint, after consulting with the Trustee, subject to the
consent of the Company (which shall not be unreasonably withheld and which
shall not be required during a continuing Event of Default), a successor notes
collateral agent.  If no successor notes
collateral agent is appointed and consented to by the Company pursuant to the
preceding sentence within thirty (30) days after the intended effective date of
resignation (as stated in the notice of resignation) the Notes Collateral Agent
shall be entitled to petition at the expense of the Company a court of
competent jurisdiction to appoint a successor. 
Upon the acceptance of its appointment as successor notes collateral
agent hereunder, such successor notes collateral agent shall succeed to all the
rights, powers and duties of the retiring Notes Collateral Agent, and the term “Notes
Collateral Agent” shall mean such successor notes collateral agent, and the
retiring Notes Collateral Agent’s appointment, powers and duties as the Notes
Collateral Agent shall be terminated. 
After the retiring Notes Collateral Agent’s resignation hereunder, the
provisions of this Section 1410 (and Section 1412) shall continue to
inure to its benefit and the retiring Notes Collateral Agent shall not by
reason of such resignation be deemed to be released from liability as to any
actions taken or omitted to be taken by it while it was the Notes Collateral
Agent under this Indenture.


 


(h)           The Trustee shall initially act as
Notes Collateral Agent and shall be authorized to appoint co-Notes Collateral
Agents as necessary in its sole discretion. 
Except as otherwise explicitly provided herein or in the Security
Documents or the Intercreditor Agreement, neither the Notes Collateral Agent
nor any of its officers, directors, employees or agents shall be liable for
failure to demand, collect or realize upon any of the Collateral or for any
delay in doing so or shall be under any obligation to sell or otherwise dispose
of any Collateral upon the request of any other Person or to take any other
action whatsoever with regard to the Collateral or any part thereof.  The Notes Collateral Agent shall be
accountable only for amounts that it actually receives as a result of the
exercise of such powers, and neither the Notes Collateral Agent nor any of its
officers, directors, employees or agents shall be responsible for any act or
failure to act hereunder, except for its own willful misconduct, gross negligence
or bad faith.


 


(i)            The Trustee, as such and as Notes
Collateral Agent, is authorized and directed to (i) enter into the
Security Agreement, the Pledge Agreement and the Security Documents, (ii) enter
into the Intercreditor Agreement, (iii) bind the Holders on the terms as
set forth in the Security Agreement, the Pledge Agreement and the Security
Documents and the Intercreditor Agreement and (iv) perform and observe its
obligations under the Security Agreement, the Pledge Agreement and the Security
Documents and the Intercreditor Agreement.


 


(j)            The Trustee agrees that it shall not
(and shall not be obliged to), and shall not instruct the Notes Collateral
Agent to, unless specifically requested to do so by a majority of the Holders,
take or cause to be taken any action to enforce its rights under this Indenture
or against the Company and the Guarantors, including the commencement of any
legal or equitable proceedings, to foreclose any Lien on, or otherwise enforce
any security interest in, any of the Collateral.


 


If at any time or times the Trustee shall receive (i) by
payment, foreclosure, set-off or otherwise, any proceeds of Collateral or any
payments with respect to the Obligations arising under, or relating to, this
Indenture, except for any such proceeds or payments received by the Trustee
from the Notes Collateral Agent pursuant to the terms of this Indenture, or (ii) payments
from the Notes Collateral Agent in excess of the amount required to be paid to
the Trustee pursuant to Article Five, the Trustee shall promptly turn the
same over to the Notes Collateral Agent, in kind, and with such endorsements as
may be required to negotiate the same to the Notes Collateral Agent.


 


105

















 


(k)           The Trustee is each Holder’s agent
for the purpose of perfecting the Holders’ security interest in assets which,
in accordance with Article 9 of the Uniform Commercial Code, can be
perfected only by possession.  Should the
Trustee obtain possession of any such Collateral, upon request from the
Company, the Trustee shall notify the Notes Collateral Agent thereof, and,
promptly upon the Notes Collateral Agent’s request therefor, shall deliver such
Collateral to the Notes Collateral Agent or otherwise deal with such Collateral
in accordance with the Notes Collateral Agent’s instructions.


 


(l)            The Notes Collateral Agent shall
have no obligation whatsoever to the Trustee or any of the Holders to assure
that the Collateral exists or is owned by the Company and the Guarantors or is
cared for, protected or insured or has been encumbered, or that the Notes
Collateral Agent’s Liens have been properly or sufficiently or lawfully
created, perfected, protected, maintained or enforced or are entitled to any
particular priority, or to determine whether all of the Grantor’s property
constituting collateral intended to be subject to the Lien and security
interest of the Security Documents has been properly and completely listed or
delivered, as the case may be, or the genuineness, validity, marketability or
sufficiency thereof or title thereto, or to exercise at all or in any
particular manner or under any duty of care, disclosure or fidelity, or to
continue exercising, any of the rights, authorities and powers granted or
available to the Notes Collateral Agent pursuant to this Indenture, any
Security Document or the Intercreditor Agreement, it being understood and
agreed that in respect of the Collateral, or any act, omission or event related
thereto, the Notes Collateral Agent may act in any manner it may deem
appropriate, in its sole discretion given the Notes Collateral Agent’s own
interest in the Collateral, and that the Notes Collateral Agent shall have no
other duty or liability whatsoever to the Trustee or any Holder as to any of
the foregoing.


 


(m)          If the Company (i) incurs any
obligations in respect of Lenders Debt at any time when no intercreditor
agreement is in effect or at any time when Indebtedness constituting Lenders
Debt entitled to the benefit of an existing Intercreditor Agreement is
concurrently retired, and (ii) delivers to the Notes Collateral Agent an
Officers’ Certificate so stating and requesting the Notes Collateral Agent to
enter into an intercreditor agreement (on substantially the same terms as the
Intercreditor Agreement) in favor of a designated agent or representative for
the holders of the Lenders Debt so incurred, the Notes Collateral Agent shall
(and is hereby authorized and directed to) enter into such intercreditor
agreement (at the sole expense and cost of the Company, including legal fees
and expenses of the Notes Collateral Agent), bind the Holders on the terms set
forth therein and perform and observe its obligations thereunder.


 


(n)           No provision of this Indenture, the
Security Agreement, the Pledge Agreement the Intercreditor Agreement or any
Security Document shall require the Notes Collateral Agent (or the Trustee) to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or thereunder or to take or omit to
take any action hereunder or thereunder or take any action at the request or
direction of Holders (or the Trustee in the case of the Notes Collateral Agent)
if it shall have reasonable grounds for believing that repayment of such funds
is not assured to it.


 


(o)           The Notes Collateral Agent (i) shall
not be liable for any action it takes or omits to take in good faith which it
reasonably believes to be authorized or within its rights or powers, or for any
error of judgment made in good faith by a Responsible Officer, unless it is
proved that the Notes Collateral Agent was grossly negligent in ascertaining
the pertinent facts, (ii) shall not be liable for interest on any money
received by it except as the Notes Collateral Agent may agree in writing with
the Company (and money held in trust by the Notes Collateral Agent need not be
segregated from other funds except to the extent required by law), and (iii) may
consult with counsel of its selection and the advice or opinion of such counsel
as to matters of law shall be full and complete authorization and protection
from liability in respect of any action taken, omitted or suffered by it in
good faith and in accordance with the advice or opinion of such counsel.  The grant of permissive rights or powers to
the Notes Collateral Agent shall not be construed to impose duties to act.


 


SECTION 1411.           Designations.


 


Except as provided in the next sentence, for
purposes of the provisions hereof and of the Intercreditor Agreement requiring
the Company to designate Indebtedness for the purposes of the terms “Lenders
Debt” and “Other Pari Passu Lien Obligations” or any other such designations
hereunder or under the Intercreditor Agreement, any such designation shall be
sufficient if the relevant designation is set forth in writing, signed on
behalf of 


 


106

















 


the Company by an Officer and delivered to the
Trustee, the Notes Collateral Agent and the Bank Collateral Agent.  For all purposes hereof and the of
Intercreditor Agreement, the Company hereby designates the Obligations pursuant
to the Credit Agreement as “Lenders Debt.”


 


SECTION 1412.           Compensation
and Indemnification.


 


The Notes Collateral Agent shall be entitled to the
compensation and indemnification set forth in Section 607 (with the
references to the Trustee therein being deemed to refer to the Notes Collateral
Agent).


 


SECTION 1413.           Intercreditor
Agreement, Security Agreement, Pledge Agreement and Other Security Documents.


 


The Trustee and Notes Collateral Agent is each
hereby directed and authorized to execute and deliver the Intercreditor
Agreement, the Security Agreement, the Pledge Agreement and any other Security
Documents in which it is named as a party. 
It is hereby expressly acknowledged and agreed that, in doing so, the
Trustee and the Notes Collateral Agent are not responsible for the terms or
contents of such agreements, or for the validity or enforceability thereof, or
the sufficiency thereof for any purpose. 
Whether or not so expressly stated therein, in entering into, or taking
(or forbearing from) any action under or pursuant to, the Intercreditor
Agreement, the Security Agreement, the Pledge Agreement or any other Security
Documents, the Trustee and Notes Collateral Agent each shall have all of the
rights, immunities, indemnities and other protections granted to it under this
Indenture (in addition to those that may be granted to it under the terms of
such other agreement or agreements).


 


ARTICLE
FIFTEEN


 


RANKING OF
NOTE LIENS


 


SECTION 1501.              Relative Rights.


 


The Intercreditor Agreement defines the relative
rights, as lienholders, of the ABL Secured Parties, the Senior Secured
Noteholder Secured Parties and Convertible Notes Secured Parties.  Nothing in this Indenture or the
Intercreditor Agreement will:


 


(a)           impair, as between the Company and
Holders, the obligation of the Company, which is absolute and unconditional, to
pay principal of, premium and interest on such Notes in accordance with their
terms or to perform any other obligation of the Company or any Guarantor under
this Indenture, the Notes, the Guarantees and any Security Documents;


 


(b)           restrict the right of any Holder to
sue for payments that are then due and owing, in a manner not inconsistent with
the provisions of the Intercreditor Agreement;


 


(c)           prevent the Trustee or any Holder
from exercising against the Company or any Guarantor any of its other available
remedies upon a Default or Event of Default (other than its rights as a secured
party, which are subject to the Intercreditor Agreement); or


 


(d)           restrict the right of the Trustee or
any Holder:


 


(i)      to file and prosecute a
petition seeking an order for relief in an involuntary bankruptcy case as to
the Company or any Guarantor or otherwise to commence, or seek relief commencing,
any Insolvency or Liquidation Proceeding involuntarily against the Company or
any Guarantor;


 


(ii)     to make, support or
oppose any request for an order for dismissal, abstention or conversion in any
Insolvency or Liquidation Proceeding;


 


107

















 


(iii)    to make, support or
oppose, in any Insolvency or Liquidation Proceeding, any request for an order
extending or terminating any period during which the debtor (or any other
Person) has the exclusive right to propose a plan of reorganization or other
dispositive restructuring or liquidation plan therein;


 


(iv)    to seek the creation of,
or appointment to, any official committee representing creditors (or certain of
the creditors) in any Insolvency or Liquidation Proceeding and, if appointed,
to serve and act as a member of such committee without being in any respect
restricted or bound by, or liable for, any of the obligations under this Article Fifteen;


 


(v)     to seek or object to the
appointment of any professional person to serve in any capacity in any
Insolvency or Liquidation Proceeding or to support or object to any request for
compensation made by any professional person or others therein;


 


(vi)    to make, support or oppose
any request for order appointing a trustee or examiner in any Insolvency or
Liquidation Proceeding; or


 


(vii)   otherwise to make, support
or oppose any request for relief in any Insolvency or Liquidation Proceeding
that it is permitted by law to make, support or oppose:


 


(x)           as
if it were a holder of unsecured claims; or


 


(y)           as to any matter
relating to any plan of reorganization or other restructuring or liquidation
plan or as to any matter relating to the administration of the estate or the disposition
of the case or proceeding (in each case set forth in this clause (vii) except
as set forth in the Intercreditor Agreement).


 


108














 


IN WITNESS WHEREOF, the parties hereto have
caused this Indenture to be duly executed all as of the day and year first
above written.


 


	
   

  	
  SEALY MATTRESS COMPANY

  	
   

  
	
   

  	
   

  	
  By:

  	
  *

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Jeffrey C.
  Ackerman

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Executive
  Vice President & Chief Financial Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SEALY CORPORATION

  	
   

  
	
   

  	
   

  	
  By:

  	
  *

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Jeffrey C.
  Ackerman

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Executive
  Vice President & Chief Financial Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ADVANCED SLEEP PRODUCTS

  
	
   

  	
  WESTERN MATTRESS COMPANY

  
	
   

  	
  SEALY COMPONENTS-PADS, INC.

  
	
   

  	
  THE OHIO MATTRESS COMPANY LICENSING AND
  COMPONENTS GROUP

  
	
   

  	
  SEALY MATTRESS MANUFACTURING COMPANY, INC.

  
	
   

  	
  SEALY MATTRESS CORPORATION

  
	
   

  	
  SEALY-KOREA, INC.

  
	
   

  	
  OHIO-SEALY MATTRESS MANUFACTURING CO.

  
	
   

  	
  SEALY MATTRESS COMPANY OF ILLINOIS

  
	
   

  	
  A. BRANDWEIN & CO.

  
	
   

  	
  SEALY OF MARYLAND AND VIRGINIA, INC.

  
	
   

  	
  OHIO-SEALY MATTRESS MANUFACTURING CO. INC.

  
	
   

  	
  MATTRESS HOLDINGS INTERNATIONAL, LLC

  
	
   

  	
  SEALY MATTRESS COMPANY OF MICHIGAN, INC.

  
	
   

  	
  SEALY OF MINNESOTA, INC.

  
	
   

  	
  SEALY MATTRESS COMPANY OF KANSAS CITY, INC.

  
	
   

  	
  SEALY MATTRESS COMPANY OF ALBANY, INC.

  
	
   

  	
  SEALY TECHNOLOGY LLC

  
	
   

  	
  SEALY REAL ESTATE, INC.

  
	
   

  	
  NORTH AMERICAN BEDDING COMPANY

  
	
   

  	
  SEALY, INC.

  
	
   

  	
  SEALY MATTRESS COMPANY OF PUERTO RICO

  
	
   

  	
  SEALY MATTRESS COMPANY OF MEMPHIS

  
	
   

  	
  SEALY TEXAS MANAGEMENT, INC.

  
	
   

  	
  SEALY MATTRESS CO. OF S.W. VIRGINIA

  



 


	
   

  	
   

  	
  By:

  	
  *

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Jeffrey C.
  Ackerman

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice
  President & Chief Financial Officer

  	
   

  



 






* The signature appearing immediately below
shall serve as a signature at each place indicated with an “*” on this page:


 


	
   

  	
   

  	
  By:

  	
  /s/ Jeffrey
  C. Ackerman

  	
   

  
	
   

  	
   

  	
   

  	
  Jeffrey C.
  Ackerman

  	
   

  



 


S-1

















 


	
   

  	
  THE BANK OF NEW YORK MELLON TRUST COMPANY,
  N.A.

  
	
   

  	
  as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Christie Leppert

  
	
   

  	
   

  	
  Name: Christie Leppert

  
	
   

  	
   

  	
  Title: Assistant Vice President

  



 


S-2

















 


	
   

  	
  THE BANK OF NEW YORK MELLON TRUST COMPANY,
  N.A.

  
	
   

  	
  as Notes Collateral Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Christie Leppert

  
	
   

  	
   

  	
  Name: Christie Leppert

  
	
   

  	
   

  	
  Title: Assistant Vice President

  



 


S-3

















 


Guarantors


 


Sealy Corporation


Sealy Mattress Corporation


Sealy Mattress Company of Puerto Rico


Ohio-Sealy Mattress Manufacturing Co. Inc.


Ohio-Sealy Mattress Manufacturing Co.


Sealy Mattress Company of Michigan, Inc.


Sealy Mattress Company of Kansas City, Inc.


Sealy of Maryland and Virginia, Inc.


Sealy Mattress Company of Illinois


A. Brandwein & Co.


Sealy Mattress Company of Albany, Inc.


Sealy of Minnesota, Inc.


Sealy Mattress Company of Memphis


North American Bedding Company


Mattress Holdings International, LLC


Sealy, Inc.


The Ohio Mattress Company Licensing and Components Group


Sealy Mattress Manufacturing Company, Inc.


Sealy-Korea, Inc.


Sealy Technology LLC


Sealy Real Estate, Inc.


Sealy Texas Management, Inc.


Western Mattress Company


Advanced Sleep Products


Sealy Components-Pads, Inc.


Sealy Mattress Co. of S.W. Virginia


 

















 


EXHIBIT A


 


[FACE OF NOTE]


 


SEALY MATTRESS COMPANY


 


10.875% Senior Secured Note due 2016


 


	
  No.

  	
  CUSIP No.

  	
   

  
	
   

  	
  $

  	
   

  



 


SEALY MATTRESS COMPANY, an Ohio corporation
(the “Company”, which term includes any successor Person under the Indenture
hereinafter referred to), for value received, promises to pay to
                      ,
or its registered assigns, the principal sum of
                         
Dollars ($              ), on April 15, 2016.


 


	
  Interest
  Rate:

  	
   

  	
  10.875%
  per annum.

  
	
  Interest
  Payment Dates:

  	
   

  	
  April 15
  and October 15 of each year commencing October 15, 2009.

  
	
  Regular
  Record Dates:

  	
   

  	
  April 1
  and October 1 of each year.

  



 


Reference is hereby made to the further
provisions of this Note set forth on the reverse hereof, which further provisions
shall for all purposes have the same effect as if set forth at this place.


 


A-1

















 


IN WITNESS WHEREOF, the Company has caused
this Note to be signed manually or by facsimile by its duly authorized officers.


 


	
   

  	
  SEALY MATTRESS COMPANY

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


A-2

















 


(Form of Trustee’s Certificate of Authentication)


 


This is one of the 10.875% Senior Secured
Notes due 2016 referred to in the within-mentioned Indenture.


 


	
   

  	
  THE BANK OF NEW YORK MELLON TRUST COMPANY,
  N.A.

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
					



 


A-3

















 


[REVERSE SIDE OF NOTE]


 


SEALY MATTRESS COMPANY


 


10.875% Senior Secured Note due 2016


 


1.             Principal and Interest; Subordination.


 


The Company will pay the principal of this
Note on April 15, 2016.


 


The Company promises to pay interest on the
principal amount of this Note on each Interest Payment Date, as set forth
below, at the rate of 10.875% per annum (subject to adjustment as provided
below).


 


Interest will be payable semi-annually (to
the Holders of record of the Notes (or any Predecessor Notes)) at the close of
business on April 1 or October 1 immediately preceding the Interest
Payment Date) on each Interest Payment Date, commencing October 1, 2009.


 


Interest on this Note will accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from May 29, 2009; provided that,
if there is no existing default in the payment of interest and if this Note is
authenticated between a Regular Record Date referred to on the face hereof and
the next succeeding Interest Payment Date, interest shall accrue from such
Interest Payment Date.  Interest will be
computed on the basis of a 360-day year of twelve 30-day months.


 


The Company shall pay interest on overdue
principal and premium, if any, and interest on overdue installments of
interest, to the extent lawful, at a rate per annum equal to the rate of
interest applicable to the Notes.


 


2.             Method of Payment.


 


The Company will pay interest (except
defaulted interest) on the principal amount of the Notes on each April 15
and October 15 to the Persons who are Holders (as reflected in the Note
Register at the close of business on April 1 and October 1
immediately preceding the Interest Payment Date), in each case, even if the
Note is cancelled on registration of transfer or registration of exchange after
such Regular Record Date; provided that,
with respect to the payment of principal, the Company will make payment to the
Holder that surrenders this Note to any Paying Agent on or after April 15,
2016.


 


The Company will pay principal (premium, if
any) and interest in money of the United States that at the time of payment is
legal tender for payment of public and private debts.  However, the Company may pay principal
(premium, if any) and interest by its check payable in such money.  The Company may pay interest on the Notes
either (a) by mailing a check for such interest to a Holder’s registered
address (as reflected in the Note Register) or (b) by wire transfer to an
account located in the United States maintained by the payee.  If a payment date is a date other than a
Business Day at a place of payment, payment may be made at that place on the
next succeeding day that is a Business Day and no interest shall accrue for the
intervening period.


 


3.             Paying Agent and Note Registrar.


 


Initially, the Trustee will act as Paying
Agent and Note Registrar.  The Company
may change any Paying Agent or Note Registrar upon written notice thereto.  The Company, any Subsidiary or any Affiliate
of any of them may act as Paying Agent, Note Registrar or co-registrar.


 


4.             Indenture; Limitations.


 


The Company issued the Notes under an
Indenture dated as of May 29, 2009 (the “Indenture”), among the Company,
the Guarantors and The Bank of New York Mellon Trust Company, N.A., as trustee
(the “Trustee”).  Capitalized terms
herein are used as defined in the Indenture unless otherwise indicated.  The terms of 


 


A-4

















 


the Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust Indenture
Act.  The Notes are subject to all such
terms, and Holders are referred to the Indenture and the Trust Indenture Act
for a statement of all such terms.  To
the extent permitted by applicable law, in the event of any inconsistency between
the terms of this Note and the terms of the Indenture, the terms of the
Indenture shall control.


 


The Notes are senior secured obligations of
the Company.  The Indenture does not
limit the aggregate principal amount of the Notes.


 


5.             Redemption.


 


Optional Redemption.  Except as described below, the Notes are not
redeemable at the Company’s option until April 15, 2012.  From and after April 15, 2012, the
Company may redeem the Notes, in whole or in part, upon not less than 30 nor
more than 60 days’ prior notice by first class mail, postage prepaid, with a
copy to the Trustee, to each Holder of Notes to the address of such Holder
appearing in the Note Register at the Redemption Prices (expressed as
percentages of principal amount) set forth below, plus accrued and unpaid
interest thereon, if any, to the applicable redemption date, subject to the
right of Holders of record on the relevant Record Date to receive interest due
on the relevant Interest Payment Date, if redeemed during the twelve-month period
beginning on April 15 of each of the years indicated below:


 


	
  Year

  	
   

  	
  Percentage

  	
   

  
	
  2012

  	
   

  	
  108.156

  	
  %

  
	
  2013

  	
   

  	
  105.438

  	
  %

  
	
  2014

  	
   

  	
  102.719

  	
  %

  
	
  2015 and thereafter

  	
   

  	
  100.000

  	
  %

  



 


In addition, prior to April 15, 2011,
the Company may, at its option, redeem up to 40% of the aggregate principal
amount of Notes issued under the Indenture at a redemption price equal to
110.875% of the aggregate principal amount thereof, plus accrued and unpaid
interest thereon, if any, to the Redemption Date, subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant Interest Payment Date, with the net proceeds of one or more Equity
Offerings of the Company or any direct or indirect parent of the Company to the
extent such net proceeds are contributed to the Company; provided that
at least 60% of the sum of the aggregate principal amount of Notes originally
issued under the Indenture remains outstanding immediately after the occurrence
of each such redemption; provided further that
each such redemption occurs within 90 days of the date of closing of each such
Equity Offering.


 


Additionally, during any 12-month period
commencing on the Issue Date, the Company will be entitled at its option to
redeem up to 10% of the aggregate principal amount of the Notes at a redemption
price equal to 103.000% of the aggregate principal amount thereof, plus accrued
interest thereon, if any, to the Redemption Date, subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant Interest Payment Date.  Notice
of any such redemption must be mailed by first-class mail to each Holder’s
registered address, not less than 30 or more than 60 days prior to the
redemption date.


 


At any time prior to April 15, 2012, the
Company may also redeem all or a part of the Notes, upon not less than 30 nor
more than 60 days’ prior notice mailed by first-class mail to each Holder’s
registered address, at a Redemption Price equal to 100% of the principal amount
of notes redeemed plus the Applicable Premium as of, and accrued and unpaid
interest, if any, to the Redemption Date, subject to the rights of Holders of
Notes on the relevant record date to receive interest due on the relevant Interest
Payment Date.


 


6.             Repurchase upon a Change in Control
and Asset Sales.


 


Upon the occurrence of (a) a Change in
Control, the Holders of the Notes will have the right to require that the
Company purchase such Holder’s outstanding Notes, in whole or in part, at a purchase
price of 101% of the principal amount thereof, plus accrued and unpaid
interest, if any, to the date of purchase and (b) Asset Sales, the Company
may be obligated to make offers to purchase Notes and Other Pari Passu Lien
Obligations with a portion


 


A-5

















 


of the Net Proceeds of such Asset Sales at a
redemption price of 100% of the principal amount thereof plus accrued and
unpaid interest, if any, to the date of purchase.


 


7.             Denominations; Transfer;
Exchange.


 


The Notes are in registered form without
coupons, in minimum denominations of $2,000 and integral multiples of $1,000 in
excess thereof.  A Holder may register
the transfer or exchange of Notes in accordance with the Indenture.  The Note Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and to
pay any taxes and fees required by law or permitted by the Indenture.  The Note Registrar need not register the
transfer or exchange of any Notes selected for redemption (except the unredeemed
portion of any Note being redeemed in part).


 


8.             Persons Deemed Owners.


 


A registered Holder may be treated as the
owner of a Note for all purposes.


 


9.             Unclaimed Money.


 


If money for the payment of principal
(premium, if any) or interest remains unclaimed for two years, the Trustee and
the Paying Agent will pay the money back to the Company at its written request.  After that, Holders entitled to the money
must look to the Company for payment, unless an abandoned property law
designates another Person, and all liability of the Trustee and such Paying
Agent with respect to such money shall cease.


 


10.           Discharge and Defeasance Prior to
Redemption or Maturity.


 


If the Company irrevocably deposits, or
causes to be deposited, with the Trustee money or Government Securities
sufficient to pay the then outstanding principal of (premium, if any) and accrued
interest on the Notes (a) to Redemption or Maturity Date, the Company will
be discharged from its obligations under the Indenture and the Notes, except in
certain circumstances for certain covenants thereof, and (b) to the Stated
Maturity, the Company will be discharged from certain covenants set forth in
the Indenture.


 


11.           Amendment; Supplement; Waiver.


 


Subject to certain exceptions, the Indenture,
the Security Documents, the Intercreditor Agreement or the Notes may be amended
or supplemented with the consent of the Holders of at least a majority in
aggregate principal amount of the Outstanding Notes, and any existing Default
or compliance with any provision may be waived with the consent of the Holders
of a majority in aggregate principal amount of the Outstanding Notes.  Without notice to or the consent of any
Holder, the parties thereto may amend or supplement the Indenture, the Security
Documents, the Intercreditor Agreement or the Notes to, among other things,
cure any ambiguity, defect or inconsistency and make any change that does not adversely
affect the rights of any Holder.


 


12.           Restrictive Covenants.


 


The Indenture contains certain covenants,
including, without limitation, covenants with respect to the following matters:
(i) Incurrence of Indebtedness and Issuance of Disqualified Stock and
Preferred Stock; (ii) Restricted Payments; (iii) transactions with
Affiliates; (iv) Liens; (v) purchase of Notes upon a Change in
Control; (vi) disposition of proceeds of Asset Sales; (vii) guarantees
of Indebtedness by Restricted Subsidiaries; (viii) dividend and other
payment restrictions affecting Restricted Subsidiaries; and (ix) merger
and certain transfers of assets.  Within
120 days (or the successor time period then in effect under the rules and
regulations of the Exchange Act) after the end of each fiscal year, the Company
must report to the Trustee on compliance with such limitations.


 


13.           Successor Persons.


 


When a successor Person or other entity
assumes all the obligations of its predecessor under the Notes and the
Indenture, the predecessor Person will be released from those obligations.


 


A-6














 


14.           Remedies for Events of Default.


 


If an Event of Default, as defined in the
Indenture, occurs and is continuing, the Trustee or the Holders of at least 30%
in principal amount of the Outstanding Notes may declare all the Notes to be
immediately due and payable.  If a
bankruptcy or insolvency default with respect to the Company or any of its
Significant Subsidiaries occurs and is continuing, the Notes automatically
become immediately due and payable. 
Holders may not enforce the Indenture, the Security Documents, the
Intercreditor Agreement or the Notes except as provided in the Indenture.  The Trustee and the Notes Collateral Agent
may require indemnity reasonably satisfactory to it before it enforces the
Indenture or the Notes.  Subject to
certain limitations, Holders of at least a majority in aggregate principal
amount of the Outstanding Notes may direct the Trustee in its exercise of any
trust or power.


 


15.           Guarantees.


 


The Company’s obligations under the Notes are
fully, irrevocably and unconditionally guaranteed on a senior secured basis, to
the extent set forth in the Indenture, by each of the Guarantors.


 


16.           Trustee Dealings with Company.


 


The Trustee or the Notes Collateral Agent
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Notes and may make loans to, accept deposits from, perform
services for, and otherwise deal with, the Company and its Affiliates as if it
were not the Trustee or the Notes Collateral Agent.


 


17.           Authentication.


 


This Note shall not be valid until the
Trustee signs the certificate of authentication on the other side of this Note.


 


18.           Abbreviations.


 


Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN
ENT (= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian) and U/G/M/A (=
Uniform Gifts to Minors Act).


 


The Company will furnish to any Holder upon
written request and without charge a copy of the Indenture.  Requests may be made to Sealy Mattress
Company, One Office Parkway, Trinity, North Carolina 27230, Attention:  General Counsel.


 


A-7

















 


ASSIGNMENT FORM


 


To assign this Note, fill in
the form below:


 


(I) or (we) assign and
transfer this Note to:


 


	
   

  
	
  (Insert assignee’s legal name)

  
	
   

  
	
   

  
	
  (Insert assignee’s soc. sec. or tax I.D. no.)

  
	
   

  
	
   

  
	
  (Print or type assignee’s name, address and zip code)

  



 


and irrevocably appoint


 


to transfer this Note on the
books of the Company.  The agent may
substitute another to act for him.


 


	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Your
  Signature:

  	
   

  
	
   

  	
   

  	
  (Sign
  exactly as your name appears on the face of this Note)

  



 


	
  Signature
  Guarantee*:

  	
   

  	
   

  



 






*                                         Participant in a recognized Signature
Guarantee Medallion Program (or other signature guarantor acceptable to the
Trustee).


 


A-8

















 


OPTION OF HOLDER TO ELECT PURCHASE


 


If you want to elect to have this Note
purchased by the Company pursuant to Section 1017 or 1018 of the
Indenture, check the appropriate box below:


 


o Section 1017                                     o Section 1018


 


If you want to elect to have only part of the
Note purchased by the Company pursuant to Section 1017 or Section 1018
of the Indenture, state the amount you elect to have purchased:


 


	
   

  	
   

  	
  $ 

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
  Your
  Signature:

  	
   

  
	
   

  	
   

  	
  (Sign
  exactly as your name appears on the face of this Note)

  



 


	
   

  	
  Tax
  Identification No.:

  	
   

  



 


	
  Signature
  Guarantee*:

  	
   

  	
   

  



 






*                                         Participant in a recognized Signature
Guarantee Medallion Program (or other signature guarantor acceptable to the
Trustee).


 


A-9

















 


SCHEDULE OF EXCHANGES OF INTERESTS IN THE
GLOBAL NOTE*


 


The following exchanges of a part of this
Global Note for an interest in another Global Note or for a Definitive Note, or
exchanges of a part of another Global Note or Definitive Note for an interest
in this Global Note, have been made:


 


	
  Date of Exchange

  	
   

  	
  

  Amount of decrease

  in Principal Amount

  of this Global Note

  	
   

  	
  

  Amount of increase

  in Principal Amount

  of this Global Note

  	
   

  	
  Principal Amount

  of this Global Note

  following such

  decrease (or increase)

  	
   

  	
  

  Signature of authorized signatory of Trustee

  or Custodian

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 






*This
schedule should be included only if the Note is issued in global form.


 


A-10














 


EXHIBIT B


 


FORM OF CERTIFICATE OF TRANSFER


 


Sealy
Mattress Company


One
Office Parkway


Trinity,
North Carolina 27370


 


The
Bank of New York Mellon Trust Company, N.A.


10161
Centurion Parkway


Jacksonville,
Florida 32256


 


Re:  10.875% Senior Secured
Notes due 2016


 


Reference is hereby made to the Indenture,
dated as of May 29, 2009 (the “Indenture”),
among Sealy Mattress Company, as Company (the “Company”),
the Guarantors party thereto and The Bank of New York Mellon Trust Company,
N.A., as trustee and as collateral agent. 
Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.


 


                                            
(the “Transferor”) owns and proposes to
transfer the Note[s] or interest in such Note[s] specified in Annex A hereto,
in the principal amount of $            in such Note[s] or interests (the “Transfer”), to (the “Transferee”),
as further specified in Annex A hereto. 
In connection with the Transfer, the Transferor hereby certifies that:


 


[CHECK ALL THAT APPLY]


 


1.             o  Check if Transferee will take delivery of
a beneficial interest in the 144A Global Note or a Restricted Definitive Note
pursuant to Rule 144A.  The
Transfer is being effected pursuant to and in accordance with Rule 144A
under the Securities Act of 1933, as amended (the “Securities
Act”), and, accordingly, the Transferor hereby further certifies
that the beneficial interest or Definitive Note is being transferred to a
Person that the Transferor reasonably believes is purchasing the beneficial
interest or Definitive Note for its own account, or for one or more accounts
with respect to which such Person exercises sole investment discretion, and
such Person and each such account is a “qualified institutional buyer” within
the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A,
and such Transfer is in compliance with any applicable blue sky securities laws
of any state of the United States.  Upon
consummation of the proposed Transfer in accordance with the terms of the Indenture,
the transferred beneficial interest or Definitive Note will be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the 144A Global Note and/or the Restricted Definitive Note and in the Indenture
and the Securities Act.


 


2.             o  Check if Transferee will take delivery of
a beneficial interest in the Regulation S Global Note or a Restricted
Definitive Note pursuant to Regulation S.  The Transfer is being effected pursuant to
and in accordance with Rule 903 or Rule 904 under the Securities Act
and, accordingly, the Transferor hereby further certifies that (i) the
Transfer is not being made to a Person in the United States and (x) at the
time the buy order was originated, the Transferee was outside the United States
or such Transferor and any Person acting on its behalf reasonably believed and
believes that the Transferee was outside the United States or (y) the
transaction was executed in, on or through the facilities of a designated
offshore securities market and neither such Transferor nor any Person acting on
its behalf knows that the transaction was prearranged with a buyer in the
United States, (ii) no directed selling efforts have been made in
contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S under the Securities Act, (iii) the transaction is not part
of a plan or scheme to evade the registration requirements of the Securities
Act and (iv) if the proposed transfer is being made prior to the
expiration of the Restricted Period, the transfer is not being made to a U.S.
Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser).  Upon consummation of the proposed transfer in
accordance with the terms of the Indenture, the transferred beneficial interest
or Definitive Note will be subject to the restrictions on Transfer enumerated
in the Private Placement 


 


B-1

















 


Legend printed on the
Regulation S Global Note and/or the Restricted Definitive Note and in the
Indenture and the Securities Act.


 


3.             o  Check and complete if Transferee will take
delivery of a beneficial interest in the IAI Global Note or a Restricted
Definitive Note pursuant to any provision of the Securities Act other than Rule 144A
or Regulation S.  The Transfer is
being effected in compliance with the transfer restrictions applicable to
beneficial interests in Restricted Global Notes and Restricted Definitive Notes
and pursuant to and in accordance with the Securities Act and any applicable
blue sky securities laws of any state of the United States, and accordingly the
Transferor hereby further certifies that (check one):


 


(a)           o  such Transfer is being effected pursuant
to and in accordance with Rule 144 under the Securities Act;


 


or


 


(b)           o  such Transfer is being effected to the
Company or a subsidiary thereof;


 


or


 


(c)           o  such Transfer is being effected pursuant
to an effective registration statement under the Securities Act and in
compliance with the prospectus delivery requirements of the Securities Act;


 


or


 


(d)           o  such Transfer is being effected to an
Institutional Accredited Investor and pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A, Rule 144,
Rule 903 or Rule 904, and the Transferor hereby further certifies
that it has not engaged in any general solicitation within the meaning of
Regulation D under the Securities Act and the Transfer complies with the
transfer restrictions applicable to beneficial interests in a Restricted Global
Note or Restricted Definitive Notes and the requirements of the exemption
claimed, which certification is supported by (1) a certificate executed by
the Transferee in the form of Exhibit D to the Indenture and (2) if
such Transfer is in respect of a principal amount of Notes at the time of
transfer of less than $250,000, an Opinion of Counsel provided by the
Transferor or the Transferee (a copy of which the Transferor has attached to
this certification), to the effect that such Transfer is in compliance with the
Securities Act.  Upon consummation of the
proposed transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the IAI Global Note and/or the Restricted Definitive Notes and in the Indenture
and the Securities Act.


 


4.             o  Check if Transferee will take delivery of
a beneficial interest in an Unrestricted Global Note or of an Unrestricted
Definitive Note.


 


(a)           Check if Transfer is
pursuant to Rule 144.  (i) The
Transfer is being effected pursuant to and in accordance with Rule 144
under the Securities Act and in compliance with the transfer restrictions contained
in the Indenture and any applicable blue sky securities laws of any state of
the United States and (ii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will no longer be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Global Notes, on Restricted Definitive Notes and in the Indenture.


 


(b)           Check if Transfer is
Pursuant to Regulation S.  (i) The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904
under the Securities Act and in compliance with the transfer restrictions contained
in the Indenture and any applicable blue sky securities laws of any state of
the United States and (ii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the proposed
Transfer in accordance 


 


B-2

















 


with the terms
of the Indenture, the transferred beneficial interest or Definitive Note will
no longer be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Global Notes, on Restricted
Definitive Notes and in the Indenture.


 


(c)           Check if Transfer is
Pursuant to Other Exemption.  (i) The
Transfer is being effected pursuant to and in compliance with an exemption from
the registration requirements of the Securities Act other than Rule 144, Rule 903
or Rule 904 and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the proposed
Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will not be subject to the restrictions
on transfer enumerated in the Private Placement Legend printed on the
Restricted Global Notes or Restricted Definitive Notes and in the Indenture.


 


This certificate and the statements contained
herein are made for your benefit and the benefit of the Company.


 


	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  [Insert Name of Transferor]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  	
   

  



 


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ANNEX A TO CERTIFICATE OF TRANSFER


 


1.             The Transferor owns and proposes to
transfer the following: 


 


[CHECK ONE OF (a) OR
(b)]


 


(i)            o  a
beneficial interest in the:


 


(i)                  o  144A
Global Note (CUSIP            ), or


 


(ii)                 o  Regulation
S Global Note (CUSIP               ), or


 


(iii)                o  IAI
Global Note (CUSIP                ); or


 


(b)           o  a
Restricted Definitive Note.


 


2.             After the Transfer the Transferee will
hold:


 


[CHECK ONE]


 


(a)           o  a
beneficial interest in the:


 


(i)                  o  144A
Global Note (CUSIP            ), or


 


(ii)                 o  Regulation
S Global Note (CUSIP               ), or


 


(iii)                o  IAI
Global Note (CUSIP                ); or


 


(b)           o  a
Restricted Definitive Note;


 


(c)           an Unrestricted Definitive Note,


 


in
accordance with the terms of the Indenture.


 


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EXHIBIT C


 


FORM OF CERTIFICATE OF EXCHANGE


 


Sealy
Mattress Company


One
Office Parkway


Trinity,
North Carolina 27370


 


The
Bank of New York Mellon Trust Company, N.A. 


10161 Centurion Parkway 

Jacksonville, Florida 32256


 


Re:  10.875% Senior Secured
Notes due 2016


 


(CUSIP         )


 


Reference is hereby made to the Indenture,
dated as of May 29, 2009 (the “Indenture”),
among Sealy Mattress Company, as Company (the “Company”),
the Guarantors party thereto and The Bank of New York Mellon Trust Company,
N.A., as trustee and as collateral agent. 
Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.


 


                         ,
(the “Owner”) owns and proposes to exchange
the Note[s] or interest in such Note[s] specified herein, in the principal
amount of $        
in such Note[s] or interests (the “Exchange”).  In connection with the Exchange, the Owner
hereby certifies that:


 


1.             Exchange of Restricted
Definitive Notes or Beneficial Interests in a Restricted Global Note for
Unrestricted  Definitive Notes or Beneficial Interests in an
Unrestricted Global Note.


 


(a)           o  Check if Exchange is from beneficial interest
in a Restricted Global Note to beneficial interest in an Unrestricted Global
Note,  In connection with the Exchange
of the Owner’s beneficial interest in a Restricted Global Note for a beneficial
interest in an Unrestricted Global Note in an equal principal amount, the Owner
hereby certifies (i) the beneficial interest is being acquired for the
Owner’s own account without transfer, (ii) such Exchange has been effected
in compliance with the transfer restrictions applicable to the Global Notes and
pursuant to and in accordance with the Securities Act of 1933, as amended (the “Securities Act”), (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the
beneficial interest in an Unrestricted Global Note is being acquired in
compliance with any applicable blue sky securities laws of any state of the
United States.


 


(b)           o  Check if Exchange is from beneficial interest
in a Restricted Global Note to Unrestricted Definitive Note,  In connection with the Exchange of the
Owner’s beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is
being acquired for the Owner’s own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions applicable
to the Restricted Global Notes and pursuant to and in accordance with the
Securities Act, (iii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the Definitive Note is being acquired
in compliance with any applicable blue sky securities laws of any state of the
United States.


 


(c)           o  Check if Exchange is from Restricted
Definitive Note to beneficial interest in an Unrestricted Global Note,  In connection with the Owner’s Exchange
of a Restricted Definitive Note for a beneficial interest in an Unrestricted
Global Note, the Owner hereby certifies (i) the beneficial interest is
being acquired for the Owner’s own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance
with the Securities Act, (iii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to 


 


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maintain
compliance with the Securities Act and (iv) the beneficial interest is
being acquired in compliance with any applicable blue sky securities laws of
any state of the United States.


 


(d)           o  Check if Exchange is from Restricted
Definitive Note to Unrestricted Definitive Note,  In connection with the Owner’s Exchange
of a Restricted Definitive Note for an Unrestricted Definitive Note, the Owner
hereby certifies (i) the Unrestricted Definitive Note is being acquired
for the Owner’s own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act
and (iv) the Unrestricted Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.


 


2.             Exchange of
Restricted Definitive Notes or Beneficial Interests in Restricted Global Notes
for Restricted Definitive Notes or Beneficial Interests in Restricted Global
Notes


 


(a)           o  Check if Exchange is from beneficial interest
in a Restricted Global Note to Restricted Definitive Note,  In connection with the Exchange of the
Owner’s beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner’s own account
without transfer,  Upon consummation of
the proposed Exchange in accordance with the terms of the Indenture, the
Restricted Definitive Note issued will continue to be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Definitive Note and in the Indenture and the Securities Act.


 


(b)           o  Check if Exchange is from Restricted
Definitive Note to beneficial interest in a Restricted Global Note,  In connection with the Exchange of the
Owner’s Restricted Definitive Note for a beneficial interest in the [CHECK
ONE]  o  144A Global Note, o  Regulation S Global Note, o  IAI Global Note with an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being
acquired for the Owner’s own account without transfer and (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance
with the Securities Act, and in compliance with any applicable blue sky
securities laws of any state of the United States,  Upon consummation of the proposed Exchange in
accordance with the terms of the Indenture, the beneficial interest issued will
be subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the relevant Restricted Global Note and in the Indenture and
the Securities Act.


 


This certificate and the statements contained
herein are made for your benefit and the benefit of the Company.


 


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  [Insert Name of Transferor]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  	
   

  



 


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EXHIBIT D


 


FORM OF CERTIFICATE FROM

ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR


 


Sealy
Mattress Company

One Office Parkway

Trinity, North Carolina 27370


 


The
Bank of New York Mellon Trust Company, N.A. 


10161 Centurion Parkway 

Jacksonville, Florida 32256


 


Re : 10.875% Senior Secured Notes due 2016


 


Reference is hereby made to the Indenture,
dated as of May 29, 2009 (the “Indenture”),
among Sealy Mattress Company, as Company (the “Company”),
the guarantors party thereto and The Bank of New York Mellon Trust Company,
N.A., as trustee and as collateral agent. 
Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.


 


In connection with our proposed purchase of $        
aggregate principal amount of:


 


(a)           o            a beneficial
interest in a Global Note, or


 


(b)           o            a Definitive Note,


 


we confirm that:


 


1.             We understand that any subsequent transfer
of the Notes or any interest therein is subject to certain restrictions and conditions
set forth in the Indenture and the undersigned agrees to be bound by, and not
to resell, pledge or otherwise transfer the Notes or any interest therein
except in compliance with, such restrictions and conditions and the Securities
Act of 1933, as amended (the “Securities Act”).


 


2.             We understand that the offer and sale of
the Notes have not been registered under the Securities Act, and that the Notes
and any interest therein may not be offered or sold except as permitted in the
following sentence.  We agree, on our own
behalf and on behalf of any accounts for which we are acting as hereinafter
stated, that if we should sell the Notes or any interest therein, we will do so
only (A) to the Company or any subsidiary thereof, (B) in accordance
with Rule 144A under the Securities Act to a “qualified institutional
buyer” (as defined therein), (C) to an institutional “accredited investor”
(as defined below) that, prior to such transfer, furnishes (or has furnished on
its behalf by a U.S. broker-dealer) to you and to the Company a signed letter
substantially in the form of this letter and, if such transfer is in respect of
a principal amount of Notes, at the time of transfer of less than $250,000, an
Opinion of Counsel in form reasonably acceptable to the Company to the effect
that such transfer is in compliance with the Securities Act, (D) outside
the United States in accordance with Rule 904 of Regulation S under the
Securities Act, (E) pursuant to the provisions of Rule 144 under the
Securities Act or (F) pursuant to an effective registration statement
under the Securities Act, and we further agree to provide to any Person
purchasing the Definitive Note or beneficial interest in a Global Note from us
in a transaction meeting the requirements of clauses (A) through (E) of
this paragraph a notice advising such purchaser that resales thereof are
restricted as stated herein.


 


3.             We understand that, on any proposed resale
of the Notes or beneficial interest therein, we will be required to furnish to
you and the Company such certifications, legal opinions and other information
as you and the Company may reasonably require to confirm that the proposed sale
complies with the foregoing restrictions. 
We further understand that the Notes purchased by us will bear a legend
to the foregoing effect.


 


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4.             We are an institutional “accredited
investor” (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation
D under the Securities Act) and have such knowledge and experience in financial
and business matters as to be capable of evaluating the merits and risks of our
investment in the Notes, and we and any accounts for which we are acting are
each able to bear the economic risk of our or its investment.


 


5.             We are acquiring the Notes or beneficial
interest therein purchased by us for our own account or for one or more accounts
(each of which is an institutional “accredited investor”) as to each of which
we exercise sole investment discretion.


 


You and the Company are entitled to rely upon
this letter and are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceedings or
official inquiry with respect to the matters covered hereby.


 


	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  [Insert Name of Transferor]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  	
   

  



 


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EXHIBIT E


 


FORM OF SUPPLEMENTAL INDENTURE

TO BE DELIVERED BY SUBSEQUENT GUARANTORS


 


SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated as of       , 200 , among (the “Guaranteeing Subsidiary”), a subsidiary of (or its permitted
successor), a [Delaware] corporation (the “Company”), the
Company, [Sealy Mattress Company] and The Bank of New York Mellon Trust
Company, N.A., as trustee and as collateral agent under the Indenture referred
to below (the “Trustee”).


 


W I T N E S S E T H


 


WHEREAS, the Company has heretofore executed
and delivered to the Trustee an indenture (the “Indenture”),
dated as of May 29, 2009 providing for the issuance of 10.875% Senior
Secured Notes due 2016 (the “Notes”);


 


WHEREAS, the Indenture provides that under
certain circumstances the Guaranteeing Subsidiary shall execute and deliver to
the Trustee a supplemental indenture pursuant to which the Guaranteeing
Subsidiary shall unconditionally guarantee all of the Company’s Obligations
under the Notes and the Indenture on the terms and conditions set forth herein
(the “Guarantee”); and


 


WHEREAS, pursuant to Section 901 of the
Indenture, the Trustee is authorized to execute and deliver this Supplemental
Indenture.


 


NOW, THEREFORE, in consideration of the
foregoing and for other good and valuable consideration, the receipt of which
is hereby acknowledged, the Guaranteeing Subsidiary and the Trustee mutually
covenant and agree for the equal and ratable benefit of the Holders of the
Notes as follows:


 


1.             CAPITALIZED TERMS.  Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.


 


2.             AGREEMENT TO GUARANTEE.  The Guaranteeing Subsidiary hereby agrees as
follows:


 


(a)           The Guaranteeing Subsidiary hereby becomes a
party to the Indenture as a Guarantor and as such will have all of the rights
and be subject to all of the obligations and agreements of a Guarantor under
the Indenture.  The Guaranteeing
Subsidiary agrees to be bound by all of the provisions of the Indenture applicable
to a Guarantor and to perform all of the obligations and agreements of a
Guarantor under the Indenture.


 


(b)           The Guaranteeing subsidiary agrees, on a
joint and several basis with all the existing Guarantors, to fully,
unconditionally and irrevocably Guarantee to each Holder of the Notes and the
Trustee the Obligations pursuant to Article Twelve of the Indenture of a
senior basis.


 


3.             NO RECOURSE AGAINST OTHERS.  No past, present or future director, officer,
employee, incorporator, stockholder or agent of the Guaranteeing Subsidiary, as
such, shall have any liability for any obligations of the Company or any
Guaranteeing Subsidiary under the Notes, any Note Guarantees, the Indenture or
this Supplemental Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. 
Each Holder of the Notes by accepting a Note waives and releases all such
liability.  The waiver and release are
part of the consideration for issuance of the Notes.  Such waiver may not be effective to waive
liabilities under the federal securities laws and it is the view of the SEC
that such a waiver is against public policy.


 


4.             NEW YORK LAW TO GOVERN.  SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.


 


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5.             COUNTERPARTS.  The parties may sign any number of copies of
this Supplemental Indenture.  Each signed
copy shall be an original, but all of them together represent the same
agreement.


 


6.             EFFECT OF HEADINGS.  The Section headings herein are for
convenience only and shall not affect the construction hereof.


 


7.             THE TRUSTEE.  The Trustee shall not be responsible in any
manner whatsoever for or in respect of the validity or sufficiency of this
Supplemental Indenture or for or in respect of the recitals contained herein,
all of which recitals are made solely by the Guaranteeing Subsidiary and the Company.


 


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


 


 


	
  Dated:

  	
                          ,
  20    

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  [GUARANTEEING SUBSIDIARY]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  SEALY MATTRESS COMPANY

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Authorized Signatory

  



 


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EXHIBIT F


 


INCUMBENCY CERTIFICATE


 


The undersigned,
             ,
being the
             
of              
(the “Company”) does hereby certify that the individuals listed below are
qualified and acting officers of the Company as set forth in the right column
opposite their respective names and the signatures appearing in the extreme
right column opposite the name of each such officer is a true specimen of the
genuine signature of such officer and such individuals have the authority to
execute documents to be delivered to, or upon the request of, The Bank of New
York Mellon Trust Company, N.A.  as Trustee
under the Indenture dated as of              , 20    , by and between the Company and The Bank of
New York Mellon Trust Company, N.A.


 




	
  Name

  	
   

  	
  Title

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  






 


IN WITNESS WHEREOF, the undersigned has duly
executed and delivered this Certificate as of the
             
day of              ,
20   .


 


	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 


F-1