Document:

Senior Unsecured Credit Agreement

 Exhibit 10.2 
  

  
 SENIOR UNSECURED CREDIT AGREEMENT 
  
 Dated as of April 6,
2004 
  
 among 
  
 SEALY MATTRESS COMPANY, 
 as Borrower 
  
 CERTAIN SUBSIDIARIES OF BORROWER, 
 as Guarantors 
  
 SEALY MATTRESS CORPORATION, 
 as Holdings and a Guarantor 
  
 SEALY CORPORATION, 
 as Parent 
  
 The Several Lenders 
 from Time to Time Parties Hereto 
  
 JPMORGAN CHASE BANK, 
 as Administrative Agent 
  
 J.P. MORGAN SECURITIES INC., 
 as Joint Lead Arranger and Joint Bookrunner 
  
 GOLDMAN SACHS CREDIT PARTNERS L.P., 
 as Joint Lead Arranger, Joint Bookrunner and Syndication Agent

  

 TABLE OF CONTENTS 
  

					
	 	 	 	  	Page

	 SECTION 1.
	 	Definitions	  	1
	 1.1.
	 	Defined Terms	  	1
	 1.2.
	 	Exchange Rates	  	35
			
	 SECTION 2.
	 	Amount and Terms of Credit	  	35
	 2.1.
	 	Commitments	  	35
	 2.2.
	 	Minimum Amount of Each Borrowing; Maximum Number of Borrowings	  	36
	 2.3.
	 	Notice of Borrowing	  	36
	 2.4.
	 	Disbursement of Funds	  	36
	 2.5.
	 	Repayment of Loans; Evidence of Debt	  	37
	 2.6.
	 	Conversions and Continuations	  	38
	 2.7.
	 	Pro Rata Borrowings	  	39
	 2.8.
	 	Interest	  	39
	 2.9.
	 	Interest Periods	  	40
	 2.10.
	 	Increased Costs, Illegality, etc.	  	41
	 2.11.
	 	Compensation	  	42
	 2.12.
	 	Change of Lending Office	  	43
	 2.13.
	 	Notice of Certain Costs	  	43
			
	 SECTION 3.
	 	[Reserved]	  	43
			
	 SECTION 4.
	 	Commitments	  	43
	 4.1.
	 	Mandatory Termination of Commitments	  	43
			
	 SECTION 5.
	 	Payments	  	43
	 5.1.
	 	Voluntary Prepayments.	  	43
	 5.2.
	 	Mandatory Prepayments	  	44
	 5.3.
	 	Method and Place of Payment	  	45
	 5.4.
	 	Net Payments	  	46
	 5.5.
	 	Computations of Interest and Fees	  	48
	 5.6.
	 	Limit on Rate of Interest	  	48
	 5.7.
	 	Change of Control Offer.	  	49
			
	 SECTION 6.
	 	Conditions Precedent to Initial Borrowing	  	50
	 6.1.
	 	Credit Documents	  	50
	 6.2.
	 	[Reserved]	  	50
	 6.3.
	 	Legal Opinions	  	50
	 6.4.
	 	No Default	  	51
	 6.5.
	 	Subordinated Notes; Senior Secured Credit Facility	  	51
	 6.6.
	 	Equity Proceeds	  	51
	 6.7.
	 	Closing Certificates	  	51
	 6.8.
	 	Corporate Proceedings of Each Credit Party	  	51
	 6.9.
	 	Corporate Documents	  	51
	 6.10.
	 	Fees	  	51
	 6.11.
	 	Representations and Warranties	  	52
	 6.12.
	 	Related Agreements	  	52

					
	 6.13.
	 	Solvency Certificate	  	52
	 6.14.
	 	Governmental Authorizations and Consents	  	52
	 6.15.
	 	Financial Statements	  	52
	 6.16.
	 	Recapitalization	  	52
			
	 SECTION 7.
	 	Additional Conditions Precedent to Credit Events	  	53
	 7.1.
	 	No Default; Representations and Warranties	  	53
	 7.2.
	 	Notice of Borrowing	  	53
			
	 SECTION 8.
	 	Representations, Warranties and Agreements	  	53
	 8.1.
	 	Corporate Status	  	53
	 8.2.
	 	Corporate Power and Authority	  	53
	 8.3.
	 	No Violation	  	54
	 8.4.
	 	Litigation	  	54
	 8.5.
	 	Margin Regulations	  	54
	 8.6.
	 	Governmental Approvals	  	54
	 8.7.
	 	Investment Company Act	  	54
	 8.8.
	 	True and Complete Disclosure	  	54
	 8.9.
	 	Financial Condition; Financial Statements	  	55
	 8.10.
	 	Tax Returns and Payments	  	55
	 8.11.
	 	Compliance with ERISA	  	55
	 8.12.
	 	Subsidiaries	  	56
	 8.13.
	 	Patents, etc.	  	56
	 8.14.
	 	Environmental Laws	  	56
	 8.15.
	 	Properties	  	57
			
	 SECTION 9.
	 	Affirmative Covenants	  	57
	 9.1.
	 	Information Covenants	  	57
	 9.2.
	 	Books, Records and Inspections	  	60
	 9.3.
	 	Maintenance of Insurance	  	60
	 9.4.
	 	Payment of Taxes	  	60
	 9.5.
	 	Consolidated Corporate Franchises	  	60
	 9.6.
	 	Compliance with Statutes, Obligations, etc.	  	60
	 9.7.
	 	ERISA	  	60
	 9.8.
	 	Good Repair	  	61
	 9.9.
	 	Transactions with Affiliates	  	61
	 9.10.
	 	End of Fiscal Years; Fiscal Quarters	  	62
	 9.11.
	 	Additional Guarantors	  	62
	 9.12.
	 	Reserved	  	63
	 9.13.
	 	Use of Proceeds	  	63
	 9.14.
	 	Changes in Business	  	63
	 9.15.
	 	Post-Closing Refinancing. .	  	63
	 9.16.
	 	Designated Senior Indebtedness	  	63
			
	 SECTION 10.
	 	Negative Covenants	  	63
	 10.1.
	 	Limitation on Indebtedness	  	63
	 10.2.
	 	Limitation on Liens	  	64

  

 ii 

					
	 10.3.
	 	Limitation on Fundamental Changes	  	65
	 10.4.
	 	Limitation on Sale of Assets	  	67
	 10.5.
	 	Reserved	  	70
	 10.6.
	 	Limitation on Restricted Payments.	  	70
	 10.7.
	 	Limitations on Debt Payments and Amendments; Unpaid Refinancing Amount	  	77
	 10.8.
	 	Limitations on Sale Leasebacks	  	77
			
	 SECTION 11.
	 	Events of Default	  	77
	 11.1.
	 	Payments	  	77
	 11.2.
	 	Representations, etc.	  	77
	 11.3.
	 	Covenants	  	78
	 11.4.
	 	Default Under Other Agreements	  	78
	 11.5.
	 	Bankruptcy, etc.	  	78
	 11.6.
	 	ERISA	  	79
	 11.7.
	 	Guarantee	  	79
	 11.8.
	 	Subordination	  	79
	 11.9.
	 	Judgments	  	79
			
	 SECTION 12.
	 	The Administrative Agent	  	80
	 12.1.
	 	Appointment	  	80
	 12.2.
	 	Delegation of Duties	  	80
	 12.3.
	 	Exculpatory Provisions	  	80
	 12.4.
	 	Reliance by Administrative Agent	  	81
	 12.5.
	 	Notice of Default	  	81
	 12.6.
	 	Non-Reliance on Administrative Agent and Other Lenders	  	82
	 12.7.
	 	Indemnification	  	82
	 12.8.
	 	Administrative Agent in its Individual Capacity	  	83
	 12.9.
	 	Successor Agent	  	83
	 12.10.
	 	Withholding Tax	  	83
			
	 SECTION 13.
	 	Reserved.	  	84
			
	 SECTION 14.
	 	Miscellaneous.	  	84
	 14.1.
	 	Amendments and Waivers	  	84
	 14.2.
	 	Notices	  	84
	 14.3.
	 	No Waiver; Cumulative Remedies	  	85
	 14.4.
	 	Survival of Representations and Warranties	  	86
	 14.5.
	 	Payment of Expenses and Taxes	  	86
	 14.6.
	 	Successors and Assigns; Participations and Assignments	  	86
	 14.7.
	 	Replacements of Lenders under Certain Circumstances	  	90
	 14.8.
	 	Adjustments; Set-off	  	90
	 14.9.
	 	Counterparts	  	91
	 14.10.
	 	Severability	  	91
	 14.11.
	 	Integration	  	91
	 14.12.
	 	GOVERNING LAW	  	92
	 14.13.
	 	Submission to Jurisdiction; Waivers	  	92
	 14.14.
	 	Acknowledgments	  	92

  

 iii 

					
	 14.15.
	 	WAIVERS OF JURY TRIAL	  	93
	 14.16.
	 	Confidentiality	  	93
	 14.17.
	 	Judgment Currency	  	94
	 14.18.
	 	USA PATRIOT Act	  	94

  

			
	 SCHEDULES
	 	 
		
	 Schedule 1.1 (c)
	 	Commitments and Addresses of Lenders
	 Schedule 1.1(d)
	 	EBITDA Add-Backs
	 Schedule 1.1(e)
	 	Excluded Subsidiaries
	 Schedule 8.12
	 	Subsidiaries
	 Schedule 10.1
	 	Closing Date Indebtedness
	 Schedule 10.2
	 	Closing Date Liens
	 Schedule 10.5
	 	Closing Date Investments
		
	 EXHIBITS
	 	 
		
	 Exhibit A
	 	Form of Guarantee
	 Exhibit B-1
	 	Form of Legal Opinion of Simpson Thacher & Bartlett LLP
	 Exhibit B-2
	 	Form of Legal Opinion of general counsel
	 Exhibit C
	 	Form of Closing Certificate
	 Exhibit D
	 	Form of Assignment and Acceptance
	 Exhibit E
	 	Form of Promissory Note

  

 iv 

 CREDIT AGREEMENT dated as of April 6, 2004, among SEALY MATTRESS COMPANY, an Ohio corporation (the
“Borrower”), SEALY MATTRESS CORPORATION, a Delaware corporation (“Holdings”) and SEALY CORPORATION, a Delaware corporation (“Parent”), the lending institutions from time to time parties hereto (each
a “Lender” and, collectively, the “Lenders”), J.P. MORGAN SECURITIES INC., as Joint Lead Arranger and Joint Bookrunner, GOLDMAN SACHS CREDIT PARTNERS L.P., as Joint Lead Arranger, Joint Bookrunner and Syndication
Agent, and JPMORGAN CHASE BANK, as Administrative Agent (such term and each other capitalized term used but not defined in this introductory statement having the meaning provided in Section 1). 
  
 In connection with the Recapitalization, (a)(i) an investment entity
controlled by KKR will contribute an amount that, together with the equity of the Permitted Investors (as defined below), is not less than 29% of the capitalization required for the consummation transactions contemplated by the Recapitalization (the
“Equity Proceeds”) in cash to Sealy Acquisition Corp. (“SAC”) as common equity, (ii) the Management Investors and certain other investors will retain certain of their common stock in Holdings (together with KKR, the
“Permitted Investors”) and (iii) SAC will merge with and into Parent (collectively, the “Merger”); 
  
 (b) the Borrower will issue not less than $390,000,000 in aggregate principal amount of its senior subordinated notes (the “Subordinated
Notes”) in a public offering or in a Rule 144A or other private placement; and 
  
 (c) the Borrower will enter into the Senior Secured Credit Facility providing for term loans and revolving credit loans in aggregate amount of no less than $685,000,000. 
  
 (d) substantially concurrent with the Recapitalization and immediately after
distribution and payments of the proceeds of the financings of the Borrower as consideration for the Merger, the Parent will contribute all of its equity interest in the Borrower to Holdings, its newly formed wholly-owned Subsidiary, after which
Holdings shall be the immediate parent of the Borrower. 
  
 In
connection with the foregoing, the Borrower has requested the Lenders to extend credit in the form of Term Loans, in an aggregate principal amount of $100,000,000. The proceeds of the Term Loans will be used by the Borrower, together with (a) the
net proceeds of the issuance of the Subordinated Notes, (b) the proceeds of the term loans and a portion of the revolving credit loans under the Senior Secured Credit Facility and (c) the net proceeds of the Equity Proceeds, on the Closing Date
solely to effect the Recapitalization and to pay Transaction Expenses. 
  
 The parties hereto hereby agree as follows: 
  
 SECTION
1. Definitions 
  
 1.1. Defined Terms. (a) As used
herein, the following terms shall have the meanings specified in this Section 1.1 unless the context otherwise requires (it being understood that defined terms in this Agreement shall include in the singular number the plural and in the plural the
singular): 
  
 “ABR” shall mean, for any day, a
rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greatest of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day plus 1⁄2 of 1%. Any change in the ABR due to a
change in the Prime Rate or the Federal Funds Effective Rate shall be effective as of the opening of business on the effective day of such change in the Prime Rate or the Federal Funds Effective Rate, respectively. 

 “ABR Loan” shall mean each Loan bearing interest at the rate provided in Section 2.8(a).

  
 “Acquired EBITDA” shall mean, with respect to
any Acquired Entity or Business, any Converted Restricted Subsidiary, any Sold Entity or Business or any Converted Unrestricted Subsidiary (any of the foregoing, a “Pro Forma Entity”) for any period, the amount for such period of
Consolidated EBITDA of such Pro Forma Entity (determined using such definitions as if references to Holdings and its Subsidiaries therein were to such Pro Forma Entity and its Subsidiaries), all as determined on a consolidated basis for such Pro
Forma Entity in accordance with GAAP. 
  
 “Acquired Entity
or Business” shall have the meaning provided in the definition of the term “Consolidated EBITDA”. 
  
 “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. 
  
 “Adjusted Total Commitment” shall mean at any time the Total Commitment less the Term Loan Commitments of all Defaulting Lenders.

  
 “Administrative Agent” shall mean JPMorgan
Chase Bank, together with its affiliates, as the arranger of the Commitments and as the administrative agent for the Lenders under this Agreement and the other Credit Documents. 
  
 “Administrative Agent’s Office” shall mean the office of the Administrative Agent located at 270 Park
Avenue, 5th Floor, New York, NY 10017, or such other office as the Administrative Agent may hereafter designate in writing as such to the other parties hereto. 
  

“Affiliate” shall mean, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under
direct or indirect common control with such Person. A Person shall be deemed to control a corporation if such Person possesses, directly or indirectly, the power (a) to vote 10% or more of the 
  

 2 

 securities having ordinary voting power for the election of directors of such corporation or (b) to direct or cause the
direction of the management and policies of such corporation, whether through the ownership of voting securities, by contract or otherwise. 
  
 “Agents” shall mean each Joint Lead Arranger, the Administrative Agent and the Syndication Agent. 
  
 “Agreement” shall mean this Credit Agreement, as the same
may be amended, supplemented or otherwise modified from time to time. 
  
 “Approved Fund” shall have the meaning provided in Section 14.6. 
  
 “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 Borrower or any Restricted Subsidiary (each referred to in this definition as a “disposition”) or (2) the issuance or sale of Equity Interests of any Restricted Subsidiary, whether in a single transaction or a series of
related transactions, in each case, other than: (a) a disposition of Cash Equivalents or Investment Grade Securities 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 Borrower in a manner permitted pursuant to Section 10.4 or any disposition that constitutes a Change of Control; (c) the making of any Restricted Payment or Permitted
Investment that is permitted to be made, and is made, under Section 10.6; (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 $2,500,000; (e) any disposition of property or assets or issuance of securities by a Restricted Subsidiary to the Borrower or by the Borrower 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 sub-lease of any real or personal property in the ordinary course of business;
(h) foreclosures on assets; (i) sales of accounts receivable, or participations therein, in connection with any Receivables Facility; and (j) any financing transaction with respect to property built or acquired by the Borrower or any Restricted
Subsidiary after the Closing Date, including, without limitation, sale leasebacks and asset securitizations permitted by this Agreement. 
  
 “Assignment and Acceptance” shall mean an assignment and acceptance substantially in the form of Exhibit D. 
  
 “Authorized Officer” shall mean the Chairman of the Board,
the President, the Chief Financial Officer, the Treasurer or any other senior officer of the Borrower designated as such in writing to the Administrative Agent by the Borrower. 
  
 “Bankruptcy Code” shall have the meaning provided in Section 11.5. 
  
 “Board” shall mean the Board of Governors of the Federal
Reserve System of the United States (or any successor). 
  

 3 

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

  
 “Borrowing” shall mean and include the
incurrence of one Type of Term Loan on the Closing Date (or resulting from conversions on a given date after the Closing Date) having, in the case of Eurodollar Term Loans, the same Interest Period (provided that ABR Loans incurred pursuant
to Section 2.10(b) shall be considered part of any related Borrowing of Eurodollar Term Loans). 
  
 “Business Day” shall mean any day excluding Saturday, Sunday and any day that shall be in The City of New York a legal holiday or a day
on which banking institutions are authorized by law or other governmental actions to close. 
  
 “Canadian Dollars” and “C$” shall mean the lawful money of Canada. 
  
 “Capital Lease” shall mean, as applied to any Person, any lease of any property (whether real, personal or mixed) by that Person as
lessee that, in conformity with GAAP, is, or is required to be, accounted for as a capital lease on the balance sheet of that Person. 
  
 “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. 
  
 “Capitalized Lease Obligations” shall mean, as applied to any Person, all obligations under Capital Leases
of such Person or any of its Subsidiaries, in each case taken at the amount thereof accounted for as liabilities in accordance with GAAP. 
  
 “Cash 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 $500,000,000, (6) repurchase obligations for underlying securities of the types described in clauses (4) and (5) entered into with any
financial institution meeting the qualifications specified in clause (5) above, (7) commercial paper rated at least P-1 by Moody’s or at least A-1 by S&P and in each case maturing within 12 months after the date of creation thereof,

  

 4 

 (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) as promptly as practicable and in any event within ten Business Days following the receipt of such amounts. 
  
 “Change of Control” shall mean the occurrence of (x) the sale, lease or transfer, in one or a series of related transactions, of all or
substantially all of the assets of the Borrower and its Subsidiaries, taken as a whole, to any Person other than a Permitted Investor, or (y) the Borrower becomes aware of (by way of a report or any other filing pursuant to 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), 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 Investors, 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 Holdings or any of its direct or
indirect parent entities. 
  
 “Change of Control
Offer” as defined in Section 5.7. 
  
 “Closing
Date” shall mean the date of the initial Borrowing hereunder. 
  
 “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated and rulings issued thereunder. Section references to the Code are to the Code, as in effect at the date of
this Agreement, and any subsequent provisions of the Code, amendatory thereof, supplemental thereto or substituted therefor. 
  
 “Commitments” shall mean, with respect to each Lender, such Lender’s Term Loan Commitment. 
  
 “Confidential Information” shall have the meaning provided
in Section 14.16. 
  
 “Confidential Information
Memorandum” shall mean the Confidential Information Memorandum of the Borrower dated March, 2004, delivered to the Lenders in connection with this Agreement. 
  

 5 

 “Consolidated Earnings” shall mean, for any period, “income (loss) before the
deduction of income taxes” of Holdings, the Borrower and the Restricted Subsidiaries, excluding extraordinary items, for such period, determined in a manner consistent with the manner in which such amount was determined in accordance with the
audited financial statements referred to in Section 9.1(a). 
  
 “Consolidated EBITDA” shall mean, for any period, the sum, without duplication, of the amounts for such period of (a) Consolidated Earnings and to the extent already deducted in arriving at Consolidated Earnings: (b)
Consolidated Interest Expense, (c) depreciation expense, (d) amortization expense, including amortization of deferred financing fees, (e) extraordinary losses and unusual or non-recurring charges (including severance, relocation costs and one-time
compensation charges), (f) non-cash charges (provided that if any such non-cash charges represent an accrual or reserve for potential cash items in any future period, the cash payment in respect thereof in such future period shall be subtracted from
Consolidated EBITDA to such extent, and excluding amortization of a prepaid cash item that was paid in a prior period), (g) losses on asset sales, (h) restructuring charges or reserves (including costs related to closure of facilities), (i) in the
case of any period that includes a period ending during the fiscal year ending November 28, 2004, Transaction Expenses, to the extent deducted in determining Consolidated Earnings, (j) any expenses or charges incurred in connection with any issuance
of debt, equity securities or any refinancing transaction, (k) any fees and expenses related to Permitted Acquisitions, (l) any deduction for minority interest expense, (m) the amount of management, monitoring, consulting and advisory fees and
related expenses paid to KKR and (n) those items described on Schedule 1.1(d) annexed hereto, less the sum of the amounts for such period of (o) extraordinary gains and non-recurring gains, (p) non-cash gains (excluding any such
non-cash gain to the extent it represents the reversal of an accrual or reserve for potential cash item in any prior period) and (q) gains on asset sales, all as determined on a consolidated basis for Holdings, the Borrower and the Restricted
Subsidiaries in accordance with GAAP, provided that (i) except as provided in clause (iv) below, there shall be excluded from Consolidated Earnings for any period the income from continuing operations before income taxes and extraordinary
items of all Unrestricted Subsidiaries for such period to the extent otherwise included in Consolidated Earnings, except to the extent actually received in cash by Holdings, the Borrower or its Restricted Subsidiaries during such period through
dividends or other distributions, (ii) there shall be excluded from Consolidated Earnings for any period the income from continuing operations before income taxes and extraordinary items of each Foreign Joint Venture for such period corresponding to
the percentage of capital stock or other equity interests in such Foreign Joint Venture not owned by the Borrower or its Restricted Subsidiaries (other than Foreign Joint Ventures), (iii) there shall be excluded in determining Consolidated EBITDA
non-operating currency transaction gains and losses and (iv) (x) there shall be included in determining Consolidated EBITDA for any period (A) the Acquired EBITDA of any Person, property, business or asset (other than an Unrestricted Subsidiary)
acquired to the extent not subsequently sold, transferred or otherwise disposed of (but not including the Acquired EBITDA of any related Person, property, business or assets to the extent not so acquired) by the Borrower or any Restricted Subsidiary
during such period and (y) for purposes of determining the Senior Leverage Ratio and the Fixed Charge Coverage Ratio only, there 
  

 6 

 shall be excluded in determining Consolidated EBITDA for any period the Acquired EBITDA of any Person, property, business
or asset (other than an Unrestricted Subsidiary) sold, transferred or otherwise disposed of, closed or classified as discontinued operations by the Borrower or any Restricted Subsidiary during such period (each such Person, property, business or
asset acquired and not subsequently so disposed of, an “Acquired Entity or Business”), and the Acquired EBITDA of any Unrestricted Subsidiary that is converted into a Restricted Subsidiary during such period (each, a
“Converted Restricted Subsidiary”), in each case based on the actual Acquired EBITDA of such Acquired Entity or Business or Converted Restricted Subsidiary for such period (including the portion thereof occurring prior to such
acquisition or conversion) and (B) for the purposes of the definition of the term “Permitted Acquisition” and Section 10.3, an adjustment in respect of each Acquired Entity or Business equal to the amount of the Pro Forma Adjustment with
respect to such Acquired Entity or Business for such period (including the portion thereof occurring prior to such acquisition or conversion) as specified in the Pro Forma Adjustment Certificate delivered to the Lenders and the Administrative Agent
(each such Person, property, business or asset so sold or disposed of, a “Sold Entity or Business”), and the Acquired EBITDA of any Restricted Subsidiary that is converted into an Unrestricted Subsidiary during such period (each, a
“Converted Unrestricted Subsidiary”), in each case based on the actual Acquired EBITDA of such Sold Entity or Business or Converted Unrestricted Subsidiary for such period (including the portion thereof occurring prior to such sale,
transfer, disposition or conversion). Notwithstanding anything to the contrary contained herein, Consolidated EBITDA shall be deemed to be $49,900,000, $47,300,000 and $47,500,000, respectively, for the fiscal quarters ended August 31, 2003,
November 30, 2003, and February 29, 2004. 
  
 “Consolidated Interest Expense” shall mean, for any period, the cash interest expense (including that attributable to Capital Leases in accordance with GAAP), net of cash interest income, of Holdings, the Borrower and the
Restricted Subsidiaries on a consolidated basis with respect to all outstanding Indebtedness of Holdings, the Borrower and the Restricted Subsidiaries, including all commissions, discounts and other fees and charges owed with respect to letters of
credit and net costs under Hedge Agreements (other than currency swap agreements, currency future or option contracts and other similar agreements), but excluding, however, amortization of deferred financing costs and any other amounts of non-cash
interest, all as calculated on a consolidated basis in accordance with GAAP, provided that (a) except as provided in clause (b) below, there shall be excluded from Consolidated Interest Expense for any period the cash interest expense (or
income) of all Unrestricted Subsidiaries for such period to the extent otherwise included in Consolidated Interest Expense and (b) for purposes of the definition of the term “Permitted Acquisition” and Sections 10.3, there shall be
included in determining Consolidated Interest Expense for any period the cash interest expense (or income) of any Acquired Entity or Business acquired during such period and of any Converted Restricted Subsidiary converted during such period, in
each case based on the cash interest expense (or income) of such Acquired Entity or Business or Converted Restricted Subsidiary for such period (including the portion thereof occurring prior to such acquisition or conversion) assuming any
Indebtedness incurred or repaid in connection with any such acquisition or conversion had been incurred or 
  

 7 

 prepaid on the first day of such period. Notwithstanding anything to the contrary contained herein, for purposes of
determining Consolidated Interest Expense for any period ending prior to the first anniversary of the Closing Date, Consolidated Interest Expense shall be an amount equal to actual Consolidated Interest Expense from the Closing Date through the date
of determination multiplied by a fraction the numerator of which is 365 and the denominator of which is the number of days from the Closing Date through the date of determination. 
  
 “Consolidated Net Income” shall mean, for any period, the consolidated net income (or loss) after the
deduction of income taxes of Holdings, the Borrower and the Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP. 
  
 “Consolidated Total Debt” shall mean, as of any date of determination, (a) the sum of (i) all indebtedness of Holdings, the Borrower and
the Restricted Subsidiaries for borrowed money outstanding on such date and (ii) all Capitalized Lease Obligations of Holdings, the Borrower and the Restricted Subsidiaries outstanding on such date, all calculated on a consolidated basis in
accordance with GAAP minus (b) the aggregate amount of cash included in the cash accounts listed on the consolidated balance sheet of Holdings, the Borrower and the Restricted Subsidiaries as at such date up to a maximum amount of $45,000,000
to the extent the use thereof for application to payment of Indebtedness is not prohibited by law or any contract to which the Borrower or any of the Restricted Subsidiaries is a party. 
  
 “Consolidated Total Debt to Consolidated EBITDA Ratio” shall mean, as of any date of determination, the
ratio of (a) Consolidated Total Debt as of the last day of the relevant Test Period to (b) Consolidated EBITDA for such Test Period. 
  
 “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. 
  
 “Continuing Director” shall mean, at any date, an individual (a) who is a member of the Board of Directors of Holdings on the date
hereof, (b) who, as at such date, has been a member of such Board of Directors for at least the 12 preceding months, (c) who has been nominated to be a member of such Board of Directors, directly or indirectly, by KKR or one of its Affiliates or
Persons nominated by KKR or one of its Affiliates or (d) who has been nominated to be a member of such Board of Directors by a majority of the other Continuing Directors then in office. 
  

 8 

 “Converted Restricted Subsidiary” shall have the meaning provided in the definition of
the term “Consolidated EBITDA”. 
  
 “Converted
Unrestricted Subsidiary” shall have the meaning provided in the definition of the term “Consolidated EBITDA”. 
  
 “Credit Documents” shall mean this Agreement, the Guarantee and any promissory notes issued by the Borrower hereunder. 
  
 “Credit Event” shall mean and include the making (but not
the conversion or continuation) of a Loan. 
  
 “Credit
Facilities” means, with respect to the Borrower, one or more debt facilities, including, without limitation, the Senior Secured Credit Facility, 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, in each case, as amended, restated, modified, renewed, refunded, replaced or refinanced, including increasing the amount borrowed thereunder, in whole or in part from time to time. 
  
 “Credit Party” shall mean each of the Borrower, the
Guarantors and each other Subsidiary of the Borrower that is a party to a Credit Document. 
  
 “Cumulative Consolidated Net Income Available to Stockholders” shall mean, as of any date of determination, Consolidated Net Income less cash dividends paid by Holdings with respect to its capital
stock for the period (taken as one accounting period) commencing on the Closing Date and ending on the last day of the most recent fiscal quarter for which Section 9.1 Financials have been delivered to the Lenders under Section 9.1. 
  
 “Default” shall mean any event, act or condition that with
notice or lapse of time, or both, would constitute an Event of Default. 
  
 “Defaulting Lender” shall mean any Lender with respect to which a Lender Default is in effect. 
  
 “Designated Noncash Consideration” means the fair market value of noncash consideration received by the Borrower or a Restricted
Subsidiary in connection with an Asset Sale that is so designated as Designated Noncash 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 Borrower, less the amount of cash or Cash Equivalents received in connection with a subsequent sale of such Designated Noncash Consideration. 
  
 “Designated Preferred Stock” means preferred stock of the Borrower or any parent entities thereof (in each
case other than Disqualified Stock) that is issued for cash (other than to a Restricted Subsidiary) and is so designated as Designated Preferred Stock, 
  

 9 

 pursuant to an Officers’ Certificate executed by an executive vice president and the principal financial officer of
the Borrower or the applicable parent entities 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 (c) of the first paragraph of Section 10.6. 
  
 “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 Term Loan Maturity Date or the date the Term Loans are no longer outstanding; provided, however, that if such Capital Stock is issued to any plan for the benefit of employees of the
Borrower 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 Borrower or its Subsidiaries in order to satisfy applicable
statutory or regulatory obligations. 
  
 “Dividends” shall have the meaning provided in Section 10.6. 
  
 “Dollar Borrowing” shall mean a Borrowing denominated in Dollars. 
  
 “Dollar Equivalent” shall mean, on any date of determination, (a) with respect to any amount denominated in Dollars, such amount, and (b)
with respect to any amount denominated in any Foreign Currency, the equivalent in Dollars of such amount, determined by the Administrative Agent pursuant to Section 1.2(b) using the applicable Exchange Rate with respect to such Foreign Currency at
the time in effect under the provisions of such Section 1.2. 
  
 “Dollars” and “$” shall mean dollars in lawful currency of the United States of America. 
  
 “Domestic Subsidiary” shall mean each Subsidiary of the Borrower that is organized under the laws of the United States, any state or
territory thereof, or the District of Columbia. 
  
 “Eligible Lender” shall mean, at any time, a Person who, on any date on which interest is payable under this Agreement, is a Person which is beneficially entitled to the interest payable to it under this Agreement.

  
 “EMU” means economic and monetary union as
contemplated in the Treaty on European Union. 
  
 “Environmental Claims” shall mean any and all administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigations (other than internal reports
prepared by the Borrower or any of the Subsidiaries (a) in the ordinary course of such Person’s business or (b) as required in connection with a financing transaction or an acquisition or 
  

 10 

 disposition of real estate) or proceedings relating in any way to any Environmental Law or any permit issued, or any
approval given, under any such Environmental Law (hereinafter, “Claims”), including (i) any and all Claims by governmental or regulatory authorities for enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law and (ii) any and all Claims by any third party seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief resulting from Hazardous Materials or arising from alleged
injury or threat of injury to health, safety or the environment. 
  
 “Environmental Law” shall mean any applicable Federal, state, foreign or local statute, law, rule, regulation, ordinance, code and rule of common law now or hereafter in effect and in each case as amended, and any binding
judicial or administrative interpretation thereof, including any binding judicial or administrative order, consent decree or judgment, relating to the environment, human health or safety or Hazardous Materials. 
  
 “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 Proceeds” shall have the meaning provided in the preamble to this Agreement. 
  
 “ERISA” shall mean the Employee Retirement Income Security
Act of 1974, as amended from time to time. Section references to ERISA are to ERISA as in effect at the date of this Agreement and any subsequent provisions of ERISA amendatory thereof, supplemental thereto or substituted therefor. 
  
 “ERISA Affiliate” shall mean each person (as defined in
Section 3(9) of ERISA) that together with the Borrower or a Subsidiary would be deemed to be a “single employer” within the meaning of Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the
Code, is treated as a single employer under Section 414 of the Code. 
  
 “euro” means the single currency of participating member states of the EMU. 
  
 “Eurodollar Loan” shall mean any Eurodollar Term Loan or Eurodollar Revolving Credit Loan. 
  
 “Eurodollar Rate” shall mean, in the case of any Eurodollar
Term Loan or Eurodollar Revolving Credit Loan, with respect to each day during each Interest Period pertaining to such Eurodollar Loan, (a) the rate of interest determined on the basis of the rate for deposits in Dollars for a period equal to such
Interest Period commencing on the first day of such Interest Period appearing on Page 3750 of the Telerate screen as of 11:00 a.m. (London time) two Business Days prior to the beginning of such Interest Period multiplied by (b) the Statutory Reserve
Rate. In the event that any such rate does not appear on the applicable Page of the Telerate Service (or otherwise on such service), 
  

 11 

 the “Eurodollar Rate” for the purposes of this paragraph shall be determined by reference to such other
publicly available service for displaying Eurodollar rates as may be agreed upon by the Administrative Agent and the Borrower or, in the absence of such agreement, the “Eurodollar Rate” for the purposes of this paragraph shall
instead be the rate per annum notified to the Administrative Agent by the Reference Lender as the rate at which the Reference Lender is offered Dollar deposits at or about 11:00 a.m. (London time) two Business Days prior to the beginning of such
Interest Period in the interbank Eurodollar market where the Eurodollar and foreign currency and exchange operations in respect of its Eurodollar Loans are then being conducted for delivery on the first day of such Interest Period for the number of
days comprised therein and in an amount comparable to the amount of its Eurodollar Term Loan or Eurodollar Revolving Credit Loan, as the case may be, to be outstanding during such Interest Period. 
  
 “Eurodollar Term Loan” shall mean any Term Loan bearing
interest at a rate determined by reference to the Eurodollar Rate. 
  
 “Event of Default” shall have the meaning provided in Section 11. 
  
 “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and any successor statute. 
  
 “Exchange Rate” shall mean on any day with respect to any Foreign Currency, the rate at which such Foreign
Currency may be exchanged into Dollars, as set forth at approximately 11:00 a.m. (London time) on such day on the Reuters World Currency Page for such Foreign Currency; in the event that such rate does not appear on any Reuters World Currency Page,
the Exchange Rate shall be determined by reference to such other publicly available service for displaying exchange rates as may be agreed upon by the Administrative Agent and the Borrower, or, in the absence of such agreement, such Exchange Rate
shall instead be the arithmetic average of the spot rates of exchange of the Administrative Agent in the market where its foreign currency exchange operations in respect of such Foreign Currency are then being conducted, at or about 10:00 a.m. (New
York time) on such date for the purchase of Dollars for delivery two Business Days later. 
  
 “Existing Credit Agreement” shall mean the Amended and Restated Credit Agreement, dated as of November 8, 2002, as amended, among the Borrower, Holdings, the lenders from time to time party thereto,
JPMorgan Chase Bank, as administrative agent, and Goldman Sachs Credit Partners L.P., as syndication agent. 
  
 “Existing Indenture” shall mean the Indenture, dated as of December 18, 1997, among the Borrower, the subsidiary guarantors party thereto
and The Bank of New York, as trustee. 
  
 “Existing
Letters of Credit” shall have the meaning provided in the preamble to this Agreement. 
  
 “Excluded Contribution” means net cash proceeds, marketable securities or Qualified Proceeds received by the Borrower from (a) contributions to its common equity 
  

 12 

 capital, and (b) the sale (other than to a Subsidiary of the Borrower or to any management equity plan or stock option
plan or any other management or employee benefit plan or agreement of the Borrower) of Capital Stock (other than Disqualified Stock and Designated Preferred Stock) of the Borrower, 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 Borrower 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 under Section 10.6. 
  
 “Federal Funds Effective Rate” shall mean, for any day, the weighted average of the per annum rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for the day of such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing selected by it. 
  
 “Fixed Charge Coverage Ratio” means, with respect to any Person for any period, the ratio of Consolidated EBITDA of such Person for such period to the Fixed Charges of such Person for such period. In
the event that the Borrower or any Restricted Subsidiary incurs, assumes, guarantees or redeems any Indebtedness 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 or redemption 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 the Borrower or any Restricted Subsidiary 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 Consolidated EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning
of such period any Person (that subsequently became a Restricted Subsidiary or was merged with or into the Borrower or any Restricted Subsidiary 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 Borrower. If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the 
  

 13 

 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 Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible
financial or accounting officer of the Borrower 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 Borrower may designate.

  
 “Fixed Charges” means, with respect to any
Person for any period, the sum of (a) Consolidated Interest Expense 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 Borrowing Base Amount” shall mean, at any time, the sum of (i) 85% of the book value of all
accounts receivable of all Restricted Foreign Subsidiaries of Holdings and (ii) 60% of the book value of all inventory of all Restricted Foreign Subsidiaries of Holdings. 
  
 “Foreign Currencies” shall mean Canadian Dollars, Euro and Sterling. 
  
 “Foreign Joint Venture” shall mean any Restricted Foreign
Subsidiary in which the Borrower and its Restricted Subsidiaries own, collectively, less than 100% of the equity interests and designated as such in a written notice to the Administrative Agent by the Borrower, provided that in the event a
Restricted Subsidiary not previously designated by the Borrower as a Foreign Joint Venture is subsequently re-designated as a Foreign Joint Venture, (x) such re-designation shall be deemed to be an investment on the date of such re-designation in a
Foreign Joint Venture in an amount equal to the product of (i) the net worth of such re-designated Restricted Subsidiary immediately prior to such re-designation (such net worth to be calculated without regard to any guarantee provided by such
re-designated Restricted Subsidiary) and (ii) the percentage of capital stock or other equity interests in such Foreign Joint Venture owned by the Borrower or its Restricted Subsidiaries (other than Foreign Joint Ventures) and (y) no Default or
Event of Default would result from such re-designation. 
  
 “Foreign Subsidiary” shall mean each Subsidiary of the Borrower that is not a Domestic Subsidiary. 
  

 14 

 “Foreign Subsidiary Guarantors” shall mean any Foreign Subsidiary that becomes a Foreign
Subsidiary Guarantor pursuant to Section 9.11. 
  
 “Funded
Debt” shall mean all indebtedness of the Borrower and the Restricted Subsidiaries for borrowed money that matures more than one year from the date of its creation or matures within one year from such date that is renewable or extendable, at
the option of the Borrower or one of the Restricted Subsidiaries, to a date more than one year from such date or arises under a revolving credit or similar agreement that obligates the lender or lenders to extend credit during a period of more than
one year from such date, including all amounts of Funded Debt required to be paid or prepaid within one year from the date of its creation and, in the case of the Borrower, Indebtedness in respect of the Loans. 
  
 “GAAP” shall mean generally accepted accounting principles
in the United States of America, as in effect from time to time; provided, however, that if there occurs after the date hereof any change in GAAP that affects in any respect the calculation of any covenant contained in Section 10, the
Lenders and the Borrower shall negotiate in good faith amendments to the provisions of this Agreement that relate to the calculation of such covenant with the intent of having the respective positions of the Lenders and the Borrower after such
change in GAAP conform as nearly as possible to their respective positions as of the date of this Agreement and, until any such amendments have been agreed upon, the covenants in Section 10 shall be calculated as if no such change in GAAP has
occurred. 
  
 “Governmental Authority” shall mean
any nation or government, any state, province or other political subdivision thereof, and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government. 
  
 “Guarantee” shall mean the Guarantee, made by each Guarantor
in favor of the Administrative Agent for the benefit of the Lenders, substantially in the form of Exhibit A, as the same may be amended, supplemented or otherwise modified from time to time. 
  
 “Guarantee Exception Amount” shall mean, at any time: (a)
$100,000,000 minus (b) the sum of (i) the aggregate amount of Indebtedness incurred or assumed prior to such time pursuant to clause (j) or (k) of the definition of “Permitted Debt” that is outstanding at such time and that was used
to acquire, or was assumed in connection with the acquisition of, capital stock and/or assets in respect of which guarantees, pledges and security have not been given pursuant to Section 9.11, (ii) $50,000,000 and (iii) any Indebtedness incurred by
any Foreign Joint Venture, provided that if such amount is a negative number, the Guarantee Exception Amount shall be zero. 
  
 “Guarantee Obligations” shall mean, as to any Person, any obligation of such Person guaranteeing or intended to guarantee any
Indebtedness of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including any obligation of such Person, whether or not contingent, (a) to purchase any such 
  

 15 

 Indebtedness or any property constituting direct or indirect security therefor (b) to advance or supply funds (i) for the
purchase or payment of any such Indebtedness or (ii) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (c) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such Indebtedness of the ability of the primary obligor to make payment of such Indebtedness or (d) otherwise to assure or hold harmless the owner of such Indebtedness against loss in respect
thereof; provided, however, that the term “Guarantee Obligations” shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Guarantee Obligation shall be
deemed to be an amount equal to the stated or determinable amount of the Indebtedness in respect of which such Guarantee Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming
such Person is required to perform thereunder) as determined by such Person in good faith. 
  
 “Guarantors” shall mean Holdings, the US Subsidiary Guarantors and the Foreign Subsidiary Guarantors, other than the immaterial Subsidiaries listed on Schedule 1.1(e). 
  
 “Hazardous Materials” shall mean (a) any petroleum or
petroleum products, radioactive materials, friable asbestos, urea formaldehyde foam insulation, transformers or other equipment that contain dielectric fluid containing regulated levels of polychlorinated biphenyls, and radon gas; (b) any chemicals,
materials or substances defined as or included in the definition of “hazardous substances”, “hazardous waste”, “hazardous materials”, “extremely hazardous waste”, “restricted hazardous waste”,
“toxic substances”, “toxic pollutants”, “contaminants”, or “pollutants”, or words of similar import, under any applicable Environmental Law; and (c) any other chemical, material or substance, which is
prohibited, limited or regulated by any Environmental Law. 
  
 “Hedge Agreements” shall mean interest rate swap, cap or collar agreements, interest rate future or option contracts, currency swap agreements, currency future or option contracts, commodity price protection agreements or
other commodity price hedging agreements, and other similar agreements entered into by the Borrower in the ordinary course of business (and not for speculative purposes) in order to protect the Borrower or any of the Restricted Subsidiaries against
fluctuations in interest rates, currency exchange rates or commodity prices. 
  
 “Hedging Obligations” means, with respect to any Person, the obligations of such Person under any Hedge Agreements. 
  
 “Historical Financial Statements” means as of the Closing Date, the audited financial statements of Parent
and its Subsidiaries, for the immediately preceding three fiscal years, consisting of balance sheets and the related consolidated statements of income, stockholders’ equity and cash flows for such fiscal years. 
  
 “Holdings” shall have the meaning provided in the preamble
to this Agreement. 
  

 16 

 “Indebtedness” of any Person shall mean (a) all indebtedness of such Person for borrowed
money, (b) the deferred purchase price of assets or services that in accordance with GAAP would be included as liabilities in the balance sheet of such Person, (c) the face amount of all letters of credit issued for the account of such Person and,
without duplication, all drafts drawn thereunder, (d) all Indebtedness of a second Person secured by any Lien on any property owned by such first Person, whether or not such Indebtedness has been assumed, (e) all Capitalized Lease Obligations of
such Person, (f) all obligations of such Person under interest rate swap, cap or collar agreements, interest rate future or option contracts, currency swap agreements, currency future or option contracts, commodity price protection agreements or
other commodity price hedging agreements and other similar agreements and (g) without duplication, all Guarantee Obligations of such Person, provided that Indebtedness shall not include trade payables and accrued expenses, in each case
payable directly or through a bank clearing arrangement and arising in the ordinary course of business. 
  
 “Initial Financial Statement Delivery Date” shall mean the date on which Section 9.1 Financials are delivered to the Lenders under
Section 9.1 for the first full fiscal quarter commencing after the Closing Date. 
  
 “Interest Period” shall mean, with respect to any Term Loan, the interest period applicable thereto, as determined pursuant to Section 2.9. 
  
 “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 Borrower 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 10.6 (1) “Investments” shall include the portion (proportionate to the Borrower’s equity interest in such Subsidiary) of the fair market value of the
net assets of a Subsidiary of the Borrower 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 Borrower shall be
deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary in an amount (if positive) equal to (x) the Borrower’s “Investment” in such Subsidiary at the time of such redesignation less (y) the portion
(proportionate to the Borrower’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 Borrower. 
  
 “Investment Grade Securities” means (1) securities issued or directly and fully guaranteed or insured by the United States government or
any agency or instrumentality thereof (other than Cash Equivalents), (2) debt securities or debt 
  

 17 

 instruments with a rating of BBB- or higher by S&P or Baa3 or higher by Moody’s or the equivalent of such rating
by such rating organization, or, if no rating of S&P or Moody’s then exists, the equivalent of such rating by any other nationally recognized securities rating agency, but excluding any debt securities or instruments constituting loans or
advances among the Borrower and its Subsidiaries, (3) investments in any fund that invests exclusively in investments of the type described in clauses (1) and (2) which fund may also hold immaterial amounts of cash pending investment and/or
distribution, and (4) corresponding instruments in countries other than the United States customarily utilized for high quality investments. 
  
 “JPMCB” shall mean JPMorgan Chase Bank, a New York banking corporation, and any successor thereto by merger, consolidation or otherwise.

  
 “Judgment Currency” shall have the meaning
set forth in Section 14.17. 
  
 “Judgment Currency
Conversion Date” shall have the meaning set forth in Section 14.17. 
  
 “Junior Subordinated Seller Notes” means the Junior Subordinated Seller Notes issued in the initial principal amount of $25,000,000 on December 18, 1997 by Holdings in favor of Zell/Chilmark Fund,
L.P, and any additional amount of such notes as are permitted to be issued under the Existing Credit Agreement. 
  
 “KKR” shall mean each of Kohlberg Kravis Roberts & Co., L.P. and KKR Associates, L.P. 
  
 “Lender” shall have the meaning provided in the preamble to
this Agreement. 
  
 “Lender Default” shall mean a
Lender having notified the Administrative Agent and/or the Borrower that it does not intend to comply with the obligations under Section 2.1 as a result of the appointment of a receiver or conservator with respect to such Lender at the direction or
request of any regulatory agency or authority. 
  
 “Lien” shall mean any mortgage, pledge, security interest, hypothecation, assignment, lien (statutory or other) or similar encumbrance (including any agreement to give any of the foregoing, any conditional sale or other
title retention agreement or any lease in the nature thereof). 
  
 “Loan” shall mean any Term Loan made by any Lender hereunder. 
  
 “Management Group” shall mean, at any time, the Chairman of the Board, any President, any Executive Vice President or Vice President, any Managing Director, any Treasurer and any Secretary of any of
Holdings, the Borrower or any Subsidiaries at such time. 
  
 “Management Investors” means the management officers and employees of Holdings and its Subsidiaries who are investors in Holdings on the Closing Date. 
  

 18 

 “Material Adverse Change” shall mean any change in the business, assets, operations,
properties or financial condition of Holdings, the Borrower and its Subsidiaries, taken as a whole, that would materially adversely affect the ability of Holdings, the Borrower and the other Credit Parties, taken as a whole, to perform their
obligations under this Agreement or any of the other Credit Documents. 
  
 “Material Adverse Effect” shall mean a circumstance or condition affecting the business, assets, operations, properties or financial condition of Holdings, the Borrower and the Subsidiaries, taken as a whole, that would
materially adversely affect (a) the ability of Holdings, the Borrower and the other Credit Parties, taken as a whole, to perform their obligations under this Agreement or any of the other Credit Documents or (b) the rights and remedies of the
Administrative Agent and the Lenders under this Agreement or any of the other Credit Documents. 
  
 “Material Subsidiary” shall mean, at any date of determination, each Restricted Subsidiary of the Borrower (a) whose total assets at the
last day of the Test Period ending on the last day of the most recent fiscal period for which Section 9.1 Financials have been delivered were equal to or greater than 5% of the consolidated total assets of the Borrower and the Restricted
Subsidiaries at such date or (b) whose gross revenues for such Test Period were equal to or greater than 5% of the consolidated gross revenues of the Borrower and the Restricted Subsidiaries for such period, in each case determined in accordance
with GAAP. 
  
 “Maturity Date” shall mean the
Term Loan Maturity Date. 
  
 “Merger” shall have
the meaning provided in the recitals hereto. 
  
 “Merger
Agreement” shall mean that certain Agreement and Plan of Merger dated as of March 3, 2004, by and among Sealy Corporation and SAC (as assignee of the rights and obligations of Posturepedic Acquisition Corp.). 
  
 “Minimum Borrowing Amount” shall mean $2,000,000.

  
 “Minority Investment” shall mean any Person
(other than a Subsidiary) in which the Borrower or any Restricted Subsidiary owns capital stock or other equity interests. 
  
 “Moody’s” shall mean Moody’s Investors Service, Inc. or any successor by merger or consolidation to its business. 

 
 “Net Proceeds” means the aggregate cash proceeds received
by the Borrower or any Restricted Subsidiary in respect of any Asset Sale or issuance of Permitted Additional Subordinated Notes, including, without limitation, any cash received upon the sale or other disposition of any Designated Noncash
Consideration received in any Asset Sale, net of the direct costs relating to such Asset Sale, issuance of Permitted Additional Subordinated Notes and the sale or disposition of such Designated Noncash Consideration, including, without limitation,
legal, accounting and investment banking fees, and brokerage and sales commissions, any relocation expenses incurred as a result 
  

 19 

 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 Senior Indebtedness required (other than required by Section 10.4(b)(i)) to be paid as a result of such transaction and any
deduction of appropriate amounts to be provided by the Borrower as a reserve in accordance with GAAP against any liabilities associated with the asset disposed of in such transaction and retained by the Borrower 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-Defaulting Lender” shall mean and include each Lender
other than a Defaulting Lender. 
  
 “Non-Excluded
Taxes” shall have the meaning provided in Section 5.4(a). 
  
 “Notice of Borrowing” shall have the meaning provided in Section 2.3. 
  
 “Notice of Conversion or Continuation” shall have the meaning provided in Section 2.6. 
  
 “Obligations” shall mean the collective reference to (i) the
due and punctual payment of (x) the principal of and premium, if any, and interest at the applicable rate provided herein (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable in such proceeding) on the Loans, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise and (y) all other monetary obligations, including fees, costs,
expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding), of the Borrowers or any other Credit Party to any of the Lenders hereunder and under the other Credit Documents, (ii) the due and punctual performance of all covenants, agreements, obligations and
liabilities of the Borrower under or pursuant to this Agreement and the other Credit Documents, (iii) the due and punctual payment and performance of all the covenants, agreements, obligations and liabilities of each other Credit Party under or
pursuant to this Agreement or the other Credit Documents and (iv) the due and punctual payment and performance of all obligations in respect of overdrafts and related liabilities owed to the Administrative Agent or its affiliates arising from or in
connection with treasury, depositary or cash management services or in connection with any automated clearinghouse transfer of funds. 
  
 “Officers’ Certificate” means a certificate signed on behalf of the Borrower by two Officers of the Borrower, one of whom must be
the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Borrower that meets the requirements set forth in the Credit Agreement. 
  

 20 

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

 
 “Participant” shall have the meaning provided in Section
14.6(c)(i). 
  
 “PBGC” shall mean the Pension
Benefit Guaranty Corporation established pursuant to Section 4002 of ERISA, or any successor thereto. 
  
 “Permitted Acquisition” shall mean the acquisition, by merger or otherwise, by the Borrower or any of the Restricted Subsidiaries of
assets or capital stock or other equity interests, so long as (a) such acquisition and all transactions related thereto shall be consummated in accordance with applicable law; (b) such acquisition shall result in the issuer of such capital stock or
other equity interests becoming (i) a Restricted Subsidiary and (ii) (x) in the case of a Restricted Domestic Subsidiary, a Subsidiary Guarantor or (y) in the case of a Restricted Foreign Subsidiary, a Foreign Subsidiary Guarantor, in each case to
the extent required by Section 9.11; and (c) after giving effect to such acquisition, no Default or Event of Default shall have occurred and be continuing. 
  
 “Permitted Additional Subordinated Notes” shall mean Subordinated Notes other than Subordinated Notes issued as Permitted Subordinated
Note Debt, provided that the aggregate principal amount of Permitted Additional Subordinated Notes outstanding at any time shall not exceed $100,000,000, plus accrued interest thereon as provided in the Subordinated Note Indenture.

  
 “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 Borrower or any of its Restricted Subsidiaries and another Person; provided, that any cash or Cash
Equivalents received must be applied in accordance with Section 10.4. 
  
 “Permitted Debt” shall mean: 
  
 (a)
Indebtedness arising under the Credit Documents; 
  
 (b)
Indebtedness of (i) the Borrower to any Subsidiary of the Borrower and (ii) any Subsidiary to the Borrower or any other Restricted Subsidiary of the Borrower; 
  

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

  
 (d) except as provided in clauses (j) and (k) below, Guarantee
Obligations incurred by (i) Restricted Subsidiaries in respect of Indebtedness of the Borrower or other Restricted Subsidiaries that is permitted to be incurred under this Agreement and (ii) the Borrower in respect of Indebtedness of the Restricted
Subsidiaries that is permitted to be incurred under this Agreement, provided that there shall be no Guarantee (a) by a Restricted Foreign Subsidiary of any Indebtedness of the Borrower 
  

 21 

 and (b) in respect of the Permitted Subordinated Note Debt, unless such Guarantee is made by a Guarantor and such
Guarantee is unsecured and subordinated to the Obligations to the same extent as the applicable Permitted Subordinated Note Debt; 
  
 (e) Guarantee Obligations incurred in the ordinary course of business in respect of obligations of suppliers, customers, franchisees, lessors and
licensees; 
  
 (f) (i) Indebtedness (including Indebtedness
arising under Capital Leases) incurred within 270 days of the acquisition, construction or improvement of fixed or capital assets to finance the acquisition, construction or improvement of such fixed or capital assets, (ii) Indebtedness arising
under Capital Leases entered into in connection with Permitted Sale Leasebacks and (iii) Indebtedness arising under Capital Leases, other than Capital Leases in effect on the date hereof and Capital Leases entered into pursuant to subclauses (i) and
(ii) above, provided that the aggregate amount of Indebtedness incurred pursuant to this subclause (iii) shall not exceed $25,000,000 at any time outstanding, and (iv) any refinancing, refunding, renewal or extension of any Indebtedness
specified in subclause (i), (ii) or (iii) above, provided that the principal amount thereof is not increased above the principal amount thereof outstanding immediately prior to such refinancing, refunding, renewal or extension; 
  
 (g) Indebtedness outstanding on the date hereof and listed on Schedule 10.1
and any refinancing, refunding, renewal or extension thereof, provided that (i) the principal amount thereof is not increased above the principal amount thereof outstanding immediately prior to such refinancing, refunding, renewal or
extension, except to the extent otherwise permitted hereunder and (ii) the direct and contingent obligors with respect to such Indebtedness are not changed; 
  
 (h) Indebtedness in respect of Hedge Agreements; 
  
 (i) Indebtedness in respect of Permitted Subordinated Note Debt; 
  

(j) (i) Indebtedness of a Person or Indebtedness attaching to assets of a Person that, in either case, becomes a Restricted Subsidiary or Indebtedness
attaching to assets that are acquired by the Borrower or any Restricted Subsidiary, in each case after the Closing Date as the result of a Permitted Acquisition, provided that (w) such Indebtedness existed at the time such Person became a
Restricted Subsidiary or at the time such assets were acquired and, in each case, was not created in anticipation thereof, (x) such Indebtedness is not guaranteed in any respect by the Borrower or any Restricted Subsidiary (other than any such
person that so becomes a Restricted Subsidiary), (y) such Person executes a supplement to the Guarantee to the extent required under Section 9.11, provided that the requirements of this subclause (y) shall not apply to an aggregate amount at
any time outstanding of up to (and including) the Guarantee Exception Amount at such time of the aggregate of (1) such Indebtedness and (2) all Indebtedness as to which the proviso to clause (k)(i)(y) below then applies, and (z) the aggregate amount
of such Indebtedness and all Indebtedness incurred under clause (k) below, when taken together, does not exceed $150,000,000 in the aggregate at any time outstanding, and (ii) any refinancing, refunding, renewal or extension of any Indebtedness
specified in 
  

 22 

 subclause (i) above, provided that, except to the extent otherwise permitted hereunder, (x) the principal amount
of any such Indebtedness is not increased above the principal amount thereof outstanding immediately prior to such refinancing, refunding, renewal or extension and (y) the direct and contingent obligors with respect to such Indebtedness are not
changed; 
  
 (k) (i) Indebtedness of the Borrower or any
Restricted Subsidiary incurred to finance a Permitted Acquisition, provided that (x) such Indebtedness is not guaranteed in any respect by any Restricted Subsidiary (other than any Person acquired (the “acquired Person”) as a
result of such Permitted Acquisition or the Restricted Subsidiary so incurring such Indebtedness) or, in the case of Indebtedness of any Restricted Subsidiary, by the Borrower, (y) such acquired Person executes a supplement to the Guarantee to the
extent required under Section 9.11, provided that the requirements of this subclause (y) shall not apply to an aggregate amount at any time outstanding of up to (and including) the amount of the Guarantee Exception Amount at such time of the
aggregate of (1) such Indebtedness and (2) all Indebtedness as to which the proviso to clause (j)(i)(y) above then applies, and (z) the aggregate amount of such Indebtedness and all Indebtedness assumed or permitted to exist under clause (j) above,
when taken together, does not exceed $150,000,000 in the aggregate at any time outstanding, and (ii) any refinancing, refunding, renewal or extension of any Indebtedness specified in subclause (i) above, provided that (x) the principal amount
of any such Indebtedness is not increased above the principal amount thereof outstanding immediately prior to such refinancing, refunding, renewal or extension and (y) the direct and contingent obligors with respect to such Indebtedness are not
changed, except to the extent otherwise permitted hereunder; 
  
 (l) Indebtedness of Restricted Foreign Subsidiaries in an aggregate amount at any time outstanding not to exceed the Dollar Equivalents of (i) the greater of (x) $70,000,000 (which amount shall include the aggregate outstanding amount at
any time of any Indebtedness of Restricted Foreign Subsidiaries existing at the Closing Date) or (y) the Foreign Borrowing Base Amount in effect at such time minus (ii) the amount, if any, by which the aggregate amount of Indebtedness
incurred and outstanding at such time pursuant to clause (n) below exceeds the Dollar Equivalent of $100,000,000; 
  
 (m) (i) Indebtedness incurred in connection with any Permitted Sale Leaseback and (ii) any refinancing, refunding, renewal or extension of any
Indebtedness specified in subclause (i) above, provided that, except to the extent otherwise permitted hereunder, (x) the principal amount of any such Indebtedness is not increased above the principal amount thereof outstanding immediately
prior to such refinancing, refunding, renewal or extension and (y) the direct and contingent obligors with respect to such Indebtedness are not changed; 
  
 (n) (i) additional Indebtedness, provided that the aggregate amount of Indebtedness incurred and remaining outstanding pursuant to this clause (n)
shall not at any time exceed the sum of (x) $100,000,000 and (y) the amount, if any, by which $70,000,000 exceeds the aggregate amount of Indebtedness then outstanding under clause (l) above, and (ii) any refinancing, refunding, renewal or extension
of any 
  

 23 

 Indebtedness specified in subclause (i) above; provided, further, at no time shall
Indebtedness of Restricted Foreign Subsidiaries in an aggregate amount at any time outstanding pursuant to subclause (l) above and this subclause (n)exceed the aggregate amount permitted by subclause (l) above; 
  
 (o) Indebtedness in respect of Permitted Additional Subordinated Notes to the
extent that the Net Proceeds therefrom are, immediately after the receipt thereof, applied to the prepayment of Term Loans in accordance with Section 5.2; and 
  

(p) Indebtedness incurred under the Credit Facilities up to an aggregate principal amount of $785,000,000 outstanding at any one time;. 
  
 (q) the Unpaid Refinancing Amount for a period of up to thirty-five (35)
Business Days after the Closing Date. 
  
 “Permitted
Investments” shall mean: 
  
 (a) Investment in the
Borrower or any Restricted Subsidiary; 
  
 (b) any Investment in
cash and Cash Equivalents or Investment Grade Securities; 
  
 (c)
any Investment by the Borrower or any Restricted Subsidiary of the Borrower 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 
  
 (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 Borrower 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 10.4 or any other disposition of assets not constituting an Asset Sale; 
  
 (e) any Investment existing on the Closing Date; 
  
 (f) advances to employees not in excess of $10,000,000 outstanding at any one time, in the aggregate; 
  
 (g) any Investment acquired by the Borrower or any Restricted Subsidiary 
  
 (1) in exchange for any other Investment or accounts receivable held by the Borrower or any such Restricted
Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the Borrower of such other Investment or accounts receivable or 
  

 24 

 (2) as a result of a foreclosure by the Borrower 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 10.1; 
  
 (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) $60,000,000 and (y) 6.0% 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 Borrower, or any of its direct or indirect parent entities (exclusive of Disqualified Stock); provided, however, that such Equity
Interests will not increase the amount available for Restricted Payments under clause (c) of the first paragraph under Section 10.6; 
  
 (l) guarantees of Indebtedness permitted under Section 10.1; 
  
 (m) any transaction to the extent it constitutes an investment that is permitted and made in accordance with Section 1013(b) of the Subordinated Note
Indenture (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 (n) 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) $35,000,000 and (y) 3.5% 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); and 
  
 (p) Investments relating to
any special purpose wholly-owned subsidiary of the Borrower organized in connection with a Receivables Facility that, in the good faith determination of the Board of Directors of the Borrower, are necessary or advisable to effect such Receivables
Facility. 
  

 25 

 “Permitted Investors” shall have the meaning provided in the preamble hereto.

  
 “Permitted Liens” shall mean (a) Liens for
taxes, assessments or governmental charges or claims not yet due or which are being contested in good faith and by appropriate proceedings for which appropriate reserves have been established in accordance with GAAP; (b) Liens in respect of property
or assets of the Borrower or any of the Subsidiaries imposed by law, such as carriers’, warehousemen’s and mechanics’ Liens and other similar Liens arising in the ordinary course of business, in each case so long as such Liens arise
in the ordinary course of business and do not individually or in the aggregate have a Material Adverse Effect; (c) Liens arising from judgments or decrees in circumstances not constituting an Event of Default under Section 11.9; (d) Liens incurred
or deposits made in connection with workers’ compensation, unemployment insurance and other types of social security, or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, government contracts,
performance and return-of-money bonds and other similar obligations incurred in the ordinary course of business; (e) ground leases in respect of real property on which facilities owned or leased by the Borrower or any of its Subsidiaries are
located; (f) easements, rights-of-way, restrictions, minor defects or irregularities in title and other similar charges or encumbrances not interfering in any material respect with the business of Holdings, the Borrower and its Subsidiaries, taken
as a whole; (g) any interest or title of a lessor or secured by a lessor’s interest under any lease permitted by this Agreement; (h) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs
duties in connection with the importation of goods; (i) Liens on goods the purchase price of which is financed by a documentary letter of credit issued for the account of the Borrower or any of its Subsidiaries, provided that such Lien
secures only the obligations of the Borrower or such Subsidiaries in respect of such letter of credit to the extent permitted under Section 10.1; (j) leases or subleases granted to others not interfering in any material respect with the business of
Holdings, the Borrower and its Subsidiaries, taken as a whole; and (k) Liens created in the ordinary course of business in favor of banks and other financial institutions over credit balances of any bank accounts of any of Holdings, the Borrower and
the Restricted Subsidiaries held at such banks or financial institutions, as the case may be, to facilitate the operation of cash pooling and/or interest set-off arrangements in respect of such bank accounts in the ordinary course of business.

  
 “Permitted Sale Leaseback” shall mean any
Sale Leaseback consummated by the Borrower or any of the Restricted Subsidiaries after the Closing Date, provided that such Sale Leaseback is consummated for fair value as determined at the time of consummation in good faith by the Borrower
and, in the case of any Sale Leaseback (or series of related Sales Leasebacks) the aggregate proceeds of which exceed $20,000,000, the Board of Directors of the Borrower (which such determination may take into account any retained interest or other
investment of the Borrower or such Restricted Subsidiary in connection with, and any other material economic terms of, such Sale Leaseback). 
  

 26 

 “Permitted Subordinated Indebtedness” means any unsecured Indebtedness of Borrower that
(a) is subordinated to the prior payment in full in cash of the Obligations on terms and conditions not materially less favorable to the Lenders than the terms and conditions of the Subordinated Notes pertaining thereto, taken as a whole, (b) will
not mature prior to the date that is six (6) months after the Term Loan Maturity Date, (c) has no scheduled amortization or payments of principal prior to the date that is six (6) months after the Term Loan Maturity Date, and (d) has covenant,
default and remedy provisions not materially more restrictive, or mandatory prepayment, repurchase, defeasance or redemption provisions no more onerous or expansive in scope, than those contained in the Subordinated Notes Indenture, taken as a
whole; provided any such Indebtedness shall constitute Permitted Subordinated Indebtedness only if both immediately before and immediately after giving effect to the issuance or incurrence thereof, no Default or Event of Default shall have
occurred and be continuing. 
  
 “Permitted Subordinated
Note Debt” shall mean the Subordinated Notes, provided that the aggregate principal amount of such Subordinated Notes outstanding at any time shall not exceed $390,000,000. 
  
 “Person” shall mean any individual, partnership, joint
venture, firm, corporation, limited liability company, association, trust or other enterprise or any Governmental Authority. 
  
 “Plan” shall mean any multiemployer or single-employer plan, as defined in Section 4001 of ERISA and subject to Title IV of ERISA, that
is or was within any of the preceding five plan years maintained or contributed to by (or to which there is or was an obligation to contribute or to make payments to) the Borrower, a Subsidiary or an ERISA Affiliate. 
  
 “preferred stock” means any Equity Interest with
preferential rights of payment of dividends or upon liquidation, dissolution, or winding up. 
  
 “Prime Rate” shall mean the rate of interest per annum publicly announced from time to time by the Administrative Agent as its reference rate in effect at its principal office in New York City (the
Prime Rate not being intended to be the lowest rate of interest charged by JPMCB in connection with extensions of credit to debtors). 
  
 “Pro Forma Adjustment” shall mean, for any test period that includes any of the six fiscal quarters first ending following any Permitted
Acquisition, with respect to the Acquired EBITDA of the applicable Acquired Entity or Business or the Consolidated EBITDA of the Borrower affected by such acquisition, the pro forma increase or decrease in such Acquired EBITDA or such Consolidated
EBITDA, as the case may be, projected by the Borrower in good faith as a result of reasonably identifiable and factually supportable net cost savings or additional net costs, as the case may be, realizable during such period by combining the
operations of such Acquired Entity or Business with the operations of the Borrower and its Subsidiaries, provided that so long as such net cost savings or additional net costs will be realizable at any time during such six-quarter period, it
may be assumed, for purposes of projecting such pro forma increase or decrease 
  

 27 

 to such Acquired EBITDA or such Consolidated EBITDA, as the case may be, that such net cost savings or additional net
costs will be realizable during the entire such period; provided further that any such pro forma increase or decrease to such Acquired EBITDA or such Consolidated EBITDA, as the case may be, shall be without duplication for net cost
savings or additional net costs actually realized during such period and already included in such Acquired EBITDA or such Consolidated EBITDA, as the case may be. 
  
 “Pro Forma Adjustment Certificate” shall mean any certificate of an Authorized Officer of the Borrower
delivered pursuant to Section 9.1(h) or setting forth the information described in clause (iv) to Section 9.1(d). 
  
 “Qualified PIK Securities” shall mean (1) any preferred capital stock or preferred equity interest of Parent (a) that does not provide
for any cash dividend payments or other cash distributions in respect thereof on or prior to the Term Loan Maturity Date and (b) that by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable or
exercisable) or upon the happening of any event does not (i)(x) mature or become mandatorily redeemable pursuant to a sinking fund obligation or otherwise, (y) become convertible or exchangeable at the option of the holder thereof for Indebtedness
or preferred stock that is not Qualified PIK Securities or (z) become redeemable at the option of the holder thereof (other than as a result of a change of control event), in whole or in part, in each case on or prior to the first anniversary of the
Term Loan Maturity Date and (ii) provide holders thereunder with any rights upon the occurrence of a “change of control” event prior to the repayment of the Obligations under the Credit Documents and (2) any Indebtedness of Parent which
has payments terms at least as favorable to the Borrower and Lenders as described in clause (1)(a) above and is subordinated and has other terms, other than with respect to interest rates, at least as favorable to the Borrower and Lenders as the
Subordinated Notes. 
  
 “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.

  
 “Real Estate” shall have the meaning given to
that term in Section 9.1(f). 
  
 “Recapitalization” shall mean the consummation of the Merger and the Refinancing. 
  
 “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 Borrower and the Restricted Subsidiaries pursuant to which the Borrower 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. 
  

 28 

 “Reference Lender” shall mean JPMCB. 
  
 “Refinancing” shall mean the repayment by the Borrower of
(a) all obligations under the Existing Credit Agreement, (b) all the Borrower’s senior subordinated notes due 2007 issued pursuant to the Existing Indenture and all other obligations under the Existing Indenture, except for the Unpaid
Refinancing Amount, (c) all obligations under the Junior Subordinated Seller Notes and (d) all obligations under the Existing Canadian Credit Agreement. 
  
 “Register” shall have the meaning provided in Section 14.6(b)(iv). 
  
 “Regulation D” shall mean Regulation D of the Board as from time to time in effect and any successor to all
or a portion thereof establishing reserve requirements. 
  
 “Regulation T” shall mean Regulation T of the Board as from time to time in effect and any successor to all or a portion thereof establishing margin requirements. 
  
 “Regulation U” shall mean Regulation U of the Board as from
time to time in effect and any successor to all or a portion thereof establishing margin requirements. 
  
 “Regulation X” shall mean Regulation X of the Board as from time to time in effect and any successor to all or a portion thereof
establishing margin requirements. 
  
 “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 Borrower or a Restricted Subsidiary in exchange for assets transferred by the Borrower 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. 
  
 “Related Parties” means, with respect to any specified
Person, such Person’s Affiliates and the directors, officers, employees, agents, trustees, advisors of such Person and any Person that possesses, directly or indirectly, the power to direct or cause the direction of the management or policies
of such Person, whether through the ability to exercise voting power, by contract or otherwise. 
  
 “Reportable Event” shall mean an event described in Section 4043 of ERISA and the regulations thereunder. 
  
 “Required Lenders” shall mean, at any date, Non-Defaulting
Lenders having or holding a majority of the sum of (a) the portion of the Adjusted Total Commitment that relates to Term Loan Commitments at such date and (b) the outstanding principal amount of the Term Loans (excluding the Term Loans held by
Defaulting Lenders) in the aggregate at such date. 
  

 29 

 “Requirement of Law” shall mean, as to any Person, the Certificate of Incorporation and
By-Laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or
any of its property or assets or to which such Person or any of its property or assets is subject. 
  
 “Restricted Domestic Subsidiary” shall mean each Restricted Subsidiary that is also a Domestic Subsidiary. 
  
 “Restricted Foreign Subsidiary” shall mean a Foreign
Subsidiary that is a Restricted Subsidiary. 
  
 “Restricted Investment” means an Investment other than a Permitted Investment. 
  
 “Restricted Payments” shall have the meaning provided in Section 10.6. 
  
 “Restricted Subsidiary” shall mean any Subsidiary of the Borrower other than an Unrestricted Subsidiary.

  
 “Sale Leaseback” shall mean any transaction
or series of related transactions pursuant to which the Borrower or any of the Restricted Subsidiaries (a) sells, transfers or otherwise disposes of any property, real or personal, whether now owned or hereafter acquired, and (b) as part of such
transaction, thereafter rents or leases such property or other property that it intends to use for substantially the same purpose or purposes as the property being sold, transferred or disposed. 
  
 “SAC” shall have the meaning provided in the recitals
hereto. 
  
 “S&P” shall mean Standard &
Poor’s Ratings Services or any successor by merger or consolidation to its business. 
  
 “SEC” shall mean the Securities and Exchange Commission or any successor thereto. 
  
 “Section 9.1 Financials” shall mean the financial statements delivered, or required to be delivered, pursuant to Section 9.1(a) or (b)
together with the accompanying officer’s certificate delivered, or required to be delivered, pursuant to Section 9.1(e). 
  
 “Securities Act” means the Securities Act of 1933, as amended from time to time, and any successor statute. 
  
 “Senior Leverage Ratio” means shall mean, as of any date of
determination, the ratio of (a) Consolidated Total Debt which constitutes Senior Indebtedness as of the last day of the relevant Test Period to (b) Consolidated EBITDA for such Test Period. 
  

 30 

 “Senior Indebtedness” means: (a) all Indebtedness of the Borrower or any Guarantor
outstanding under the Credit Facilities (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization of the Borrower or any Guarantor, regardless of whether or not a claim for post-filing interest is
allowed in such proceedings); (b) all Hedging Obligations (and guarantees thereof) permitted to be incurred hereunder; (c) any other Indebtedness of the Borrower or any Guarantor permitted to be incurred under the terms of this Agreement, unless the
instrument under which such Indebtedness is incurred expressly provides that it is subordinated in right of payment to the Term Loans or any Guarantee and (d) all obligations with respect to the items listed in the preceding clauses (a), (b) and
(c). 
  
 “Senior Secured Credit Facility” shall
mean the senior secured Credit Agreement, dated as of the Closing Date, among the Company, Holdings, Sealy Canada, Ltd., J.P. Morgan Securities Inc., as joint lead arranger and joint bookrunner, Goldman Sachs Credit Partners L.P., as joint lead
arranger, joint bookrunner and syndication agent, JPMCB, as administrative agent and the other agents and the lenders party thereto as it may be amended, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time.

  
 “Senior Subordinated Indebtedness” means (a)
with respect to the Borrower, Indebtedness which ranks equal in right of payment to the Subordinated Notes, and (b) with respect to any Guarantor, Indebtedness which ranks equal in right of payment to the guarantee of such Guarantor under the
Subordinated Notes Indenture. 
  
 “Similar
Business” means any business conducted or proposed to be conducted by the Borrower and its Restricted Subsidiaries on the date of this Agreement or any business that is similar, reasonably related, incidental or ancillary thereto.

  
 “Sold Entity or Business” shall have the
meaning provided in the definition of the term “Consolidated EBITDA”. 
  
 “Solvent” means, with respect to the Borrower, that as of the Closing Date, both (i) (a) the sum of the Borrower’s debt (including contingent liabilities) does not exceed the present fair
saleable value of the Borrower’s present assets; (b) the Borrower’s capital is not unreasonably small in relation to its business as contemplated on the Closing Date; and (c) the Borrower has not incurred and does not intend to incur, or
believe that it will incur, debts including current obligations beyond its ability to pay such debts as they become due (whether at maturity or otherwise); and (ii) such Person is “solvent” within the meaning given that term and similar
terms under applicable laws relating to fraudulent transfers and conveyances. For purposes of this definition, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability (irrespective of whether such contingent liabilities meet the criteria for accrual under Statement of Financial Accounting Standard
No.5). 
  

 31 

 “Specified Subsidiary” shall mean, at any date of determination, (a) any Material
Subsidiary or (b) any Unrestricted Subsidiary (i) whose total assets at the last day of the Test Period ending on the last day of the most recent fiscal period for which Section 9.1 Financials have been delivered were equal to or greater than 15% of
the consolidated total assets of the Borrower and the Subsidiaries at such date or (ii) whose gross revenues for such Test Period were equal to or greater than 15% of the consolidated gross revenues of the Borrower and the Subsidiaries for such
period, in each case determined in accordance with GAAP. 
  
 “Statutory Reserve Rate” shall mean for any day as applied to any Eurodollar Loan, a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the
aggregate of the maximum reserve percentages that are in effect on that day (including any marginal, special, emergency or supplemental reserves), expressed as a decimal, as prescribed by the Board and to which the Administrative Agent is subject,
for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Board). Such reserve percentages shall include those imposed pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute
eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable regulation. The
Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage. 
  
 “Subordinated Indebtedness” means (a) respect to the Borrower, any Indebtedness of the Borrower which is by its terms subordinated in
right of payment to the Subordinated Notes, and (b) 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 under the Subordinated Notes Indenture.

  
 “Subordinated Note Indenture” shall mean the
Indenture dated as of the Closing Date, among the Borrower, the guarantors party thereto and The Bank of New York, as trustee, pursuant to which the Subordinated Notes are issued, as the same may be amended, supplemented or otherwise modified from
time to time to the extent permitted by Section 10.7(b). 
  
 “Subordinated Notes” shall mean (a) the Subordinated Notes defined in the Recitals hereof and (b) any replacement or refinancing thereof having terms no more adverse to the interests of the Lenders than the terms thereof,
provided that any such amendment, replacement or refinancing shall bear a rate of interest determined by the Board of Directors of the Borrower to be a market rate of interest at the date of such amendment, replacement or refinancing and have
other terms customary for similar issuances under similar market conditions or otherwise be on terms reasonably acceptable to the Administrative Agent. 
  

 32 

 “Subsidiary” of any Person shall mean and include (a) any corporation more than 50% of
whose stock of any class or classes having by the terms thereof ordinary voting power to elect a majority of the directors of such corporation (irrespective of whether or not at the time stock of any class or classes of such corporation shall have
or might have voting power by reason of the happening of any contingency) is at the time owned by such Person directly or indirectly through Subsidiaries and (b) any partnership, association, joint venture or other entity in which such Person
directly or indirectly through Subsidiaries has more than a 50% equity interest at the time. Unless otherwise expressly provided, all references herein to a “Subsidiary” shall mean a Subsidiary of the Borrower. 
  
 “Syndication Agent” shall mean JPMCB, together with its
affiliates, as the syndication agent for the Lenders under this Agreement and the other Credit Documents. 
  
 “Term Loan” shall have the meaning provided in Section 2.1. 
  
 “Term Loan Commitment” shall mean, (a) in the case of each Lender that is a Lender on the date hereof, the
amount set forth opposite such Lender’s name on Schedule 1.1(c) as such Lender’s “Term Loan Commitment” and (b) in the case of any Lender that becomes a Lender after the date hereof, the amount specified as such Lender’s
“Term Loan Commitment” in the Assignment and Acceptance pursuant to which such Lender assumed a portion of the Total Commitment, in each case as the same may be changed from time to time pursuant to the terms hereof. The aggregate amount
of the Term Loan Commitments as of the Closing Date is $100,000,000. 
  
 “Term Loan Maturity Date” shall mean the date that is nine years after the Closing Date, or, if such date is not a Business Day, the next preceding Business Day. 
  
 “Test Period” shall mean, for any determination under this Agreement, the four consecutive fiscal quarters
of the Borrower then last ended; provided, however, that for any period ending prior to one year after the end of the first fiscal quarter ending after the Closing Date, pro forma adjustments shall be made with respect to the relevant
determination in accordance with Schedule 1.1(d). 
  
 “Total Assets” means the total assets of the Borrower and the Restricted Subsidiaries, as shown on the most recent balance sheet of the Borrower. 
  
 “Total Commitment” shall mean the sum of the Term Loan Commitments of all the Lenders. 
  
 “Total Credit Exposure” shall mean, at any date, the Total
Commitment at such date and the outstanding principal amount of all Term Loans at such date. 
  
 “Transaction Expenses” shall mean any fees or expenses incurred or paid by Holdings or any of its Subsidiaries in connection with the Recapitalization, this Agreement and the other Credit Documents
and the transactions contemplated hereby and thereby. 
  

 33 

 “Transferee” shall have the meaning provided in Section 14.6(e). 
  
 “Type” shall mean, as to any Term Loan, its nature as an ABR
Loan or a Eurodollar Term Loan. 
  
 “Unfunded Current
Liability” of any Plan shall mean the amount, if any, by which the present value of the accrued benefits under the Plan as of the close of its most recent plan year, determined in accordance with Statement of Financial Accounting Standards
No. 87 as in effect on the date hereof, based upon the actuarial assumptions that would be used by the Plan’s actuary in a termination of the Plan, exceeds the fair market value of the assets allocable thereto. 
  
 “Unpaid Refinancing Amount” shall mean any amounts of the
Borrower’s senior subordinated notes issued pursuant to the Existing Indenture not tendered as of the Closing Date. 
  
 “Unrestricted Subsidiary” shall mean (1) any Subsidiary of the Borrower which at the time of determination is an Unrestricted Subsidiary
(as designated by the Board of Directors of the Borrower, as provided below) and (2) any Subsidiary of an Unrestricted Subsidiary. The Board of Directors of the Borrower may designate any Subsidiary of the Borrower (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 Borrower or any
Subsidiary of the Borrower (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
Borrower, (b) such designation complies with Section 10.6 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 Borrower or any Restricted Subsidiary. 
  
 The Board of Directors of the Borrower 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 Borrower could incur at least $1.00 of additional Indebtedness pursuant to the Fixed
Charge Coverage Ratio test described in the first sentence of Section 10.1 or (2) the Fixed Charge Coverage Ratio for the Borrower and its Restricted Subsidiaries would be greater than such ratio for the Borrower 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 Borrower shall be notified by the Borrower to the Administrative Agent by promptly
filing with the Administrative Agent a copy of the board resolution giving effect to such designation and an Officers’ Certificate certifying that such designation complied with the foregoing provisions. 
  

 34 

 “US Subsidiary Guarantors” shall mean (a) each Domestic Subsidiary (other than an
Unrestricted Subsidiary) on the Closing Date and (b) each Domestic Subsidiary that becomes a party to the Guarantee after the Closing Date pursuant to Section 9.11. 
  
 “Voting Stock” shall mean, with respect to any Person, shares of such Person’s capital stock having
the right to vote for the election of directors of such Person under ordinary circumstances. 
  
 “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 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. 
  
 (b) The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of
this Agreement, and Section references are to Sections of this Agreement unless otherwise specified. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without
limitation”. 
  
 1.2. Exchange Rates. (a) For purposes
of determining compliance under Sections 10.1 (to the extent calculating Senior Leverage Ratio and Fixed Charge Coverage Ratio), 10.4 and 10.6 with respect to any amount in a Foreign Currency, such amount shall be deemed to equal the Dollar
Equivalent thereof based on the average Exchange Rate for a Foreign Currency for the most recent twelve-month period immediately prior to the date of determination determined in a manner consistent with that used in calculating Consolidated EBITDA
for the related period. For purposes of determining compliance with other provisions of Section 10.1 and with Section 10.2, with respect to any amount of Indebtedness in a Foreign Currency, compliance will be determined at the time of incurrence
thereof using the Dollar Equivalent thereof at the Exchange Rate in effect at the time of such incurrence. 
  
 SECTION 2. Amount and Terms of Credit 
  
 2.1. Commitments. Subject to and upon the terms and conditions herein set forth, each Lender having a Term Loan Commitment severally agrees to make
a loan or loans (each a “Term Loan”) to the Borrower in Dollars, which Term Loans shall not exceed for any such Lender the Term Loan Commitment of such Lender; and 
  

 35 

 Such Term Loans (i) shall be made on the Closing Date, (ii) may at the option of the Borrower be incurred
and maintained as, and/or converted into, ABR Loans or Eurodollar Term Loans, provided that all such Term Loans made by each of the Lenders pursuant to the same Borrowing shall, unless otherwise specifically provided herein, consist entirely
of Term Loans of the same Type, (iii) may be repaid or prepaid in accordance with the provisions hereof, but once repaid or prepaid, may not be reborrowed, (iv) shall not exceed for any such Lender the Term Loan Commitment, of such Lender and (v)
shall not exceed in the aggregate the total of all Term Loan Commitments. On the Term Loan Maturity Date, all Term Loans shall be repaid in full. 
  
 2.2. Minimum Amount of Each Borrowing; Maximum Number of Borrowings. The aggregate principal amount of each Borrowing of Term Loans shall be in a
multiple of $1,000,000 and shall not be less than the Minimum Borrowing Amount with respect thereto. More than one Borrowing may be incurred on any date, provided that at no time shall there be outstanding more than 20 Borrowings of Eurodollar Loans
under this Agreement. 
  
 2.3. Notice of Borrowing. (a) The
Borrower shall give the Administrative Agent at the Administrative Agent’s Office (i) prior to 12:00 Noon (New York time) at least three Business Days’ prior written notice (or telephonic notice promptly confirmed in writing) of the
Borrowing of Term Loans if all or any of such Term Loans are to be initially Eurodollar Loans, and (ii) prior written notice (or telephonic notice promptly confirmed in writing) prior to 10:00 a.m. (New York time) on the date of the Borrowing of
Term Loans if all such Term Loans are to be ABR Loans. Such notice (a “Notice of Borrowing”) shall be irrevocable and shall specify (i) the aggregate principal amount of the Term Loans to be made, (ii) the date of the borrowing
(which shall be the Closing Date) and (iii) whether the Term Loans shall consist of ABR Loans and/or Eurodollar Term Loans and, if the Term Loans are to include Eurodollar Term Loans, the Interest Period to be initially applicable thereto. The
Administrative Agent shall promptly give each Lender written notice (or telephonic notice promptly confirmed in writing) of the proposed Borrowing of Term Loans, of such Lender’s proportionate share thereof and of the other matters covered by
the related Notice of Borrowing. 
  
 (b) Without in any way
limiting the obligation of the Borrower to confirm in writing any notice it may give hereunder by telephone, the Administrative Agent may act prior to receipt of written confirmation without liability upon the basis of such telephonic notice
believed by the Administrative Agent in good faith to be from an Authorized Officer of the Borrower. The Borrower hereby waives the right to dispute the Administrative Agent’s record of the terms of any such telephonic notice. 
  
 2.4. Disbursement of Funds. (a) On the date specified in the Notice of
Borrowing (which shall be the Closing Date), each Lender will make available its pro rata portion, if any, of the Borrowing requested to be made on such date in the manner provided below. 
  

 36 

 (b) Each Lender shall make available all amounts it is to fund to the Borrower under any Borrowing in
Dollars, and in immediately available funds to the Administrative Agent at the Administrative Agent’s Office and the Administrative Agent will make available to the Borrower, by depositing to the Borrower’s account at the Administrative
Agent’s Office the aggregate of the amounts so made available in Dollars. Unless the Administrative Agent shall have been notified by any Lender prior to the date of any such Borrowing that such Lender does not intend to make available to the
Administrative Agent its portion of the Borrowing to be made on such date, the Administrative Agent may assume that such Lender has made such amount available to the Administrative Agent on such date of Borrowing, and the Administrative Agent in
reliance upon such assumption, may (in its sole discretion and without any obligation to do so) make available to the a corresponding amount. If such corresponding amount is not in fact made available to the Administrative Agent by such Lender and
the Administrative Agent has made available same to the Borrower the Administrative Agent shall be entitled to recover such corresponding amount from such Lender. If such Lender does not pay such corresponding amount forthwith upon the
Administrative Agent’s demand therefor the Administrative Agent shall promptly notify the Borrower and the Borrower shall immediately pay such corresponding amount to the Administrative Agent. The Administrative Agent shall also be entitled to
recover from such Lender or the Borrower interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Administrative Agent to the Borrower to the date such corresponding amount is
recovered by the Administrative Agent at a rate per annum equal to (i) if paid by such Lender, the Federal Funds Effective Rate or (ii) if paid by the Borrower, the then-applicable rate of interest or fees, calculated in accordance with Section 2.8.

  
 (c) Nothing in this Section 2.4 shall be deemed to relieve any
Lender from its obligation to fulfill its commitments hereunder or to prejudice any rights that the Borrower may have against any Lender as a result of any default by such Lender hereunder (it being understood, however, that no Lender shall be
responsible for the failure of any other Lender to fulfill its commitments hereunder). 
  
 2.5. Repayment of Loans; Evidence of Debt. (a) The Borrower shall repay to the Administrative Agent, for the benefit of the Lenders, on the Term Loan Maturity Date, the then-unpaid Term Loans, in Dollars.

  
 (b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrower to the appropriate lending office of such Lender resulting from each Loan made by such lending office of such Lender from time to time, including the amounts of principal
and interest payable and paid to such lending office of such Lender from time to time under this Agreement. 
  
 (c) The Administrative Agent shall maintain the Register pursuant to Section 14.6(b), and a subaccount for each Lender, in which Register and subaccounts
(taken together) shall be recorded (i) the amount and currency of each Loan made hereunder, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender and (iii) the amount of any sum
received by the Administrative Agent hereunder from the Borrower and each Lender’s share thereof. 
  

 37 

 (d) The entries made in the Register and accounts and subaccounts maintained pursuant to paragraphs (b)
and (c) of this Section 2.5 shall, to the extent permitted by applicable law, be prima facie evidence of the existence and amounts of the obligations of the Borrower therein recorded; provided, however, that the failure of any Lender
or the Administrative Agent to maintain such account, such Register or such subaccount, as applicable, or any error therein, shall not in any manner affect the obligation of the Borrower to repay (with applicable interest) the Loans made to the
Borrower by such Lender in accordance with the terms of this Agreement. 
  
 2.6. Conversions and Continuations. (a) The Borrower shall have the option on any Business Day to convert all or a portion equal to at least the Minimum Borrowing Amount of the outstanding principal amount of Term Loans made to such
Borrower of one Type into a Borrowing or Borrowings of another Type in the same currency and the Borrower shall have the option on any Business Day to continue the outstanding principal amount of any Eurodollar Term Loans as Eurodollar Term Loans
for an additional Interest Period, provided that (i) no partial conversion of Eurodollar Term Loans shall reduce the outstanding principal amount of Eurodollar Term Loans made pursuant to a single Borrowing to less than the Minimum Borrowing Amount,
(ii) ABR Loans may not be converted into Eurodollar Term Loans if a Default or Event of Default is in existence on the date of the conversion and the Administrative Agent has or the Required Lenders have determined in its or their sole discretion
not to permit such conversion, (iii) Eurodollar Loans may not be continued Eurodollar Loans for an additional Interest Period if a Default or Event of Default is in existence on the date of the proposed continuation and the Administrative Agent has
or the Required Lenders have determined in its or their sole discretion not to permit such continuation, and (iv) Borrowings resulting from conversions pursuant to this Section 2.6 shall be limited in number as provided in Section 2.2. Each such
conversion or continuation shall be effected by the Borrower by giving the Administrative Agent at the Administrative Agent’s Office prior to 12:00 Noon (New York time) at least three Business Days’ (or one Business Day’s notice in
the case of a conversion into ABR Loans) prior written notice (or telephonic notice promptly confirmed in writing) (each a “Notice of Conversion or Continuation”) specifying the Term Loans to be so converted or continued, the Type
of Term Loans to be converted or continued into and, if such Term Loans are to be converted into or continued as Eurodollar Loans, the Interest Period to be initially applicable thereto. The Administrative Agent shall give each Lender notice as
promptly as practicable of any such proposed conversion or continuation affecting any of its Term Loans. 
  
 (b) If any Default or Event of Default is in existence at the time of any proposed continuation of any Eurodollar Loans and the Administrative Agent has
or the Required Lenders have determined in its or their sole discretion not to permit such continuation, such Eurodollar Loans shall be automatically converted on the last day of the current Interest Period into ABR Loans. If upon the expiration of
any Interest Period in respect of Eurodollar Loans, the Borrower has failed to elect a new Interest Period to 
  

 38 

 be applicable thereto as provided in paragraph (a) above, the Borrower shall be deemed to have elected to continue such
Borrowing of Eurodollar Loans into a Borrowing of ABR Loans effective as of the expiration date of such current Interest Period. 
  
 2.7. Pro Rata Borrowings. Each Borrowing of Term Loans under this Agreement shall be granted by the Lenders pro rata on the basis of their
then-applicable Term Loan Commitments. It is understood that no Lender shall be responsible for any default by any other Lender in its obligation to make Loans hereunder and that each Lender shall be obligated to make the Loans provided to be made
by it hereunder, regardless of the failure of any other Lender to fulfill its commitments hereunder. 
  
 2.8. Interest. (a) The unpaid principal amount of each ABR Loan shall bear interest from the date of the Borrowing thereof until maturity (whether
by acceleration or otherwise) at a rate per annum that shall be (i) at any time the Term Loan has been assigned and maintains a credit rating by Moody’s and S&P of at least B2 and B, respectively, in each case with a “stable”
outlook, 3.25% plus the ABR in effect from time to time and (ii) at all other times, 3.50% plus the ABR in effect from time to time. 
  
 (b) The unpaid principal amount of each Eurodollar Loan shall bear interest from the date of the Borrowing thereof until maturity thereof (whether by
acceleration or otherwise) at a rate per annum that shall be (i) at any time the Term Loan has been assigned and maintains a credit rating by Moody’s and S&P of at least B2 and B, respectively, in each case with a “stable”
outlook, 4.25% plus the relevant Eurodollar Rate and (ii) at all other times, 4.50% plus the relevant Eurodollar Rate. 
  
 (c) If all or a portion of (i) the principal amount of any Loan or (ii) any interest payable thereon shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), such overdue amount shall bear interest at a rate per annum that is (x) in the case of overdue principal, the rate that would otherwise be applicable thereto plus 2% or (y) in the case of any overdue
interest, to the extent permitted by applicable law, the rate described in Section 2.8(a) plus 2% from and including the date of such non-payment to but excluding the date on which such amount is paid in full (after as well as before
judgment). 
  
 (d) Interest on each Loan shall accrue from and
including the date of any Borrowing to but excluding the date of any repayment thereof and shall be payable (i) in respect of each Eurodollar Loan, on the last day of each Interest Period applicable thereto and, in the case of an Interest Period in
excess of three months, on each date occurring at three-month intervals after the first day of such Interest Period and (ii) in respect of each Loan (except, other than in the case of prepayments, any ABR Loan), on any prepayment (on the amount
prepaid), at maturity (whether by acceleration or otherwise) and, after such maturity, on demand. 
  
 (e) All computations of interest hereunder shall be made in accordance with Section 5.5. 
  

 39 

 (f) The Administrative Agent, upon determining the interest rate for any Borrowing of Eurodollar Loans,
shall promptly notify the Borrower and the relevant Lenders thereof. Each such determination shall, absent clearly demonstrable error, be final and conclusive and binding on all parties hereto. 
  
 2.9. Interest Periods. At the time the Borrower gives a Notice of
Borrowing or Notice of Conversion or Continuation in respect of the making of, or conversion into or continuation as, a Borrowing of Eurodollar Loans (in the case of the initial Interest Period applicable thereto) or prior to 10:00 a.m. (New York
time) on the third Business Day prior to the expiration of an Interest Period applicable to a Borrowing of Eurodollar Loans, the Borrower shall have the right to elect by giving the Administrative Agent written notice (or telephonic notice promptly
confirmed in writing) the Interest Period applicable to such Borrowing, which Interest Period shall, at the option of the Borrower, be a one, two, three, or six month period, provided that the initial Interest Period may be for a period less than
one month if agreed upon by the Borrower and the Agents. Notwithstanding anything to the contrary contained above: 
  
 (i) the initial Interest Period for any Borrowing of Eurodollar Loans shall commence on the date of such Borrowing (including the date of
any conversion from a Borrowing of ABR Loans) and each Interest Period occurring thereafter in respect of such Borrowing shall commence on the day on which the next preceding Interest Period expires; 
  
 (ii) if any Interest Period relating to a Borrowing of
Eurodollar Credit Loans begins on the last Business Day of a calendar month or begins on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period, such Interest Period shall end on the last
Business Day of the calendar month at the end of such Interest Period; 
  
 (iii) if any Interest Period would otherwise expire on a day that is not a Business Day, such Interest Period shall expire on the next succeeding Business Day, provided that if any Interest Period in respect of
a Eurodollar Loan would otherwise expire on a day that is not a Business Day but is a day of the month after which no further Business Day occurs in such month, such Interest Period shall expire on the next preceding Business Day; and 
  
 (iv) the Borrower shall not be entitled to elect any
Interest Period in respect of any Eurodollar Loan if such Interest Period would extend beyond the applicable Maturity Date of such Loan. 
  

 40 

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

  
 (i) on any date for determining the
Eurodollar Rate for any Interest Period that (x) deposits in the principal amounts of the Loans comprising such Eurodollar Borrowing are not generally available in the relevant market or (y) by reason of any changes arising on or after the Closing
Date affecting the interbank Eurodollar market, adequate and fair means do not exist for ascertaining the applicable interest rate on the basis provided for in the definition of Eurodollar Rate; or 
  
 (ii) at any time, that such Lender shall incur increased
costs or reductions in the amounts received or receivable hereunder with respect to any Eurodollar Loans (other than any such increase or reduction attributable to taxes) because of (x) any change since the date hereof in any applicable law,
governmental rule, regulation, guideline or order (or in the interpretation or administration thereof and including the introduction of any new law or governmental rule, regulation, guideline or order), such as, for example, without limitation, a
change in official reserve requirements, and/or (y) other circumstances affecting the interbank Eurodollar market or the position of such Lender in such market; or 
  
 (iii) at any time, that the making or continuance of any Eurodollar Loan has become unlawful by compliance
by such Lender in good faith with any law, governmental rule, regulation, guideline or order (or would conflict with any such governmental rule, regulation, guideline or order not having the force of law even though the failure to comply therewith
would not be unlawful), or has become impracticable as a result of a contingency occurring after the date hereof that materially and adversely affects the interbank Eurodollar market; 
  
 then, and in any such event, such Lender (or the Administrative Agent, in the case of clause (i) above) shall within a reasonable time
thereafter give notice (if by telephone, confirmed in writing) to the Borrower and to the Administrative Agent of such determination (which notice the Administrative Agent shall promptly transmit to each of the other Lenders). Thereafter (x) in the
case of clause (i) above, Eurodollar Term Loans shall no longer be available until such time as the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice by the Administrative Agent no longer
exist (which notice the Administrative Agent agrees to give at such time when such circumstances no longer exist), and any Notice of Borrowing or Notice of Conversion given by the Borrower with respect to Eurodollar Term Loans that have not yet been
incurred shall be deemed rescinded by the Borrower (y) in the case of clause (ii) above, the Borrower shall pay to such Lender, promptly after receipt of written demand therefor such additional amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its reasonable discretion shall determine) as shall be required to compensate such Lender for such increased costs or reductions in amounts receivable hereunder (it being
agreed that a written notice as to the additional amounts owed to such Lender, showing in reasonable detail the basis for the calculation thereof, submitted to the Borrower by such Lender shall, absent clearly demonstrable error, be final and
conclusive and binding upon all parties hereto) and (z) in the case of clause (iii) above, the Borrower shall take one of the actions specified in Section 2.10(b) as promptly as possible and, in any event, within the time period required by law.

  

 41 

 (b) At any time that any Eurodollar Loan is affected by the circumstances described in Section
2.10(a)(ii) or (iii), the Borrower may (and in the case of a Eurodollar Loan affected pursuant to Section 2.10(a)(iii) shall) either (x) if the affected Eurodollar Loan is then being made pursuant to a Borrowing, cancel said Borrowing by giving the
Administrative Agent telephonic notice (confirmed promptly in writing) thereof on the same date that the Borrower was notified by a Lender pursuant to Section 2.10(a)(ii) or (iii) or (y) if the affected Eurodollar Loan is then outstanding, upon at
least three Business Days’ notice to the Administrative Agent, require the affected Lender to convert each such Eurodollar Term Loan into an ABR, provided that if more than one Lender is affected at any time, then all affected Lenders
must be treated in the same manner pursuant to this Section 2.10(b). 
  
 (c) If, after the date hereof, the adoption of any applicable law, rule or regulation regarding capital adequacy, or any change therein, or any change in the interpretation or administration thereof by any governmental authority, the
National Association of Insurance Commissioners, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by a Lender or its parent with any request or directive made or adopted after the date hereof
regarding capital adequacy (whether or not having the force of law) of any such authority, association, central bank or comparable agency, has or would have the effect of reducing the rate of return on such Lender’s or its parent’s capital
or assets as a consequence of such Lender’s commitments or obligations hereunder to a level below that which such Lender or its parent could have achieved but for such adoption, effectiveness, change or compliance (taking into consideration
such Lender’s or its parent’s policies with respect to capital adequacy), then from time to time, promptly after demand by such Lender (with a copy to the Administrative Agent), the Borrower shall pay to such Lender such additional amount
or amounts as will compensate such Lender or its parent for such reduction, it being understood and agreed, however, that a Lender shall not be entitled to such compensation as a result of such Lender’s compliance with, or pursuant to any
request or directive to comply with, any such law, rule or regulation as in effect on the date hereof. Each Lender, upon determining in good faith that any additional amounts will be payable pursuant to this Section 2.10(c), will give prompt written
notice thereof to the Borrower which notice shall set forth in reasonable detail the basis of the calculation of such additional amounts, although the failure to give any such notice shall not, subject to Section 2.13, release or diminish any of the
Borrower’s obligations to pay additional amounts pursuant to this Section 2.10(c) upon receipt of such notice. 
  
 2.11. Compensation. If (a) any payment of principal of any Eurodollar Loan is made by the Borrower to or for the account of a Lender other than on
the last day of the Interest Period for such Eurodollar Loan as a result of a payment or conversion pursuant to Section 2.5, 2.6, 2.10, 5.1, 5.2 or 14.7, as a result of acceleration of the maturity of the Loans pursuant to Section 11 or for any
other reason, (b) any Borrowing of Eurodollar Loans is not made as a result of a withdrawn Notice of Borrowing, (c) any 
  

 42 

 ABR Loan is not converted into a Eurodollar Loan as a result of a withdrawn Notice of Conversion or Continuation, (d)
Eurodollar Loan is not continued as a Eurodollar Loan as a result of a withdrawn Notice of Conversion or Continuation or (e) any prepayment of principal of any Eurodollar Loan is not made as a result of a withdrawn notice of prepayment pursuant to
Section 5.1 or 5.2, the Borrower shall, after receipt of a written request by such Lender (which request shall set forth in reasonable detail the basis for requesting such amount), pay to the Administrative Agent for the account of such Lender any
amounts required to compensate such Lender for any additional losses, costs or expenses that such Lender may reasonably incur as a result of such payment, failure to convert, failure to continue or failure to prepay, including any loss, cost or
expense (excluding loss of anticipated profits) actually incurred by reason of the liquidation or reemployment of deposits or other funds acquired by any Lender to fund or maintain such Eurodollar Loan. 
  
 2.12. Change of Lending Office. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 2.10(a)(ii), 2.10(a)(iii), 2.10(b), 3.5 or 5.4 with respect to such Lender, it will, if requested by the Borrower, use reasonable efforts (subject to overall policy considerations of
such Lender) to designate another lending office for any Loans affected by such event, provided that such designation is made on such terms that such Lender and its lending office suffer no economic, legal or regulatory disadvantage, with the object
of avoiding the consequence of the event giving rise to the operation of any such Section. Nothing in this Section 2.12 shall affect or postpone any of the obligations of the Borrower or the right of any Lender provided in Section 2.10, 3.5 or 5.4.

  
 2.13. Notice of Certain Costs. Notwithstanding anything
in this Agreement to the contrary, to the extent any notice required by Section 2.10, 2.11, 3.5 or 5.4 is given by any Lender more than 180 days after such Lender has knowledge (or should have had knowledge) of the occurrence of the event giving
rise to the additional cost, reduction in amounts, loss, tax or other additional amounts described in such Sections, such Lender shall not be entitled to compensation under Section 2.10, 2.11, 3.5 or 5.4, as the case may be, for any such amounts
incurred or accruing prior to the giving of such notice to the Borrower. 
  
 SECTION 3. [Reserved] 
  
 SECTION 4. Commitments 
  
 4.1. Mandatory
Termination of Commitments. The Total Commitments shall terminate at 5:00 p.m. (New York time) on the Closing Date. 
  
 SECTION 5. Payments 
  
 5.1. Voluntary Prepayments. The Borrower shall have the right to prepay Term Loans in whole or in part from time to time on the following terms and
conditions: (a) the Borrower shall give the Administrative Agent at the Administrative Agent’s Office written notice (or telephonic notice promptly confirmed in writing) of its 
  

 43 

 intent to make such prepayment, the amount of such prepayment and (in the case Eurodollar Loans) the specific
Borrowing(s) pursuant to which made, which notice shall be given by the Borrower no later than 10:00 a.m. (New York time) one Business Day prior to the date of such prepayment and shall promptly be transmitted by the Administrative Agent to each of
the Lenders; (b) each partial prepayment of any Borrowing of Term Loans shall be in a multiple of f $100,000 and in an aggregate principal amount of at least $1,000,000, provided that no partial prepayment of Eurodollar Term Loans made pursuant to a
single Borrowing shall reduce the outstanding Eurodollar Term Loans made pursuant to such Borrowing to an amount less than the Minimum Borrowing Amount for Eurodollar Term Loans; and (c) any prepayment of Eurodollar Term Loans pursuant to this
Section 5.1 on any day other than the last day of an Interest Period applicable thereto shall be subject to compliance by the Borrower, as the case may be, with the applicable provisions of Section 2.11. To the extent Borrower makes a voluntary
prepayment of any Term Loans within three (3) years after the Closing Date, such prepayment shall be made with a premium such that the aggregate amount of such voluntary prepayment shall be in an amount equal to (1) 103% of the principal amount
prepaid if such voluntary prepayment is made within one (1) year after the Closing Date, (2) 102% of the principal amount prepaid if such voluntary prepayment is made within two (2) years after the Closing Date, and (3) 101% of the principal amount
prepaid if such voluntary prepayment is made within three (3) years after the Closing Date. The prepayment of any Term Loans after the third anniversary of the Closing Date pursuant to this Section 2.12 shall be made without premium or penalty. At
the Borrower’s election in connection with any prepayment pursuant to this Section 5.1, such prepayment shall not be applied to any Term Loan of a Defaulting Lender. 
  
 5.2. Mandatory Prepayments (a) Application to Type of Term Loans. With respect to each prepayment of Term
Loans required by Section 10.4, the Borrower may designate the Types of Loans that are to be prepaid and the specific Borrowing(s) pursuant to which made, provided that (i) Eurodollar Term Loans may be designated for prepayment pursuant to
this Section 5.2 only on the last day of an Interest Period applicable thereto unless all Eurodollar Term Loans with Interest Periods ending on such date of required prepayment and all ABR Loans have been paid in full; and (ii) Eurodollar Term Loans
made pursuant to a single Borrowing shall reduce the outstanding Term Loans made pursuant to such Borrowing to an amount less than the Minimum Borrowing Amount for Eurodollar Loans such Borrowing shall immediately be converted into ABR Loans . In
the absence of a designation by the Borrower as described in the preceding sentence, the Administrative Agent shall, subject to the above, make such designation in its reasonable discretion with a view, but no obligation, to minimize breakage costs
owing under Section 2.11. 
  
 (b) Eurodollar Interest
Periods. In lieu of making any payment pursuant to Section 10.4 in respect of any Eurodollar Loan other than on the last day of the Interest Period therefor so long as no Default or Event of Default shall have occurred and be continuing, the
Borrower at its option may deposit with the Administrative Agent an amount equal to the amount of the Eurodollar Loan to be prepaid and such Eurodollar Loan shall be repaid on the last day of the Interest Period therefor in the required amount. Such
deposit shall be held by the Administrative Agent in a corporate time deposit 
  

 44 

 account established on terms reasonably satisfactory to the Administrative Agent, earning interest at the then-customary
rate for accounts of such type. Such deposit shall constitute cash collateral for the Obligations, provided that the Borrower may at any time direct that such deposit be applied to make the applicable payment required pursuant to this Section
5.2. 
  
 (c) Foreign Asset Sales. Notwithstanding any other
provisions of Section 10.4, (i) to the extent that any of or all the Excess Proceeds of any asset sale by a Restricted Foreign Subsidiary (a “Foreign Asset Sale”) are prohibited or delayed by applicable local law from being
repatriated to the United States, the portion of such Excess Proceeds so affected will not be required to be applied to repay Term Loans at the times provided in this Section 5.2 but may be retained by the applicable Restricted Foreign
Subsidiary so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Borrower hereby agreeing to cause the applicable Restricted Foreign Subsidiary to promptly take all actions required by the
applicable local law to permit such repatriation), and once such repatriation of any of such affected Excess Proceeds is permitted under the applicable local law, such repatriation will be immediately effected and such repatriated Excess Proceeds
will be promptly (and in any event not later than two Business Days after such repatriation) applied (net of additional taxes payable or reserved against as a result thereof) to the repayment of the Term Loans pursuant to this Section 5.2 and (ii)
to the extent that the Borrower has determined in good faith that repatriation of any of or all the Excess Proceeds of any Foreign Asset Sale would have a material adverse tax cost consequence with respect to such Excess Proceeds, the Excess
Proceeds so affected may be retained by the applicable Restricted Foreign Subsidiary, provided that, in the case of this clause (ii), on or before the date on which any Excess Proceeds so retained would otherwise have been required to be
applied to reinvestments or prepayments pursuant to Section 5.2(a), (x) the Borrower applies an amount equal to such Excess Proceeds to such reinvestments or prepayments as if such Excess Proceeds had been received by the Borrower rather than such
Restricted Foreign Subsidiary, less the amount of additional taxes that would have been payable or reserved against if such Excess Proceeds had been repatriated (or, if less, the Excess Proceeds that would be calculated if received by such Foreign
Subsidiary) or (y) such Excess Proceeds are applied to the repayment of Indebtedness of a Restricted Foreign Subsidiary. 
  
 5.3. Method and Place of Payment. (a) Except as otherwise specifically provided herein, all payments under this Agreement shall be made by the
Borrower without set-off, counterclaim or deduction of any kind, to the Administrative Agent for the ratable account of the Lenders entitled thereto not later than 12:00 Noon (New York time) on the date when due and shall be made in the case of
amounts payable in Dollars, in immediately available funds at the Administrative Agent’s Office, it being understood that written or facsimile notice by the Borrower to the Administrative Agent to make a payment from the funds in the
Borrower’s account at the Administrative Agent’s Office shall constitute the making of such payment to the extent of such funds held in such account. All payments under each Credit Document (whether of principal, interest or otherwise)
shall be made (i) in the case of the principal of and interest on each Loan, in the currency in which such Loan is denominated or (ii) in the case of any indemnification or expense reimbursement payment, in Dollars, except as otherwise 

 

 45 

 expressly provided herein. The Administrative Agent will thereafter cause to be distributed on the same day (if payment
was actually received by the Administrative Agent prior to 2:00 p.m. (New York time) on such day) like funds relating to the payment of principal or interest ratably to the Lenders entitled thereto. 
  
 (b) Any payments under this Agreement that are made later than 2:00 p.m. (New
York time) shall be deemed to have been made on the next succeeding Business Day. Whenever any payment to be made hereunder shall be stated to be due on a day that is not a Business Day, the due date thereof shall be extended to the next succeeding
Business Day and, with respect to payments of principal, interest shall be payable during such extension at the applicable rate in effect immediately prior to such extension. 
  
 5.4. Net Payments. (a) Subject to the following sentence, all payments made by or on behalf of the Borrower under
this Agreement or any other Credit Document shall be made free and clear of, and without deduction or withholding for or on account of, any current or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority, excluding (i) net income taxes and franchise taxes (imposed in lieu of net income taxes) and capital taxes imposed on the Administrative
Agent or any Lender and (ii) any taxes imposed on the Administrative Agent or any Lender as a result of a current or former connection between the Administrative Agent or such Lender and the jurisdiction of the Governmental Authority imposing such
tax or any political subdivision or taxing authority thereof or therein (other than any such connection arising solely from the Administrative Agent or such Lender having executed, delivered or performed its obligations or received a payment under,
or enforced, this Agreement). If any such non-excluded taxes, levies, imposts, duties, charges, fees, deductions or withholdings (“Non-Excluded Taxes”) are required to be withheld from any amounts payable under this Agreement, the
Borrower shall increase the amounts payable to the Administrative Agent or such Lender to the extent necessary to yield to the Administrative Agent or such Lender (after payment of all Non-Excluded Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement; provided, however, that the Borrower shall not be required to increase any such amounts payable to any Lender that is not organized under the laws of the United States of America
or a state thereof (a “Non-U.S. Lender”) if such Lender fails to comply with the requirements of paragraph (b) of this Section 5.4. Whenever any Non-Excluded Taxes are payable by the Borrower as promptly as possible thereafter such
Borrower shall send to the Administrative Agent for its own account or for the account of such Lender, as the case may be, a certified copy of an original official receipt (or other evidence acceptable to such Lender, acting reasonably) received by
such Borrower showing payment thereof. If the Borrower fails to pay any Non-Excluded Taxes when due to the appropriate taxing authority or fails to remit to the Administrative Agent the required receipts or other required documentary evidence, such
Borrower shall indemnify the Administrative Agent and the Lenders for any incremental taxes, interest, costs or penalties that may become payable by the Administrative Agent or any Lender as a result of any such failure. The agreements in this
Section 5.4(a) shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder. 
  

 46 

 (b) Each Non-U.S. Lender shall: 
  
 (i) deliver to the Borrower and the Administrative Agent two copies of either (x) in the case of Non-U.S.
Lender claiming exemption from U.S. Federal withholding tax under Section 871(h) or 881(c) of the Code with respect to payments of “portfolio interest”, United States Internal Revenue Service Form W-8BEN (together with a certificate
representing that such Non-U.S. Lender is not a bank for purposes of Section 881(c) of the Code, is not a 10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of the Borrower and is not a controlled foreign corporation
related to the Borrower (within the meaning of Section 864(d)(4) of the Code)), or (y) Internal Revenue Service Form W-8BEN or Form W-8ECI, in each case properly completed and duly executed by such Non-U.S. Lender claiming complete exemption from,
or reduced rate of, U.S. Federal withholding tax on payments by the Borrower under this Agreement; 
  
 (ii) deliver to the Borrower and the Administrative Agent two further copies of any such form or certification (or any applicable
successor form) on or before the date that any such form or certification expires or becomes obsolete and after the occurrence of any event requiring a change in the most recent form previously delivered by it to the Borrower; and 
  
 (iii) obtain such extensions of time for filing and complete
such forms or certifications as may reasonably be requested by the Borrower or the Administrative Agent; 
  
 unless in any such case any change in treaty, law or regulation has occurred prior to the date on which any such delivery would otherwise be required that renders any such form inapplicable or would prevent such
Lender from duly completing and delivering any such form with respect to it and such Lender so advises the Borrower and the Administrative Agent. Each Person that shall become a Participant pursuant to Section 14.6 or a Lender pursuant to Section
14.6 shall, upon the effectiveness of the related transfer, be required to provide all the forms and statements required pursuant to this Section 5.4(b), provided that in the case of a Participant such Participant shall furnish all such
required forms and statements to the Lender from which the related participation shall have been purchased. 
  
 (c) The Borrower shall not be required to indemnify any Non-U.S. Lender, or to pay any additional amounts to any Non-U.S. Lender, in respect of U.S.
Federal withholding tax pursuant to paragraph (a) above to the extent that (i) the obligation to withhold amounts with respect to U.S. Federal withholding tax existed on the date such Non-U.S. Lender became a party to this Agreement (or, in the case
of a Participant that is not organized under the laws of the United States of America or a state thereof (a “Non-U.S. Participant”), on the date such Non-U.S. Participant became a Participant hereunder); provided,
however, that this clause (i) shall not apply to the extent 
  

 47 

 that (x) the indemnity payments or additional amounts any Lender (or Participant) would be entitled to receive (without
regard to this clause (i)) do not exceed the indemnity payment or additional amounts that the person making the assignment, participation or transfer to such Lender (or Participant) would have been entitled to receive in the absence of such
assignment, participation or transfer, or (y) such assignment, participation or transfer had been requested by the Borrower, (ii) the obligation to pay such additional amounts would not have arisen but for a failure by such Non-U.S. Lender or
Non-U.S. Participant to comply with the provisions of paragraph (b) above or (iii) any of the representations or certifications made by a Non-U.S. Lender or Non-U.S. Participant pursuant to paragraph (b) above are incorrect at the time a payment
hereunder is made, other than by reason of any change in treaty, law or regulation having effect after the date such representations or certifications were made. 
  
 (d) If the Borrower determines in good faith that a reasonable basis exists for contesting any taxes for which
indemnification has been demanded hereunder, the relevant Lender or the Administrative Agent, as applicable, shall cooperate with such Borrower in challenging such taxes at Borrower’s expense if so requested by Borrower. If any Lender or the
Administrative Agent, as applicable, receives a refund of a tax for which a payment has been made by the Borrower pursuant to this Agreement, which refund in the good faith judgment of such Lender or Administrative Agent, as the case may be, is
attributable to such payment made by such Borrower, then the Lender or the Administrative Agent, as the case may be, shall reimburse Borrower for such amount (together with any interest received thereon) as the Lender or Administrative Agent, as the
case may be, determines to be the proportion of the refund as will leave it, after such reimbursement, in no better or worse position than it would have been in if the payment had not been required. A Lender or Administrative Agent shall claim any
refund that it determines is available to it, unless it concludes in its reasonable discretion that it would be adversely affected by making such a claim. Neither the Lender nor the Administrative Agent shall be obliged to disclose any information
regarding its tax affairs or computations to the Borrower in connection with this paragraph (d) or any other provision of this Section 5.4. 
  
 (e) Each Lender represents and agrees that, on the date hereof and at all times during the term of this Agreement, it is not and will not be a conduit
entity participating in a conduit financing arrangement (as defined in Section 7701(1) of the Code and the regulations thereunder) with respect to the Borrowings hereunder unless the Borrower has consented to such arrangement prior thereto.

  
 5.5. Computations of Interest and Fees. (a) Interest on
Eurodollar Loans and, except as provided in the next succeeding sentence, ABR Loans shall be calculated on the basis of a 360-day year for the actual days elapsed. Interest on ABR Loans in respect of which the rate of interest is calculated on the
basis of the Prime Rate and interest on overdue interest shall be calculated on the basis of a 365- (or 366-, as the case may be) day year for the actual days elapsed. 
  
 5.6. Limit on Rate of Interest. Notwithstanding any other term of this Agreement, the Borrower shall not be obliged
to pay any interest or other amounts under or in connection with this Agreement in excess of the amount or rate permitted under or consistent with any applicable law, rule or regulation. 
  

 48 

 5.7. Change of Control Offer. 
  
 (a) Upon a Change of Control, each Lender shall have the right to require that the Borrower offer to prepay all or any
portion of the Term Loans of each Lender pursuant to an Assignment and Acceptance Agreement, at a prepayment price in cash equal to 101% of the principal amount thereof plus accrued and unpaid interest to the date of purchase (subject to the right
of Lenders of record on the relevant record date to receive interest due on the relevant interest payment date), in accordance with the terms contemplated in Section 5.7(b); provided that, with respect to such prepayments, Borrower shall
simultaneously provide a copy of such Assignment and Acceptance Agreement and any other agreements between Borrower and each Lender with respect to such prepayment to Administrative Agent. In the event that at the time of such Change of Control the
terms of the Senior Secured Credit Facility restrict or prohibit the prepayment of Loans pursuant to this Section 5.7, then prior to complying with the provisions of this Section 5.7 but in any event within 30 days following the date the Borrower
obtains actual knowledge of any Change of Control, the Borrower shall (i) repay in full all Indebtedness under the Senior Secured Credit Facility or (ii) obtain the requisite consent under the Senior Secured Credit Facility to permit the prepayment
of the Loans as provided for in Section 5.7(b). 
  
 (b) Within 30
days following the date the Borrower obtains actual knowledge of any Change of Control, the Borrower shall mail a notice to Administrative Agent and all Lenders (the “Change of Control Offer”) stating: 
  
 (i) that a Change of Control has occurred and that each
Lender has the right to require the Borrower to purchase all or a portion of such Lender’s outstanding Loans at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest to the date of purchase
(subject to the right of Lenders of record on the relevant record date to receive interest on the relevant interest payment date); 
  
 (ii) the circumstances and relevant facts and financial information regarding such Change of Control; 
  
 (iii) the purchase date (which shall be no earlier than 30
days nor later than 60 days from the date such notice is mailed); and 
  
 (iv) the instructions determined by the Borrower (which shall be reasonably acceptable to Administrative Agent), consistent with this Section 5.7, that a Lender must follow in order to have its outstanding Loans
purchased. 
  
 (c) With respect to all offers to prepay made by
Borrower pursuant to this Section 5.7, (i) Borrower shall pay all accrued and unpaid interest, if any, on the prepaid Term Loans to the date of prepayment of such Term Loans together with all amounts due under Section 2.11, (ii) Lenders shall be
entitled to withdraw their election if the 
  

 49 

 Borrower receives not later than two Business Days prior to the prepayment date a telegram, telex, facsimile transmission
or letter setting forth the name of the Lender, the principal amount of the outstanding Loan which was elected for prepayment by the Lender and a statement that such Lender is withdrawing his election to have such Loan prepaid and (iii) such
prepayments shall not be deemed to be voluntary prepayments pursuant to Section 5.1. 
  
 (d) Following prepayment by Borrower pursuant to this Section 5.7, the Term Loans so prepaid shall be deemed cancelled for all purposes and no longer outstanding (and may not be resold by Borrower), for all purposes
of this Agreement and all other Credit Documents, including, but not limited to (i) the making of, or the application of, any payments to the Lenders under this Agreement or any other Credit Document, (ii) the making of any request, demand,
authorization, direction, notice, consent or waiver under this Agreement or any other Credit Document or (iii) the determination of Requisite Lenders, or for any similar or related purpose, under this Agreement or any other Credit Document.

  
 (e) Notwithstanding the foregoing provisions of this Section,
the Borrower shall not be required to make a Change of Control Offer upon 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 Section
5.7(b) applicable to a Change of Control Offer made by the Borrower and purchases all outstanding Loans validly tendered and not withdrawn under such Change of Control Offer. 
  
 Notwithstanding any of the provisions set forth in this Agreement to the contrary, Borrower, the Lenders and Agents hereby agree that
nothing in this Agreement shall be understood to mean or suggest that the Term Loans constitute “securities” for purposes of either the Securities Act or the Exchange Act. 
  
 SECTION 6. Conditions Precedent to Initial Borrowing 
  
 The initial Borrowing under this Agreement is subject to the satisfaction of the following conditions precedent, except as
otherwise agreed between the Borrower and the Administrative Agent: 
  
 6.1. Credit Documents. The Administrative Agent shall have received: 
  
 (a) this Agreement, executed and delivered by a duly authorized officer of each of the Holdings, the Borrower and each Lender; and 
  
 (b) the Guarantee, executed and delivered by a duly authorized officer of each Guarantor. 
  
 6.2. [Reserved]. 
  
 6.3. Legal Opinions. The Administrative Agent shall have received the
executed legal opinions of Simpson Thacher & Bartlett LLP, special New York counsel 
  

 50 

 to the Borrower, substantially in the form of Exhibit B-1 and (b) Kenneth L. Walker, General Counsel to the Borrower,
substantially in the form of Exhibit B-2. The Borrower, the other Credit Parties and the Administrative Agent hereby instruct such counsel to deliver such legal opinions. 
  
 6.4. No Default. After giving effect to the Borrowings on the Closing Date and the other transactions contemplated
hereby, no Default or Event of Default has occurred and is continuing. 
  
 6.5. Subordinated Notes; Senior Secured Credit Facility. (a) The Borrower shall have received gross proceeds of not less than $390,000,000 from the issuance of Subordinated Notes under the Subordinated Note Indenture in a public
offering or in a Rule 144A or other private placement. The terms and conditions of the Subordinated Notes (including, but not limited to, subordination, maturity, covenants, events of default, remedies, redemption and prepayment events) shall be
reasonably satisfactory to the Agents. 
  
 (b) The Borrower shall
have received gross proceeds of not less than $560,000,000 in term loans under the Senior Secured Credit Facility. The terms and conditions of the Senior Secured Credit Facility shall be reasonably satisfactory to the Agents. 
  
 6.6. Equity Proceeds. The Equity Proceeds shall have been irrevocably
committed to the payment of a portion of the Recapitalization. 
  
 6.7. Closing Certificates. The Administrative Agent shall have received a certificate of each Credit Party, dated the Closing Date, substantially in the form of Exhibit C, with appropriate insertions, executed by the President or any
Vice President and the Secretary or any Assistant Secretary of such Credit Party, and attaching the documents referred to in Sections 6.8 and 6.9. 
  
 6.8. Corporate Proceedings of Each Credit Party. The Administrative Agent shall have received a copy of the resolutions, in form and substance
satisfactory to the Administrative Agent, of the Board of Directors of each Credit Party (or a duly authorized committee thereof) authorizing (a) the execution, delivery and performance of the Credit Documents (and any agreements relating thereto)
to which it is a party and (b) in the case of the Borrower, the extensions of credit contemplated hereunder. 
  
 6.9. Corporate Documents. The Administrative Agent shall have received true and complete copies of the certificate of incorporation and by-laws (or
equivalent organizational documents) of each Credit Party. 
  
 6.10. Fees. (a) The Lenders shall have received the fees in the amounts previously agreed in writing by the Agents and such Lenders to be received on the Closing Date and all expenses (including the reasonable fees, disbursements and
other charges of counsel) for which invoices have been presented on or prior to the Closing Date shall have been paid. 
  

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 6.11. Representations and Warranties. On the Closing Date, the representations and warranties made
by each of Holdings and the Borrower in Section 8, as they relate to the Credit Parties at such time, shall be true and correct in all material respects. 
  
 6.12. Related Agreements. Administrative Agent shall have received a fully executed or conformed copy of the Merger Agreement which shall be in
full force and effect and in form and substance reasonably satisfactory to the Agents. 
  
 6.13. Solvency Certificate. On the Closing Date, Administrative Agent shall have received a certificate from the chief financial officer of the Borrower in form, scope and substance satisfactory to
Administrative Agent, with appropriate attachments and demonstrating that after giving effect to the consummation of the Recapitalization, the Borrower taken as a whole with its Subsidiaries are Solvent. 
  
 6.14. Governmental Authorizations and Consents. Each Credit Party
shall have obtained all approval and authorizations of Governmental Authorities and all consents of other Persons, in each case that are necessary in connection with the Recapitalization and the transactions contemplated by the Credit Documents and
each of the foregoing shall be in full force and effect. All applicable waiting periods shall have expired without any action being taken or threatened by any competent authority which would restrain, prevent or otherwise impose adverse conditions
on the transactions contemplated by the Recapitalization and the Credit Documents and no action, request for stay, petition for review or rehearing, reconsideration, or appeal with respect to any of the foregoing shall be pending, and the time for
any applicable agency to take action to set aside its consent on its own motion shall have expired. 
  
 6.15. Financial Statements. Lenders shall have received from Holdings (i) the Historical Financial Statements and (ii) pro forma consolidated and
consolidating balance sheets of Parent and its Subsidiaries as at the Closing Date, and reflecting the consummation of the Recapitalization, the related financings and the other transactions contemplated by the Credit Documents to occur on or prior
to the Closing Date, which pro forma financial statements shall be in form and substance satisfactory to Administrative Agent and shall demonstrate that the Consolidated Total Debt to Consolidated EBITDA Ratio for the latest twelve month period
ending February 29, 2004, after giving effect to the Recapitalization, shall not be greater than 6.54:1.00. 
  
 6.16. Recapitalization. Concurrently with the initial Credit Event made hereunder, the Recapitalization shall have been consummated on terms and
conditions reasonably satisfactory to the Agents and all commitments to lend under each of the Existing Credit Agreement and Existing Canadian Credit Agreement shall have been terminated and all liens in respect of amounts due under each of the
Existing Credit Agreement and Existing Canadian Credit Agreement shall have been released or arrangements for such release satisfactory to the Administrative Agent shall have been made. 
  

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 SECTION 7. Additional Conditions Precedent to Credit Events 
  
 The agreement of each Lender to make any Loan requested to be made by it on
the Closing Date is subject to the satisfaction of the following conditions precedent: 
  
 7.1. No Default; Representations and Warranties. At the time of each Credit Event and also after giving effect thereto (a) no Default or Event of Default shall have occurred and be continuing and (b) all
representations and warranties made by any Credit Party contained herein or in the other Credit Documents shall be true and correct in all material respects with the same effect as though such representations and warranties had been made on and as
of the date of such Credit Event (except where such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects as of such earlier
date). 
  
 7.2. Notice of Borrowing. Prior to the making of
the Term Loans, the Administrative Agent shall have received a Notice of Borrowing (whether in writing or by telephone) meeting the requirements of Section 2.3. The acceptance of the benefits of each Credit Event shall constitute a representation
and warranty by each Credit Party to each of the Lenders that all the applicable conditions specified above exist as of that time. 
  
 SECTION 8. Representations, Warranties and Agreements 
  
 In order to induce the Lenders to enter into this Agreement, to make the Loans as provided for herein, Holdings and the Borrower make the following
representations and warranties to, and agreements with, the Lenders, all of which shall survive the execution and delivery of this Agreement and the making of the Loans: 
  
 8.1. Corporate Status. Holdings, the Borrower and each Material Subsidiary (a) is a duly organized and validly
existing corporation or other entity in good standing under the laws of the jurisdiction of its organization and has the corporate or other organizational power and authority to own its property and assets and to transact the business in which it is
engaged and (b) has duly qualified and is authorized to do business and is in good standing in all jurisdictions where it is required to be so qualified, except where the failure to be so qualified could not reasonably be expected to result in a
Material Adverse Effect. 
  
 8.2. Corporate Power and
Authority. Each Credit Party has the corporate or other organizational power and authority to execute, deliver and carry out the terms and provisions of the Credit Documents to which it is a party and has taken all necessary corporate or other
organizational action to authorize the execution, delivery and performance of the Credit Documents to which it is a party. Each Credit Party has duly executed and delivered each Credit Document to which it is a party and each such Credit Document
constitutes the legal, valid and binding obligation of such Credit Party enforceable in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors’ rights
generally and subject to general principles of equity. 
  

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 8.3. No Violation. Neither the execution, delivery or performance by any Credit Party of the
Credit Documents to which it is a party nor compliance with the terms and provisions thereof nor the consummation of the Recapitalization and the other transactions contemplated hereby or thereby will (a) contravene any applicable provision of any
material law, statute, rule, regulation, order, writ, injunction or decree of any court or governmental instrumentality, (b) result in any breach of any of the terms, covenants, conditions or provisions of, or constitute a default under, or result
in the creation or imposition of (or the obligation to create or impose) any Lien upon any of the property or assets of any of Holdings, the Borrower or any of the Restricted Subsidiaries (other than Liens created under the Credit Documents)
pursuant to, the terms of any material indenture (including the Subordinated Note Indenture), loan agreement, lease agreement, mortgage, deed of trust, agreement or other material instrument to which Holdings, the Borrower or any of the Restricted
Subsidiaries is a party or by which it or any of its property or assets is bound or (c) violate any provision of the certificate of incorporation, By-Laws or other constitutional documents of Holdings, the Borrower or any of the Restricted
Subsidiaries. 
  
 8.4. Litigation. There are no actions,
suits or proceedings (including Environmental Claims) pending or, to the knowledge of Holdings or the Borrower, threatened with respect to Holdings, the Borrower or any of its Subsidiaries that could reasonably be expected to result in a Material
Adverse Effect. 
  
 8.5. Margin Regulations. Neither the
making of any Loan hereunder nor the use of the proceeds thereof will violate the provisions of Regulation T, U or X of the Board. 
  
 8.6. Governmental Approvals. No order, consent, approval, license, authorization, or validation of, or filing, recording or registration with, or
exemption by, any Governmental Authority is required to authorize or is required in connection with (a) the execution, delivery and performance of any Credit Document or (b) the legality, validity, binding effect or enforceability of any Credit
Document, except any of the foregoing the failure to obtain or make could not reasonably be expected to have a Material Adverse Effect. 
  
 8.7. Investment Company Act. Neither Holdings nor the Borrower is an “investment company” within the meaning of the Investment Company
Act of 1940, as amended. 
  
 8.8. True and Complete
Disclosure. (a) None of the factual information and data (taken as a whole) heretofore or contemporaneously furnished by any of Holdings, the Borrower, any of the Subsidiaries or any of their respective authorized representatives in writing to
the Administrative Agent and/or any Lender on or before the Closing Date (including (i) the Confidential Information Memorandum and (ii) all information contained in the Credit Documents) for purposes of or in connection with this Agreement or any
transaction contemplated herein contained any untrue statement or omitted to state any material fact necessary to make such information and data (taken as a whole) not misleading at such time in light of the circumstances under 
  

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 which such information or data was furnished, it being understood and agreed that for purposes of this Section 8.8(a),
such factual information and data shall not include projections and pro forma financial information. 
  
 (b) The projections and pro forma financial information contained in the information and data referred to in paragraph (a) above were based on good faith
estimates and assumptions believed by such Persons to be reasonable at the time made, it being recognized by the Lenders that such projections as to future events are not to be viewed as facts and that actual results during the period or periods
covered by any such projections may differ from the projected results. 
  
 8.9. Financial Condition; Financial Statements. The (a) unaudited historical consolidated financial information of the Parent as set forth in the Confidential Information Memorandum, and (b) the Historical Financial Statements, in
each case present or will, when provided, present fairly in all material respects the combined financial position of the Borrower at the respective dates of said information, statements and results of operations for the respective periods covered
thereby. The financial statements referred to in clause (b) of this Section 8.9 have been prepared in accordance with GAAP consistently applied except to the extent provided in the notes to said financial statements. There has been no Material
Adverse Change since November 30, 2003, other than solely as a result of changes in general economic conditions. 
  
 8.10. Tax Returns and Payments. Each of Holdings, the Borrower and the Subsidiaries has filed all federal income tax returns and all other material
tax returns, domestic and foreign, required to be filed by it and has paid all material taxes and assessments payable by it that have become due, other than those not yet delinquent or contested in good faith. Each of Holdings, the Borrower and each
of the Subsidiaries have paid, or have provided adequate reserves (in the good faith judgment of the management of the Borrower) in accordance with GAAP for the payment of, all material federal, state, provincial and foreign income taxes applicable
for all prior fiscal years and for the current fiscal year to the Closing Date. 
  
 8.11. Compliance with ERISA. Each Plan is in compliance with ERISA, the Code and any applicable Requirement of Law; no Reportable Event has occurred (or is reasonably likely to occur) with respect to any Plan;
no Plan is insolvent or in reorganization (or is reasonably likely to be insolvent or in reorganization), and no written notice of any such insolvency or reorganization has been given to any of Holdings, the Borrower, any Subsidiary or any ERISA
Affiliate; no Plan (other than a multiemployer plan) has an accumulated or waived funding deficiency (or is reasonably likely to have such a deficiency); none of Holdings, the Borrower, any Subsidiary or any ERISA Affiliate has incurred (or is
reasonably likely expected to incur) any liability to or on account of a Plan pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA or Section 4971 or 4975 of the Code or has been notified in writing that it
will incur any liability under any of the foregoing Sections with respect to any Plan; no proceedings have been instituted (or are reasonably likely to be instituted) to terminate or to reorganize any Plan or to appoint a trustee to administer any
Plan, and no written notice of any such proceedings has been given to any of Holdings, the 
  

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 Borrower, any Subsidiary or any ERISA Affiliate; and no lien imposed under the Code or ERISA on the assets of any of
Holdings, the Borrower or any Subsidiary or any ERISA Affiliate exists (or is reasonably likely to exist) nor has Holdings, the Borrower, any Subsidiary or any ERISA Affiliate been notified in writing that such a lien will be imposed on the assets
of any of Holdings, the Borrower, any Subsidiary or any ERISA Affiliate on account of any Plan, except to the extent that a breach of any of the representations, warranties or agreements in this Section 8.11 would not result, individually or in the
aggregate, in an amount of liability that would be reasonably likely to have a Material Adverse Effect or relates to any matter disclosed in the financial statements of the Borrower contained in the Confidential Information Memorandum. No Plan
(other than a multiemployer plan) has an Unfunded Current Liability that would, individually or when taken together with any other liabilities referenced in this Section 8.11, be reasonably likely to have a Material Adverse Effect. With respect to
Plans that are multiemployer plans (as defined in Section 3(37) of ERISA), the representations and warranties in this Section 8.11(i), other than any made with respect to (a) liability under Section 4201 or 4204 of ERISA or (b) liability for
termination or reorganization of such Plans under ERISA, are made to the best knowledge of the Borrower. 
  
 8.12. Subsidiaries. On the Closing Date, Holdings does not have any Subsidiaries other than the Borrower and its Subsidiaries. Schedule 8.12 lists
each Subsidiary of the Borrower (and the direct and indirect ownership interest of the Borrower therein), in each case existing on the Closing Date. To the knowledge of the Borrower, after due enquiry, each Material Subsidiary as of the Closing Date
has been so designated on Schedule 8.12. 
  
 8.13. Patents,
etc. Holdings, the Borrower and each of the Restricted Subsidiaries have obtained all patents, trademarks, servicemarks, trade names, copyrights, licenses and other rights, free from burdensome restrictions, that are necessary for the operation
of their respective businesses as currently conducted and as proposed to be conducted, except where the failure to obtain any such rights could not reasonably be expected to have a Material Adverse Effect. 
  
 8.14. Environmental Laws. (a) Except as could not reasonably be
expected to have a Material Adverse Effect: (i) each of Holdings, the Borrower and each of the Subsidiaries are in compliance with all Environmental Laws in all jurisdictions in which Holdings, the Borrower and each of the Subsidiaries are currently
doing business (including having obtained all material permits required under Environmental Laws); (ii) each of Holdings and the Borrower will comply and cause each of the Subsidiaries to comply with all such Environmental Laws (including all
permits required under Environmental Laws); and (iii) none of Holdings, the Borrower and each of the Subsidiaries has become subject to any Environmental Claim or any other liability under any Environmental Law. 
  
 (b) None of Holdings, the Borrower or any of the Subsidiaries has treated,
stored, transported, released or disposed of Hazardous Materials at or from any currently or formerly owned Real Estate or facility relating to its business in a manner that could reasonably be expected to have a Material Adverse Effect. 

 

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 8.15. Properties. Each of Holdings, the Borrower and each of the Subsidiaries have good and
marketable title to or leasehold interest in all properties that are necessary for the operation of their respective businesses as currently conducted and as proposed to be conducted, free and clear of all Liens (other than any Liens permitted by
this Agreement) and except where the failure to have such good title could not reasonably be expected to have a Material Adverse Effect. 
  
 SECTION 9. Affirmative Covenants 
  
 Each of Holdings and the Borrower hereby covenants and agrees that on the Closing Date and thereafter, until the Loans, together with interest, and all
other Obligations incurred hereunder, are paid in full: 
  
 9.1.
Information Covenants. Holdings or the Borrower will furnish to each Lender and the Administrative Agent: 
  
 (a) Annual Financial Statements. As soon as available and in any event on or before the date on which such financial statements are required to be
filed with the SEC (or, if such financial statements are not required to be filed with the SEC, on or before the date that is 90 days after the end of each such fiscal year), the consolidated balance sheet of (i) Holdings, the Borrower and the
Restricted Subsidiaries and (ii) Holdings and its Subsidiaries, in each case as at the end of such fiscal year, and the related consolidated statement of operations and cash flows for such fiscal year, setting forth comparative consolidated figures
for the preceding fiscal year, and certified by independent certified public accountants of recognized national standing whose opinion shall not be qualified as to the scope of audit or as to the status of Holdings, the Borrower or any of the
Material Subsidiaries as a going concern. The requirements of this Section 9.1(a) shall be satisfied by delivery of financial statements of Parent and its Subsidiaries which otherwise meet the requirements hereof and are accompanied by
reconciliations for any difference between what is delivered hereunder and what would have been delivered by Holdings and its Subsidiaries pursuit to this Section 9.1(a). 
  
 (b) Quarterly Financial Statements. As soon as available and in any event on or before the date on which such
financial statements are required to be filed with the SEC with respect to each of the first three quarterly accounting periods in each fiscal year of Holdings (or, if such financial statements are not required to be filed with the SEC, on or before
the date that is 45 days after the end of each such quarterly accounting period), the consolidated balance sheet of (i) Holdings, the Borrower and the Restricted Subsidiaries and (ii) Holdings and its Subsidiaries, in each case as at the end of such
quarterly period and the related consolidated statement of operations for such quarterly accounting period and for the elapsed portion of the fiscal year ended with the last day of such quarterly period, and the related consolidated statement of
cash flows for the elapsed portion of the fiscal year ended with the last day of such quarterly period, and setting forth comparative consolidated figures for the related periods in the prior fiscal 
  

 57 

 year or, in the case of such consolidated balance sheet, for the last day of the prior fiscal year, all of which shall be
certified by an Authorized Officer of the Borrower, subject to changes resulting from audit and normal year-end audit adjustments. The requirements of this Section 9.1(b) shall be satisfied by delivery of financial statements of Parent and its
Subsidiaries which otherwise meet the requirements hereof and are accompanied by reconciliations for any difference between what is delivered hereunder and what would have been delivered by Holdings and its Subsidiaries pursuit to this Section
9.1(b). 
  
 (c) Budgets. Within 60 days after the
commencement of each fiscal year of Holdings and the Borrower, budgets of Holdings and the Borrower in reasonable detail for the fiscal year as customarily prepared by management of Holdings and the Borrower for their internal use consistent in
scope with the financial statements provided pursuant to Section 9.1(a), setting forth the principal assumptions upon which such budgets are based. 
  
 (d) Officer’s Certificates. At the time of the delivery of the financial statements provided for in Sections 9.1(a) and (b), a certificate of
an Authorized Officer of the Borrower to the effect that no Default or Event of Default exists or, if any Default or Event of Default does exist, specifying the nature and extent thereof, which certificate shall set forth (i) a specification of any
change in the identity of the Restricted Subsidiaries, Unrestricted Subsidiaries and Foreign Subsidiaries as at the end of such fiscal year or period, as the case may be, from the Restricted Subsidiaries, Unrestricted Subsidiaries and Foreign
Subsidiaries, respectively, provided to the Lenders on the Closing Date or the most recent fiscal year or period, as the case may be, and (ii) the amount of any Pro Forma Adjustment not previously set forth in a Pro Forma Adjustment Certificate or
any change in the amount of a Pro Forma Adjustment set forth in any Pro Forma Adjustment Certificate previously provided and, in either case, in reasonable detail, the calculations and basis therefor. 
  
 (e) Notice of Default or Litigation. Promptly after an Authorized
Officer of any of Holdings, the Borrower or any of the Subsidiaries obtains knowledge thereof, notice of (i) the occurrence of any event that constitutes a Default or Event of Default, which notice shall specify the nature thereof, the period of
existence thereof and what action any of Holdings or the Borrower proposes to take with respect thereto, and (ii) any litigation or governmental proceeding pending against any of Holdings, the Borrower or any of the Subsidiaries that could
reasonably be expected to result in a Material Adverse Effect. 
  
 (f) Environmental Matters. Holdings and the Borrower will promptly advise the Lenders in writing after obtaining knowledge of any one or more of the following environmental matters, unless such environmental matters would not,
individually or when aggregated with all other such matters, be reasonably expected to result in a Material Adverse Effect: 
  
 (i) Any pending or threatened Environmental Claim against any of Holdings, the Borrower or any of the Subsidiaries or any Real Estate;

  

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 (ii) Any condition or occurrence on any Real Estate that (x) results in noncompliance by
any of Holdings, the Borrower or any of the Subsidiaries with any applicable Environmental Law or (y) could reasonably be anticipated to form the basis of an Environmental Claim against any of Holdings, the Borrower or any of the Subsidiaries or any
Real Estate; 
  
 (iii) Any condition or
occurrence on any Real Estate that could reasonably be anticipated to cause such Real Estate to be subject to any restrictions on the ownership, occupancy, use or transferability of such Real Estate under any Environmental Law; and 
  
 (iv) The taking of any removal or remedial action in
response to the actual or alleged presence of any Hazardous Material on any Real Estate. 
  
 All such notices shall describe in reasonable detail the nature of the claim, investigation, condition, occurrence or removal or remedial action and the response thereto. The term “Real Estate” shall
mean land, buildings and improvements owned or leased by any of Holdings, the Borrower or any of the Subsidiaries, but excluding all operating fixtures and equipment, whether or not incorporated into improvements. 
  
 (g) Other Information. Promptly upon filing thereof, copies of any
filings (including on Form 10-K, 10-Q or 8-K) or registration statements with, and reports to, the SEC or any analogous Government Authority in any relevant jurisdiction by any of Holdings, the Borrower or any of the Subsidiaries (other than
amendments to any registration statement (to the extent such registration statement, in the form it becomes effective, is delivered to the Lenders), exhibits to any registration statement and, if applicable, any registration statements on Form S-8)
and copies of all financial statements, proxy statements, notices and reports that Holdings, the Borrower or any of the Subsidiaries shall send to the holders of any publicly issued debt of Holdings, the Borrower and/or any of the Subsidiaries
(including any Subordinated Notes (whether publicly issued or not)) in their capacity as such holders (in each case to the extent not theretofore delivered to the Lenders pursuant to this Agreement) and, with reasonable promptness, such other
information (financial or otherwise) as the Administrative Agent on its own behalf or on behalf of any Lender may reasonably request in writing from time to time. 
  
 (h) Pro Forma Adjustment Certificate. Not later than the consummation of the acquisition of any Acquired Entity or
Business by the Borrower or any Restricted Subsidiary for which there shall be a Pro Forma Adjustment or not later than any date on which financial statements are delivered with respect to any four-quarter period in which a Pro Forma Adjustment is
made as a result of the consummation of the acquisition of any Acquired Entity or Business by the Borrower or any Restricted Subsidiary for which there shall be a Pro Forma Adjustment, a certificate of an Authorized Officer of the Borrower setting
forth the amount of such Pro Forma Adjustment and, in reasonable detail, the calculations and basis therefor. 
  

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 9.2. Books, Records and Inspections. Each of Holdings and the Borrower will, and will cause each
of the Subsidiaries to, permit officers and designated representatives of the Administrative Agent or the Required Lenders to visit and inspect any of the properties or assets Holdings, the Borrower and any such Subsidiary in whomsoever’s
possession to the extent that it is within such party’s control to permit such inspection, and to examine the books of account Holdings, the Borrower and any such Subsidiary and discuss the affairs, finances and accounts Holdings, the Borrower
and of any such Subsidiary with, and be advised as to the same by, its and their officers and independent accountants, all at such reasonable times and intervals and to such reasonable extent as the Administrative Agent or the Required Lenders may
desire. 
  
 9.3. Maintenance of Insurance. Each of Holdings
and the Borrower will, and will cause each of the Material Subsidiaries to, at all times maintain in full force and effect, with insurance companies that the Borrower believes (in the good faith judgment of the management of the Borrower) are
financially sound and responsible at the time the relevant coverage is placed or renewed, insurance in at least such amounts and against at least such risks (and with such risk retentions) as are usually insured against in the same general area by
companies engaged in the same or a similar business; and will furnish to the Lenders, upon written request from the Administrative Agent, information presented in reasonable detail as to the insurance so carried. 
  
 9.4. Payment of Taxes. Each of Holdings and the Borrower will pay and
discharge, and will cause each of the Subsidiaries to pay and discharge, all material taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits, or upon any properties belonging to it, prior to the date on
which material penalties attach thereto, and all lawful material claims that, if unpaid, could reasonably be expected to become a material Lien upon any properties of the Borrower or any of the Restricted Subsidiaries, provided that neither
Holdings, the Borrower nor any of the Subsidiaries shall be required to pay any such tax, assessment, charge, levy or claim that is being contested in good faith and by proper proceedings if it has maintained adequate reserves (in the good faith
judgment of the management of the Borrower) with respect thereto in accordance with GAAP. 
  
 9.5. Consolidated Corporate Franchises. Each of Holdings and the Borrower will do, and will cause each Material Subsidiary to do, or cause to be done, all things necessary to preserve and keep in full force and
effect its existence, corporate rights and authority, except to the extent that the failure to do so could not reasonably be expected to have a Material Adverse Effect; provided, however, that the Borrower and its Subsidiaries may consummate any
transaction permitted under Section 10.3 or 10.4. 
  
 9.6.
Compliance with Statutes, Obligations, etc. Each of Holdings and the Borrower will, and will cause each Subsidiary to, comply with all applicable laws, rules, regulations and orders, except to the extent the failure to do so could not
reasonably be expected to have a Material Adverse Effect. 
  
 9.7.
ERISA. Promptly after Holdings, the Borrower or any Subsidiary or any ERISA Affiliate knows or has reason to know of the occurrence of any of the 
  

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 following events that, individually or in the aggregate (including in the aggregate such events previously disclosed or
exempt from disclosure hereunder, to the extent the liability therefor remains outstanding), would be reasonably likely to have a Material Adverse Effect, Holdings or the Borrower will deliver to each of the Lenders a certificate of an Authorized
Officer or any other senior officer of the Borrower setting forth details as to such occurrence and the action, if any, that Holdings, the Borrower, such Subsidiary or such ERISA Affiliate is required or proposes to take, together with any notices
(required, proposed or otherwise) given to or filed with or by Holdings, the Borrower, such Subsidiary, such ERISA Affiliate, the PBGC, a Plan participant (other than notices relating to an individual participant’s benefits) or the Plan
administrator with respect thereto: that a Reportable Event has occurred; that an accumulated funding deficiency has been incurred or an application is to be made to the Secretary of the Treasury for a waiver or modification of the minimum funding
standard (including any required installment payments) or an extension of any amortization period under Section 412 of the Code with respect to a Plan; that a Plan having an Unfunded Current Liability has been or is to be terminated, reorganized,
partitioned or declared insolvent under Title IV of ERISA (including the giving of written notice thereof); that a Plan has an Unfunded Current Liability that has or will result in a lien under ERISA or the Code; that proceedings will be or have
been instituted to terminate a Plan having an Unfunded Current Liability (including the giving of written notice thereof); that a proceeding has been instituted against the Borrower, a Subsidiary or an ERISA Affiliate pursuant to Section 515 of
ERISA to collect a delinquent contribution to a Plan; that the PBGC has notified Holdings, the Borrower, any Subsidiary or any ERISA Affiliate of its intention to appoint a trustee to administer any Plan; that Holdings, the Borrower, any Subsidiary
or any ERISA Affiliate has failed to make a required installment or other payment pursuant to Section 412 of the Code with respect to a Plan; or that Holdings, the Borrower, any Subsidiary or any ERISA Affiliate has incurred or will incur (or has
been notified in writing that it will incur) any liability (including any contingent or secondary liability) to or on account of a Plan pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA or Section 4971 or
4975 of the Code. 
  
 9.8. Good Repair. Each of Holdings
and the Borrower will, and will cause each of the Restricted Subsidiaries to, ensure that its properties and equipment used or useful in its business in whomsoever’s possession they may be to the extent that it is within the control of such
party to cause same, are kept in good repair, working order and condition, normal wear and tear excepted, and that from time to time there are made in such properties and equipment all needful and proper repairs, renewals, replacements, extensions,
additions, betterments and improvements thereto, to the extent and in the manner customary for companies in similar businesses and consistent with third party leases, except in each case to the extent the failure to do so could not be reasonably
expected to have a Material Adverse Effect. 
  
 9.9.
Transactions with Affiliates. Each of Holdings and the Borrower will conduct, and cause each of the Restricted Subsidiaries to conduct, all transactions with any of its Affiliates on terms that are substantially as favorable to Holdings, the
Borrower or such Restricted Subsidiary as it would obtain in a comparable arm’s-length transaction with a Person that is not an Affiliate, provided that the foregoing restrictions 
  

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 shall not apply to (a) the payment of customary annual fees to KKR and/or its Affiliates for management, consulting and
financial services rendered to Holdings, the Borrower and the Subsidiaries and customary investment banking fees paid to KKR and its Affiliates for services rendered to Holdings, the Borrower and the Subsidiaries in connection with divestitures,
acquisitions, financings and other transactions, (b) customary fees paid to members of the Board of Directors Holdings, the Borrower and the Subsidiaries and (c) transactions permitted by Section 10.6. 
  
 9.10. End of Fiscal Years; Fiscal Quarters. Holdings and the Borrower
will, for financial reporting purposes, cause (a) each of its, and each of its Subsidiaries’, fiscal years to end on December 31 of each year and (b) each of its, and each of its Subsidiaries’, fiscal quarters to end on dates consistent
with such fiscal year-end and Holdings and the Borrower’s past practice; provided, however, that Holdings and the Borrower may, upon written notice to the Administrative Agent, change the financial reporting convention specified above to any
other financial reporting convention reasonably acceptable to the Administrative Agent, in which case Holdings and the Borrower and the Administrative Agent will, and are hereby authorized by the Lenders to, make any adjustments to this Agreement
that are necessary in order to reflect such change in financial reporting. 
  
 9.11. Additional Guarantors . (a) Except as provided in clauses (j) or (k) of the definition of “Permitted Debt”, each of Holdings and the Borrower will cause (i) any direct or indirect Domestic
Subsidiary (other than any Unrestricted Subsidiary) formed or otherwise purchased or acquired after the date hereof (including pursuant to a Permitted Acquisition), (ii) any Subsidiary (other than any Unrestricted Subsidiary) that is not a Domestic
Subsidiary on the date hereof but subsequently becomes a Domestic Subsidiary (other than any Unrestricted Subsidiary) and (iii) any inactive Subsidiary listed on Schedule 1.1(e) (unless such Subsidiary is designated an Unrestricted Subsidiary in
accordance with terms of this Agreement) which acquires any material assets or is otherwise no longer deemed inactive, in each case to execute a supplement to the Guarantee, substantially in the form of Annex B to the agreement in order to become a
Guarantor under the Guarantee. 
  
 (b) Except as provided in
clauses (j) or (k) of the definition of “Permitted Debt”, each of Holdings and the Borrower will cause each Foreign Subsidiary that is a Restricted Foreign Subsidiary, or that is required to become a Restricted Foreign Subsidiary for an
investment to constitute a Permitted Acquisition, in each case that makes an investment constituting a Permitted Acquisition permitted under the terms of this Agreement to enter into guarantee arrangements in relation to the Obligations of the
Borrower, in a form and to an extent agreed between the Borrower and the Administrative Agent, but to be substantially consistent with the scope of the guarantee arrangements entered into pursuant to the Guarantees, provided that no such
Restricted Foreign Subsidiary shall be required to enter into such arrangements to the extent that such arrangements would (i) be prohibited by the law of the jurisdiction of incorporation or formation of such Restricted Subsidiary or of the entity
whose capital stock is acquired or (ii) have material adverse tax consequences for any of Holdings, the Borrower or any of the Restricted Subsidiaries. 
  

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 9.12. Reserved. 
  
 9.13. Use of Proceeds. The Borrower the proceeds of all Loans for the purposes set forth in the introductory
statement to this Agreement. 
  
 9.14. Changes in Business.
Holdings, the Borrower and the Subsidiaries, taken as a whole, will not fundamentally and substantively alter the character of their business, taken as a whole, from the business conducted by Holdings, the Borrower and the Subsidiaries, taken as a
whole, on the Closing Date and other business activities incidental or related to any of the foregoing. 
  
 9.15. Post-Closing Refinancing. Within thirty-five (35) Business Days of the Closing Date, the Company shall repay in full the Unpaid Refinancing
Amount. 
  
 9.16. Designated Senior Indebtedness. Upon the
termination of the Senior Secured Credit Agreement, and for so long as no other Credit Facilities are in effect, the designation of the Obligations as “Designated Senior Indebtedness” (or any comparable term) under and as defined in the
Subordinated Note Indenture or any other applicable documentation governing Subordinated Indebtedness shall immediately become effective. 
  
 SECTION 10. Negative Covenants 
  
 Each of Holdings and the Borrower hereby covenant and agree that on the Closing Date and thereafter, until the Loans, together with interest, and all
other Obligations incurred hereunder, are paid in full: 
  
 10.1.
Limitation on Indebtedness. (A) The Borrower will not, and will 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 and the Borrower will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to
issue any shares of Disqualified Stock or preferred stock, except: 
  
 (a) Borrower and its Restricted Subsidiaries may incur Senior Indebtedness if the (x) Senior Leverage Ratio for the Borrower’s most recently ended four (4) full fiscal quarters for which internal financial statements are available
immediately preceding the date on which such additional Senior Indebtedness is incurred would have been less than 4.50 to 1.00 and (y) the Fixed Charge Coverage Ratio for Borrower’s most recently ended four full fiscal quarters for which
internal consolidated financial statements are available immediately preceding the date on which such additional Senior Indebtedness is incurred would have been at least 2.00:1.00, in each case on a pro forma basis after giving effect to such
Indebtedness and the application of the proceeds thereof; 
  
 (b)
Borrower and its Restricted Subsidiaries may incur Permitted Subordinated Indebtedness or issue Disqualified Stock and any Restricted Subsidiary 
  

 63 

 may issue preferred stock, if the Fixed Charge Coverage Ratio for Borrower’s most recently ended four full fiscal
quarters for which internal consolidated 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 2.00:1.00,
determined on a pro forma basis after giving effect to such Indebtedness or the preferred stock or Disqualified Stock and the application of the proceeds thereof; and 
  
 (c) Holdings, Borrower and its Restricted Subsidiaries may incur Permitted Debt. 
  
 For purposes of determining compliance with this Section 10.1, in the event
that any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt, or is entitled to be incurred pursuant to clause (a) or (b) of this Section 10.1, Borrower will be permitted to classify such item of
Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 10.1 at such time. Indebtedness under the Senior Secured Credit Agreement and Subordinated Notes on the Closing Date
shall be deemed to have been incurred on the Closing Date in reliance on the definition of Permitted Debt. 
  
 The accrual of interest, the accretion or amortization of original issue discount, the payment of interest and dividends on any Indebtedness in the form
of additional Indebtedness with the same terms, and the payment or accrual of dividends on Disqualified Stock or preferred stock in the form of additional shares of the same class of Disqualified Stock or preferred stock will not be deemed to be an
incurrence of Indebtedness or an issuance of Disqualified Stock or preferred stock for purposes of this Section 10.1. 
  
 (B) Neither Parent nor Holdings will create, incur, assume or suffer to exist any Indebtedness except (1) with respect to Parent, Qualified PIK Securities
and (2) the guarantee obligations of Parent and Holdings of the Senior Unsecured Term Loans under the Senior Unsecured Term Loan Agreement and the Subordinated Notes under the Subordinated Note Indenture (provided that Holdings shall not
guarantee the Subordinated Notes unless (i) Holdings also has guaranteed the Obligations pursuant to the Guarantee, (ii) such guarantee of the Subordinated Notes is unsecured and subordinated to such guarantee of the Obligations on terms no less
favorable to the Lenders than the subordination provisions of the Subordinated Notes and (iii) such guarantee of the Subordinated Notes provides for the release and termination thereof, without action by any party, upon any release and termination
of such guarantee of the Obligations). 
  
 (C) Neither of Parent,
Holdings nor the Borrower will, nor will they permit any Subsidiary to, issue any preferred stock or other preferred equity interests, other than, in the case of Parent, Qualified PIK Securities. 
  
 10.2. Limitation on Liens. (A) The Borrower will not, and will not
permit any of the Restricted Subsidiaries to, create, incur, assume or suffer to exist any 
  

 64 

 Lien upon any property or assets of any kind (real or personal, tangible or intangible) of the Borrower or any Restricted
Subsidiary, whether now owned or hereafter acquired, except: 
  
 (a) Liens arising under Senior Indebtedness; 
  
 (b)
Permitted Liens; 
  
 (c) Liens securing Indebtedness permitted
pursuant to clause (f) of the definition of Permitted Debt, provided that such Liens attach at all times only to the assets so financed, and Liens on the assets of Foreign Subsidiaries securing Indebtedness permitted pursuant to clause (f) of
the definition of Permitted Debt; 
  
 (d) Liens existing on the
date hereof and listed on Schedule 10.2; 
  
 (e) the replacement,
extension or renewal of any Lien permitted by clauses (a) through (d) above and clauses (f) and (g) of this Section 10.2 upon or in the same assets theretofore subject to such Lien or the replacement, extension or renewal (without increase in the
amount or change in any direct or contingent obligor except to the extent otherwise permitted hereunder) of the Indebtedness secured thereby; 
  
 (f) Liens existing on the assets of any Person that becomes a Restricted Subsidiary, or existing on assets acquired, pursuant to a Permitted Acquisition
to the extent the Liens on such assets secure Indebtedness permitted by clause (j) of the definition of “Permitted Debt”, provided that such Liens attach at all times only to the same assets that such Liens attached to, and secure
only the same Indebtedness that such Liens secured, immediately prior to such Permitted Acquisition; 
  
 (g) (i) Liens placed upon the capital stock of any Restricted Subsidiary acquired pursuant to a Permitted Acquisition to secure Indebtedness of the
Borrower or any other Restricted Subsidiary incurred pursuant to clause (k) of the definition of “Permitted Debt” in connection with such Permitted Acquisition and (ii) Liens placed upon the assets of such Restricted Subsidiary to secure a
guarantee by such Restricted Subsidiary or any such Indebtedness of the Borrower or any other Restricted Subsidiary; and 
  
 (h) additional Liens so long as the aggregate principal amount of the obligations so secured does not exceed $25,000,000 at any time outstanding.

  
 (B) Neither Parent nor Holdings will create, incur, assume or
suffer to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect thereof, except liens of the nature set forth in clauses (a), (c)
and (h) of the definition of the term “Permitted Liens”. 
  
 10.3. Limitation on Fundamental Changes. (A) Except as expressly permitted by Section 10.4, each of Holdings and the Borrower will not, and will not permit any of the Restricted Subsidiaries to, enter into any merger, consolidation
or 
  

 65 

 amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or convey, sell,
lease, assign, transfer or otherwise dispose of, all or substantially all its business units, assets or other properties, except that: 
  
 (a) any Subsidiary of the Borrower or any other Person may be merged or consolidated with or into the Borrower, provided that (i) the Borrower
shall be the continuing or surviving corporation or the Person formed by or surviving any such merger or consolidation (if other than the Borrower) shall be an entity organized or existing under the laws of the United States, any state thereof, the
District of Columbia or any territory thereof (the Borrower or such Person, as the case may be, being herein referred to as the “Successor Borrower”), (ii) the Successor Borrower (if other than the Borrower) shall expressly assume
all the obligations of the Borrower under this Agreement and the other Credit Documents pursuant to a supplement hereto or thereto in form reasonably satisfactory to the Administrative Agent, (iii) no Default or Event of Default would result from
the consummation of such merger or consolidation, (iv) each Guarantor, unless it is the other party to such merger or consolidation, shall have by a supplement to the Guarantee confirmed that its Guarantee shall apply to the Successor
Borrower’s obligations under this Agreement and (v) the Borrower shall have delivered to the Administrative Agent an officer’s certificate and an opinion of counsel, each stating that such merger or consolidation and such supplement to
this Agreement or the Guarantee Agreement comply with this Agreement; provided further that if the foregoing are satisfied, the Successor Borrower (if other than the Borrower) will succeed to, and be substituted for, the Borrower under
this Agreement; 
  
 (b) [Reserved]; 
  
 (c) any Subsidiary of the Borrower or any other Person may be merged or
consolidated with or into any one or more Subsidiaries of the Borrower, provided that (i) in the case of any merger or consolidation involving one or more Restricted Subsidiaries, (A) a Restricted Subsidiary shall be the continuing or
surviving corporation or (B) the Borrower shall take all steps necessary to cause the Person formed by or surviving any such merger or consolidation (if other than a Restricted Subsidiary) to become a Restricted Subsidiary, (ii) in the case of any
merger or consolidation involving one or more Guarantors, a Guarantor shall be the continuing or surviving corporation or the Person formed by or surviving any such merger, amalgamation or consolidation (if other than a Guarantor) shall execute a
supplement to the Guarantee Agreement in form and substance reasonably satisfactory to the Administrative Agent in order to become a Guarantor, (iii) no Default or Event of Default would result from the consummation of such merger or consolidation
and (iv) the Borrower shall have delivered to the Administrative Agent an Officers’ Certificate stating that such merger or consolidation and such supplements to any Guarantee Agreement comply with this Agreement; 
  
 (d) any Restricted Subsidiary that is not a Guarantor or a Foreign Subsidiary
Guarantor may sell, lease, transfer or otherwise dispose of any or all of its assets (upon voluntary liquidation or otherwise) to the Borrower, a Guarantor, a Foreign Subsidiary Guarantor or any other Restricted Subsidiary of the Borrower;

  

 66 

 (e) any Guarantor or any Foreign Subsidiary Guarantor may sell, lease, transfer or otherwise dispose of
any or all of its assets (upon voluntary liquidation or otherwise) to the Borrower or any other Guarantor or Foreign Subsidiary Guarantor; and 
  
 (f) any Restricted Subsidiary may liquidate or dissolve if (x) the Borrower determines in good faith that such liquidation or dissolution is in the best
interests of the Borrower and is not materially disadvantageous to the Lenders and (y) to the extent such Restricted Subsidiary is a Credit Party, any assets or business not otherwise disposed of or transferred in accordance with Section 10.4, or,
in the case of any such business, discontinued, shall be transferred to, or otherwise owned or conducted by, another Credit Party after giving effect to such liquidation or dissolution. 
  
 (B) Holdings will not engage in any business or activity other than (a) the ownership of all the outstanding shares of
capital stock of the Borrower, (b) maintaining its corporate existence, (c) participating in tax, accounting and other administrative matters as a member of the consolidated group of Holdings and Borrower, (d) the performance of the Credit Documents
to which it is a party, (e) making any Dividend permitted by Section 10.6 or holding any cash received in connection with Dividends made by the Borrower in accordance with Section 10.6 pending application thereof by Holdings in the manner
contemplated by Section 10.6 and (f) activities incidental to the businesses or activities described in clauses (a) to (e) of this Section 10.3(B). Holdings will not own or acquire any assets (other than shares of capital stock of the Borrower, cash
and Permitted Investments) or incur any liabilities (other than liabilities under the Credit Documents, liabilities under its guarantee of the Subordinated Notes and liabilities imposed by law, including tax liabilities, and other liabilities
incidental to its existence and business and activities permitted by this Agreement). 
  
 (C) Parent will not engage in any business or activity other than (a) the ownership of all the outstanding shares of capital stock of Holdings, (b) maintaining its corporate existence, (c) participating in tax,
accounting and other administrative matters as a member of the consolidated group of Holdings and Borrower, (d) the performance of the Credit Documents to which it is a party, (e) holding any cash received in connection with Dividends made by
Holdings in accordance with Section 10.6 pending application thereof by Parent in the manner contemplated by Section 10.6, (f) activities related to Qualified PIK Securities and other permitted Capital Stock and (g) activities incidental to the
businesses or activities described in clauses (a) to (e) of this Section 10.3(C). Parent will not own or acquire any assets (other than shares of capital stock of Holdings, cash and Permitted Investments) or incur any liabilities (other than those
liabilities permitted by Section 10.1(B) or liabilities imposed by law, including tax liabilities, and other liabilities incidental to its existence and business and activities permitted by this Agreement). 
  
 10.4. Limitation on Sale of Assets. 
  
 (a) Borrower will not, and will not permit any Restricted Subsidiary to,
cause, make or suffer to exist an Asset Sale, unless: 
  
 (i) the Borrower 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 Borrower) of the assets sold or otherwise
disposed of; and 
  

 67 

 (ii) except in the case of a Permitted Asset Swap, at least 75% of the consideration
therefor received by the Borrower or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; provided that the amount of 
  
 (A) any liabilities (as shown on the Borrower’s, or such Restricted Subsidiary’s, most recent
balance sheet or in the notes thereto) of the Borrower or any Restricted Subsidiary, other than liabilities that are by their terms subordinated to the Subordinated Notes, that are assumed by the transferee of any such assets and for which the
Borrower and all Restricted Subsidiaries have been validly released by all creditors in writing, 
  
 (B) any securities received by the Borrower or such Restricted Subsidiary from such transferee that are converted by the Borrower or such
Restricted Subsidiary into cash (to the extent of the cash received) within 180 days following the closing of such Asset Sale, and 
  
 (C) any Designated Noncash Consideration received by the Borrower or any Restricted Subsidiary in such Asset Sale having an aggregate fair
market value, taken together with all other Designated Noncash Consideration received pursuant to this clause (C) that is at that time outstanding, not to exceed the greater of (x) $100,000,000 and (y) 10.0% of Total Assets at the time of the
receipt of such Designated Noncash Consideration, with the fair market value of each item of Designated Noncash Consideration being measured at the time received and without giving effect to subsequent changes in value, 
  
 shall be deemed to be cash for purposes of this provision and for no other
purpose. 
  
 (b) Within 365 days after the Borrower’s or any
Restricted Subsidiary’s receipt of the Net Proceeds of any Asset Sale, the Borrower or such Restricted Subsidiary, at its option, may apply the Net Proceeds from such Asset Sale: 
  
 (i) to permanently reduce (x) obligations under the Senior Secured Credit Facility, and to correspondingly
reduce commitments with respect thereto, (y) obligations under other Senior Indebtedness (and to correspondingly reduce commitments with respect thereto) or Senior Subordinated Indebtedness provided that if the Borrower shall so reduce
obligations under Senior Subordinated Indebtedness, it will equally and ratably reduce the Term Loans, or (z) Indebtedness of a Restricted Subsidiary which is not a Guarantor, other than Indebtedness owed to the Borrower or another Restricted
Subsidiary, 
  

 68 

 (ii) to an investment in (x) 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 Borrower 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, (y) capital expenditures or (z) acquisitions of other assets, in each of (x), (y) and (z), used or useful in a Similar Business, and/or 
  
 (iii) to an investment in (x) 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 Borrower 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, (y) properties or (z) other assets
that, in each of (x), (y) and (z) replace the businesses, properties and assets that are the subject of such Asset Sale. 
  
 (c) Any Net Proceeds from the Asset Sale that are not invested or applied as provided and within the time period set forth in clause (b) above will be
deemed to constitute “Excess Proceeds.” When the aggregate amount of Excess Proceeds exceeds $15,000,000, the Borrower shall make an offer to all Lenders, and, if required by the terms of any Indebtedness that is pari passu
with the Term Loans (“Pari Passu Indebtedness”), to the holders of such Pari Passu Indebtedness, (an “Asset Sale Offer”), to prepay the maximum principal amount of Term Loans and purchase or prepay such Pari
Passu Indebtedness, that is an integral multiple of $1,000 that may be purchased out of the Excess Proceeds (inclusive of the first $15,000,000 of such Excess Proceeds) at an offer price in cash in an amount equal to 100% of the principal amount
thereof, plus accrued and unpaid interest and Special Interest, if any, to the date fixed for the closing of such offer, in accordance with the procedures set forth in the Subordinated Note Indenture. The Borrower will commence an Asset Sale Offer
with respect to Excess Proceeds within ten business days after the date that Excess Proceeds exceeds $15,000,000 by mailing the notice to the Administrative Agent and all Lenders. To the extent that the aggregate amount of Term Loans and such Pari
Passu Indebtedness tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Borrower may use any remaining Excess Proceeds for general corporate purposes, subject to the other covenants contained herein. If the aggregate
principal amount of Term Loans or the Pari Passu Indebtedness surrendered by such holders thereof exceeds the amount of Excess Proceeds, the Administrative Agent shall select the Term Loans and such Pari Passu Indebtedness to be prepaid or purchased
on a pro rata basis based on the accreted value or principal amount of the Term Loans or such Pari Passu Indebtedness tendered. Upon completion of any such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero. 
  
 (d) Pending the final application of any Net Proceeds pursuant to this
covenant, the Borrower 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 the
terms of this Agreement. 
  

 69 

 10.5. Reserved. 
  
 10.6. Limitation on Restricted Payments. 
  
 (a) The Borrower will not, and will not permit any Restricted Subsidiary to, directly or indirectly: 
  
 (i) declare or pay any dividend or make any distribution on
account of the Borrower’s or any Restricted Subsidiary’s Equity Interests, including any dividend or distribution payable in connection with any merger or consolidation other than 
  
 (x) dividends or distributions by the Borrower payable in
Equity Interests (other than Disqualified Stock) of the Borrower or in options, warrants or other rights to purchase such Equity Interests; or 
  
 (y) 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 Subsidiary other than a Wholly Owned Subsidiary, the Borrower 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; 
  
 (ii)
purchase, redeem, defease or otherwise acquire or retire for value any Equity Interests of the Borrower or any direct or indirect parent of the Borrower, including in connection with any merger or consolidation; 
  
 (iii) 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 Subordinated Notes or Subordinated Indebtedness, other than 
  
 (x) Indebtedness permitted under Section 10.1 pursuant to
clause (b) of the definition of “Permitted Debt;” or 
  
 (y) the purchase, repurchase or other acquisition of Subordinated Notes or 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 
  
 (iv) make any Restricted Investment; 
  

 70 

 (all such payments and other actions set forth in clauses (i) through (iv) 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 Borrower could incur $1.00 of additional Indebtedness under the
provisions of the first paragraph of Section 10.1(A)(b); and 
  
 (C) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Borrower and its Restricted Subsidiaries after the Closing 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 (C) and (9) of clause (b) of this Section, but excluding all other Restricted Payments permitted by clause (b) of this Section), is
less than the sum of 
  
 (1) 50% of the
Consolidated Net Income of the Borrower for the period (taken as one accounting period) from the beginning of the first fiscal quarter commencing after the Closing Date, to the end of the Borrower’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 Borrower since immediately after the Closing 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)(13) of the Subordinated Note Indenture from the issue or sale of 
  
 (x) Equity Interests of the Borrower, 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 Borrower, any direct or
indirect parent entity of the Borrower and the Borrower’s Subsidiaries after the Closing Date to the extent such amounts have been applied to Restricted Payments made in accordance with clause (b)(4) of this Section and 
  
 (B) Designated Preferred Stock 
  
 and to the extent actually contributed to the Borrower, Equity Interests of
the Borrower’s direct or indirect parent entities (excluding contributions of the proceeds from the sale of Designated Preferred Stock of such corporations) or 
  

 71 

 (y) debt securities of the Borrower that have been converted into such Equity Interests
of the Borrower; 
  
 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 Borrower sold to a Restricted Subsidiary or the Borrower, 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 the capital of the Borrower following the Closing 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 10.1) (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 means of 
  
 (A) the sale or other disposition (other than to the Borrower or a Restricted Subsidiary) of Restricted Investments made by the Borrower and its Restricted Subsidiaries and repurchases and redemptions of such
Restricted Investments from the Borrower and its Restricted Subsidiaries and repayments of loans or advances which constitute Restricted Investments by the Borrower and its Restricted Subsidiaries; or 
  
 (B) the sale (other than to the Borrower or a Restricted
Subsidiary) of the stock of an Unrestricted Subsidiary or a distribution from an Unrestricted Subsidiary (other than in each case to the extent the Investment in such Unrestricted Subsidiary was made by the Borrower or a Restricted Subsidiary
pursuant to clause (b)(10) of this Section or to the extent such Investment constituted a Permitted Investment) or a dividend from an Unrestricted Subsidiary 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 $25,000,000, in writing by an independent
investment banking firm of nationally recognized standing, at the time of the redesignation of such Unrestricted Subsidiary as a 
  

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 Restricted Subsidiary, other than an Unrestricted Subsidiary to the extent the Investment in such
Unrestricted Subsidiary was made by the Borrower or a Restricted Subsidiary pursuant to clause (10) of the next succeeding paragraph or to the extent such Investment constituted a Permitted Investment. 
  
 (b) The foregoing provisions will not prohibit: 

 
 (1) the payment of any dividend 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 Agreement; 
  
 (2) (a) the redemption, repurchase, retirement or other acquisition of any Equity Interests (“Retired Capital Stock”),
Subordinated Notes or Subordinated Indebtedness of the Borrower, or any Equity Interests of any direct or indirect parent entity of the Borrower, in exchange for, or out of the proceeds of the substantially concurrent sale (other than to a
Restricted Subsidiary) of, Equity Interests of the Borrower (in each case, other than any Disqualified Stock) (“Refunding Capital Stock”) and (b) if immediately prior to the retirement of Retired Capital Stock, the declaration and
payment of dividends thereon was permitted under clause (6) of this paragraph, 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 entity of the Borrower) 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 Subordinated Notes or Subordinated Indebtedness of the Borrower made by exchange for, or out of the proceeds of the substantially concurrent sale of, new Indebtedness of
the Borrower which is incurred in compliance with Section 10.1 so long as: 
  
 (A) the principal amount of such new Indebtedness does not exceed the principal amount of the Subordinated 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 Subordinated Notes or Subordinated Indebtedness being so redeemed, repurchased, acquired or retired, 
  
 (B) such Indebtedness is subordinated to Senior Indebtedness
at least to the same extent as such Subordinated Notes or 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 Subordinated Notes or Subordinated Indebtedness being so redeemed, repurchased, acquired or retired, and 
  

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 (D) such Indebtedness has a Weighted Average Life to Maturity equal to or greater than
the remaining Weighted Average Life to Maturity of the Subordinated 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 Borrower or any of its direct or indirect parent entities held by any future, present or former employee, director or consultant of the Borrower, any of its Subsidiaries or any of its direct or indirect parent entities 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 $10,000,000 (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 $20,000,000 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 of the Borrower and, to the extent contributed to the Borrower, Equity Interests of any of the Borrower’s direct or indirect parent entities, in each case to members of
management, directors or consultants of the Borrower, any of its Subsidiaries or any of its direct or indirect parent entities that occurs after the Closing 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 sub-clause (C) of clause (a) of this Section, plus 
  
 (B) the cash proceeds of key man life insurance policies received by the Borrower and its Restricted Subsidiaries after the Closing Date
less 
  
 (C) the amount of any Restricted
Payments previously made pursuant to clauses (A) and (B) of this clause (4); 
  
 and provided further that cancellation of Indebtedness owing to the Borrower from members of management of the Borrower, any of its direct or indirect parent entities or any Restricted Subsidiary in connection
with a repurchase of Equity Interests of the Borrower or any of its direct or indirect parent entities will not be deemed to constitute a Restricted Payment for purposes of this covenant or any other provision of this Agreement; 
  

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 (5) the declaration and payment of dividends to holders of any class or series of
Disqualified Stock of the Borrower or any other Restricted Subsidiary issued in accordance with Section 10.1 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 Borrower after the Closing Date; 
  
 (B) the declaration and payment of dividends to a direct or indirect parent entity of the Borrower, 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 entity issued after the Closing 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 Borrower from the sale of such Designated Preferred Stock; or 
  
 (C) the declaration and payment of dividends on Refunding Capital Stock in excess of the dividends declarable and payable thereon pursuant
to clause (2); provided, however, in the case of each of (A), (B) and (C) 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 or the declaration of such dividends on Refunding Capital Stock, after giving effect to such issuance or declaration on a pro forma basis, the Borrower 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 $25,000,000 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 Borrower’s Capital Stock, following the first public offering of the Borrower’s Capital Stock or the Capital Stock of any of its direct or indirect parent entities after
the Closing Date, of up to 6% per annum of the net proceeds received by or contributed to the Borrower in such public offering, other than public offerings with respect to the Borrower’s Capital Stock registered on Form S-8 and other than any
public sale constituting an Excluded Contribution; 
  

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 (10) Investments that are made with Excluded Contributions; 
  
 (11) other Restricted Payments in an aggregate amount not to
exceed $30,000,000; 
  
 (12) the declaration and
payment of dividends by the Borrower to, or the making of loans to, the Parent or Holdings in amounts required for either of their respective direct or indirect parent entities 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 Borrower 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 entity of the Borrower to the extent such salaries, bonuses and other benefits are attributable to the
ownership or operation of the Borrower and the Restricted Subsidiaries, and 
  
 (D) general corporate overhead expenses of any direct or indirect parent entity of the Borrower to the extent such expenses are attributable to the ownership or operation of the Borrower and the Restricted
Subsidiaries; 
  
 (13) distributions or payments
of Receivables Fees; 
  
 (14) cash dividends or
other distributions on the Borrower’s or any Restricted Subsidiary’s Capital Stock used to fund the Transactions and the fees and expenses related thereto or owed to Affiliates, in each case to the extent permitted by Section 9.9; and

  
 (15) the repurchase, redemption or other
acquisition or retirement for value of any Subordinated Notes or Subordinated Indebtedness pursuant to the provisions similar to those described in Section 10.4 or 5.7; provided that all Term Loans tendered by Lenders in connection with a
Change of Control Offer or Asset Sale Offer, as applicable, have been repurchased, redeemed or acquired for value; 
  
 provided however, that at the time of, and after giving effect to, any Restricted Payment permitted under clauses (5), (6), and (11), no
Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof. 
  
  

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 (c) As of the time of the Borrowing, all of the Borrower’s Subsidiaries will be Restricted
Subsidiaries. Borrower will not permit any Unrestricted Subsidiary to become a Restricted Subsidiary except pursuant to the definition of “Unrestricted Subsidiary.” For purposes of designating any Restricted Subsidiary as an Unrestricted
Subsidiary, all outstanding Investments by the Borrower and its Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so designated will 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 the first paragraph of this covenant or under clauses (7), (10) or (11)
of clause (b) of this Section, or pursuant to the definition of “Permitted Investments,” and if such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. Unrestricted Subsidiaries will not be subject to any of the
restrictive covenants set forth in this Agreement. 
  
 10.7.
Limitations on Debt Payments and Amendments; Unpaid Refinancing Amount. (a) Except as otherwise permitted under Section 10.6, the Borrower will not prepay, repurchase or redeem or otherwise defease any Subordinated Notes (it being understood
that any payment of principal prior to April 6, 2014 shall be deemed a prepayment for purposes of this Section 10.7). 
  
 (b) The Borrower will not waive, amend, modify, terminate or release the Subordinated Note Indenture to the extent that any such waiver, amendment,
modification, termination or release would be adverse to the Lenders in any material respect. 
  
 (c) The Borrower may make payments to the extent necessary to pay the Unpaid Refinancing Amount, if any, provided such payment is made within thirty-five (35) Business Days of the Closing Date. 
  
 10.8. Limitations on Sale Leasebacks. Holdings and the Borrower will
not, and will not permit any of the Restricted Subsidiaries to, enter into or effect any Sale Leasebacks, other than Permitted Sale Leasebacks. 
  
 SECTION 11. Events of Default 
  
 Upon the occurrence of any of the following specified events (each an “Event of Default”): 
  
 11.1. Payments. The Borrower shall (a) default in the payment when due
of any principal of the Loans or (b) default, and such default shall continue for five or more days, in the payment when due of any interest on the Loans or of any other amounts owing hereunder or under any other Credit Document; or 
  
 11.2. Representations, etc. Any representation, warranty or statement
made or deemed made by any Credit Party herein or in the Guarantee Agreement or any certificate delivered or required to be delivered pursuant hereto or thereto shall prove to be untrue in any material respect on the date as of which made or deemed
made; or 
  

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 11.3. Covenants. Any Credit Party shall (a) default in the due performance or observance by it of
any term, covenant or agreement contained in Section 9.1(e) or Section 10 or (b) default in the due performance or observance by it of any term, covenant or agreement (other than those referred to in Section 11.1 or 11.2 or clause (a) of this
Section 11.3) contained in this Agreement, or the Guarantee Agreement and such default shall continue unremedied for a period of at least 30 days after receipt of written notice by the Borrower from the Administrative Agent or the Required Lenders;
or 
  
 11.4. Default Under Other Agreements. (a) a default
by Holdings, Borrower or any of its Restricted Subsidiaries with respect any Indebtedness (other than the Obligations) any other event shall occur or condition exist if that default (i) is caused by a failure to pay principal of such Indebtedness at
its final stated maturity within any applicable grace period provided in such Indebtedness (a “Payment Default”); or (ii) causes, or any other event shall occur or condition exist (other than, with respect to Indebtedness consisting
of any Hedge Agreements, termination events or equivalent events pursuant to the terms of such Hedge Agreements) which causes any such Indebtedness to become due prior to its stated maturity, and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any such Indebtedness which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $20,000,000 or more or (b) without limiting the provisions of clause (a)
above, any such Indebtedness shall be declared to be due and payable, or required to be prepaid other than by a regularly scheduled required prepayment or as a mandatory prepayment (and, with respect to Indebtedness consisting of any Hedge
Agreements, other than due to a termination event or equivalent event pursuant to the terms of such Hedge Agreements), prior to the stated maturity thereof.; or 
  

11.5. Bankruptcy, etc. Holdings, the Borrower or any Specified Subsidiary shall commence a voluntary case, proceeding or action concerning
itself under (a) Title 11 of the United States Code entitled “Bankruptcy,” or (b) in the case of any Foreign Subsidiary that is a Specified Subsidiary, any domestic or foreign law relating to bankruptcy, insolvency reorganization or relief
of debtors legislation of its jurisdiction of incorporation, in each case as now or hereafter in effect, or any successor thereto (collectively, the “Bankruptcy Code”); or an involuntary case, proceeding or action is commenced
against any of Holdings, the Borrower or any Specified Subsidiary and the petition is not controverted within 10 days after commencement of the case, proceeding or action; or an involuntary case, proceeding or action is commenced against any of
Holdings, the Borrower or any Specified Subsidiary and the petition is not dismissed within 60 days after commencement of the case, proceeding or action; or a custodian (as defined in the Bankruptcy Code) receiver, receiver manager, trustee or
similar person is appointed for, or takes charge of, all or substantially all of the property of any of Holdings, the Borrower or any Specified Subsidiary; or any of Holdings, the Borrower or any Specified Subsidiary commences any other proceeding
or action under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency 
  

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 or liquidation or similar law of any jurisdiction whether now or hereafter in effect relating to any of Holdings, the
Borrower or any Specified Subsidiary; or there is commenced against any of Holdings, the Borrower or any Specified Subsidiary any such proceeding or action that remains undismissed for a period of 60 days; or any of Holdings, the Borrower or any
Specified Subsidiary is adjudicated insolvent or bankrupt; or any order of relief or other order approving any such case or proceeding or action is entered; or any of Holdings, the Borrower or any Specified Subsidiary suffers any appointment of any
custodian receiver, receiver manager, trustee or the like for it or any substantial part of its property to continue undischarged or unstayed for a period of 60 days; or any of Holdings, the Borrower or any Specified Subsidiary makes a general
assignment for the benefit of creditors; or any corporate action is taken by any of Holdings, the Borrower or any Specified Subsidiary for the purpose of effecting any of the foregoing; or 
  
 11.6. ERISA. (a) Any Plan shall fail to satisfy the minimum funding
standard required for any plan year or part thereof or a waiver of such standard or extension of any amortization period is sought or granted under Section 412 of the Code; any Plan is or shall have been terminated or is the subject of termination
proceedings under ERISA (including the giving of written notice thereof); an event shall have occurred or a condition shall exist in either case entitling the PBGC to terminate any Plan or to appoint a trustee to administer any Plan (including the
giving of written notice thereof); any Plan shall have an accumulated funding deficiency (whether or not waived); any of Holdings, the Borrower or any Subsidiary or any ERISA Affiliate has incurred or is likely to incur a liability to or on account
of a Plan under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA or Section 4971 or 4975 of the Code (including the giving of written notice thereof); (b) there could result from any event or events set forth in clause
(a) of this Section 11.6 the imposition of a lien, the granting of a security interest, or a liability, or the reasonable likelihood of incurring a lien, security interest or liability; and (c) such lien, security interest or liability will or would
be reasonably likely to have a Material Adverse Effect; or 
  
 11.7. Guarantee. The Guarantees or any material provision thereof shall cease to be in full force or effect or any Guarantor thereunder or any Credit Party shall deny or disaffirm in writing any Guarantor’s obligations under the
Guarantee; or 
  
 11.8. Subordination. The Obligations of
the Borrower or the obligations of Holdings or any Subsidiaries pursuant to the Guarantee, shall cease to constitute senior indebtedness under the subordination provisions of any document or instrument evidencing the Subordinated Notes or any other
permitted subordinated Indebtedness or such subordination provisions shall be invalidated or otherwise cease to be legal, valid and binding obligations of the parties thereto, enforceable in accordance with their terms; or 
  
 11.9. Judgments. One or more judgments or decrees shall be entered
against the Borrower or any of the Restricted Subsidiaries involving a liability of $20,000,000 or more in the aggregate for all such judgments and decrees for the Borrower and the Restricted Subsidiaries (to the extent not paid or fully covered by
insurance provided by a carrier not disputing coverage) and any such judgments or decrees shall not have been satisfied, vacated, discharged or stayed or bonded pending appeal within 60 days from the entry thereof; 
  

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 then, and in any such event, and at any time thereafter, if any Event of Default shall then be continuing, the
Administrative Agent shall, upon the written request of the Required Lenders, by written notice to the Borrower, take any or all of the following actions, without prejudice to the rights of the Administrative Agent or any Lender to enforce its
claims against the Borrower, except as otherwise specifically provided for in this Agreement (provided that, if an Event of Default specified in Section 11.5 shall occur with respect to the Borrower or any Specified Subsidiary, the result
that would occur upon the giving of written notice by the Administrative Agent as specified below shall occur automatically without the giving of any such notice): declare the principal of and any accrued interest and fees in respect of all Loans
and all Obligations owing hereunder and thereunder to be, whereupon the same shall become, forthwith due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower. 
  
 SECTION 12. The Administrative Agent 
  
 12.1. Appointment. Each Lender hereby irrevocably designates and
appoints the Administrative Agent as the agent of such Lender under this Agreement and the other Credit Documents, and each such Lender irrevocably authorizes the Administrative Agent, in such capacity, to take such action on its behalf under the
provisions of this Agreement and the other Credit Documents and to exercise such powers and perform such duties as are expressly delegated to the Administrative Agent by the terms of this Agreement and the other Credit Documents, together with such
other powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere in this Agreement, the Administrative Agent shall not have any duties or responsibilities, except those expressly set forth herein, or any
fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Credit Document or otherwise exist against the Administrative Agent. The
Syndication Agent, in its respective capacity as such, shall not have any obligations, duties or responsibilities under this Agreement but shall be entitled to all benefits of this Section 12. 
  
 12.2. Delegation of Duties. The Administrative Agent may execute any
of its duties under this Agreement and the other Credit Documents by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Administrative Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care. 
  
 12.3. Exculpatory Provisions. Neither the Administrative Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (a) liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection with this Agreement or any other Credit Document (except for its or such Person’s own gross negligence or willful
misconduct) or (b) responsible in any manner to 
  

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 any of the Lenders for any recitals, statements, representations or warranties made by the Borrower, any Guarantor, any
other Credit Party or any officer thereof contained in this Agreement or any other Credit Document or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent under or in
connection with, this Agreement or any other Credit Document or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Credit Document or for any failure of the Borrower, any Guarantor or
any other Credit Party to perform its obligations hereunder or thereunder. The Administrative Agent shall not be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in,
or conditions of, this Agreement or any other Credit Document, or to inspect the properties, books or records of the Borrower. 
  
 12.4. Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any
writing, resolution, notice, consent, certificate, affidavit, letter, telecopy, telex or teletype message, statement, order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons and upon advice and statements of legal counsel (including counsel to the Borrower), independent accountants and other experts selected by the Administrative Agent. The Administrative Agent may deem and treat the Lender
specified in the Register with respect to any amount owing hereunder as the owner thereof for all purposes unless a written notice of assignment, negotiation or transfer thereof shall have been filed with the Administrative Agent. The Administrative
Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Credit Document unless it shall first receive such advice or concurrence of the Required Lenders as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and expense that may be incurred by it by reason of taking or continuing to take any such action. The Administrative Agent shall in all cases be fully protected in acting,
or in refraining from acting, under this Agreement and the other Credit Documents in accordance with a request of the Required Lenders, and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders
and all future holders of the Loans. 
  
 12.5. Notice of
Default. The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default hereunder unless the Administrative Agent has received notice from a Lender or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such notice is a “notice of default”. In the event that the Administrative Agent receives such a notice, the Administrative Agent shall give notice thereof to the
Lenders. The Administrative Agent shall take such action with respect to such Default or Event of Default as shall be reasonably directed by the Required Lenders, provided that unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable in the best interests of the Lenders (except
to the extent that this Agreement requires that such action be taken only with the approval of the Required Lenders or each of the Lenders, as applicable). 
  

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 12.6. Non-Reliance on Administrative Agent and Other Lenders. Each Lender expressly acknowledges
that neither the Administrative Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates has made any representations or warranties to it and that no act by the Administrative Agent hereinafter taken, including
any review of the affairs of the Borrower, any Guarantor or any other Credit Party, shall be deemed to constitute any representation or warranty by the Administrative Agent to any Lender. Each Lender represents to the Administrative Agent that it
has, independently and without reliance upon the Administrative Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Borrower, any Guarantor and any other Credit Party and made its own decision to make its Loans hereunder and enter into this Agreement. Each Lender also represents that it will, independently
and without reliance upon the Administrative Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking
action under this Agreement and the other Credit Documents, and to make such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other condition and creditworthiness of the Borrower, any
Guarantor and any other Credit Party. Except for notices, reports and other documents expressly required to be furnished to the Lenders by the Administrative Agent hereunder, the Administrative Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the business, assets, operations, properties, financial condition, prospects or creditworthiness of the Borrower, any Guarantor or any other Credit Party that may come into the
possession of the Administrative Agent or any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates. 
  
 12.7. Indemnification. The Lenders agree to indemnify the Administrative Agent in its capacity as such (to the extent not reimbursed by the
Borrower and without limiting the obligation of the Borrower to do so), ratably according to their respective portions of the Total Credit Exposure in effect on the date on which indemnification is sought (or, if indemnification is sought after the
date upon which the Commitments shall have terminated and the Loans shall have been paid in full, ratably in accordance with their respective portions of the Total Credit Exposure in effect immediately prior to such date), from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever that may at any time (including at any time following the payment of the Loans) be imposed on, incurred by
or asserted against the Administrative Agent in any way relating to or arising out of, the Commitments, this Agreement, any of the other Credit Documents or any documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the Administrative Agent under or in connection with any of the foregoing, provided that no Lender shall be liable for the payment of any portion of such liabilities, obligations,

  

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 losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Administrative
Agent’s gross negligence or willful misconduct. The agreements in this Section 12.7 shall survive the payment of the Loans and all other amounts payable hereunder. 
  
 12.8. Administrative Agent in its Individual Capacity. The Administrative Agent and its Affiliates may make loans to,
accept deposits from and generally engage in any kind of business with the Borrower, any Guarantor and any other Credit Party as though the Administrative Agent were not the Administrative Agent hereunder and under the other Credit Documents. With
respect to the Loans made by it, the Administrative Agent shall have the same rights and powers under this Agreement and the other Credit Documents as any Lender and may exercise the same as though it were not the Administrative Agent, and the terms
“Lender” and “Lenders” shall include the Administrative Agent in its individual capacity. 
  
 12.9. Successor Agent. Prior to the first anniversary of the Closing Date JPMCB may resign as Administrative Agent and appoint a successor agent
for the Lenders with immediate effect unless Required Lenders shall vote to remove such successor Administrative Agent prior to the first anniversary of the Closing Date. In all other cases, the Administrative Agent may resign as Administrative
Agent upon 20 days’ prior written notice to the Lenders and the Borrower. If the Administrative Agent shall resign as Administrative Agent under this Agreement and the other Credit Documents, then the Required Lenders shall appoint from among
the Lenders a successor agent for the Lenders, which successor agent shall be approved by the Borrower (which approval shall not be unreasonably withheld), whereupon such successor agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term “Administrative Agent” shall mean such successor agent effective upon such appointment and approval, and the former Administrative Agent’s rights, powers and duties as Administrative Agent shall be
terminated, without any other or further act or deed on the part of such former Administrative Agent or any of the parties to this Agreement or any holders of the Loans. After any retiring Administrative Agent’s resignation as Administrative
Agent, the provisions of this Section 12 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement and the other Credit Documents. 
  
 12.10. Withholding Tax. To the extent required by any applicable law,
the Administrative Agent may withhold from any interest payment to any Lender an amount equivalent to any applicable withholding tax. If the Internal Revenue Service or any authority of the United States or other jurisdiction asserts a claim that
the Administrative Agent did not properly withhold tax from amounts paid to or for the account of any Lender (because the appropriate form was not delivered, was not properly executed, or because such Lender failed to notify the Administrative Agent
of a change in circumstances which rendered the exemption from, or reduction of, withholding tax ineffective, or for any other reason), such Lender shall indemnify the Administrative Agent fully for all amounts paid, directly or indirectly, by the
Administrative Agent as tax or otherwise, including penalties and interest, together with all expenses incurred, including legal expenses, allocated staff costs and any out of pocket expenses. 
  

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 SECTION 13. Reserved. 
  
 SECTION 14. Miscellaneous. 
  

14.1. Amendments and Waivers. Neither this Agreement nor any other Credit Document, nor any terms hereof or thereof may be amended, supplemented
or modified except in accordance with the provisions of this Section 14.1. The Required Lenders may, or, with the written consent of the Required Lenders, the Administrative Agent may, from time to time, (a) enter into with the relevant Credit Party
or Credit Parties written amendments, supplements or modifications hereto and to the other Credit Documents for the purpose of adding any provisions to this Agreement or the other Credit Documents or changing in any manner the rights of the Lenders
or of the Credit Parties hereunder or thereunder or (b) waive, on such terms and conditions as the Required Lenders or the Administrative Agent, as the case may be, may specify in such instrument, any of the requirements of this Agreement or the
other Credit Documents or any Default or Event of Default and its consequences; provided, however, that no such waiver and no such amendment, supplement or modification shall directly (i) forgive any portion of any Loan or extend the
final scheduled maturity date of any Loan or reduce the stated rate, or forgive any portion, or extend the date for the payment, of any interest or fee payable hereunder (other than as a result of waiving the applicability of any post-default
increase in interest rates), or extend the final expiration date of any Lender’s Commitment or increase the aggregate amount of the Commitments of any Lender, or amend or modify any provisions of Section 14.8(a), in each case without the
written consent of each Lender directly and adversely affected thereby, or (ii) amend, modify or waive any provision of this Section 14.1 or reduce the percentages specified in the definitions of the terms “Required Lenders” or consent to
the assignment or transfer by the Borrower of its rights and obligations under any Credit Document to which it is a party (except as permitted pursuant to Section 10.3), in each case without the written consent of each Lender directly and adversely
affected thereby, or (iii) amend, modify or waive any provision of Section 12 without the written consent of the then-current Administrative Agent, or (iv) release any of the Guarantors under the Guarantee (except as expressly permitted by the
Guarantee Agreement) without the prior written consent of each Lender, or (v) decrease the amount or allocation of any mandatory prepayment to be received by any Lender holding any Term Loans without the written consent of the Required Lenders or
(vi) amend, modify or waive the premium payment requirements under Sections 5.1 or 5.7, in each case without the written consent of each Lender directly and adversely affected thereby. In the case of any waiver, the Borrower, the Lenders and the
Administrative Agent shall be restored to their former positions and rights hereunder and under the other Credit Documents, and any Default or Event of Default waived shall be deemed to be cured and not continuing, it being understood that no such
waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereon. 
  
 14.2. Notices. All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including by
facsimile transmission), and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered, or three days after being deposited in the mail, 
  

 84 

 postage prepaid, or, in the case of telecopy notice, when received, addressed as follows in the case of the Borrower and
the Administrative Agent, and as set forth on Schedule 1.1(c) in the case of the other parties hereto, or to such other address as may be hereafter notified by the respective parties hereto: 
  

			
	The Borrower:	  	Sealy Mattress Company
	 	  	One Office Parkway
	 	  	Trinity, NC 27370
	 	  	Attention:        Kenneth L. Walker
	 	  	Fax:                   +-336-861-3786
		
	 	  	with a copy to:
		
	 	  	Kohlberg Kravis Roberts & Co., L.P.
	 	  	9 West 57th Street
	 	  	Suite 4200
	 	  	New York, NY 10019
	 	  	Attention:        Brian Carroll
	 	  	Fax:                   212-750-0003
		
	The Administrative Agent:	  	JPMorgan Chase Bank
	 	  	Agent Bank Services Group
	 	  	1111 Fannin, 10th Floor
	 	  	Houston, Texas 77002
	 	  	Attention:        Teri Smith
	 	  	Fax:                   (713) 750-2932
		
	 	  	with a copy to:
		
	 	  	JPMorgan Chase Bank
	 	  	270 Park Avenue, 4th Floor
	 	  	New York, New York 10017
	 	  	Attention:        Pam Lambiase
	 	  	Fax:                   (212) 270-0998

  
 provided that any notice,
request or demand to or upon the Administrative Agent or the Lenders pursuant to Sections 2.3, 2.6, 2.9 and 5.1 shall not be effective until received. 
  
 14.3. No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of the Administrative Agent or any Lender, any
right, remedy, power or privilege hereunder or under the other Credit Documents shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law. 
  

 85 

 14.4. Survival of Representations and Warranties. All representations and warranties made
hereunder, in the other Credit Documents and in any document, certificate or statement delivered pursuant hereto or in connection herewith shall survive the execution and delivery of this Agreement and the making of the Loans hereunder. 

 
 14.5. Payment of Expenses and Taxes. The Borrower agrees (a) to pay
or reimburse the Agents for all their reasonable out-of-pocket costs and expenses incurred in connection with the development, preparation and execution of, and any amendment, supplement or modification to, this Agreement and the other Credit
Documents and any other documents prepared in connection herewith or therewith, and the consummation and administration of the transactions contemplated hereby and thereby, including the reasonable fees, disbursements and other charges of counsel to
the Agents, (b) to pay or reimburse each Lender and the Administrative Agent for all its reasonable and documented costs and expenses incurred in connection with the enforcement or preservation of any rights under this Agreement, the other Credit
Documents and any such other documents, including the reasonable fees, disbursements and other charges of counsel to each Lender and of counsel to the Administrative Agent, (c) to pay, indemnify, and hold harmless each Lender and the Administrative
Agent from, any and all recording and filing fees and any and all liabilities with respect to, or resulting from any delay in paying, stamp, excise and other similar taxes, if any, that may be payable or determined to be payable in connection with
the execution and delivery of, or consummation or administration of any of the transactions contemplated by, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement, the other Credit Documents
and any such other documents, and (d) to pay, indemnify, and hold harmless each Lender and the Administrative Agent and their respective directors, officers, employees, trustees and agents from and against any and all other liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever, including reasonable and documented fees, disbursements and other charges of counsel, with respect to the execution, delivery,
enforcement, performance and administration of this Agreement, the other Credit Documents and any such other documents, including any of the foregoing relating to the violation of, noncompliance with or liability under, any Environmental Law or any
actual or alleged presence of Hazardous Materials applicable to the operations of the Borrower, any of its Subsidiaries or any of the Real Estate (all the foregoing in this clause (d), collectively, the “indemnified liabilities”),
provided that the Borrower shall have no obligation hereunder to the Administrative Agent or any Lender nor any of their respective directors, officers, employees and agents with respect to indemnified liabilities arising from (i) the gross
negligence or willful misconduct of the party to be indemnified or (ii) disputes among the Administrative Agent, the Lenders and/or their transferees. The agreements in this Section 14.5 shall survive repayment of the Loans and all other amounts
payable hereunder. 
  
 14.6. Successors and Assigns;
Participations and Assignments. (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that (i) the Borrower may not assign
or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted 
  

 86 

 assignment or transfer by the Borrower without such consent shall be null and void) and (ii) no Lender may assign or
otherwise transfer its rights or obligations hereunder except in accordance with this Section. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors
and assigns permitted hereby, Participants (to the extent provided in paragraph (c) of this Section) and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement. 
  
 (b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitments and
the Loans at the time owing to it) with the prior written consent (such consent not be unreasonably withheld; it being understood that, without limitation, the Borrower shall have the right to withhold its consent to any assignment if, in order for
such assignment to comply with applicable law, the Borrower would be required to obtain the consent of, or make any filing or registration with, any Governmental Authority) of: 
  
 (A) the Borrower, provided that no consent of the Borrower shall be required for an assignment to a
Lender, an Affiliate of a Lender (unless increased costs would result therefrom except if an Event of Default under Section 11.1 or Section 11.5 has occurred and is continuing), an Approved Fund or, if an Event of Default under Section 11.1 or
Section 11.5 has occurred and is continuing, any other assignee; and 
  
 (B) the Administrative Agent, provided that no consent of the Administrative Agent shall be required for an assignment of any Term Loan to a Lender, an Affiliate of a Lender or an Approved Fund. 
  
 (ii) Assignments shall be subject to the following
additional conditions: 
  
 (A) except in the case
of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund or an assignment of the entire remaining amount of the assigning Lender’s Commitment or Loans, the amount of the Commitment or Loans of the assigning Lender subject to
each such assignment (determined as of the date the Assignment and Acceptance with respect to such assignment is delivered to the Administrative Agent) shall not be less than $1,000,000 unless each of the Borrower and the Administrative Agent
otherwise consents, provided that no such consent of the Borrower shall be required if an Event of Default under Section 11.1 or Section 11.5 has occurred and is continuing; provided further that contemporaneous assignments made
to a single assignee by Affiliate Lenders shall be aggregated for purposes of meeting the minimum assignment amount requirements stated above; 
  

 87 

 (B) each partial assignment shall be made as an assignment of a proportionate part of all
the assigning Lender’s rights and obligations under this Agreement; 
  
 (C) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Acceptance, together with a processing and recordation fee of $3,500, provided that only one such fee
shall be payable in the event of simultaneous assignments to or from two or more Approved Funds; and 
  
 (D) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire in a form
approved by the Administrative Agent. 
  
 For the purpose of this
Section 14.6(b), the term “Approved Fund” has the following meaning: 
  
 “Approved Fund” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course of its
business and that is administered, advised or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers, advises or manages a Lender. 
  
 (iii) Subject to acceptance and recording thereof pursuant
to paragraph (b)(v) of this Section, from and after the effective date specified in each Assignment and Acceptance, the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Acceptance, have
the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case
of an Assignment and Acceptance covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.10, 2.11, 3.5, 5.4
and 14.5). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 14.6 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights
and obligations in accordance with paragraph (c) of this Section. 
  
 (iv) The Administrative Agent, acting for this purpose as an agent of the Borrower, shall maintain at the Administrative Agent’s Office a copy of each Assignment and Acceptance delivered to it and a register for
the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amount of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). Further, the Register shall
contain the 
  

 88 

 name and address of the Administrative Agent and the lending office through which each such Person acts
under this Agreement. The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all
purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice. 
  
 (v) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this
Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Acceptance and record the information contained therein in the Register. No assignment shall be
effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph. 
  
 (c) (i) Any Lender may, without the consent of the Borrower or the Administrative Agent, sell participations to one or more banks or other entities (each,
a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitments and the Loans owing to it), provided that (A) such Lender’s
obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (C) the Borrower, the Administrative Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender
shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement or any other Credit Document, provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 14.1 that affects such Participant. Subject to paragraph (c)(ii) of this Section, the Borrower agree
that each Participant shall be entitled to the benefits of Sections 2.10, 2.11 and 5.4 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section. To the extent permitted by law,
each Participant also shall be entitled to the benefits of Section 14.8(b) as though it were a Lender, provided such Participant agrees to be subject to Section 14.8(a) as though it were a Lender. 
  
 (ii) A Participant shall not be entitled to receive any
greater payment under Section 2.10 or 5.4 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the
Borrower’s prior written consent. A Participant that would be a Non-U.S. Lender if it were a Lender shall not be entitled to the benefits of Section 5.4 unless the Borrower is 
  

 89 

 notified of the participation sold to such Participant and such Participant agrees, for the benefit of
the Borrower, to comply with Section 5.4(b) as though it were a Lender. 
  
 (d) Any Lender may, without the consent of the Borrower or the Administrative Agent, at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including
any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest, provided that no such pledge or assignment of a security interest shall
release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto. In order to facilitate such pledge or assignment, the Borrower hereby agrees that, upon request of any Lender at any
time and from time to time after the Borrower has made its initial borrowing hereunder, the Borrower shall provide to such Lender, at the Borrower’s own expense, a promissory note, substantially in the form of Exhibit E evidencing the Term
Loans owing to such Lender. 
  
 (e) Subject to Section 14.16, the
Borrower authorize each Lender to disclose to any Participant, secured creditor of such Lender or assignee (each, a “Transferee”) and any prospective Transferee any and all financial information in such Lender’s possession
concerning the Borrower and its Affiliates that has been delivered to such Lender by or on behalf of the Borrower and its Affiliates pursuant to this Agreement or which has been delivered to such Lender by or on behalf of the Borrower and its
Affiliates in connection with such Lender’s credit evaluation of the Borrower and its Affiliates prior to becoming a party to this Agreement. 
  
 14.7. Replacements of Lenders under Certain Circumstances. The Borrower shall be permitted to replace any Lender that (a) requests reimbursement
for amounts owing pursuant to Section 2.10, 2.12, 3.5 or 5.4, (b) is affected in the manner described in Section 2.10(a)(iii) and as a result thereof any of the actions described in such Section is required to be taken or (c) becomes a Defaulting
Lender, with a replacement bank or other financial institution, provided that (i) such replacement does not conflict with any Requirement of Law, (ii) no Event of Default shall have occurred and be continuing at the time of such replacement, (iii)
the Borrower shall repay (or the replacement bank or institution shall purchase, at par) all Loans and other amounts (other than any disputed amounts), pursuant to Section 2.10, 2.11, 2.12, 3.5 or 5.4, as the case may be) owing to such replaced
Lender prior to the date of replacement, (iv) the replacement bank or institution, if not already a Lender, and the terms and conditions of such replacement, shall be reasonably satisfactory to the Administrative Agent, (v) the replaced Lender shall
be obligated to make such replacement in accordance with the provisions of Section 14.6 (provided that the Borrower shall be obligated to pay the registration and processing fee referred to therein) and (vi) any such replacement shall not be deemed
to be a waiver of any rights that the Borrower, the Administrative Agent or any other Lender shall have against the replaced Lender. 
  
 14.8. Adjustments; Set-off. (a) If any Lender (a “benefited Lender”) shall at any time receive any payment of all or part of its
Loans, or interest thereon, or 
  

 90 

 receive any collateral in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to events or
proceedings of the nature referred to in Section 11.5, or otherwise), in a greater proportion than any such payment to or collateral received by any other Lender, if any, in respect of such other Lender’s Loans, or interest thereon, such
benefited Lender shall purchase for cash from the other Lenders a participating interest in such portion of each such other Lender’s Loan, or shall provide such other Lenders with the benefits of any such collateral, or the proceeds thereof, as
shall be necessary to cause such benefited Lender to share the excess payment or benefits of such collateral or proceeds ratably with each of the Lenders; provided, however, that if all or any portion of such excess payment or benefits is thereafter
recovered from such benefited Lender, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest. 
  
 (b) After the occurrence and during the continuance of an Event of Default, in addition to any rights and remedies of the
Lenders provided by law, each Lender shall have the right, without prior notice to the Borrower, any such notice being expressly waived by the Borrower to the extent permitted by applicable law, upon any amount becoming due and payable by the
Borrower hereunder (whether at the stated maturity, by acceleration or otherwise) to set-off and appropriate and apply against such amount any and all deposits (general or special, time or demand, provisional or final), in any currency, and any
other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Lender or any branch or agency thereof to or for the credit or the
account of the Borrower. Each Lender agrees promptly to notify the Borrower and the Administrative Agent after any such set-off and application made by such Lender, provided that the failure to give such notice shall not affect the validity
of such set-off and application. 
  
 14.9. Counterparts.
This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by facsimile or other electronic transmission), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the copies of this Agreement signed by all the parties shall be lodged with the Borrower and the Administrative Agent. 
  
 14.10. Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. 
  
 14.11.
Integration. This Agreement and the other Credit Documents represent the agreement of the Borrower, the Administrative Agent and the Lenders with respect to the subject matter hereof, and there are no promises, undertakings, representations
or warranties by the Administrative Agent or any Lender relative to subject matter hereof not expressly set forth or referred to herein or in the other Credit Documents. 
  

 91 

 14.12. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL
BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. 
  
 14.13. Submission to Jurisdiction; Waivers. The Borrower hereby irrevocably and unconditionally: 
  
 (a) submits for itself and its property in any legal action or proceeding
relating to this Agreement and the other Credit Documents to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the courts of the State of New York, the courts of
the United States of America for the Southern District of New York and appellate courts from any thereof; 
  
 (b) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of
any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same; 
  
 (c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered
or certified mail (or any substantially similar form of mail), postage prepaid, to the Borrower at its address set forth in Section 14.2 or at such other address of which the Administrative Agent shall have been notified pursuant thereto;

  
 (d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and 
  
 (e) waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this
Section 14.13 any special, exemplary, punitive or consequential damages. 
  
 14.14. Acknowledgments. The Borrower hereby acknowledges that: 
  
 (a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Credit Documents; 
  
 (b) neither the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to the Borrower arising out of or in connection with this Agreement or any of the other Credit Documents, and the relationship between Administrative Agent and Lenders, on one hand, and the Borrower, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor; and 
  
 (c) no joint venture is created hereby or by the other Credit Documents or otherwise exists by virtue of the transactions contemplated hereby among the Lenders or among the Borrower and the Lenders. 
  

 92 

 14.15. WAIVERS OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT AND THE LENDERS
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN. 
  
 14.16. Confidentiality. The Administrative Agent and each Lender shall hold all non-public information furnished by
or on behalf of the Borrower in connection with such Lender’s evaluation of whether to become a Lender hereunder or obtained by such Lender or the Administrative Agent pursuant to the requirements of this Agreement (“Confidential
Information”), confidential in accordance with its customary procedure for handling confidential information of this nature and (in the case of a Lender that is a bank) in accordance with safe and sound banking practices and in any event
may make disclosure as required or requested by any governmental agency or representative thereof or pursuant to legal process or to such Lender’s or the Administrative Agent’s attorneys, professional advisors or independent auditors or
Affiliates, provided that unless specifically prohibited by applicable law or court order, each Lender and the Administrative Agent shall notify the Borrower of any request by any governmental agency or representative thereof (other than any
such request in connection with an examination of the financial condition of such Lender by such governmental agency) for disclosure of any such non-public information prior to disclosure of such information, and provided further that in no
event shall any Lender or the Administrative Agent be obligated or required to return any materials furnished by the Borrower or any Subsidiary of the Borrower. Each Lender and the Administrative Agent agrees that it will not provide to prospective
Transferees or to prospective direct or indirect contractual counterparties in swap agreements to be entered into in connection with Loans made hereunder any of the Confidential Information unless such Person is advises of and agrees to be bound by
the provisions of this Section 14.16. 
  
 Notwithstanding anything express or
implied to the contrary herein or by the documents referred to or incorporated by reference herein, or any other prior or future oral or written statements by any parties hereto with respect to the transactions contemplated herein or by the other
Credit Documents, and whether or not any of them are legally binding, the obligations of confidentiality contained herein and therein, as they relate to the transactions contemplated by this Agreement, shall not apply to the tax structure or tax
treatment of such transactions, and each recipient (and its employees, representatives, or other agents) may immediately disclose to any and all persons, without limitation of any kind, the U.S. Federal income tax structure and such recipient’s
U.S. Federal income tax treatment of such transactions and any opinions or other tax analyses that have been provided by the parties hereto (or any agent thereof) to the recipient regarding such tax structure or tax treatment. However, no such
recipient shall disclose any information relating to such tax structure or tax treatment to the extent that non-disclosure is reasonably necessary to comply with applicable securities law. This paragraph is intended to cause the transactions
contemplated by this Agreement not to be treated as having been offered under conditions of confidentiality for purposes of Section 1.6011-4(b)(3) (or any successor provision) of the Treasury Regulations promulgated under Section 6011 of the
Internal Revenue Code of 1986, as amended, and shall be construed in a manner consistent with such purpose. 
  

 93 

 14.17. Judgment Currency. (a) The obligations of the Borrower hereunder and under the other Loan
Documents to make payments in Dollars (the “Obligation Currency”), shall not be discharged or satisfied by any tender or recovery pursuant to any judgment expressed in or converted into any currency other than the Obligation
Currency, except to the extent that such tender or recovery results in the effective receipt by the Administrative Agent or a Lender of the full amount of the Obligation Currency expressed to be payable to the Administrative Agent or Lender under
this Agreement or the other Credit Documents. If, for the purpose of obtaining or enforcing judgment against the Borrower or any other Credit Party in any court or in any jurisdiction, it becomes necessary to convert into or from any currency other
than the Obligation Currency (such other currency being hereinafter referred to as the “Judgment Currency”) an amount due in the Obligation Currency, the conversion shall be made, at the rate of exchange prevailing, in each case, as
of the date immediately preceding the day on which the judgment is given (such Business Day being hereinafter referred to as the “Judgment Currency Conversion Date”). 
  
 (b) If there is a change in the rate of exchange prevailing between the Judgment Currency Conversion Date and the date of
actual payment of the amount due, the Borrower covenants and agrees to pay, or cause to be paid, such additional amounts, if any (but in any event not a lesser amount), as may be necessary to ensure that the amount paid in the Judgment Currency,
when converted at the rate of exchange prevailing on the date of payment, will produce the amount of the Obligation Currency which could have been purchased with the amount of Judgment Currency stipulated in the judgment or judicial award at the
rate of exchange prevailing on the Judgment Currency Conversion Date. 
  
 (c) For purposes of determining the prevailing rate of exchange, such amounts shall include any premium and costs payable in connection with the purchase of the Obligation Currency. 
  
 14.18. USA PATRIOT Act. Each Lender hereby notifies the Borrower that
pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot Act”), it is required to obtain, verify and record information that identifies the Borrower, which
information includes the name and address of the Borrower and other information that will allow such Lender to identify the Borrower in accordance with the Patriot Act. 
  

 94 

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

			
	 SEALY MATTRESS COMPANY

		
	 By:
	 	 /s/ Kenneth L. Walker

	 Name:
	 	 Kenneth L. Walker

	 Title:
	 	Corporate Vice President, General
Counsel & Secretary
	
	 SEALY MATTRESS CORPORATION

		
	 By:
	 	 /s/ Kenneth L. Walker

	 Name:
	 	 Kenneth L. Walker

	 Title:
	 	Corporate Vice President, General
Counsel & Secretary
	
	 SEALY CORPORATION

		
	 By:
	 	 /s/ Kenneth L. Walker

	 Name:
	 	 Kenneth L. Walker

	 Title:
	 	Corporate Vice President, General
Counsel & Secretary

 SUBSIDIARY GUARANTORS: 
 SEALY MATTRESS COMPANY OF PUERTO RICO 
 OHIO-SEALY MATTRESS MANUFACTURING CO., INC. 
 OHIO-SEALY MATTRESS MANUFACTURING CO. 
 SEALY MATTRESS COMPANY OF KANSAS CITY, INC. 
 SEALY MATTRESS COMPANY OF MEMPHIS 
 SEALY MATTRESS COMPANY OF ILLINOIS

 SEALY MATTRESS COMPANY OF ALBANY, INC. 
 SEALY OF MARYLAND AND
VIRGINIA, INC. 
 SEALY OF MINNESOTA, INC. 
 NORTH AMERICAN
BEDDING COMPANY 
 SEALY, INC. 
 MATTRESS HOLDINGS INTERNATIONAL
LLC 
 THE OHIO MATTRESS COMPANY LICENSING AND COMPONENTS GROUP 
 SEALY MATTRESS MANUFACTURING COMPANY, INC. 
 SEALY TECHNOLOGY LLC 
 SEALY KOREA, INC. 
 SEALY REAL ESTATE, INC. 
 SEALY TEXAS MANAGEMENT, INC. 
 SEALY TEXAS HOLDINGS LLC 
 SEALY TEXAS L.P. 
 WESTERN MATTRESS COMPANY 
  

			
	 By:
	 	 /s/ Kenneth L. Walker

	 Name:
	 	 Kenneth L. Walker

	 Title:
	 	Corporate Vice President, General
Counsel & Secretary

			
	 JPMORGAN CHASE BANK, as Administrative
 Agent and as a Lender

		
	 By:
	 	 /s/ Robert Anastasio

	 Name:
	 	 Robert Anastasio

	 Title:
	 	 Vice President

	
	 GOLDMAN SACHS CREDIT PARTNERS, L.P.,
 as Joint Lead Arranger, Joint Bookrunner,
 Syndication Agent and as a Lender

		
	 By:
	 	 /s/ Robert Wagner

	 Name:
	 	 Robert Wagner

	 Title:
	 	 Authorized Signatory

	
	 UBS AG, STAMFORD BRANCH,
 as a Lender

		
	 By:
	 	 /s/ Anthony N. Joseph

	 Name:
	 	 Anthony N. Joseph

	 Title:
	 	 Associate Director Banking Products Services, US

		
	 By:
	 	 /s/ Joselin Fernandes

	 Name:
	 	 Joselin Fernandes

	 Title:
	 	 Associate Director
 Banking Products Services, USASSET PURCHASE AGREEMENT - SELLER WAYNE LOTT

 Exhibit 10.1 
  
 ASSET PURCHASE AGREEMENT 
  
 by and among 
  
 TELETOUCH COMMUNICATIONS, INC. 
 as Buyer 
  
 and 
  
 DCAE, INC. 
 (d/b/a Delta Communications and Electronics) 
 as Seller 
  
 and 
  
 Wayne Lott 
 as Shareholder 

 
 January 29, 2004 

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page

			
	 ARTICLE I
	  	 DEFINITIONS
	  	1
			
	 1.1
	  	 Definitions
	  	1
			
	 1.2
	  	 Other Terms
	  	6
			
	 1.3
	  	 Other Definitional Provisions
	  	6
			
	 ARTICLE II
	  	 THE TRANSACTION
	  	7
			
	 2.1
	  	 Purchase and Sale of Assets
	  	7
			
	 2.2
	  	 Excluded Assets
	  	9
			
	 2.3
	  	 Assumption of Obligations
	  	9
			
	 2.4
	  	 Excluded Obligations and Liabilities
	  	10
			
	 2.5
	  	 Nonassignable Contracts and Leases
	  	11
			
	 2.6
	  	 Telephone Rental Agreements
	  	11
			
	 ARTICLE III
	  	 PAYMENT OF PURCHASE PRICE
	  	12
			
	 3.1
	  	 Amount; Delivery
	  	12
			
	 3.2
	  	 Price Allocation
	  	12
			
	 3.3
	  	 Purchase Price Adjustment
	  	13
			
	 3.4
	  	 Cash Holdback
	  	13
			
	 ARTICLE IV
	  	 TLL SHARES
	  	14
			
	 4.1
	  	 Delivery of TLL Shares
	  	14
			
	 4.2
	  	 Registration Rights
	  	14
			
	 4.3
	  	 Put Option
	  	14
			
	 4.4
	  	 Call Option
	  	15
			
	 4.5
	  	 Closing of Put/Call Sales
	  	16
			
	 ARTICLE V
	  	 REPRESENTATIONS AND WARRANTIES OF SELLER AND SHAREHOLDER
	  	16
			
	 5.1
	  	 Existence and Good Standing
	  	16
			
	 5.2
	  	 Authorization and Validity of Agreement
	  	16
			
	 5.3
	  	 Consents and Approvals; No Violations
	  	16
			
	 5.4
	  	 Receivables
	  	17
			
	 5.5
	  	 Payables
	  	17

  

 -i- 

 TABLE OF CONTENTS 
 (continued) 
  

					
	 	  	 	  	Page

			
	 5.6
	  	 Warranty Claims
	  	17
			
	 5.7
	  	 Title to Properties; Encumbrances; Condition and Sufficiency of Assets
	  	17
			
	 5.8
	  	 Real Property Leases
	  	17
			
	 5.9
	  	 Contracts and Commitments
	  	17
			
	 5.10
	  	 Permits
	  	19
			
	 5.11
	  	 Litigation
	  	19
			
	 5.12
	  	 Taxes
	  	20
			
	 5.13
	  	 Insurance
	  	20
			
	 5.14
	  	 Intellectual Property
	  	20
			
	 5.15
	  	 Compliance with Laws
	  	20
			
	 5.16
	  	 Employment Relations
	  	20
			
	 5.17
	  	 Environmental Laws and Regulations
	  	20
			
	 5.18
	  	 Customers
	  	21
			
	 5.19
	  	 Solvency
	  	21
			
	 5.20
	  	 Disclosure
	  	22
			
	 5.21
	  	 Government Contracts
	  	22
			
	 5.22
	  	 Undisclosed Liabilities
	  	22
			
	 5.23
	  	 Restrictions on Business Activities
	  	23
			
	 5.24
	  	 Copies of Documents
	  	23
			
	 5.25
	  	 No Subsidiaries
	  	23
			
	 5.26
	  	 Broker’s or Finder’s Fees
	  	23
			
	 5.27
	  	 Investment Representation
	  	23
			
	 ARTICLE VI
	  	 REPRESENTATIONS AND WARRANTIES OF BUYER
	  	24
			
	 6.1
	  	 Existence and Good Standing of Buyer; Power and Authority
	  	24
			
	 6.2
	  	 No Violations
	  	24
			
	 6.3
	  	 Broker’s or Finder’s Fees
	  	25
			
	 ARTICLE VII
	  	 CONDITIONS TO SELLER’S OBLIGATIONS
	  	25
			
	 7.1
	  	 Truth of Representations and Warranties
	  	25
			
	 7.2
	  	 Performance of Agreements
	  	25
			
	 7.3
	  	 No Litigation Threatened
	  	25

  

 -ii- 

 TABLE OF CONTENTS 
 (continued) 
  

					
	 	  	 	  	Page

			
	 7.4
	  	 Proceedings
	  	25
			
	 ARTICLE VIII
	  	 CONDITIONS TO BUYER’S OBLIGATIONS
	  	26
			
	 8.1
	  	 Truth of Representations and Warranties
	  	26
			
	 8.2
	  	 Performance of Agreements
	  	26
			
	 8.3
	  	 No Litigation Threatened
	  	26
			
	 8.4
	  	 Consents
	  	26
			
	 8.5
	  	 Proceedings
	  	26
			
	 8.6
	  	 Board Approval
	  	26
			
	 8.7
	  	 Binion Agreements
	  	26
			
	 ARTICLE IX
	  	 COVENANTS OF SELLER AND SHAREHOLDER
	  	27
			
	 9.1
	  	 Cooperation by Seller and Shareholder
	  	27
			
	 9.2
	  	 Notice of Breaches
	  	27
			
	 9.3
	  	 Conduct of Business
	  	27
			
	 9.4
	  	 Noncompetition and Nonsolicitation Agreement
	  	27
			
	 9.5
	  	 Provisional Agreements
	  	27
			
	 9.6
	  	 Negative Covenants of Seller
	  	28
			
	 9.7
	  	 Exclusive Dealing
	  	29
			
	 9.8
	  	 Review of the Assets
	  	29
			
	 9.9
	  	 Governmental Filings
	  	29
			
	 9.10
	  	 Use of Name
	  	29
			
	 9.11
	  	 Further Assurances
	  	30
			
	 9.12
	  	 Bank Account; Customer Payments
	  	30
			
	 ARTICLE X
	  	 COVENANTS OF BUYER
	  	30
			
	 10.1
	  	 Cooperation by Buyer
	  	30
			
	 10.2
	  	 Books and Records; Personnel
	  	30
			
	 10.3
	  	 Provisional Agreements
	  	30
			
	 10.4
	  	 Further Assurances
	  	31
			
	 10.5
	  	 Governmental Filings
	  	31
			
	 10.6
	  	 Yellow Page Advertisements
	  	31

  

 -iii- 

 TABLE OF CONTENTS 
 (continued) 
  

					
	 	  	 	  	Page

			
	 ARTICLE XI
	  	 THE CLOSING
	  	31
			
	 11.1
	  	 Time and Place
	  	31
			
	 11.2
	  	 Seller’s Obligations
	  	31
			
	 11.3
	  	 Buyer’s Obligations
	  	32
			
	 11.4
	  	 Transfer of Permits
	  	33
			
	 11.5
	  	 Possession
	  	33
			
	 ARTICLE XII
	  	 TERMINATION
	  	34
			
	 12.1
	  	 Termination
	  	34
			
	 12.2
	  	 Effect on Obligations
	  	34
			
	 ARTICLE XIII
	  	 SURVIVAL AND INDEMNIFICATION
	  	34
			
	 13.1
	  	 Indemnification of Seller
	  	34
			
	 13.2
	  	 Indemnification of Buyer
	  	35
			
	 13.3
	  	 Demands
	  	35
			
	 13.4
	  	 Right to Contest and Defend
	  	35
			
	 13.5
	  	 Cooperation
	  	36
			
	 13.6
	  	 Right to Participate
	  	36
			
	 13.7
	  	 Payment of Damages
	  	36
			
	 13.8
	  	 Survival of Representations and Warranties
	  	36
			
	 13.9
	  	 General
	  	37
			
	 ARTICLE XIV
	  	 MISCELLANEOUS
	  	37
			
	 14.1
	  	 Notices
	  	37
			
	 14.2
	  	 Governing Law
	  	38
			
	 14.3
	  	 Arbitration
	  	38
			
	 14.4
	  	 Entire Agreement; Amendments and Waivers
	  	38
			
	 14.5
	  	 Binding Effect and Assignment
	  	38
			
	 14.6
	  	 Severability
	  	39
			
	 14.7
	  	 Headings
	  	39
			
	 14.8
	  	 Execution
	  	39
			
	 14.9
	  	 Sales and Transfer Taxes
	  	39
			
	 14.10
	  	 Expenses
	  	39
			
	 14.11
	  	 Publicity
	  	39
			
	 14.12
	  	 Confidentiality
	  	39
			
	 14.13
	  	 Post-Closing Confidentiality
	  	40

  

 -iv- 

 SCHEDULES 
  

			
	 2.1(a)
	  	450 MHz Equipment
	 2.1(b)
	  	Paging Equipment
	 2.1(c)
	  	Inventory
	 2.1(f)
	  	Leases
	 2.1(j)
	  	Permits
	 2.1(k)
	  	Customer List
	 2.1(n)
	  	Telephone Numbers
	 2.1(r)
	  	Prepaid Items
	 2.1(t)
	  	Accounts Receivable
	 2.1(u)
	  	Intellectual Property
	 2.1(v)
	  	Vehicles
	 2.1(x)
	  	Reseller and Intercarrier Agreements
	 2.1(y)
	  	Additional Assets
	 2.3(b)
	  	Accounts Payable
	 2.3(c)
	  	Customer Deposits and Prepaid Items
	 2.4(g)
	  	Violations of Assigned Contracts
	 5.3
	  	Consents and Violations
	 5.6
	  	Warranty Claims
	 5.7
	  	Title and Condition of Assets
	 5.9
	  	Contracts and Commitments
	 5.10
	  	Expired or Lapsed Permits
	 5.11
	  	Litigation
	 5.17
	  	Environmental
	 5.21
	  	Government Contracts
	 5.22
	  	Undisclosed Liabilities
	 5.23
	  	Restrictions on Business Activities

  
 EXHIBITS 
  

			
	 Exhibit A
	  	Noncompetition and Nonsolicitation Agreement
	 Exhibit B
	  	Registration Rights Agreement
	 Exhibit C
	  	Provisional Lease Agreement
	 Exhibit D
	  	Provisional Management Agreement
	 Exhibit E
	  	Provisional Reseller Agreement

  

 vi 

 ASSET PURCHASE AGREEMENT 
  
 This Asset Purchase Agreement (this “Agreement”) dated as of January 29, 2004, is by and among Teletouch
Communications, Inc., a Delaware corporation (“Buyer”), DCAE, Inc., a Texas corporation, d/b/a Delta Communications and Electronics (“Seller”), and Wayne Lott, a resident of the State of Texas
(“Shareholder”). 
  
 W I T N E S S E T H:

  
 WHEREAS, Seller is engaged in the business of (a) operating a
450 MHz telecommunications system and marketing and selling 450 MHz and 800 MHz two-way radios and related equipment, supplies and accessories, (b) marketing and selling paging equipment and services and (c) marketing and selling Kenwood and
Motorola equipment and supplies as an authorized dealer of Kenwood and Motorola (collectively, the “Business”); and 
  
 WHEREAS, Shareholder is the sole shareholder of Seller; and 
  
 WHEREAS, Seller wishes to sell to Buyer, and Buyer wishes to purchase from Seller, substantially all of the assets of Seller associated with the Business,
all upon the terms and subject to the conditions set forth below. 
  
 NOW, THEREFORE, for the mutual covenants and other consideration described herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto covenant and agree as follows:

  
 ARTICLE I 
 DEFINITIONS 
  
 1.1 Definitions. As used herein, the following terms have the meanings set forth below: 
  
 “AAA”: as defined in Section 14.3. 
  
 “Accounts Receivable”: all notes and accounts receivable of
Seller attributable to the Business. 
  
 “Accounts
Payable”: the payables of Seller to trade accounts and other creditors incurred in the ordinary course of the Business. 
  
 “Act”: the Communications Act of 1934, as amended. 
  
 “Adjustment Amount”: as defined in Section 3.3. 
  

 -1- 

 “Affiliate”: with respect to any Person, any other Person directly or indirectly
controlling (including but not limited to all directors and officers of such Person), controlled by, or under direct or indirect common control with such Person. 
  
 “Agreement”: this Asset Purchase Agreement, as amended from time to time as provided herein, and all
exhibits, schedules and ancillary documents hereto, except where the context clearly indicates otherwise. 
  
 “Antenna Structure Registration”: Registration issued by the Commission with respect to certain antenna structures in accordance with
Part 17 of the Rules and Regulations. 
  
 “Assets”: as defined in Section 2.1. 
  
 “Assigned Contracts”: as defined in Section 2.3. 
  
 “Assumed Obligations”: as defined in Section 2.3. 
  
 “Binion”: refers to Glen Binion. 
  
 “Binion Purchase Agreement”: the Asset Purchase Agreement to be entered into on the Closing Date between Buyer and Binion. 
  
 “Books and Records”: all books, records, books of account,
files and data (including customer and supplier lists), catalogs, brochures, sales literature, promotional material, certificates and other documents used in or associated with the conduct of the Business or the ownership of the Assets, except that
the Books and Records shall not include personnel records and files or any books, records, files and other data of Seller which relate exclusively to (i) organizational or governance proceedings of Seller, (ii) the Excluded Assets, or (iii) excluded
obligations or liabilities in Section 2.4 below. 
  
 “Business”: as defined in the Recitals to this Agreement; provided, however, that such term shall in no event refer to (i) Seller’s wholesale radio business with customers outside of a 100 mile radius of the main post
office in Dallas, Texas or (ii) Seller’s existing operations as a Nextel dealer. 
  
 “Business Day”: any day excluding Saturday, Sunday and any day on which banks in Houston, Texas are authorized or required by law or other governmental action to close. 
  
 “Buyer”: as defined in the preamble of this Agreement.

  
 “Buyer Indemnitees”: as defined in Section
13.2. 
  
 “Cash Holdback”: as defined in
Section 3.1. 
  
 “Cash Payment”: as
defined in Section 3.1. 
  
 “Claim”: as
defined in Section 13.3. 
  

 -2- 

 “Closing”: as defined in Section 11.1. 
  
 “Closing Date”: as defined in Section 11.1.

  
 “CMRS”: as defined in Section 11.4.

  
 “Code”: the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings issued thereunder. Section references to the Code are to the Code as in effect at the date of this Agreement and any subsequent provisions of the Code amendatory thereof,
supplemental thereto or substituted therefor. 
  
 “Commission”: the Federal Communications Commission. 
  
 “Communications Sites”: All properties on which Seller leases or licenses tower, ground, rooftop or other space for the operation of 450 MHz transmission equipment. 
  
 “Confidentiality Agreement”: as defined in Section
14.13. 
  
 “Contract”: any written or oral
contract, agreement or instrument relating to the Business to which Seller is a party or is otherwise bound, including, without limitation, supply contracts, customer agreements and accounts, any mortgages, deeds of trust, notes or guarantees,
pledges, liens, or conditional sales agreements to which Seller is a party or by which any of its assets may be bound, but excluding Leases. 
  
 “Damages”: as defined in Section 13.1. 
  
 “Dispute”: as defined in Section 14.3. 
  
 “Encumbrances”: liens, security interests, options, rights of first refusal, easements, mortgages, charges, debentures, indentures, deeds
of trust, rights-of-way, restrictions, encroachments, licenses, Leases, Permits, security agreements, or any other encumbrances and other restrictions or limitations on the use or ownership of real or personal property or irregularities in title
thereto. 
  
 “Environmental Claim”: any and all
administrative, regulatory, judicial or other actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violations, investigations or proceedings relating in any way to any Environmental Law or any permit issued under any
such Environmental Law (cumulatively and for purposes of this definition, “Environmental Claims”), including without limitation (i) any and all Environmental Claims by Governmental Authorities for enforcement, penalties, cleanup,
removal, remedial or other actions or damages pursuant to any applicable Environmental Law, and (ii) any and all Environmental Claims by any third party seeking damages, enforcement, penalties, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from Hazardous Materials or arising from alleged injury or threat of injury to health, safety or the environment. 
  
 “Environmental Law”: any federal, state or local statute, law, rule, regulation, ordinance, code, policy or rule of common law now in
effect and in each case as amended and any judicial 
  

 -3- 

 or administrative interpretation thereof, including any judicial or administrative order, consent decree or judgment,
relating to Hazardous Materials, the environment or health relating to or arising from environmental conditions, including without limitation the National Environmental Policy Act of 1969 (NEPA), 42 U.S.C. §4321 et. seq.;
Procedures Implementing NEPA, 47 C.F.R. §1.1307 et. seq.; Occupational Safety and Health Act, as amended, 29 U.S.C. § 651 et seq; the Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended 42 U.S.C. § 9601 et seq.; the Hazardous Materials Transportation Act, as amended, 49 U.S.C. § 5101 et seq.; the Resource Conservation and Recovery Act, as amended, 42 U.S.C. § 6901
et seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C. §1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq.; the Clean Air Act, 42 U.S.C. § 7401
et seq.; the Safe Drinking Water Act, 42 U.S.C. § 300f et seq.; the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et seq.; and relevant state and local laws. 
  
 “Excluded Assets”: as defined in Section 2.2.

  
 “Excluded Liabilities”: as defined in
Section 2.4. 
  
 “FCC Approvals”: as
defined in Section 11.4. 
  
 “GAAP”:
generally accepted accounting principles consistently applied (as such term is used in the American Institute of Certified Public Accountants Professional Standards). 
  
 “Governmental Authority”: means (a) any national, state, county, municipal or other government, domestic or
foreign, or any agency, board, bureau, commission, court, department, or other instrumentality of any such government, or (b) any person having the authority under any applicable government requirements to assess and collect taxes for its own
account. 
  
 “Hazardous Materials”: (i) any
petroleum or petroleum products, radioactive materials, asbestos in any form that is or could become friable, urea formaldehyde foam insulation, transformers or other equipment that contain dielectric fluid containing levels of polychlorinated
biphenyls, and radon gas; and (ii) any chemicals, materials or substances defined as or included in the definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,” “extremely hazardous
wastes,” “restricted hazardous wastes,” “toxic substances,” “toxic pollutants,” “contaminants,” “pollutants,” “regulated substances” or words of similar import under any applicable
Environmental Law. 
  
 “Intellectual Property”:
domestic and foreign patents, patent applications, registered and unregistered trademarks, service marks, trade names and logos, registered and unregistered copyrights, computer programs and software, data bases, trade secrets, methods, designs,
processes, procedures, proprietary information and any other intangible property used in or associated with the conduct of the Business and the ownership of the Assets, including all of Seller’s rights to any such property which is owned by and
licensed from others and any goodwill associated with any of the foregoing. 
  
 “Leases”: any and all written and oral contracts, agreements, and commitments regarding the lease of real or personal property to which Seller is a party or is otherwise bound that relate to or are
used in the operation of the Business, including, but not limited to, leases of towers and transmitter sites. 
  

 -4- 

 “Material Adverse Effect”: a material adverse effect on the assets, liabilities,
business, condition (financial or otherwise), results of operations or prospects of the applicable party. 
  
 “Noncompetition and Nonsolicitation Agreement”: the agreement relating to Shareholder’s noncompetition with Buyer in the form of
Exhibit “A” attached hereto. 
  
 “Pending
Applications”: any applications related to the Business filed with, but not granted by, the Commission on behalf of Seller prior to the Closing Date. 
  

“Permitted Encumbrances”: (i) Encumbrances consisting of easements, permits and other restrictions or limitations on the use of real
property or irregularities in title thereto that do not materially detract from the value of, or materially impair the use of, such property by Seller in the operation of the Business, (ii) Encumbrances for current taxes, assessments or governmental
charges or levies on property not yet due and delinquent, (iii) Encumbrances created by Buyer, and (iv) Encumbrances, if any, relating to the Assumed Obligations. 
  
 “Permits”: as defined in Section 2.1(j). 
  
 “Person”: any individual, partnership, joint venture,
corporation, limited liability company, trust, unincorporated organization, government or other department or agency thereof or other entity. 
  
 “PMRS”: as defined in Section 11.4. 
  
 “Pre-Closing Period”: as defined in Section 5.12(a). 
  
 “Price Allocation”: as defined in Section 3.2. 
  
 “Provisional Lease Agreement”: as defined in Section
9.5. 
  
 “Provisional Management Agreement”:
as defined in Section 9.5. 
  
 “Provisional
Reseller Agreement”: as defined in Section 9.5. 
  
 “Purchase Price”: as defined in Section 3.1. 
  
 “Registration Rights Agreement”: as defined in Section 4.2. 
  
 “Regulated Permits”: as defined in Section 11.4. 
  
 “Releases”: as defined in Section 5.17. 
  
 “Reseller Agreements”: as defined in Section 2.1(x).

  

 -5- 

 “Returns”: as defined in Section 5.12(a). 
  
 “Rules and Regulations”: as defined in Section
5.10(b). 
  
 “Schedules”: The schedules of
Seller, Buyer or both as appropriate in the context and as referenced throughout this Agreement. 
  
 “Seller”: as defined in the preamble of this Agreement. 
  
 “Seller Indemnitees”: as defined in Section 13.1. 
  
 “Shareholder”: as defined in the preamble of this Agreement.

  
 “Shareholder Noncompetition Payment”: as
defined in Section 3.1. 
  
 “Stores”: the
Seller’s leased store and warehouse facilities located in Fort Worth, Texas and in Garland, Texas. 
  
 “Subsequent Permits”: any Permits related to the Business acquired by or granted to Seller after the date of this Agreement but prior to
the Closing Date. 
  
 “Tax”: any net income,
alternative or add-on minimum tax, advance, corporation, gross income, gross receipts, sales, use, ad valorem, franchise, profits, license, value added, withholding, payroll, employment, excise, stamp or occupation tax, governmental fee or other
like assessment or charge of any kind whatsoever, together with any interest or any penalty imposed by any Governmental Authority with respect thereto, and any liability for such amounts as a result either of being a member of an affiliated group or
of a contractual obligation to indemnify any other entity. 
  
 “TLL Shares”: as defined in Section 3.1. 
  
 “True-up Amount”: as defined in Section 3.3. 
  
 1.2 Other Terms. Other terms may be defined elsewhere in the text of this Agreement and shall have the meaning indicated throughout this Agreement.

  
 1.3 Other Definitional Provisions. 
  
 (a) The words “hereof,” “herein” and
“hereunder,” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not any particular provision of this Agreement. 
  
 (b) The terms defined in the singular shall have a comparable meaning when used in the plural, and vice versa. 

 
 (c) The terms defined in the neuter or masculine gender shall include the
feminine, neuter and masculine genders, unless the context clearly indicates otherwise. 
  

 -6- 

 (d) Reference to the “best knowledge” of a Person or words of similar import shall mean the
actual or constructive best knowledge of such Person after reasonable due diligence as to the facts and circumstances addressed. 
  
 (e) All references made herein to schedules and exhibits refer to the schedules and exhibits attached hereto, which are incorporated into and made a part
of this Agreement by reference. 
  
 ARTICLE II 

THE TRANSACTION 
  
 2.1 Purchase and Sale of Assets. Subject to the terms and conditions of this Agreement, Buyer agrees to purchase from Seller, and Seller agrees to
sell, convey, transfer, assign and deliver, and cause to be sold, conveyed, transferred, assigned and delivered, all of Seller’s rights, title and interest in and to the following assets (the “Assets”) free and clear of all
Encumbrances except Permitted Encumbrances, to Buyer on the Closing Date (except with respect to certain Permits which shall be conveyed in accordance with Section 11.4) against the receipt by Seller of the Purchase Price: 
  
 (a) 450 MHz Equipment. all of Seller’s UHF LTR trunked 450 MHz
repeaters, combiners, testing equipment, antennas, dishes, generators, shelters, buildings, cables and other equipment associated with or servicing such communications equipment, including the equipment listed on Schedule 2.1(a); 

 
 (b) Paging Equipment. all of Seller’s paging equipment,
including but not limited to the paging equipment listed on Schedule 2.1(b); 
  
 (c) Inventory. all pagers, radios, antennas, accessories and other merchandise, supplies, stock in trade and other such assets of Seller held for sale or lease in the ordinary course of the Business or to be
furnished under contracts of service or held as work in process or to be used or consumed in the Business, including but not limited to the inventory described on Schedule 2.1(c); 
  
 (d) Spare Parts and Supplies. All of Seller’s spare parts, supplies, specialty tools and other items and
equipment used or useful in the operation of the Business; 
  
 (e)
Intentionally Deleted. 
  
 (f) Leases. all of
Seller’s rights, title and interest under the real property leases, licenses and subleases listed on Schedule 2.1(f), including Seller’s rights to occupy the portion of the Store located in Garland, Texas that has historically been
dedicated to the Business; 
  
 (g) Fixtures. all shelving,
desks, displays and display cases, lighting, built-in furniture and other fixtures owned by Seller, located at the Stores and used or useful in connection with the Business; 
  

 -7- 

 (h) Furniture. all furniture, movable or immovable, located at the Stores and used or useful in
connection with the Business; 
  
 (i) Store Equipment. all
cash registers, computers and other equipment located at the Stores and used or useful in connection with the Business, except as otherwise specifically provided in Schedule 2.1(f); 
  
 (j) Permits. all licenses, permits, franchises, consents, approvals
and authorities granted to Seller by any Person and applicable to the Business, including, but not limited to, all licenses and permits issued by the Commission and the Federal Aviation Administration, including all Subsequent Permits and Pending
Applications (collectively, the “Permits”), all of such Permits, together with associated frequencies (if applicable) are listed on Schedule 2.1(j); 
  
 (k) Customer Lists and Code Book. Seller’s current customer lists with respect to the Business, such list of
customers being attached hereto as Schedule 2.1(k), and all contact information associated with the customers on such lists, including the Seller’s code books identifying the radio codes of Seller’s customers; 
  
 (l) Customer Contracts. all of Seller’s rights, title and
interest in and to the customer contracts with respect to the Business (the “Customer Contracts”); 
  
 (m) Dealerships. Seller’s Kenwood, Motorola and Vertex dealership businesses, including all of Seller’s rights under the Kenwood,
Motorola and Vertex dealership agreements, to the extent such agreements are assignable by Seller to Buyer; 
  
 (n) Telephone Numbers. the telephone numbers listed on Schedule 2.1(n) attached hereto and made a part hereof; 
  
 (o) Books and Records. all Books and Records; 
  
 (p) Goodwill. all goodwill and going concern value of the Business;

  
 (q) Claims and Defenses. any rights of Seller
pertaining to any counterclaims, set-offs or defenses Seller may have with respect to any Assumed Obligations; 
  
 (r) Prepaid Items. all prepaid claims, prepaid taxes, prepaid insurance premiums and other prepaid expense items of Seller related to the Business
or the Assets, including but not limited to those set forth on Schedule 2.1(r); 
  
 (s) Indemnities and Insurance. third-party indemnities, policies of insurance, fidelity, surety or similar bonds and the coverages afforded thereby relating to any of the other Assets; 
  
 (t) Accounts Receivable. all Accounts Receivable of the Business
incurred in the ordinary course of the Business through the Closing Date, which Accounts receivable as of the date hereof, including the aging of such, are detailed on Schedule 2.1(t) as of the date hereof; 
  

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 (u) Intellectual Property. all Intellectual Property listed on Schedule 2.1(u); 

 
 (v) Vehicles. the vehicles listed on Schedule 2.1(v); and

  
 (w) Trade Names. the names “Delta Communications
and Electronics,” “Delta Communications,” any derivatives thereof and any other names used by Seller in connection with the Business, but specifically excluding Seller’s corporate name of “DCAE, Inc.” and the names
“Delta Wireless” and “Delta Wireless Solutions”; 
  
 (x) Reseller and Inter-carrier Agreements. the reseller and inter-carrier agreements listed on Schedule 2.1(x) (collectively, the “Reseller Agreements”); and 
  
 (y) Additional Assets. any additional assets from time to time
acquired for the Business by Seller in the ordinary course of business prior to Closing Date, including those assets identified on Schedule 2.1(y), except for such property as may be used, sold, consumed or disposed of by Seller in the
ordinary course of business prior to the Closing Date and in compliance with the terms and conditions of this Agreement. 
  
 2.2 Excluded Assets. The Assets shall not include any of the following (the “Excluded Assets”): 
  
 (a) all cash on hand or on deposit and arising out of the operation of the
Business prior to the Closing Date; 
  
 (b) any assets (including
inventory, receivables, payables and Seller’s corporate name “DCAE, Inc.” and the names “Delta Wireless” and “Delta Wireless Solutions”) related exclusively to the Seller’s business as a Nextel dealer;

  
 (c) causes of action and third-party indemnities, policies of
insurance, fidelity, surety or similar bonds and the coverage afforded thereby other than those relating to the Assets; 
  
 (d) tax refunds related to the Business or the Assets received or receivable by Seller relating to taxes paid by Seller for all periods prior to Closing
Date; 
  
 (e) Seller’s lease with respect to the Store
located in Ft. Worth, Texas; 
  
 (f) Seller’s leases and
contracts for telephone systems at the Store located in Ft. Worth, Texas; 
  
 (g) minute books and governance documents of Seller; and 
  
 (h) all rights of Seller to any payments from Susan M. Estrada under Ms. Estrada’s existing indebtedness to the company. 
  
 2.3 Assumption of Obligations. Upon the sale of the Assets by Seller, Buyer shall assume and agree to pay, perform and discharge, in a timely
manner and in accordance with the terms thereof, from and after the Closing Date all of Seller’s obligations with respect to the following (collectively, the “Assumed Obligations”): 
  
 (a) the Permits, Customer Contracts, Reseller Agreements and Leases properly
transferred and assigned to Buyer hereunder in conformity with the provisions of such Permits, Customer Contracts and Leases (collectively, the “Assigned Contracts”); 
  

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 (b) the Accounts Payable of the Business incurred in the ordinary course of the Business through the
Closing Date, which Accounts Payable as of the date hereof are listed on Schedule 2.3(b) attached hereto and made a part hereof; and 
  
 (c) the customer deposits and prepaid amounts existing on the Closing Date to the extent such deposits were made pursuant to and remain outstanding under
the Assigned Contracts, which deposits and amounts as of the date hereof are set forth on Schedule 2.3(c). 
  
 The assumption by Buyer of the Assumed Obligations shall not enlarge any rights or remedies of any third parties under any contracts, agreements, instruments or
arrangements of any kind with Seller. Nothing herein shall prevent Buyer from contesting in good faith any of the Assumed Obligations. 
  
 2.4 Excluded Obligations and Liabilities. It is expressly understood and agreed that, except as specifically provided in Section 2.3, Buyer
shall not be obligated to pay, perform or discharge any debt, obligation, cost, expense or liability of Seller, whether absolute or contingent, known or unknown (“Excluded Liabilities”), including, but not limited to debts,
obligations, costs, expenses and liabilities: 
  
 (a) related to
any of the Excluded Assets or to any employees of Seller, including all severance, retirement, medical and other benefits payable to employees or former employees of the Business or of Seller or to their dependents or beneficiaries; 
  
 (b) for any Taxes owed by Seller, including without limitation, any foreign,
federal, state or local Tax (i) based on income or revenues of Seller, or any state franchise tax or sales or use taxes of Seller, (ii) based on wages earned by employees of Seller (as that term is defined under Section 3121 of the Code), or (iii)
based on the transfer of motor vehicles by reason of the existence or operations of Seller prior to the Closing Date; 
  
 (c) for any losses, costs, damages, judgments, penalties, expenses, fines, debts, liabilities and obligations of any nature whatsoever based upon or
arising (i) from any agreement, commitment, undertaking, law, rule, regulation, order or other obligations, or (ii) out of any claims or actions against Seller or Buyer, in either case arising out of events, facts, circumstances or conditions
existing on or occurring prior to the Closing Date, whether or not filed or known to Seller prior to the Closing Date, unless such claims arise from Buyer’s failure to perform an Assumed Obligation; 
  
 (d) for any of the liabilities or expenses of Seller incurred in the
negotiation of and carrying out of its obligations under this Agreement; 
  

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 (e) for liabilities and obligations of Seller to Buyer created by this Agreement; 
  
 (f) for any product liability resulting from any product sold by Seller prior
to the Closing Date or any tort liability of Seller arising out of the Assets or the Business not expressly assumed by Buyer hereunder; 
  
 (g) for any pre-Closing Date breach or violation of any of the Assigned Contracts unless such breach or violation is specifically disclosed on Schedule
2.4(g) and assumed by Buyer; 
  
 (h) for any claims, costs,
expenses or other liabilities related to (i) Seller’s sales tax audit by the State of Texas or (b) the personal injury lawsuit filed against Seller by Ms. Betty Funk; and 
  
 (i) for any regulatory user fees attributable to the Assets or the Business for the period prior to the Closing Date and
payable to the Commission. 
  
 Seller agrees to satisfy and discharge all the
liabilities of Seller relating to the Business and which are not assumed by Buyer pursuant to the terms of this Agreement, whether known at the Closing or thereafter determined, and, pursuant to Section 14.2 below, Seller agrees to indemnify
and hold Buyer harmless with respect thereto. 
  
 2.5
Nonassignable Contracts and Leases. If any Permits, Assigned Contracts or Leases are not by their respective terms assignable, Seller agrees to use its reasonable best efforts promptly to obtain, or cause to be obtained, prior to the Closing
Date, any written consents necessary to convey to Buyer the benefit thereof. Buyer shall cooperate with Seller, in such manner as may be reasonably requested, in connection therewith, including without limitation, active participation in visits to
and meetings, discussions and negotiations with all Persons with the authority to grant or withhold consent. To the extent that any such consents cannot be obtained, Seller and Buyer will use their reasonable best efforts to take such actions as may
be possible without violation or breach of any such nonassignable Permits, Assigned Contracts or Leases to effectively (i) grant Buyer the economic benefits of, and (ii) impose upon Buyer the economic burdens of, such Permits, Assigned Contracts and
Leases. Specifically, Seller and Buyer acknowledge that Seller’s Motorola dealership agreement is not assignable, and Seller agrees to cooperate with Buyer to obtain, effective on the Closing Date, a cancellation of Seller’s Motorola
dealership agreement and the execution by Motorola of a substantially identical dealership agreement directly with Buyer. 
  
 2.6 Telephone Rental Agreements. The Parties hereby agree to exercise their respective best commercial efforts to effect the termination of the
Seller’s rental agreements with respect to the Seller’s telephone systems at the Stores. In the event that the Parties are unable to effect such terminations within sixty (60) days following the Closing Date, Seller shall remain obligated
under the telephone rental agreement with respect to the Store in Fort Worth, Texas and Buyer shall assume and become obligated under the telephone rental agreement with respect to the Store in Garland, Texas. 
  

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 ARTICLE III 
 PAYMENT OF PURCHASE PRICE 
  
 3.1 Amount; Delivery. In addition to Buyer’s assumption of the Assumed Obligations, Buyer shall pay to Seller the consideration as follows (the “Purchase Price”), subject to adjustment as provided in Section
3.3 hereof, which Purchase Price shall be remitted by Buyer to Seller in the following manner: 
  
 (a) $530,000 in cash (the “Cash Payment”) to Seller on the Closing Date, $439,637.50 of which shall be paid by check or by wire transfer
of immediately available funds to an account of Seller as designated in writing by Seller to Buyer not more than three (3) Business Days prior to the Closing Date and $90,362.50 of which shall be paid by wire transfer to Wells Fargo Bank Texas, N.A.
for the payment and release of the security interests on the Assets held by Wells Fargo Bank Texas, N.A., which release shall be filed of record no later than three (3) Business Days following the Closing Date; 
  
 (b) $70,000 in cash (the “Shareholder Noncompetition
Payment”) to Seller on the Closing Date, constituting the consideration payable to Shareholder under the Noncompetition and Nonsolicitation Agreement to which Shareholder is a party which shall be paid by check or by wire transfer of
immediately available funds to an account of Seller as designated in writing by Seller to Buyer not more than three (3) Business Days prior to the Closing Date; 
  

(c) $50,000 in cash, subject to adjustment pursuant to Section 3.4 hereof, to be delivered at the time specified in Section 3.4 (the
“Cash Holdback”); and 
  
 (d) 640,000 shares of
common stock of Buyer to Seller on February 15, 2005, subject to the provisions in Article IV and subject to adjustment pursuant to Section 3.3 (the “TLL Shares “), which TLL Shares Buyer and Seller agree have an
aggregate value of $640,000. 
  
 3.2 Price Allocation.

  
 (a) Seller and Buyer agree to comply with all filing, notice
and reporting requirements described in Section 1060 of the Code and the Treasury Regulations promulgated thereunder. Seller and Buyer mutually agree that, within ninety (90) days following the Closing Date, an independent appraiser selected by
Buyer shall appraise the Assets purchased hereunder. Seller and Buyer mutually agree that the purchase price shall be allocated as follows (the “Price Allocation”): 
  

	 	(i)	The aggregate appraised value of the Assets as determined by the appraiser shall be allocated to assets; 

  

	 	(ii)	$70,000 to the Noncompetition and Nonsolicitation Agreement to be executed by Shareholder; and 

  

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	 	(iii)	the remainder of the purchase price shall be allocated to goodwill. 

  
 Seller and Buyer agree to use their reasonable best efforts to reflect the Price Allocation on the Form 8594 jointly completed and separately filed with their respective
income tax returns for the tax year in which the Closing occurs. The parties further agree that they will report the federal, state, municipal, foreign and local and other tax consequences of the purchase and sale hereunder in a manner consistent
with the Price Allocation, and that they will not take any position inconsistent therewith. 
  
 3.3 Purchase Price Adjustment. 
  
 (a) Buyer shall have a period of six (6) months following the Closing Date to determine whether the statements of Accounts Payable and Accounts Receivable
provided to Buyer as of the date hereof accurately reflect the Accounts Payable and Accounts Receivable of the Business as of the Closing Date. If any discrepancy exists, Buyer shall prepare and deliver to Seller a statement detailing the amount by
which the Accounts Receivable listed on Schedule 2.1(x) less the Accounts Payable listed on Schedule 2.3(b), exceeds the Accounts Receivable as of the Closing Date less the Accounts Payable as of the Closing Date, (such excess amount
being hereinafter referred to as the “True-up Amount”). Buyer shall additionally prepare and deliver to Seller, together with the statement of the True-up Amount, a statement of charges, expenses and losses incurred by Buyer as a
result of (i) the breach by Seller or Shareholder of any representation or warranty hereunder, (ii) repair costs with respect to any Assets due to conditions existing on the Closing Date, (iii) the existence of any prepaid amounts by customers or
other parties or (iv) the failure by Seller to pay any amounts when due in the ordinary course of business consistent with past practices (the aggregate of all such charges, reasonable expenses and losses, together with the True-up Amount, is
hereinafter referred to as the “Adjustment Amount”). If and only if the Adjustment Amount exceeds $5,000, the number of TLL Shares to be delivered to Seller on February 15, 2005 in accordance with Section 3.1 above shall be
reduced by a number of TLL Shares determined by dividing the Adjustment Amount by 100; provided, however, that in no event shall the number of TLL Shares be reduced to less than 540,000. 
  
 (b) Seller shall have a period of fifteen (15) days from receipt of Buyer’s calculation of the Adjustment Amount to
challenge such calculation in writing. If Seller fails to challenge such calculation within such fifteen (15) day period, the calculation shall be final and binding on Seller and Buyer. If Seller challenges such calculation, and Seller and Buyer
cannot agree on the Adjustment Amount, the Adjustment Amount shall be determined by BDO Seidman, such determination to be final and binding on Seller and Buyer. The purchase price adjustment in this Section 3.3 is limited to 100,000 of the
TLL Shares and and in no event shall this purchase price adjustment be applied against any cash payments made hereunder or against the remainder of the TLL Shares. 
  
 3.4 Cash Holdback. Buyer shall retain the Cash Holdback until such time as the Permits identified on Schedule
5.10 are renewed or replaced to the reasonable satisfaction of Buyer; provided that such time shall be no later than one (1) year from the Closing Date. Buyer shall be entitled to offset against the Cash Holdback the amount of all reasonable
fees, expenses 
  

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 (including reasonable attorney’s fees) and other out-of-pocket expenses incurred by Buyer in connection with
Buyer’s efforts to renew or replace such Permits. On the later to occur of (a) thirty (30) days following the date that the Permits identified on Schedules 5.10 are renewed or replaced to Buyer’s satisfaction or (b) the first
(1st) anniversary of the Closing Date, Buyer shall deliver to Seller (i) a statement of the fees, expenses
(including attorney’s fees) and other out-of-pocket expenses incurred by Buyer as described above and (ii) cash in the amount of the Cash Holdback less the total amount of the fees, expenses and other out-of-pocket expenses identified in such
statement. 
  
 ARTICLE IV 
 TLL SHARES 
  
 4.1 Delivery of TLL Shares. (a) In accordance with Section 3.1(d) above, Buyer shall deliver to Seller the TLL Shares on February 15, 2005,
less any amount deducted from such TLL Shares in accordance with Section 3.3. Such TLL Shares shall not have been registered under the Securities Act of 1933 and shall bear the following legend: 
  
 THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES LAWS (“ACTS”). THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE ACTS OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED. 
  
 4.2 Registration Rights. On the Closing Date, Buyer and Seller shall execute and deliver a registration rights agreement in the form attached
hereto as Exhibit B (the “Registration Rights Agreement”) covering the TLL Shares. 
  
 4.3 Put Option. 
  
 (a) Seller shall have the option, by giving written notice to Buyer within fifteen (15) days following the end of any of Buyer’s fiscal quarters
ending February 28, 2005, May 31, 2005, August 31, 2005 or November 30, 2005, to sell to Buyer 25% of the TLL Shares then held by Seller for the price of $1.05 per share, and upon Seller’s exercise of such option, Buyer shall be obligated to
buy such TLL Shares. 
  
 (b) Seller shall have the option, by
giving written notice to Buyer within fifteen (15) days following the end of any of Buyer’s fiscal quarters ending February 28, 2006, May 31, 2006, August 31, 2006 or November 30, 2006, to sell to Buyer 25% of the TLL Shares then held by Seller
for the price of $1.10 per share, and upon Seller’s exercise of such option, Buyer shall be obligated to buy such TLL Shares. 
  
 (c) Seller shall have the option, by giving written notice to Buyer within fifteen (15) days following the end of any of Buyer’s fiscal quarters
ending February 28, 2007, 
  

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 May 31, 2007, August 31, 2007 or November 30, 2007, to sell to Buyer 25% of the TLL Shares then held by Seller for the
price of $1.15 per share, and upon Seller’s exercise of such option, Buyer shall be obligated to buy such TLL Shares. 
  
 (d) In the event that Seller holds a number of TLL Shares less than or equal to 100,000 at any time when Seller is entitled to exercise its put options
under this Section 4.3, Seller shall (notwithstanding any percentage limitations in paragraphs (a), (b) or (c) of this section) be entitled at such time to sell to Buyer the entire remaining portion of such TLL Shares for the price applicable
to such time period. 
  
 (e) In no event shall Buyer be required
to purchase or redeem any TLL Shares under this Section 4.3 if such purchase or redemption would violate, constitute a default under, constitute an impairment of capital under, or cause the acceleration of indebtedness of the Buyer under (A)
the certificate of incorporation or bylaws of Buyer, (B) any provision of the General Corporation Law of the State of Delaware, (C) the Securities Act or any other state or federal securities laws, (D) the rules and regulations of AMEX or any other
securities exchange on which Buyer’s shares are traded or (E) any other agreement or commitment to which Buyer is a party or under which any of its assets are bound. 
  
 (f) Notwithstanding the foregoing, Seller (i) shall have no right to exercise its put options pursuant to this Section
4.3 during any fiscal quarter of Buyer in which Seller has disposed of any of the TLL Shares in the public market for Buyer’s securities and (ii) shall not dispose of any of the TLL Shares in the public market for Buyer’s securities
during any fiscal quarter of Buyer in which Seller has sold any TLL Shares to Buyer pursuant to this Section 4.3. 
  
 4.4 Call Option. 
  
 (a) Buyer shall have the option, by giving written notice to Seller within fifteen (15) days following the end of any of Buyer’s fiscal quarters
ending February 28, 2005, May 31, 2005, August 31, 2005 or November 30, 2005, to purchase from Seller all or any portion of the TLL Shares then held by Seller for the price of $1.05 per share, and upon Buyer’s exercise of such option, Seller
shall be obligated to sell such TLL Shares. 
  
 (b) Buyer shall
have the option, by giving written notice to Seller within fifteen (15) days following the end of any of Buyer’s fiscal quarters ending February 28, 2006, May 31, 2006, August 31, 2006 or November 30, 2006, to purchase from Seller all or any
portion of the TLL Shares then held by Seller for the price of $1.10 per share, and upon Buyer’s exercise of such option, Seller shall be obligated to sell such TLL Shares. 
  
 (c) Buyer shall have the option, by giving written notice to Seller within fifteen (15) days following the end of any of
Buyer’s fiscal quarters ending February 28, 2007, May 31, 2007, August 31, 2007 or November 30, 2007, to purchase from Seller all or any portion of the TLL Shares then held by Seller for the price of $1.15 per share, and upon Buyer’s
exercise of such option, Seller shall be obligated to sell such TLL Shares. 
  

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 (d) Nothing in this Section 4.4 shall be deemed to prohibit Seller from selling, assigning or
transferring all or any portion of the TLL Shares held by Seller. At such time as the TLL Shares become registered under the applicable federal and state securities laws, Seller shall not be restricted from selling, assigning or transferring all or
any portion of the TLL Shares to a third party; provided, however, that Seller may not so sell, assign or transfer any TLL Shares at any time following Buyer’s exercise of its call option under this Section 4.4 but prior to the
consummation of the sale pursuant to such exercise. 
  
 4.5
Closing of Put/Call Sales. In each event in which Seller exercises its put option under Section 4.3 above, and in each event in which Buyer exercises its call option under Section 4.4 above, the notice of such exercise shall
specify a closing date with respect to the exercise of such option, which closing date shall not be sooner than ten (10) business days from the date of such notice nor later than sixty (60) days from the date of such notice. 
  
 ARTICLE V 
 REPRESENTATIONS AND WARRANTIES OF SELLER AND SHAREHOLDER 
  
 Seller and Shareholder hereby represent and warrant to Buyer as follows: 
  
 5.1 Existence and Good Standing. Seller is a corporation duly organized and validly existing under the laws of the
State of Texas. Seller has the power and authority to own, lease and operate its property and to carry on its business as now being conducted and to own or lease the assets owned or leased by it. Seller is duly qualified or licensed to do business
in each jurisdiction in which the character or location of the properties owned or leased by Seller or the nature of the businesses conducted by Seller make such qualification necessary. 
  
 5.2 Authorization and Validity of Agreement. Seller has full corporate power and authority to execute and deliver
this Agreement, to perform its obligations hereunder, and to consummate the transactions contemplated hereby. The execution, delivery and performance of this Agreement by Seller and the consummation of the transactions contemplated hereby, have been
duly authorized and approved by the board of directors of Seller and, if so required, the sole shareholder of Seller, and no other action on the part of Seller is necessary to authorize the execution, delivery and performance of this Agreement by
Seller and the consummation of the transactions contemplated hereby. This Agreement has been duly executed and delivered by Seller and represents the valid and binding obligations of Seller enforceable against Seller in accordance with its terms,
except to the extent that such enforceability may be subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles.

  
 5.3 Consents and Approvals; No Violations. The
execution, delivery and performance of this Agreement by Seller and the consummation by Seller of the transactions contemplated hereby will not, with or without the giving of notice or the lapse of time or both: (a) violate, conflict with, or result
in a breach or default under any provision of the articles of incorporation or bylaws of Seller; (b) violate any statute, ordinance, rule, regulation, order, judgment or decree of any Governmental Authority applicable to Seller or by which any of
its properties or assets may be bound; (c) require any filing by Seller with, or require Seller to 
  

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 obtain any Permit of, or require Seller to give any notice to, any Governmental Authority other than as set forth on
Schedule 5.3; or (d) other than as set forth on Schedule 5.3, result in a violation or breach by Seller of, conflict with, constitute (with or without due notice or lapse of time or both) a default by Seller, or give rise to any right
of termination, cancellation, payment or acceleration, under or result in the creation of any Encumbrance upon any of the Assets under any of the terms, conditions, or provisions of any note, bond, mortgage, indenture, Permit, Contract, Lease or
other instrument or obligation to which Seller is a party, or by which it or any of the Assets may be bound. 
  
 5.4 Receivables. Schedule 2.1(t) lists all Accounts Receivable of Seller with respect to the Business as of the date hereof. Schedule
2.1(t) specifically indicates all such Accounts Receivable from any Affiliate of Seller. All such Accounts Receivable are, and all Accounts Receivable at the Closing Date will be, (i) bona fide claims against debtors for sales, services
performed or other charges, (ii) to the best knowledge of Seller, subject to no defenses, set-offs or counterclaims and (iii) collectible subject to Seller’s normal reserve for bad debts as reflected in the Unaudited Financial Statements.

  
 5.5 Payables. Schedules 2.3(b) lists all
Accounts Payable of Seller with respect to the Business as of the date hereof. Such schedule of Accounts Payable is of the date hereof, and shall be as of the Closing Date, true, complete and correct in all respects. Seller is, and of the Closing
Date shall be, current in payment with respect to all such Accounts Payable. 
  
 5.6 Warranty Claims. Except as set forth on Schedule 5.6 attached hereto, as of the date hereof, there are no warranty claims relating to products at any time sold or services at any time performed by
Seller pending or, to the best knowledge of Seller, threatened. 
  
 5.7 Title to Properties; Encumbrances; Condition and Sufficiency of Assets. Except as set forth on Schedule 5.7 Seller owns outright, and has, and shall at the Closing have, full legal and beneficial title to all of the
Assets, in each case subject to no Encumbrances except for Permitted Encumbrances. Except as set forth on Schedule 5.7, each Asset is in good operating condition and repair, subject to ordinary wear and tear and has been properly maintained
in accordance with the manufacturers’ specifications, and each Asset is in compliance with all applicable federal and state laws and regulations. The Assets consist of all of the assets used or useful in connection with the Business and no
other assets other than the Assets are required to operate the Business as presently conducted, including but not limited to the operation and maintenance of Seller’s 450 MHz system. The Inventory consists of items of a quality and quantity
usable or saleable in the regular course of business of Seller. 
  
 5.8 Real Property Leases. Schedule 2.1(f) contains an accurate and complete list of all Leases to which Seller is a party (as lessee or lessor) and which are associated with the Business. Each real property lease set forth on
Schedule 2.1(f) is, to the best knowledge of Seller, in full force and effect; there is no existing default under any of such Leases on the part of Seller or, to the best of Seller’s knowledge, any other party thereto. 
  
 5.9 Contracts and Commitments. Schedule 5.9 contains an
accurate and complete list of all Contracts to which Seller is a party and which are to be included in the Assets. Each 
  

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 Contract set forth on Schedule 5.9 is in full force and effect; there is no existing default under any of such
Contracts on the part of Seller, or, to the best of Seller’s knowledge, any other party thereto. Except as set forth on Schedule 5.9: 
  
 (a) Seller is not a party to or bound by any loan, credit or similar agreement or any indenture, trust agreement or other instrument relating to any issue
of bonds, debentures, notes or other evidences of indebtedness or creating any Encumbrance on any of the Assets; 
  
 (b) There are no bonus, pension, profit sharing, retirement, stock option, stock purchase, deferred compensation, hospitalization or insurance plans, or
vacation or severance pay plans, or any other plans or arrangements providing benefits to officers, agents or employees of Seller; 
  
 (c) Seller does not have nor is Seller currently negotiating any collective bargaining agreement with any labor union or association or any employment
contract or other binding agreement relating to the employment of any of its employees; 
  
 (d) Seller is not a party to any joint venture agreement or other agreement involving the sharing of profits relating to the Business and/or the Assets; 
  
 (e) Seller is not a party to any (i) contracts or commitments for capital expenditures outside the ordinary course of
business or involving obligations on the part of Seller in amounts inconsistent with those incurred by Seller in the ordinary course of business in accordance with Seller’s prior operation of the Business, (ii) Lease under which personal
property is leased to or from Seller in connection with the Business, (iii) continuing contract for the future purchase of Inventory or other materials, supplies, machinery or equipment in excess of the requirements of the Business conducted in the
ordinary course, consistent with the historical operation of the Business, (iv) other contract or agreement which involves an obligation on the part of Seller, either individually or in the aggregate, in excess of amounts previously incurred by
Seller in the ordinary course of business or, (v) contract not made in the ordinary course of business; 
  
 (f) Seller is not party to any Contract limiting the freedom of Seller or any of its employees to engage in any line of business or to compete with any
Person, and to the knowledge of Seller, no employee of Seller is subject to any such restrictions; 
  
 (g) Seller is not a party to any Contract in connection with the Business which involves aggregate expenditures of $5,000 or more and is not cancelable
without penalty within thirty (30) days, except for those yellow page agreements and telephone service contracts specifically identified as “Contracts above $5,000” on Schedule 5.9; 
  
 (h) There are no persons holding powers of attorney from, or otherwise
authorized to act on behalf of Seller with respect to the Business or the Assets except for its respective officers and other management personnel regularly performing their business functions; and 
  

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 (i) Seller is current with respect to all payments due under the Contracts. 
  
 Except as specifically identified on Schedule 5.9, Seller has no knowledge that any
Contract, Lease, or other obligation to which Seller is a party, individually or in the aggregate: (i) will result in a material loss to the Buyer after the Closing Date; (ii) cannot readily be performed or fulfilled on time without undue or unusual
expenditure of money or effort by the Buyer after the Closing Date, or (iii) is not in full force and effect and there exists a default or event of default or event, occurrence, condition or act which, with the giving of notice, the lapse of time or
the happening of any other event or condition, would become a default or event of default thereunder. A true copy of each written Contract and Lease as well as all other documents evidencing any commitment of Seller required to be set forth on any
Schedule hereto has been or will be delivered to Buyer by Seller no later than five (5) days after execution of this Agreement. Also set forth on Schedule 5.9 is a list of all proposals, except proposals made by Seller’s sales people in
the ordinary course of business, submitted by Seller to any third party that, if accepted by such third party, would require disclosure on Schedule 5.9. 
  

5.10 Permits. 
  
 (a) All Permits required in connection with the use, operation or ownership of the Assets and the conduct of the Business as currently conducted are
listed on Schedule 2.1(j). To the best knowledge of Seller, the Permits issued to Seller by the Commission can be transferred to Buyer or a subsidiary corporation of Buyer as part of the consummation of the transactions contemplated by this
Agreement. No event has occurred or fact exists with respect to the Permits which allows or, after notice or lapse of time or both would permit, revocation or termination of any of the Permits or would result in any other impairment of the rights of
the holder of any of the Permits or which might limit the operation of Seller’s Business as it is now conducted. Seller has performed all of its respective obligations under such Permits. The Commission’s action granting the Permits,
together with all underlying construction permits, have not been reversed, stayed, enjoined, annulled, or suspended, and there is not pending or, to the knowledge of Seller, threatened, any application, petition, objection, or other pleading with
the Commission or other governmental entity which challenges or questions the validity of or any rights of the holder under any Permit. 
  
 (b) Except as set forth on Schedule 5.10, all Permits are in full force and effect and the facilities associated with such Permits have been
constructed within the time frame provided by the rules and regulations promulgated by the Commission pursuant to the Act (the “Rules and Regulations”) and where required, Seller has filed appropriate construction notifications with
the Commission. 
  
 5.11 Litigation. Except as set forth on
Schedule 5.11, there is no action, suit, proceeding at law or in equity, arbitration or administrative or other proceeding by or before (or any investigation by) any Governmental Authority, pending, or, to the best knowledge of Seller,
threatened, against or affecting the properties or rights of Seller, and Seller does not know of any valid basis for any such action, proceeding or investigation. There are no such suits, actions, claims, proceedings or investigations pending or to
the best knowledge of Seller, threatened, seeking to prevent or challenge the transactions contemplated by this Agreement. Without 
  

 -19- 

 exception as to materiality or otherwise, Schedule 5.11 lists all claims, if any, filed with the Commission with
respect to Seller and/or the operation of the Business since October 15, 1993. A decision adverse to Seller with respect to any of the matters listed on Schedule 5.11, or with respect to all or any combination thereof, would not result in a
Material Adverse Effect with respect to Seller. 
  
 5.12
Taxes. 
  
 (a) All returns and reports for Taxes for all
taxable years or periods that end on or before the Closing Date and, with respect to any taxable year or period beginning before and ending after the Closing Date the portion of such taxable year or period ending on and including the Closing Date
(the “Pre-Closing Period”), which are required to be filed by or with respect to Seller (collectively, the “Returns”) have been or will be filed when due in a timely fashion and such Returns as filed are or will be
accurate in all material respects. 
  
 (b) There are no agreements
for the extension or waiver of the time for assessment of any Taxes relating to Seller for any Pre-Closing Period and Seller has not been requested to enter into any such agreement or waiver. 
  
 (c) All Taxes relating to Seller which Seller is required by law to withhold
or collect have been duly withheld or collected, and have been timely paid over to the proper authorities to the extent due and payable. 
  
 (d) Seller is not now nor has it ever been a party to any Tax allocation or sharing agreement that could result in any liability to Buyer. 
  
 5.13 Insurance. In the judgment of Seller, Seller’s insurance
policies covering the Business, with respect to their amounts and types of coverage, are adequate to insure against risks to which Seller and its property and assets are normally exposed in the operation of the Business, subject to customary
deductibles and policy limits. 
  
 5.14 Intellectual
Property. Schedule 2.1(u) sets forth all Intellectual Property owned by Seller. The operation of the Business requires no rights to any Intellectual Property other than rights under the Intellectual Property listed on Schedule
2.1(u) and rights granted to Seller pursuant to agreements listed on Schedule 2.1(u). No litigation is pending or, to the best knowledge of Seller, threatened wherein Seller is accused of infringing or otherwise violating the intellectual
property rights of another, or of breaching a contract conveying intellectual property rights. 
  
 5.15 Compliance with Laws. Seller is in compliance with all applicable laws, regulations, orders, judgments and decrees applicable to the Business. 
  
 5.16 Employment Relations. Seller is not engaged in any unfair labor practice and to its knowledge has a good
relationship with its employees. 
  
 5.17 Environmental Laws
and Regulations. Except as set forth on Schedule 5.17, 
  

 -20- 

 (a) Seller or its authorized agents or independent contractors (including suppliers) have not generated
on, used on, treated or stored on, transported to or from or arranged for transportation to or from, the real property owned or leased by Seller or any property adjoining such real property any Hazardous Materials, 
  
 (b) Hazardous Materials have not been disposed, discharged, injected,
spilled, leaked, leached, dumped, emitted, escaped, emptied, allowed to seep, placed and the like, into or upon any land or water or air, or otherwise allowed to enter into the environment (collectively, “Releases”) by Seller, its
authorized agents or independent contractors (including suppliers) on such real property or by Seller or its agents on any other property, 
  
 (c) Seller is and has been in compliance with all applicable Environmental Laws, possesses all Permits required thereunder and is in compliance with all
Permits issued thereunder with respect to such real property and to Seller’s operations conducted thereon, 
  
 (d) there are no pending or, to the best knowledge of Seller, threatened Environmental Claims against Seller with respect to such real property,

  
 (e) there are no facts or present or past circumstances,
conditions or occurrences on such real property known to Seller that reasonably could be anticipated (i) to form the basis of an Environmental Claim against Seller or any owner, operator or lessee of such real property, or (ii) to cause such real
property to be subject to any restrictions on the ownership, occupancy use or transferability of such real property under any Environmental Law, 
  
 (f) there are not now and to the best knowledge of Seller, there never have been any underground storage tanks located on such real property, and

  
 (g) Seller has not in the ordinary course of business
transported, treated, disposed of or stored Hazardous Materials. 
  
 5.18 Customers. Schedule 2.1(j) contains a true, complete and correct list of all customers of the Business. To the knowledge of Seller and Shareholder, each of the customers identified on such schedule (each of which are on a
month-to-month basis) are content and intend to continue their relationship with the Business following the Closing Date. Neither Seller nor Shareholder have any reason to believe that any of such customers intend to cancel their relationship with
the Business following the Closing Date. 
  
 5.19 Solvency.
Seller is not entering into this Agreement with actual intent to hinder, delay or defraud creditors. Immediately prior to and immediately subsequent to the Closing Date: 
  
 (a) the present fair salable value of the assets of Seller (on a going concern basis) will exceed the liability of Seller
for its debts (including its contingent obligations); 
  
 (b)
Seller has not incurred, nor does it intend to or believe that it will incur, debts (including contingent obligations) beyond its ability to pay such debts as such debts mature 
  

 -21- 

 (taking into account the timing and amounts of cash to be received from any source, and of amounts to be payable on or in
respect of debts); and the amount of cash available to Seller after taking into account all other anticipated uses of funds is anticipated to be sufficient to pay all such amounts on or in respect of debts, when such amounts are required to be paid;
and 
  
 (c) Seller will have sufficient capital with which to
conduct its business, and the property of Seller does not constitute unreasonably small capital with which to conduct its business. 
  
 For purposes of this Section 5.19, “debt” means any liability or a (i) right to payment whether or not such a right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable secured, or unsecured; or (ii) right to an equitable remedy for breach of performance if such breach gives rise to a payment, whether or not such a right to
an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured, or unsecured. 
  
 5.20 Disclosure. No representation or warranty by Seller contained in this Agreement, nor any statement or certificate furnished or to be furnished
by Seller to Buyer or its representatives in connection herewith or pursuant hereto, contains or will contain any untrue statement of a material fact, or omits or will omit to state any material fact required to make the statements herein or therein
contained not misleading or necessary in order to provide a prospective purchaser of the Business with adequate information as to Seller and its condition (financial and otherwise), properties, assets, liabilities, business and prospects, and Seller
has disclosed to Buyer in writing all material adverse facts known to Seller relating to the same. The representations and warranties contained in this Article IV or elsewhere in this Agreement or any document delivered pursuant hereto shall
not be affected or deemed waived by reason of the fact that Buyer and/or its representatives knew or should have known that any such representation or warranty is or might be inaccurate in any respect. 
  
 5.21 Government Contracts. Except as set forth on Schedule
5.21, Seller does not: 
  
 (a) have any Contracts with any
agency of the Government of the United States involving any information, technology or data which is classified under Executive Order 12356 of April 2, 1982; or 
  

(b) have any products or services (including research and development) with respect to which Seller (i) is a supplier, directly or indirectly, to any
of the military services of the United States or the Department of Defense, other than the United States Coast Guard, except the supply to individuals of such military in their individual capacity, or (ii) has technology which has or could have
military applications. 
  
 5.22 Undisclosed Liabilities.
The Seller has no liabilities or obligations, whether accrued, absolute, contingent or otherwise, which are material to the Business or the Assets taken as a whole, except (i) liabilities or obligations disclosed on Schedule 5.22 and in the
other Schedules hereto and (ii) liabilities or obligations disclosed in this Agreement. 
  

 -22- 

 5.23 Restrictions on Business Activities. Except for this Agreement or as set forth in Schedule
5.23, to the knowledge of Seller and Shareholder, there is no agreement, judgment, injunction, order or decree binding upon Seller which has or could reasonably be expected to have the effect of prohibiting or impairing any business practice of
the Business, acquisition of property by Seller for the Business, or the conduct of business as currently conducted or as proposed to be conducted by the Business. 
  
 5.24 Copies of Documents. Seller has made available for inspection and copying by Buyer and its advisers, true,
complete and correct copies of all documents referred to in this Article IV or in any Schedule attached hereto. The Books and Records to be delivered at Closing are true, complete and correct. 
  
 5.25 No Subsidiaries. Seller has no subsidiaries. 
  
 5.26 Broker’s or Finder’s Fees. Other than Glen Binion, who
is to receive only such consideration as is identified in the Binion Purchase Agreement, no Person acting on behalf of Seller is, or will be, entitled to any fee, commission or broker’s or finder’s fees in connection with this Agreement or
any of the transactions contemplated hereby. 
  
 5.27
Investment Representation. 
  
 (a) Seller acknowledges
that the TLL Shares constitute securities under the Securities Act of 1933, as amended, and the applicable state securities laws and that Buyer is relying on Seller’s representations contained in this Section 5.27 in effecting the
issuance of the TLL Shares. Seller further acknowledges that the TLL Shares are being issued to Seller under an exemption from registration pursuant to Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”) in
reliance upon the representations and warranties of Seller contained in this Agreement and the restrictions on transfer provided for herein. 
  
 (b) Seller is an “accredited investor” as such term is defined under Regulation D promulgated under the Securities Act and has such knowledge
and experience in financial and business matters that Seller is capable of evaluating the merits and risks of its acquisition of the TLL Shares. 
  
 (c) Seller has had access to and an opportunity to inspect all relevant information relating to Buyer, including Buyer’s public filings, sufficient
to enable Seller to evaluate the merits and risks of its acquisition of the TLL Shares. Seller hereby acknowledges that it has been given reasonable opportunity to meet with officers of the Buyer for the purpose of asking questions of such officers
concerning the business and operations of the Buyer and all such questions have been answered to its satisfaction. Seller has also been given an opportunity to obtain any additional relevant information to the extent reasonably available to Buyer.

  
 (d) Seller has (i) the financial ability to bear the economic
risk of its investment in the TLL Shares, including a possible loss of the entire amount of such investment, (ii) adequate means for providing for its current and future needs and contingencies notwithstanding (1) its investment in the TLL Shares,
(2) the unavailability of any tax, financial 
  

 -23- 

 or other benefits from its investment in or ownership of the TLL Shares or (3) the complete loss of its entire investment
in the TLL Shares and (iii) no need for liquidity with respect to its investment in the TLL Shares. 
  
 (e) Seller has been informed and understands that: (i) the TLL Shares have not been registered under the Securities Act of 1933 or under applicable state
securities laws and may only be sold, encumbered or otherwise transferred by Seller in a transaction that complies with applicable federal and state securities laws and (ii) with the exception of Buyer’s obligations under the Registration
Rights Agreement, Buyer will not be under any obligation to assist Seller in obtaining an exemption from registration under applicable federal and state securities laws in the event of any proposed re-sale or other transfer by Seller of any of the
TLL Shares. 
  
 (f) The TLL Shares are being acquired for
investment for Seller’s own account, not as nominee or agent, and not with a view to the resale or distribution of any part thereof, and Seller has no present intention of selling or otherwise distributing the same. Seller understands that the
TLL Shares are “restricted securities” under the federal securities laws inasmuch as they are being acquired from the Buyer in a transaction not involving a public offering and that under such laws and applicable regulations such
securities may be resold without registration under the Securities Act only in certain limited circumstances. Seller understands that it cannot make any disposition of all or any portion of the TLL Shares unless there is then in effect a
registration statement under the Securities Act covering such proposed distribution and such distribution is made in accord with such registration statement, or Seller shall have notified the Buyer of the proposed disposition, shall have furnished
the Buyer with the statement of the circumstances surrounding the proposed disposition, and shall have furnished the Buyer with an opinion of counsel, reasonably satisfactory to the Buyer, that such disposition will not require registration of such
TLL Shares under the Securities Act. Seller understands that the certificates for the TLL Shares shall bear appropriate restrictive legends. 
  
 ARTICLE VI 
 REPRESENTATIONS AND
WARRANTIES OF BUYER 
  
 Buyer hereby represents and warrants
to Seller as follows: 
  
 6.1 Existence and Good Standing of
Buyer; Power and Authority. Buyer is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. Buyer has full corporate power and authority to make, execute, deliver and perform this Agreement,
to perform its obligations hereunder and to consummate the transactions contemplated hereby. This Agreement has been duly authorized and approved by all required corporate governance action of Buyer. This Agreement has been duly executed and
delivered by Buyer and is the valid and binding obligations of Buyer enforceable against Buyer in accordance with its terms, except to the extent that enforceability may be subject to applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles. 
  
 6.2 No Violations. The execution, delivery and performance of this Agreement by Buyer and the consummation by Buyer of the transactions
contemplated hereby will not, with or 
  

 -24- 

 without the giving of notice or the lapse of time or both, (a) violate, conflict with, or result in a breach or default
under any provision of the charter or bylaws of Buyer; (b) violate any statute, ordinance, rule, regulation, order, judgment or decree of any Governmental Authority applicable to Buyer or by which any of its properties or assets may be bound; (c)
require any filing by Buyer with, or require Buyer to obtain any permit, consent or approval of, or require Buyer to give any notice to, any Governmental Authority or any third party other than the Commission; or (d) result in a violation or breach
by Buyer of, conflict with, constitute (with or without due notice or lapse of time or both) a default by Buyer (or give rise to any right of termination, cancellation, payment or acceleration) under, or result in the creation of any Encumbrance
upon any of the properties or assets of Buyer pursuant to, any of the terms, conditions or provision of any note, bond, mortgage, indenture, permit, contract, lease or other instrument or obligation to which Buyer is a party, or by which it or any
of its properties or assets may be bound. 
  
 6.3 Broker’s
or Finder’s Fees. No Person acting on behalf of Buyer is, or will be, entitled to any fee, commission or broker’s or finder’s fee in connection with this Agreement or any of the transactions contemplated hereby. 
  
 ARTICLE VII 
 CONDITIONS TO SELLER’S OBLIGATIONS 
  
 The obligations of Seller under this Agreement to sell, or cause to be sold, the Assets and to consummate the other transactions contemplated hereby shall
be subject to the satisfaction (or waiver by Seller) on or prior to the Closing Date of all of the following conditions: 
  
 7.1 Truth of Representations and Warranties. The representations and warranties of Buyer contained in this Agreement shall be true and correct in
all material respects on and as of the Closing Date with the same effect as though such representations and warranties had been made on and as of the Closing Date, and Buyer shall have delivered to Seller on the Closing Date a certificate of an
authorized officer of Buyer, dated the Closing Date, to such effect. 
  
 7.2 Performance of Agreements. Each and all of the agreements and covenants of Buyer to be performed on or before the Closing Date pursuant to the terms hereof, including all deliveries and obligations at Closing, shall have been
duly performed in all material respects, and Buyer shall have delivered to Seller a certificate of an authorized officer of Buyer, dated the Closing Date, to such effect and evidencing the incumbency of all officers executing any documents in
connection with the Closing. 
  
 7.3 No Litigation
Threatened. No action or proceedings shall have been instituted before any Governmental Authority to restrain or prohibit any of the transactions contemplated hereby, and Buyer shall have delivered to Seller a certificate of an authorized
officer of Buyer, dated the Closing Date, to such effect to the best knowledge of such officer. 
  
 7.4 Proceedings. All proceedings to be taken in connection with the transactions contemplated by this Agreement and all documents incident thereto
shall be reasonably satisfactory in form and substance to Seller and its counsel, and Seller shall have received copies of all such documents and other evidence as its or its counsel may reasonably request in order to establish the consummation of
such transactions and the taking of all proceedings in connection therewith. 
  

 -25- 

 ARTICLE VIII 
 CONDITIONS TO BUYER’S OBLIGATIONS 
  
 The obligations of Buyer under this Agreement to purchase the Assets and to consummate the other transactions contemplated hereby shall be subject to the satisfaction (or waiver by Buyer) on or prior to the Closing
Date of all of the following conditions: 
  
 8.1 Truth of
Representations and Warranties. The representations and warranties of Seller and Shareholder contained herein shall be true and correct in all material respects on and as of the Closing Date with the same effect as though such representations
and warranties had been made on and as of the Closing Date, and Seller shall have delivered to Buyer on the Closing Date a certificate of an authorized representative of Seller, dated the Closing Date, to such effect. 
  
 8.2 Performance of Agreements. Each and all of the agreements and
covenants of Seller and Shareholder to be performed on or before the Closing Date pursuant to the terms hereof, including all deliveries and obligations at Closing, shall have been duly performed in all material respects, and Seller shall have
delivered to Buyer a certificate of an authorized representative of Seller, dated the Closing Date, to such effect and evidencing the incumbency of all officers executing any documents in connection with the Closing. 
  
 8.3 No Litigation Threatened. No action or proceedings shall have been
instituted before any Governmental Authority to restrain or prohibit any of the transactions contemplated hereby, and Seller shall have delivered to Buyer a certificate of an authorized representative of Seller, dated the Closing Date, to such
effect to the best knowledge of such officer. 
  
 8.4
Consents. Each of the consents referred to on Schedule 5.3 attached hereto shall have been obtained. 
  
 8.5 Proceedings. All proceedings to be taken in connection with the transactions contemplated by this Agreement and all documents incident thereto
shall be reasonably satisfactory in form and substance to Buyer and its counsel, and Buyer shall have received copies of all such documents and other evidence as it or its counsel may reasonably request in order to establish the consummation of such
transactions and the taking of all proceedings in connection therewith. 
  
 8.6 Board Approval. This Agreement and the transactions contemplated hereby shall have been approved by the board of directors of the Buyer. 
  
 8.7 Binion Agreements. Binion shall execute and deliver to the Buyer the Binion Purchase Agreement and the noncompetition and nonsolicitation
agreement attached thereto as “Exhibit A.” 
  

 -26- 

 ARTICLE IX 
 COVENANTS OF SELLER AND SHAREHOLDER 
  
 Seller and Shareholder hereby covenant and agree with Buyer as follows: 
  
 9.1 Cooperation by Seller and Shareholder. Seller and Shareholder shall use their reasonable best efforts to cooperate with Buyer to secure all
necessary consents, approvals (including FCC Approvals), authorizations, exemptions and waivers from third parties as shall be required in order to enable Seller to effect the transactions contemplated hereby, and Seller shall otherwise use its
reasonable best efforts to cause the consummation of such transactions in accordance with the terms and conditions hereof and to cause all conditions contained in this Agreement over which it has control to be satisfied. Seller further agrees to
deliver to Buyer prompt written notice of any event or condition known to or discovered by Seller, which if it existed on the date of this Agreement or on the Closing Date, would result in any of the representations and warranties of Seller
contained herein being untrue in any material respect. In addition, Seller and Shareholder shall cooperate with Buyer and shall use their reasonable best efforts to assist Buyer in obtaining the proper renewal or replacement of the Permits
identified on Schedule 5.10. 
  
 9.2 Notice of
Breaches. Seller shall deliver to Buyer prompt written notice of any event or condition actually known to or discovered by Seller, which, if it existed on the date of this Agreement or on the Closing Date, would result in any of the
representations and warranties of Seller contained herein being untrue in any material respect. Upon the discovery and subsequent notice of such an event or condition, Buyer and Seller shall be entitled to the rights and remedies set forth in
Section 12.1. 
  
 9.3 Conduct of Business. Except as
Buyer may otherwise consent to in writing, between the date hereof and the Closing Date, Seller and Shareholder shall, (a) conduct the Business only in the ordinary course, (b) use their reasonable efforts to keep available the services of its
employees and maintain its current relationships with licensors, suppliers, lessors, distributors, customers, clients and others, (c) maintain, consistent with past practice and good business judgment, all of the Assets in customary repair, order
and condition, ordinary wear and tear excepted, and insurance upon all of the Assets used in the conduct of the Business in such amounts and of such kinds comparable to that in effect on the date hereof, to the extent available at current premiums,
and (d) maintain the Books and Records in the usual, regular and ordinary manner, on a basis consistent with past practice. 
  
 9.4 Noncompetition and Nonsolicitation Agreement. At the Closing, Seller and Shareholder shall deliver or cause to be delivered the Noncompetition
and Nonsolicitation Agreement. 
  
 9.5 Provisional
Agreements. At the Closing, Seller shall: 
  
 (a) enter into
the Radio Equipment Lease Agreement attached hereto as Exhibit C (the “Provisional Lease Agreement”); 
  

 -27- 

 (b) enter into the Management Agreement attached hereto as Exhibit D (the “Provisional
Management Agreement”); and 
  
 (c) enter into the
Reseller Agreement attached hereto as Exhibit E (the “Provisional Reseller Agreement”). 
  
 9.6 Negative Covenants of Seller. From and after the date hereof and through the Closing Date and except with the specific prior written consent of
Buyer, Seller and Shareholder covenant and agree as follows: 
  
 (a) Seller shall not sell, transfer or dispose of any of the Assets other than in the ordinary course of business; provided, however, that any sale, transfer or disposition of any Assets in the ordinary course of business shall not exceed
Assets valued at more than $5,000 in the aggregate; 
  
 (b) Seller
shall not grant an Encumbrance (except a Permitted Encumbrance) on any of the Assets or allow any such Encumbrance (except a Permitted Encumbrance) to occur or to be created; 
  
 (c) Except in the ordinary course of business, Seller shall not acquire any tangible properties or assets relating to the
Business; 
  
 (d) Seller shall not enter into any employment
and/or any independent contractor agreements relating to services to be rendered in connection with the Business or any of the Assets except in the ordinary course of business; 
  
 (e) Except in the ordinary course of business, Seller shall not amend, modify or terminate, without the prior written
consent of Buyer, any of the Contracts, Leases or other agreements, if any, to be assumed by Buyer hereunder; 
  
 (f) Seller shall not incur any indebtedness for which any of the Assets are, or may be, subject to any Encumbrance or claim, either express or implied;

  
 (g) Seller shall not enter into any undertaking to furnish
services for any consideration other than money with respect to the operation of the Assets; 
  
 (h) Seller shall not forgive, discharge or write off any debts or receivables owing to Seller in connection with the Business, including but not limited to those Accounts Receivable listed on Schedule 2.1(t);

  
 (i) Seller shall not incur any Accounts Payable except in the
ordinary course of Business, consistent with the historical operation of the Business; and 
  
 (j) Seller shall pay all Accounts Payable when due, in accordance with the ordinary course of the Business. 
  

 -28- 

 9.7 Exclusive Dealing. During the period from the date of this Agreement to the earlier of the
Closing Date or the termination of this Agreement, Seller shall not take any action, directly or indirectly, to encourage, initiate or engage in discussions or negotiations with, or provide any information to, any Person other than Buyer, concerning
any sale of the Assets or any material part thereof or a similar transaction involving Seller. 
  
 9.8 Review of the Assets. Seller agrees that Buyer may, prior to the Closing Date, through its representatives, review (a) the Assets, (b) the complete working papers of Seller’s certified public
accountants used in their preparation of financial statements for Seller and (c) the Books and Records of Seller and otherwise review the financial and legal condition of Seller as Buyer deems necessary or advisable to familiarize itself with the
Business and related matters; such review shall not, however, affect the representations and warranties made by Seller hereunder or the remedies of Buyer for breaches of those representations and warranties. Buyer may also, prior to the Closing
Date, through its representatives, inspect any or all of Seller’s towers and other transmitting facilities. Such review and inspection shall occur only during normal business hours upon reasonable notice by Buyer. Seller shall permit Buyer and
its representatives to have, after the execution of this Agreement, full access to employees of Seller who can furnish Buyer with financial and operating data and other information with respect to the Business as Buyer shall from time to time
reasonably request. 
  
 9.9 Governmental Filings. It is
expressly acknowledged and agreed that, as soon as practicable after the execution of this Agreement, but in no event more than fifteen (15) Business Days from the date hereof, Buyer and Seller shall file any forms required by the Commission to
transfer the Assets. Seller agrees that it will cooperate with Buyer in all respects in connection with such filings and in connection with any requests for information or further filings which may be necessary in order to obtain the necessary
consents (or to allow the applicable time periods to expire) with respect thereto. Seller shall deliver to Buyer and its counsel drafts of such filings by Seller and all other materials to be submitted sufficiently in advance of any such submission
so that Buyer and its counsel may review and comment upon such filings and other materials. It is further agreed that (a) as soon as reasonably practicable, but in no event more than fifteen (15) Business Days after the Closing Date, Buyer and
Seller shall file any forms required by the Commission to transfer the Subsequent Permits; provided that notwithstanding the provisions of Section 11.1, Buyer and Seller shall undertake the Closing prior to the grant of the FCC Approvals of
the assignment of the Subsequent Permits, and (b) as soon as reasonably practicable, but in no event more than fifteen (15) Business Days after the Closing Date, Buyer and Seller shall amend any Pending Applications to replace Seller with Buyer as
the proposed licensee. 
  
 9.10 Use of Name. Seller hereby
agrees that, after the Closing Date, Seller shall discontinue all use of the name “Delta Communications and Electronics,” “Delta Communications,” any derivatives thereof, and any other trade or assumed names used by Seller in the
Business prior to the Closing Date, alone or in any combination of words for any purpose whatsoever, excluding, however, Seller’s corporate name “DCAE, Inc.” and the names “Delta Wireless” and “Delta Wireless
Solutions.” 
  

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 9.11 Further Assurances. At any time or from time to time after the Closing Date, Seller shall, at
the reasonable request of Buyer and at Buyer’s expense, execute and deliver any further instruments or documents and take all such further action as Buyer may reasonably request in order to consummate and make effective the sale of the Assets
and the assumption of the Assumed Obligations pursuant to this Agreement. 
  
 9.12 Bank Account; Customer Payments. No later than three (3) Business Days following the Closing Date, Seller shall change the name on Seller’s bank account to “DCAE, Inc.”, “DCAE, Inc.
d/b/a Delta Wireless” or “ DCAE, Inc. d/b/a Delta Wireless Solutions.” Seller shall forward to Buyer any checks or other payments received by Seller that are associated with the Accounts Receivable purchased hereunder, including the
applicable portion of any payments on joint accounts. Seller shall provide Buyer with bank statements any additional information reasonably requested by Buyer for Buyer to assure Seller’s compliance with this section. 
  
 ARTICLE X 
 COVENANTS OF BUYER 
  
 Buyer hereby covenants and agrees with Seller as follows: 
  
 10.1 Cooperation by Buyer. Buyer will use its reasonable best efforts, and will cooperate with Seller, to secure all necessary consents, approvals, authorizations, exemptions and waivers from third parties as
shall be required in order to enable Buyer to effect the transactions contemplated on its part hereby, and Buyer will otherwise use its reasonable best efforts to cause and consummation of such transactions in accordance with the terms and
conditions hereof and to cause all conditions contained in this Agreement over which it has control to be satisfied. 
  
 10.2 Books and Records; Personnel. At all times after the Closing Date, Buyer shall allow Seller and any agents of Seller, upon reasonable advance
notice to Buyer, access to all Books and Records of Seller which are transferred to Buyer in connection herewith, to the extent necessary or desirable in anticipation of, or preparation for, existing or future litigation, employment matters, tax
returns or audits, or reports to or filings with any Governmental Authorities, during normal working hours at the location where such Books and Records are maintained, and Seller shall have the right, at Seller’s sole cost, to make copies of
any such Books and Records. Buyer agrees to maintain all Books and Records acquired from Seller for a period of six years from the Closing Date unless such Books and Records are transferred and delivered to Seller within such six (6) year period.

  
 10.3 Provisional Agreements. At the Closing, Buyer
shall: 
  
 (a) enter into the Provisional Lease Agreement;

  
 (b) enter into the Provisional Management Agreement; and

  
 (c) enter into the Provisional Reseller Agreement.

  

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 10.4 Further Assurances. At any time or from time to time after the Closing Date, Buyer shall, at
the request of Seller and at Seller’s expense, execute and deliver any further instruments or documents and take all such further action as Seller may reasonably request in order to consummate and make effective the sale of the Assets and the
assumption of the Assumed Obligations pursuant to this Agreement. 
  
 10.5 Governmental Filings. It is expressly acknowledged and agreed that, as soon as practicable after the execution of this Agreement, but in no event more than fifteen (15) Business Days from the date hereof, Buyer and Seller shall
file any forms required by the Commission to authorize the transfer of the Assets. Buyer agrees that it will cooperate with Seller in all respects in connection with such filings and in connection with any requests for information or further filings
which may be necessary in order to obtain the necessary consents (or to allow the applicable time periods to expire) with respect thereto. Buyer shall deliver to Seller and its counsel drafts of such filings by Buyer and all other materials to be
submitted sufficiently in advance of any such submission so that Seller and its counsel may review and comment upon such filings and other materials. In the event that the FCC has issued a registration for the 450 MHz Tower, subsequent to the
Closing Date, Buyer shall make the appropriate filing with the Commission in order to notify the Commission that the ownership of the 450 MHz Tower has been transferred to Buyer. 
  
 10.6 Yellow Page Advertisements. Buyer hereby agrees to reimburse Seller 50% of the fee for the current yellow page
advertisement identified in the “Contracts above $5,000” section of Schedule 5.9. Seller shall notify Buyer of Seller’s receipt of an invoice with respect to such advertisement and Buyer shall pay to Seller within fifteen (15)
days following such notice, an amount equal to 50% of the invoice amount. 
  
 ARTICLE XI 
 THE CLOSING 
  
 11.1 Time and Place. The closing of the transactions contemplated by this Agreement (the “Closing”)
will take place at 9:00 a.m. at the offices of Bird & Shaw, P.C., located at 4114 McMillan Ave., Dallas, Texas 75206, on or before January 29, 2004, or at such other time, at such other place or on such other date as the parties hereto may
mutually agree. The date on which the Closing occurs is herein referred to as the “Closing Date,” and the transactions contemplated by this Agreement shall be deemed to be effective as of 12:01 a.m. on the Closing Date. 

 
 11.2 Seller’s Obligations. At the Closing, Seller shall
deliver to Buyer, against delivery of the items specified in Section 11.3: 
  
 (a) bills of sale, assumptions and other instruments of transfer, assignment and conveyance in form and substance reasonably satisfactory to Buyer sufficient to (i) transfer to and effectively vest in Buyer all right,
title and interest in the Assets together with possession of the Assets free and clear of all Encumbrances except Permitted Encumbrances, and (ii) at Buyer’s option, transfer to and effective with Teletouch Licenses, Inc. or any other
wholly-owned subsidiary of Buyer, identified by Buyer no later than five (5) days prior to the Closing Date, all rights, title and interest in and to the Permits; 
  

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 (b) certified copies of the Articles of Incorporation, Bylaws and Good Standing and Existence
Certificates of Seller; 
  
 (c) the Registration Rights Agreement;

  
 (d) the Noncompetition and Nonsolicitation Agreement;

  
 (e) the Provisional Lease Agreement; 
  
 (f) the Provisional Management Agreement; 
  
 (g) the Provisional Reseller Agreement; 
  
 (h) all Books and Records which are to be furnished to Buyer hereunder,
including all Contracts and Leases of Seller; 
  
 (i) the
certifications required by Sections 8.1, 8.2 and 8.3 which may be contained in one certificate; 
  
 (j) the consents to assignment of the Contracts and Leases as required by Section 8.4; 
  
 (k) Intentionally deleted. 
  
 (l) a blanket letter to Seller’s lessors with respect to the
Communications Sites, notifying such lessors of the assignment of the Leases of such Communications Sites pursuant to this Agreement; 
  
 (m) a joint letter to the customers of the Business notifying such customers of the purchase of the Business by Buyer; 
  
 (n) letters to Kenwood, Motorola and Vertex consenting to the transfer of the
respective dealerships to Buyer; and 
  
 (o) such other
instruments, documents and certificates in form and substance reasonably satisfactory to Buyer, as Buyer shall have reasonably required. 
  
 11.3 Buyer’s Obligations. At the Closing, Buyer shall deliver to Seller, against delivery of the items specified in Section 11.2:

  
 (a) a wire transfer for the total of the Cash Payment and the
Shareholder Noncompetition Payment; 
  
 (b) the Provisional Lease
Agreement; 
  

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 (c) the Provisional Management Agreement; 
  
 (d) the Provisional Reseller Agreement; 
  
 (e) the Registration Rights Agreement; 
  
 (f) the certifications required by Sections 7.1, 7.2 and 7.3, which may be contained in one
certificate. 
  
 11.4 Transfer of Permits. 
  
 (a) Governmental Approvals. With respect to Seller’s licenses
issued by the Commission with a Commercial Mobile Radio Service (“CMRS”) regulatory status or a Private Mobile Radio Service (“PMRS”) regulatory status if licensed for spectrum above 470 MHz, such licenses shall not
be transferred until all governmental consents and approvals necessary to permit the consummation of the transactions contemplated by this Agreement shall have been received, including, but not limited to, all necessary approvals of the Commission
(“FCC Approvals”) and until such FCC Approvals shall be final and nonappealable. With respect to Seller’s licenses issued by the Commission with a PMRS regulatory status if licensed for spectrum below 470 MHz, such licenses
shall not be transferred until the parties have authority to close the transactions contemplated by this Agreement pursuant to conditional temporary authority under the Rules and Regulations following the filing of the required applications with the
Commission. All Permits requiring such approvals for transfer are hereinafter referred to collectively as the “Regulated Permits.” 
  
 (b) Transfer of Regulated Permits. Notwithstanding any provision of this Agreement to the contrary, Seller shall assign all of their respective
rights, title and interest in and to the Regulated Permits on the first business day following the date on which the parties receive, as applicable (a) evidence of final and nonappealable FCC Approvals with respect to Seller’s licenses issued
by the Commission with a CMRS regulatory status or a PMRS regulatory status for spectrum above 470 MHz or (b) evidence of authority to close the transactions contemplated by this Agreement pursuant to conditional temporary authority under the Rules
and Regulations with respect to Seller’s licenses issued by the Commission with a PMRS regulatory status for spectrum below 470 MHz. Seller shall deliver to Buyer on such date the evidence referenced in this Section 11.4. 
  
 11.5 Possession. Simultaneously with the consummation of the transfers
contemplated herein, Seller, through its officers, agents and employees, shall put Buyer in full possession and enjoyment of all Assets to be conveyed and transferred by this Agreement. 
  

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 ARTICLE XII 
 TERMINATION 
  
 12.1
Termination. This Agreement may be terminated and the transactions contemplated hereby may be abandoned at any time on or prior to the Closing Date: 
  
 (a) by the mutual written consent of Buyer and Seller; 
  
 (b) by either party on or after January 30, 2004, if the Closing has not occurred by such date, provided that as of such date neither party is in default
or that both parties are in default under this Agreement; or 
  
 (c) by Buyer or Seller in writing, without prejudice to other rights and remedies which the terminating party may have (provided the terminating party is not otherwise in material default or breach of this Agreement, or has failed or
refused to close without justification hereunder), if the other party shall (i) materially fail or have failed to perform its covenants or agreements contained herein required to be performed on or prior to the Closing Date, or (ii) materially
breach or have breached any of its representations or warranties contained herein. 
  
 12.2 Effect on Obligations. Termination of this Agreement pursuant to this Article shall terminate all obligations of the parties hereunder, except for (i) Sections 13.1, 13.2, 13.9,
13.10 and 13.11 and Buyer’s remedies under Article XII hereof. Upon any termination of this Agreement each party hereto will redeliver all documents, work papers and other material of any other party relating to the
transactions contemplated hereby, and all copies of such materials, whether so obtained before or after the execution hereof, to the party furnishing the same. 
  

ARTICLE XIII 
 SURVIVAL AND
INDEMNIFICATION 
  
 13.1 Indemnification of Seller.
Buyer shall indemnify and hold Seller and Shareholder (the “Seller Indemnitees”) harmless from and against any and all damages, including exemplary damages and penalties, losses, deficiencies, costs, expenses, obligations, fines,
expenditures, claims and liabilities, including reasonable counsel fees and reasonable expenses of investigation, defending and prosecuting litigation (collectively, the “Damages”), suffered by Seller Indemnitees as a result of,
caused by, arising out of, or in any way relating to (a) any misrepresentation, breach of warranty, or nonfulfillment of any agreement or covenant on the part of Buyer under this Agreement or any misrepresentation in or omission from any list,
schedule, certificate, or other instrument furnished or to be furnished to Seller by Buyer pursuant to the terms of this Agreement, or (b) any liability or obligation (other than the Excluded Liabilities or any other liabilities or obligations for
which Buyer is being indemnified by Seller hereunder) which pertains to the ownership, operation or conduct of the Business or Assets arising from any acts, omissions, events, conditions or circumstances occurring on or after the Closing Date,
including, but not limited to, Buyer’s failure to perform any of the Assumed Obligations. 
  

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 13.2 Indemnification of Buyer. Seller and Shareholder shall indemnify and hold Buyer, its
officers, directors, shareholders, agents, Affiliates, successors and assigns (the “Buyer Indemnitees”) harmless from and against any and all Damages suffered by Buyer Indemnitees as a result of, caused by, arising out of, or in any
way relating to (a) any misrepresentation, breach of warranty, nonfulfillment of any agreement or covenant on the part of Seller or Shareholder under this Agreement or any misrepresentation in or omission from any list, schedule, certificate or
other instrument furnished or to be furnished to Buyer by Seller pursuant to the terms of this Agreement, (b) any liability or obligation (other than those for which Seller is being indemnified by Buyer hereunder and other than the Assumed
Obligations) which pertains to the ownership, operation or conduct of the Business or Assets arising from any acts, omissions, events, conditions or circumstances occurring before the Closing Date and (c) the Excluded Liabilities. 
  
 13.3 Demands. Each indemnified party hereunder agrees that promptly
upon its discovery of facts giving rise to a claim for indemnity under the provisions of this Agreement, including receipt by it of notice of any demand, assertion, claim, action or proceeding, judicial or otherwise, by any third party (such third
party actions being collectively referred to herein as the “Claim”), with respect to any matter as to which it claims to be entitled to indemnity under the provisions of this Agreement, it will give prompt notice thereof in writing
to the indemnifying party, together with a statement of such information respecting any of the foregoing as it shall have. Such notice shall include a formal demand for indemnification under this Agreement. The indemnifying party shall not be
obligated to indemnify the indemnified party with respect to any Claim if the indemnified party knowingly failed to notify the indemnifying party thereof in accordance with the provisions of this Agreement in sufficient time to permit the
indemnifying party or its counsel to defend against such matter and to make a timely response thereto including, without limitation, any responsive motion or answer to a complaint, petition, notice or other legal, equitable or administrative process
relating to the Claim, only insofar as such knowing failure to notify the indemnifying party has actually resulted in prejudice or damage to the indemnifying party. 
  
 13.4 Right to Contest and Defend. The indemnifying party shall be entitled at its cost and expense to contest and
defend by all appropriate legal proceedings any Claim with respect to which it is called upon to indemnify the indemnified party under the provisions of this Agreement; provided, that notice of the intention to contest shall be delivered by the
indemnifying party to the indemnified party within twenty (20) days from the date of receipt by the indemnifying party of notice by the indemnified party of the assertion of the Claim. Any such contest may be conducted in the name and on behalf of
the indemnifying party or the indemnified party as may be appropriate. Such contest shall be conducted by reputable counsel employed by the indemnifying party, but the indemnified party shall have the right but not the obligation to participate in
such proceedings and to be represented by counsel of its own choosing at its sole cost and expense. The indemnifying party shall have full authority to determine all action to be taken with respect thereto; provided, however, that the indemnifying
party will not have the authority to subject the indemnified party to any obligation whatsoever, 
  

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 other than the performance of purely ministerial tasks or obligations not involving material expense. If the indemnifying
party does not elect to contest any such Claim, the indemnifying party shall be bound by the result obtained with respect thereto by the indemnified party, having used its reasonable best efforts in resolution. At any time after the commencement of
the defense of any Claim, the indemnifying party may request the indemnified party to agree in writing to the abandonment of such contest or to the payment or compromise by the indemnified party of the asserted Claim, whereupon such action shall be
taken unless the indemnified party determines that the contest should be continued, and so notifies the indemnifying party in writing within fifteen (15) days of such request from the indemnifying party. If the indemnified party determines that the
contest should be continued, the indemnifying party shall be liable hereunder only to the extent of the amount that the other party to the contested Claim had agreed unconditionally to accept in payment or compromise as of the time the indemnifying
party made its request therefor to the indemnified party. 
  
 13.5
Cooperation. If requested by the indemnifying party, the indemnified party agrees to cooperate with the indemnifying party and its counsel in contesting any Claim that the indemnifying party elects to contest or, if appropriate, in making any
counterclaim against the person asserting the Claim, or any cross-complaint against any person, and the indemnifying party will reimburse the indemnified party for any expenses incurred by it in so cooperating. If the indemnifying party has not
chosen to contest a Claim, the indemnifying party shall cooperate with the indemnified party and its counsel in contesting any Claim at no cost or expense to the indemnified party. 
  
 13.6 Right to Participate. The indemnified party agrees to afford the indemnifying party and its counsel the
opportunity to be present at, and to participate in, conferences with all persons, including Governmental Authorities, asserting any Claim against the indemnified party or conferences with representatives of or counsel for such persons. 

 
 13.7 Payment of Damages. The indemnifying party shall pay to the
indemnified party in immediately available funds any amounts to which the indemnified party may become entitled by reason of the provisions of this Agreement subject to offset for any insurance proceeds actually received by the indemnified party,
such payment to be made within five days after any such amounts are finally determined either by mutual agreement of the parties hereto or pursuant to the final unappealable judgment of a court of competent jurisdiction. The availability of
insurance proceeds shall not delay or postpone any indemnification payment required hereunder. If the indemnified party both collects any such insurance proceeds and receives a payment from the indemnifying party hereunder, and the sum of such
proceeds and payment is in excess of the amount payable with respect to the matter that is the subject of the indemnity, then the indemnified party shall promptly refund to the indemnifying party the amount of such excess, if permitted by the
applicable insurance policies. Except as otherwise provided in the preceding sentence, the indemnified party’s receipt of any such insurance proceeds shall not eliminate or reduce the obligations of the indemnifying party or the rights of the
indemnified party hereunder. 
  
 13.8 Survival of
Representations and Warranties. The representations and warranties contained in Articles V and VI of this Agreement shall survive until the fifth anniversary date of the Closing Date except for the representations and warranties in
Sections 5.2 and 5.7, which shall survive indefinitely, and Sections 5.12 and 5.17, which shall survive until the lapse of the applicable statute of limitations. 
  

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 13.9 General. THE INDEMNIFICATION AND ASSUMPTION PROVISIONS PROVIDED FOR IN THIS AGREEMENT HAVE
BEEN EXPRESSLY NEGOTIATED IN EVERY DETAIL, ARE INTENDED TO BE GIVEN FULL AND LITERAL EFFECT, AND SHALL BE APPLICABLE WHETHER OR NOT THE LIABILITIES, OBLIGATIONS, CLAIMS, JUDGMENTS, LOSSES, COSTS, EXPENSES OR DAMAGES IN QUESTION ARISE OR AROSE SOLELY
OR IN PART FROM THE GROSS, ACTIVE, PASSIVE OR CONCURRENT NEGLIGENCE, STRICT LIABILITY, OR OTHER FAULT OF ANY INDEMNIFIED PARTY. BUYER AND SELLER ACKNOWLEDGE THAT THIS STATEMENT COMPLIES WITH THE EXPRESS NEGLIGENCE RULE AND CONSTITUTES CONSPICUOUS
NOTICE. NOTHING IN THIS CONSPICUOUS NOTICE IS INTENDED TO PROVIDE OR ALTER THE RIGHTS AND OBLIGATIONS OF THE PARTIES, ALL OF WHICH ARE SPECIFIED ELSEWHERE IN THIS AGREEMENT. 
  
 ARTICLE XIV 
 MISCELLANEOUS 
  
 14.1 Notices. Any notice,
request, instruction, correspondence or other document to be given hereunder by either party to the other (herein collectively called “Notice”) shall be in writing and delivered in person or by courier service requiring
acknowledgment of receipt of delivery or mailed by certified mail, postage prepaid and return receipt requested, or by telecopier, as follows: 
  
 If to Seller or Shareholder, addressed to: 
  
 DCAE, Inc. 
 2162 S. Jupiter Road 
 Garland, Texas 75041 
 Attention: Wayne Lott 
  
 If to Buyer, addressed to: 
  
 Teletouch Communications, Inc. 
 110 North College Avenue, Suite 200 
 Tyler, Texas 75702 
 Attention: J. Kernan Crotty 
 Telecopy: (903) 595-8865 
  
 with a copy prior to Closing to: 
  
 Mr. Thomas D. Manford III 
 Bracewell & Patterson, L.L.P. 
 711 Louisiana Street, Suite 2900 
 Houston, Texas 77002-2781 
 Telecopy: (713) 221-1212 
  

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 Notice given by personal delivery, courier service or mail shall be effective upon actual receipt. Notice given by
telecopier shall be confirmed by appropriate answer back and shall be effective upon actual receipt if received during the recipient’s normal business hours, or at the beginning of the recipient’s next Business Day after receipt if not
received during the recipient’s normal business hours. All Notices by telecopier shall be confirmed promptly after transmission in writing by certified mail or personal delivery. Any party may change any address to which Notice is to be given
to it by giving Notice as provided above of such change of address. 
  
 14.2 Governing Law. The provisions of this Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Texas (excluding any conflicts-of-law rule or principle that might refer same to the
laws of another jurisdiction). 
  
 14.3 Arbitration. If any
dispute, controversy or claim (referred to collectively as a “Dispute”) of any kind or character arises by or among the Parties which cannot be amicably resolved, then at the written demand of any one Party to the others, the
Dispute shall be fully and finally resolved by arbitration in Dallas County, Texas before a single arbitrator mutually acceptable to and selected by the Parties and otherwise in accordance with the Commercial Arbitration Rules of the American
Arbitration Association (“AAA”). If no prompt agreement can be reached among the Parties concerning the identity of the arbitrator, then the sole arbitrator shall be selected in accordance with the applicable AAA Rules. 

 
 14.4 Entire Agreement; Amendments and Waivers. This Agreement
(including the exhibits and schedules hereto) constitutes the entire agreement between the parties hereto pertaining to the subject matter hereof and supersede all prior agreements, understandings, negotiations and discussions, whether oral or
written, of the parties, and there are no warranties, representations or other agreements between the parties in connection with the subject matter hereof except as set forth specifically herein or contemplated hereby. No supplement, modification or
waiver of this Agreement shall be binding unless executed in writing by the party to be bound thereby. The failure of a party to exercise any right or remedy shall not be deemed or constitute a waiver of such right or remedy in the future. No waiver
of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (regardless of whether similar), nor shall any such waiver constitute a continuing waiver unless otherwise expressly provided.

  
 14.5 Binding Effect and Assignment. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their respective permitted successors and assigns; but neither this Agreement nor any of the rights, benefits or obligations hereunder shall be assigned, by operation of law or
otherwise, by Seller without the prior written consent of Buyer. Seller hereby specifically consents to the assignment, at the election of Buyer and in connection with the FCC Approvals to be obtained as a condition of Closing, of all Permits of
Seller issued by the Commission and subject to assignment and/or transfer from Seller to Buyer pursuant to the Agreement may be transferred and assigned to either Buyer, Teletouch Licenses, Inc., a Delaware corporation and wholly-owned subsidiary of
Buyer or any other wholly-owned subsidiary of Buyer. Nothing in this Agreement, express or implied, is intended to confer upon any person or entity other than the parties hereto and their respective permitted successors and assigns, any rights,
benefits or obligations hereunder. 
  

 -38- 

 14.6 Severability. If any provision of the Agreement is rendered or declared illegal or
unenforceable by reason of any existing or subsequently enacted legislation or by decree of a court of last resort, Buyer and Seller shall promptly meet and negotiate substitute provisions for those rendered or declared illegal or unenforceable so
as to preserve as nearly as possible the contemplated economic effects of the transactions, but all of the remaining provisions of this Agreement shall remain in full force and effect. 
  
 14.7 Headings. The headings of the sections herein are inserted for convenience of reference only and are not
intended to be a part of or to affect the meaning or interpretation of this Agreement. 
  
 14.8 Execution. This Agreement may be executed in multiple counterparts each of which shall be deemed an original and all of which shall constitute one instrument. 
  
 14.9 Sales and Transfer Taxes. Seller shall be responsible for and pay
any applicable sales, stamp, transfer, documentary, use, filing and other taxes and fees (including any penalties and interest) that may become due or payable in connection with this Agreement and the transactions contemplated hereby.
Notwithstanding the foregoing, Buyer shall be responsible for the payment of any transfer taxes and registrations applicable to the transfer of the Vehicles and the Permits. Seller shall be responsible for a 1/12th fraction, and Buyer shall be responsible for the remaining 11/12ths
fraction, of any ad valorem personal property taxes assessed with respect to the Assets during the 2004 calendar year. 
  
 14.10 Expenses. Except as otherwise provided in this Agreement, Seller
and Buyer shall each pay all costs and expenses incurred by them or on their behalf in connection with this Agreement and the transactions contemplated hereby. 
  

14.11 Publicity. Except as otherwise required by applicable laws or regulations, Seller shall not issue any press release or make any other
public statement, in each case relating to or connected with or arising out of this Agreement or the matters contained herein, without obtaining the prior approval of the Buyer to the contents and the manner of presentation and publication thereof.

  
 14.12 Confidentiality. Prior to the Closing Date,
neither Buyer, Seller nor Shareholder will disclose the terms of this Agreement or the Acquisition to any person other than their respective directors, officers, agents or representatives, except as otherwise provided herein or unless required by
law. The Seller may make appropriate disclosures of the general nature of the acquisition to its employees, vendors and customers to protect the goodwill of the Business and to facilitate the Closing. Buyer may disclose pertinent information
regarding the acquisition to existing and prospective investors, lenders, or investment bankers or financial advisors for the purpose of obtaining debt and/or equity financing, and may describe this Agreement and the transactions contemplated hereby
in any offering document with respect to securities of the Purchaser, and may include this Agreement as an exhibit thereto. 
  

 -39- 

 14.13 Post-Closing Confidentiality. Reference is hereby made to a certain 2-page Confidentiality
Agreement dated August 22, 2003, between Seller and Buyer (the “Confidentiality Agreement”). Recognizing that: (i) Seller will continue onward as a Nextel dealer from and after the Closing; (ii) the Nextel business is excluded from
the “Business” otherwise being sold and conveyed from Seller to Buyer; (iii) Buyer (or Buyer’s affiliates) are or may be competitors of Nextel; (iv) the foregoing provisions (e.g. the Section 10.6 sharing of the existing Yellow
Pages ad and the Schedule 2.1(f) provisions re a transition period prior to establishing two separate offices) may give rise to one or more situations in which Buyer may be exposed to or receive confidential information regarding
Nextel’s business and/or Nextel customers, Buyer agrees to keep all such information confidential, to the same extent and in accordance with the same provisions, as if such were original described as Evaluation and/or Derivative Materials under
the Confidentiality Agreement. 
  
 (Remainder of page intentionally
left blank; signature page follows.) 
  

 -40- 

 IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed on its behalf as
of the date first above written. 
  

			
	 TELETOUCH COMMUNICATIONS, INC.

		
	 By:
	 	  

	 Name:
	 	  

	 Title:
	 	  

	
	 DCAE, INC.

		
	 By:
	 	  

	 Name:
	 	  

	 Title:
	 	  

	
	  

	 Wayne Lott

  

 -41-

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