Document:

Registration Rights Agreement

 

Exhibit No. 4.15

TECHNICAL OLYMPIC USA, INC.

$250,000,000

81/4% Senior Notes Due 2011

REGISTRATION RIGHTS AGREEMENT

New York, New York

April 12, 2006

Deutsche Bank Securities Inc.

60 Wall Street

New York, New York 10005

Dear Sirs:

          Technical Olympic USA, Inc., a corporation organized under the laws of the State of
Delaware (the “Company”), proposes to issue and sell to Deutsche Bank Securities Inc. (the “Initial
Purchaser”), upon the terms set forth in a purchase agreement, dated April 5, 2006 (the “Purchase
Agreement”) relating to the initial placement of the Notes (the “Initial Placement”), $250,000,000
aggregate principal amount of its 81/4% Senior Notes due 2011 (the “Notes”). The Notes will be
unconditionally guaranteed (the “Guarantees” and together with the Notes, the “Securities”) on a
senior unsecured basis by each of the Company’s direct and indirect domestic subsidiaries set forth
on the signature page hereto (the “Guarantors”). To induce the Initial Purchaser to enter into the
Purchase Agreement and to satisfy a condition of your obligations thereunder, the Company and the
Guarantors agree with you for your benefit and the benefit of the holders from time to time of the
Securities (including the Initial Purchaser) and the New Securities (as defined herein) (each a
“Holder” and, together, the “Holders”), as follows:

          Section 1. Definitions. Capitalized terms used herein without definition shall have
their respective meanings set forth in the Purchase Agreement. As used in this Agreement, the
following capitalized defined terms shall have the following meanings:

          “Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations of the
Commission promulgated thereunder.

          “Affiliate” of any specified Person shall mean any other Person that, directly or indirectly,
is in control of, is controlled by, or is under common control with, such specified Person. For
purposes of this definition, control of a Person shall mean the power, direct or indirect, to
direct or cause the direction of the management and policies of such Person whether by contract or
otherwise; and the terms “controlling” and “controlled” shall have meanings correlative to the
foregoing.

          “Broker-Dealer” shall mean any broker or dealer registered as such under the Exchange Act.

          “Business Day” shall mean any day other than a Saturday, a Sunday or a legal holiday or a day
on which banking institutions or trust companies are authorized or obligated by law to close in New
York City.

 

 

          “Commission” shall mean the Securities and Exchange Commission.

          “Company” shall have the meaning set forth in the preamble hereto.

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

          “Exchange Offer Registration Period” shall mean the 180-day period following the consummation
of the Registered Exchange Offer, exclusive of any period during which any stop order shall be in
effect suspending the effectiveness of the Exchange Offer Registration Statement, or such shorter
period as will terminate when all New Securities held by Exchanging Dealers or the Initial
Purchaser have been sold pursuant thereto.

          “Exchange Offer Registration Statement” shall mean a registration statement of the Company and
the Guarantors on an appropriate form under the Act with respect to the Registered Exchange Offer,
all amendments and supplements to such registration statement, including post-effective amendments
thereto, in each case including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.

          “Exchanging Dealer” shall mean any Holder (which may include the Initial Purchaser) that is a
Broker-Dealer and elects to exchange for New Securities any Securities that it acquired for its own
account as a result of market-making activities or other trading activities (but not directly from
the Company or any Affiliate of the Company).

          “Final Memorandum” shall have the meaning set forth in the Purchase Agreement.

          “Guarantees” shall have the meaning set forth in the preamble hereto.

          “Guarantors” shall have the meaning set forth in the preamble hereto.

          “Holder” shall have the meaning set forth in the preamble hereto.

          “Indenture” shall mean the Indenture relating to the Securities, dated as of April 12, 2006,
among the Company, the Guarantors and Wells Fargo Bank, National Association, as trustee, as the
same may be amended, supplemented, waived or otherwise modified from time to time in accordance
with the terms thereof.

          “Initial Placement” shall have the meaning set forth in the preamble hereto.

          “Initial Purchaser” shall have the meaning set forth in the preamble hereto.

          “Losses” shall have the meaning set forth in Section 7(d) hereof.

          “Majority Holders” shall mean the Holders of a majority of the aggregate principal amount of
Securities and/or New Securities, as applicable, registered under a Registration Statement.

          “Managing Underwriters” shall mean the investment banker or investment bankers and manager or
managers that shall administer an underwritten offering.

          “New Notes” shall mean debt securities of the Company, guaranteed by the Guarantors, identical
in all material respects to the Notes (except that the cash interest and interest rate step-up
provi-

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sions and the transfer restrictions shall be modified or eliminated, as appropriate) and to be
issued under the Indenture or the New Securities Indenture.

          “New Securities” shall mean debt securities of the Company and the related guarantees of the
Guarantors, identical in all material respects to the Securities (except that the cash interest and
interest rate step-up provisions and the transfer restrictions shall be modified or eliminated, as
appropriate) and to be issued under the Indenture or the New Securities Indenture.

          “New Securities Indenture” shall mean an indenture between the Company, the Guarantors and the
New Securities Trustee, identical in all material respects to the Indenture (except that the cash
interest and interest rate step-up provisions and the transfer restrictions will be modified or
eliminated, as appropriate).

          “New Securities Trustee” shall mean a bank or trust company reasonably satisfactory to the
Initial Purchaser, as trustee with respect to the New Securities under the New Securities
Indenture.

          “Notes” shall have the meaning set forth in the preamble hereto.

          “Person” shall mean an individual, trustee, corporation, partnership, limited liability
company, joint stock company, trust, unincorporated association, union, business association, firm
or other legal entity.

          “Prospectus” shall mean the prospectus included in any Registration Statement (including,
without limitation, a prospectus that discloses information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A under the Act), as
amended or supplemented by any prospectus supplement, with respect to the terms of the offering of
any portion of the Securities or the New Securities covered by such Registration Statement, and all
amendments and supplements thereto and all material incorporated by reference therein.

          “Purchase Agreement” shall have the meaning set forth in the preamble hereto.

          “Registered Exchange Offer” shall mean the proposed offer of the Company and the Guarantors to
issue and deliver to the Holders of the Securities that are not prohibited by any law or policy of
the Commission from participating in such offer, in exchange for the Securities, a like aggregate
principal amount of the New Notes and Related Guarantees.

          “Registration Statement” shall mean any Exchange Offer Registration Statement or Shelf
Registration Statement that covers any of the Securities or the New Securities pursuant to the
provisions of this Agreement, any amendments and supplements to such registration statement,
including post-effective amendments (in each case including the Prospectus contained therein), all
exhibits thereto and all material incorporated by reference therein.

          “Related Guarantees” shall mean the guarantees of the Guarantors to be issued under the
Indenture or the New Securities Indenture in respect of New Notes.

          “Securities” shall have the meaning set forth in the preamble hereto.

          “Shelf Registration” shall mean a registration effected pursuant to Section 3 hereof.

          “Shelf Registration Period” has the meaning set forth in Section 3(b) hereof.

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          “Shelf Registration Statement” shall mean a “shelf” registration statement of the Company and
the Guarantors pursuant to the provisions of Section 3 hereof which covers some or all of the
Securities and/or New Securities, as applicable, on an appropriate form under Rule 415 under the
Act, or any similar rule that may be adopted by the Commission, amendments and supplements to such
registration statement, including post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated by reference therein.

          “Trustee” shall mean the trustee with respect to the Securities and New Securities under the
Indenture.

          “Underwriter” shall mean any underwriter of Securities or New Securities in connection with an
offering thereof under a Registration Statement.

          Section 2. Registered Exchange Offer. (a) The Company and the Guarantors shall
prepare, at their cost, and, not later than 90 days following the date of the original issuance of
the Securities (or if such 90th day is not a Business Day, the next succeeding Business Day), shall
file with the Commission the Exchange Offer Registration Statement with respect to the Registered
Exchange Offer. The Company and the Guarantors shall use their respective best efforts to cause
the Exchange Offer Registration Statement to become effective under the Act not later than 180 days
following the date of the original issuance of the Securities (or if such 180th day is not a
Business Day, the next succeeding Business Day).

          (b) Upon the effectiveness of the Exchange Offer Registration Statement, the Company and the
Guarantors shall promptly commence the Registered Exchange Offer, it being the objective of such
Registered Exchange Offer to enable each Holder electing to exchange Securities for New Securities
(assuming that such Holder is not an Affiliate of the Company, acquires the New Securities in the
ordinary course of such Holder’s business, has no arrangements with any Person to participate in
the distribution of the New Securities and is not prohibited by any law or policy of the Commission
from participating in the Registered Exchange Offer) and to trade such New Securities from and
after their receipt without any limitations or restrictions under the Act and without material
restrictions under the securities laws of a substantial proportion of the several states of the
United States.

          (c) In connection with the Registered Exchange Offer, the Company and the Guarantors shall:

     (i) mail to each Holder a copy of the Prospectus forming part of the Exchange Offer
Registration Statement, together with an appropriate letter of transmittal and related
documents;

     (ii) keep the Registered Exchange Offer open for not less than 20 business days and
not more than 45 days after the date notice thereof is mailed to the Holders (or, in each
case, longer if required by applicable law);

     (iii) use their respective best efforts to keep the Exchange Offer Registration
Statement continuously effective under the Act, supplemented and amended as required, under
the Act to ensure that it is available for sales of New Securities by Exchanging Dealers or
the Initial Purchaser during the Exchange Offer Registration Period;

     (iv) utilize the services of a depositary for the Registered Exchange Offer with an
address in the Borough of Manhattan in New York City, which may be the Trustee, the New
Securities Trustee or an Affiliate of either of them;

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     (v) permit Holders to withdraw tendered Securities at any time prior to the close of
business, New York time, on the last Business Day on which the Registered Exchange Offer is
open;

     (vi) prior to effectiveness of the Exchange Offer Registration Statement to the extent
required by the Commission, provide a supplemental letter to the Commission (A) stating
that the Company and the Guarantors are conducting the Registered Exchange Offer in
reliance on the position of the Commission in Exxon Capital Holdings Corporation (pub.
avail. May 13, 1988), and Morgan Stanley and Co., Inc. (pub. avail. June 5, 1991); and (B)
including a representation that the Company and the Guarantors have not entered into any
arrangement or understanding with any Person to distribute the New Securities to be
received in the Registered Exchange Offer and that, to the best of their information and
belief, each Holder participating in the Registered Exchange Offer is acquiring the New
Securities in the ordinary course of business and has no arrangement or understanding with
any Person to participate in the distribution of the New Securities; and

     (vii) comply in all material respects with all applicable laws.

          (d) As soon as practicable after the close of the Registered Exchange Offer, the Company and
the Guarantors shall:

     (i) accept for exchange all Notes tendered and not validly withdrawn pursuant to the
Registered Exchange Offer;

     (ii) deliver to the Trustee for cancellation in accordance with Section 5(s) all Notes
so accepted for exchange; and

     (iii) cause the Trustee or New Securities Trustee, as the case may be, promptly to
authenticate and deliver to each Holder of Securities a principal amount of New Notes equal
to the principal amount of the Notes of such Holder so accepted for exchange.

          (e) Each Holder hereby acknowledges and agrees that any Broker-Dealer and any such Holder
using the Registered Exchange Offer to participate in a distribution of the New Securities (x)
could not under Commission policy as in effect on the date of this Agreement rely on the position
of the Commission in Morgan Stanley and Co., Inc. (pub. avail. June 5, 1991) and Exxon Capital
Holdings Corporation (pub. avail. May 13, 1988), as interpreted in the Commission’s letter to
Shearman & Sterling dated July 2, 1993 and similar no-action letters; and (y) must comply with the
registration and prospectus delivery requirements of the Act in connection with any secondary
resale transaction which must be covered by an effective registration statement containing the
selling security holder information required by Item 507 or 508, as applicable, of Regulation S-K under the Act, if the resales are of New Securities
obtained by such Holder in exchange for Securities acquired by such Holder directly from the
Company or one of its Affiliates. Accordingly, each Holder participating in the Registered
Exchange Offer shall be required to represent to the Company and the Guarantors that, at the time
of the consummation of the Registered Exchange Offer:

     (i) any New Securities received by such Holder will be acquired in the ordinary course
of business;

     (ii) such Holder will have no arrangement or understanding with any Person to
participate in the distribution of the Securities or the New Securities within the meaning
of the Act;

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     (iii) such Holder is not an Affiliate of the Company or any of the Guarantors or if it
is an Affiliate, such Holder will comply with the registration and prospectus delivery
requirements of the Act to the extent applicable;

     (iv) if such Holder is not a Broker-Dealer, that it is not engaged in, and does not
intend to engage in, the distribution of the New Securities; and

     (v) if such Holder is a Broker-Dealer, that it will receive New Securities for its own
account in exchange for Securities that were acquired as a result of market-making
activities or other trading activities and that it will deliver a prospectus in connection
with any resale of such New Securities.

          (f) If the Initial Purchaser determines that it is not eligible to participate in the
Registered Exchange Offer with respect to the exchange of Securities constituting any portion of an
unsold allotment, at the request of the Initial Purchaser, the Company and the Guarantors shall
issue and deliver to the Initial Purchaser or the Person purchasing New Securities registered under
a Shelf Registration Statement as contemplated by Section 3 hereof from the Initial Purchaser, in
exchange for such Securities, a like principal amount of New Securities. The Company and the
Guarantors shall use their respective reasonable efforts to cause the CUSIP Service Bureau to issue
the same CUSIP number for such New Securities as for New Securities issued pursuant to the
Registered Exchange Offer.

          Section 3. Shelf Registration. (a) If (i) due to any change in law or applicable
interpretations thereof by the Commission’s staff, the Company determines upon advice of its
outside counsel that it is not permitted to effect the Registered Exchange Offer as contemplated by
Section 2 hereof; (ii) for any other reason the Exchange Offer Registration Statement is not
declared effective within 180 days following the date of the original issuance of the Securities or
the Registered Exchange Offer is not consummated within 45 days following the date that is 180 days
following the date of the original issuance; (iii) the Initial Purchaser so requests with respect
to Securities that are not eligible to be exchanged for New Securities in the Registered Exchange
Offer and that are held by it following consummation of the Registered Exchange Offer; (iv) any
Holder (other than the Initial Purchaser) is not eligible to participate in the Registered Exchange
Offer or does not receive freely tradeable New Securities in the Registered Exchange Offer other
than by reason of such Holder being an Affiliate of the Company (it being understood that the
requirement that a participating Broker-Dealer deliver the prospectus contained in the Exchange
Offer Registration Statement in connection with sales of New Securities shall not result in such
New Securities being not “freely tradeable”); or (v) in the case of the Initial Purchaser that
participates in the Registered Exchange Offer or acquires New Securities pursuant to Section 2(f) hereof, the Initial Purchaser does not receive freely
tradeable New Securities in exchange for Securities constituting any portion of an unsold allotment
(it being understood that (x) the requirement that the Initial Purchaser deliver a Prospectus
containing the information required by Item 507 or 508 of Regulation S-K under the Act in
connection with sales of New Securities acquired in exchange for such Securities shall result in
such New Securities being not “freely tradeable;” and (y) the requirement that an Exchanging Dealer
deliver a Prospectus in connection with sales of New Securities acquired in the Registered Exchange
Offer in exchange for Securities acquired as a result of market-making activities or other trading
activities shall not result in such New Securities being not “freely tradeable”) the Company and
the Guarantors shall effect a Shelf Registration Statement in accordance with subsection (b) below.

          (b) If required pursuant to subsection (a) above,

     (i) the Company and the Guarantors, at their cost, shall as promptly as practicable,
file with the Commission and thereafter shall use their best efforts to cause to be
declared effective under the Act a Shelf Registration Statement relating to the offer and
sale of the Securities or

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the New Securities, as applicable, by the Holders thereof from
time to time in accordance with the methods of distribution elected by such Holders and set
forth in such Shelf Registration Statement; provided, however, that no Holder (other than
the Initial Purchaser) shall be entitled to have the Securities or New Securities held by
it covered by such Shelf Registration Statement unless such Holder agrees in writing to be
bound by all of the provisions of this Agreement applicable to such Holder; and provided
further, that with respect to New Securities received by the Initial Purchaser in exchange
for Securities constituting any portion of an unsold allotment, the Company and the
Guarantors may, if permitted by current interpretations by the Commission’s staff, file a
post-effective amendment to the Exchange Offer Registration Statement containing the
information required by Item 507 or 508 of Regulation S-K, as applicable, in satisfaction
of their obligations under this subsection with respect thereto, and any such Exchange
Offer Registration Statement, as so amended, shall be referred to herein as, and governed
by the provisions herein applicable to, a Shelf Registration Statement.

     (ii) the Company and the Guarantors shall use their respective best efforts to keep
the Shelf Registration Statement continuously effective, supplemented and amended as
required by the Act, in order to permit the Prospectus forming part thereof to be usable by
Holders for a period until the earlier of (A) the time when all of the Securities or New
Securities, as applicable, covered by the Shelf Registration Statement can be sold pursuant
to Rule 144 without limitation under clauses (c), (e), (f) and (h) of Rule 144, (B) the
date on which all the Securities or New Securities, as applicable, covered by the Shelf
Registration Statement have been sold pursuant to the Shelf Registration Statement, and (C)
the date two years from the date the Shelf Registration Statement is declared effective by
the Commission (in any such case, such period being called the “Shelf Registration
Period”). The Company and the Guarantors shall be deemed not to have used their respective
best efforts to keep the Shelf Registration Statement effective during the requisite period
if they voluntarily take any action that would result in Holders of Securities or New
Securities covered thereby not being able to offer and sell such Securities or New
Securities during that period, unless (A) such action is required by applicable law; or (B)
such action is taken by the Company and the Guarantors in good faith and for valid business
reasons (not including avoidance of the Company’s and the Guarantors’ obligations
hereunder), including the acquisition or divestiture of assets, so
long as the Company and the Guarantors promptly thereafter comply with the
requirements of Section 5(k) hereof, if applicable.

     (iii) the Company and the Guarantors shall cause the Shelf Registration Statement and
the related Prospectus and any amendment or supplement thereto, as of the effective date of
the Shelf Registration Statement or such amendment or supplement, (A) to comply in all
material respects with the applicable requirements of the Act and the rules and regulations
of the Commission; and (B) not to contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not
misleading.

          Section 4. Special Interest. If (a) on or prior to the 90th day following the
original issue date of the Securities, neither the Exchange Offer Registration Statement nor the
Shelf Registration Statement has been filed with the Commission, (b) on or prior to the 180th day
following the original issue date of the Securities, neither the Exchange Offer Registration
Statement nor the Shelf Registration Statement has been declared effective, (c) on or prior to the
45th day following the date the Exchange Offer Registration Statement is first declared effective,
neither the Registered Exchange Offer has been consummated nor the Shelf Registration Statement has
been declared effective, or (d) after either the Exchange Offer Registration Statement or the Shelf
Registration Statement has been declared effective, such Registration Statement thereafter ceases
to be effective or usable in connection with resales of Securities

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or New Securities in accordance
with and during the periods specified in this Agreement (each such event referred to in clauses (a)
through (d), a (“Registration Default”), interest (“Special Interest”) will accrue on the principal
amount of the Securities and the New Securities (in addition to the stated interest on the
Securities and New Securities) from and including the date on which any such Registration Default
shall occur to but excluding the date on which all Registration Defaults have been cured. Special
Interest will accrue at a rate of 0.25% per annum during the 90-day period immediately following
the occurrence of such Registration Default and shall increase by 0.25% per annum at the end of
each subsequent 90-day period, but in no event shall such rate exceed 1.00% per annum.

          All obligations of the Company and the Guarantors set forth in the preceding paragraph that
are outstanding with respect to any Security at the time such Security is exchanged for a New
Security shall survive until such time as all such obligations with respect to such Security have
been satisfied in full.

          Section 5. Additional Registration Procedures. In connection with any Shelf
Registration Statement and, to the extent applicable, any Exchange Offer Registration Statement,
the following provisions shall apply.

          (a) The Company and the Guarantors shall:

     (i) furnish to you, not less than five Business Days prior to the filing thereof with
the Commission, a copy of any Exchange Offer Registration Statement and any Shelf
Registration Statement, and each amendment thereof and each amendment or supplement, if
any, to the Prospectus included therein (including all documents incorporated by reference
therein after the initial filing) and shall use their respective commercially reasonable
best efforts to reflect in each such document, when so filed with the Commission, such
comments as you reasonably propose;

     (ii) include the information set forth in Annex A hereto on the facing page of the
Exchange Offer Registration Statement, in Annex B hereto in the forepart of the Exchange
Offer Registration Statement in a section setting forth details of the Exchange Offer, in
Annex C hereto in the underwriting or plan of distribution section of the Prospectus
contained in the Exchange Offer Registration Statement, and in Annex D hereto in the letter
of transmittal delivered pursuant to the Registered Exchange Offer;

     (iii) if requested by the Initial Purchaser, include the information required by Item
507 or 508 of Regulation S-K, as applicable, in the Prospectus contained in the Exchange
Offer Registration Statement; and

     (iv) in the case of a Shelf Registration Statement, include the names of the Holders
that propose to sell Securities or New Securities, as applicable, pursuant to the Shelf
Registration Statement as selling security holders.

          (b) The Company and the Guarantors shall ensure that:

     (i) any Registration Statement and any amendment thereto and any Prospectus forming
part thereof and any amendment or supplement thereto complies in all material respects with
the Act and the rules and regulations thereunder; and

     (ii) any Registration Statement and any amendment thereto does not, when it becomes
effective, contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not misleading.

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          (c) The Company and the Guarantors shall advise you, the Holders of Securities or New
Securities covered by any Shelf Registration Statement and any Exchanging Dealer or the Initial
Purchaser under any Exchange Offer Registration Statement that has provided in writing to the
Company and the Guarantors a telephone or facsimile number and address for notices, and, if
requested by you or any such Holder, Exchanging Dealer or the Initial Purchaser, shall confirm such
advice in writing (which notice pursuant to clauses (ii)-(v) hereof shall be accompanied by an
instruction to suspend the use of the Prospectus until the Company and the Guarantors shall have
remedied the basis for such suspension):

     (i) when a Registration Statement and any amendment thereto has been filed with the
Commission and when the Registration Statement or any post-effective amendment thereto has
become effective;

     (ii) of any request by the Commission for any amendment or supplement to the
Registration Statement or the Prospectus or for additional information;

     (iii) of the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or the initiation of any proceedings for that purpose;

     (iv) of the receipt by the Company and the Guarantors of any notification with respect
to the suspension of the qualification of the Securities or New Securities included therein
for sale in any jurisdiction or the initiation of any proceeding for such purpose; and

     (v) of the happening of any event that requires any change in the Registration
Statement or the Prospectus so that, as of such date, the statements therein are not
misleading and do not omit to state a material fact required to be stated therein or
necessary to make the statements therein (in the case of the Prospectus, in the light of
the circumstances under which they were made) not misleading.

          (d) The Company and the Guarantors shall use their respective best efforts to obtain the
withdrawal of any order suspending the effectiveness of any Registration Statement or the
qualification of the Securities or New Securities therein for sale in any jurisdiction at the
earliest possible time.

          (e) The Company and the Guarantors shall furnish to each Holder of Securities or New
Securities covered by any Shelf Registration Statement, without charge, at least one copy of such
Shelf Registration Statement and any post-effective amendment thereto, including all material
incorporated therein by reference, and, if the Holder so requests in writing, all exhibits thereto
(including exhibits incorporated by reference therein).

          (f) The Company and the Guarantors shall, during the Shelf Registration Period, deliver to
each Holder of Securities or New Securities covered by any Shelf Registration Statement, without
charge, as many copies of the Prospectus (including each preliminary Prospectus) included in such
Shelf Registration Statement and any amendment or supplement thereto as such Holder may reasonably
request. The Company and the Guarantors consent to the use of the Prospectus or any amendment or
supplement thereto by each of the selling Holders of Securities or New Securities in connection
with the offering and sale of the Securities or New Securities covered by the Prospectus, or any
amendment or supplement thereto, included in the Shelf Registration Statement.

          (g) The Company and the Guarantors shall furnish to each Exchanging Dealer or the Initial
Purchaser which so requests, without charge, at least one copy of the Exchange Offer Registration
Statement and any post-effective amendment thereto, including all material incorporated by
reference

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therein, and, if the Exchanging Dealer so requests in writing, all exhibits thereto
(including exhibits incorporated by reference therein).

          (h) The Company and the Guarantors shall promptly deliver to the Initial Purchaser, each
Exchanging Dealer and each other Person required to deliver a Prospectus during the Exchange Offer
Registration Period, without charge, as many copies of the Prospectus included in such Exchange
Offer Registration Statement and any amendment or supplement thereto as any such Person may
reasonably request. The Company and the Guarantors consent to the use of the Prospectus or any
amendment or supplement thereto by the Initial Purchaser, any Exchanging Dealer and any such other
Person that may be required to deliver a Prospectus following the Registered Exchange Offer in
connection with the offering and sale of the New Securities covered by the Prospectus, or any
amendment or supplement thereto, included in the Exchange Offer Registration Statement.

          (i) Prior to the Registered Exchange Offer or any other offering of Securities or New
Securities pursuant to any Registration Statement, the Company and the Guarantors shall arrange, if
necessary, for the qualification of the Securities or the New Securities for sale under the laws of
such jurisdictions as any Holder shall reasonably request and will maintain such qualification in
effect so long as required; provided that in no event shall the Company and the Guarantors be
obligated to qualify to do business in any jurisdiction where they are not then so qualified or to
take any action that would subject them to service of process in
suits or taxation, other than those arising out of the Initial Placement, the Registered
Exchange Offer or any offering pursuant to a Shelf Registration Statement, in any such jurisdiction
where they are not then so subject.

          (j) The Company and the Guarantors shall cooperate with the Holders of Securities and New
Securities to facilitate the timely preparation and delivery of certificates representing New
Securities or Securities to be issued or sold pursuant to any Registration Statement free of any
restrictive legends and in such denominations and registered in such names as Holders may request.

          (k) Upon the occurrence of any event contemplated by subsections (c)(ii) through (v) above,
the Company and the Guarantors shall promptly prepare a post-effective amendment to the applicable
Registration Statement or an amendment or supplement to the related Prospectus or file any other
required document so that, as thereafter delivered to the Initial Purchaser or Exchanging Dealers,
the Prospectus will not include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading. In such circumstances, the period of effectiveness of the
Exchange Offer Registration Statement provided for in Section 2 and the Shelf Registration
Statement provided for in Section 3(b) shall each be extended by the number of days from and
including the date of the giving of a notice of suspension pursuant to Section 5(c) to and
including the date when the Initial Purchaser, the Holders of the Securities or New Securities and
any known Exchanging Dealer shall have received such amended or supplemented Prospectus pursuant to
this Section.

          (l) Not later than the effective date of any Registration Statement, the Company and the
Guarantors shall provide a CUSIP number for the Securities or the New Securities, as the case may
be, registered under such Registration Statement and provide the Trustee with printed certificates
for such Securities or New Securities, in a form eligible for deposit with The Depository Trust
Company.

          (m) The Company and the Guarantors shall comply with all applicable rules and regulations of
the Commission and shall make generally available to their security holders as soon as practicable
after the effective date of the applicable Registration Statement an earnings statement satisfying
the provisions of Section 11(a) of the Act.

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          (n) The Company and the Guarantors shall cause the Indenture or the New Securities Indenture,
as the case may be, to be qualified under the Trust Indenture Act in a timely manner, if
applicable.

          (o) The Company and the Guarantors may require each Holder of Securities or New Securities to
be sold pursuant to any Shelf Registration Statement to furnish to the Company and the Guarantors
such information regarding the Holder and the distribution of such Securities or New Securities as
the Company and the Guarantors may from time to time reasonably require for inclusion in such
Registration Statement. The Company and the Guarantors may exclude from such Shelf Registration
Statement the Securities or New Securities of any Holder that fails to furnish such information
within a reasonable time after receiving such request.

          (p) In the case of any Shelf Registration Statement, the Company and the Guarantors shall
enter into such agreements and take all other appropriate actions (including if requested an
underwriting agreement in customary form) in order to expedite or facilitate the
registration or the disposition of the Securities or New Securities, and in connection
therewith, if an underwriting agreement is entered into, cause the same to contain indemnification
provisions and procedures no less favorable than those set forth in Section 7 (or such other
provisions and procedures acceptable to the Majority Holders and the Managing Underwriters, if any,
with respect to all parties to be indemnified pursuant to Section 7).

          (q) In the case of any Shelf Registration Statement, the Company and the Guarantors shall:

     (i) make reasonably available for inspection by the Holders of Securities or New
Securities to be registered thereunder, any Underwriter participating in any disposition
pursuant to such Registration Statement, and any attorney, accountant or other agent
retained by the Holders or any such Underwriter all relevant financial and other records,
pertinent corporate documents and properties of the Company and its subsidiaries;

     (ii) cause the Company’s officers, directors and employees to supply all relevant
information reasonably requested by the Holders or any such Underwriter, attorney,
accountant or agent in connection with any such Registration Statement as is customary for
similar due diligence examinations; provided, however, that any information that is
designated in writing by the Company, in good faith, as confidential at the time of
delivery of such information shall be kept confidential by the Holders or any such
Underwriter, attorney, accountant or agent, unless such disclosure is made in connection
with a court proceeding or required by law, or such information becomes available to the
public generally or through a third party without an accompanying obligation of
confidentiality;

     (iii) make such representations and warranties to the Holders of Securities or New
Securities registered thereunder and the Underwriters, if any, in form, substance and scope
as are customarily made by issuers to Underwriters in primary underwritten offerings and
covering matters including, but not limited to, those set forth in the Purchase Agreement;

     (iv) obtain opinions of counsel to the Company and the Guarantors and updates thereof
(which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory
to the Managing Underwriters, if any) addressed to each selling Holder and the
Underwriters, if any, covering such matters as are customarily covered in opinions
requested in underwritten offerings and such other matters as may be reasonably requested
by such Holders and Underwriters;

-11-

 

     (v) obtain “cold comfort” letters and updates thereof from the independent certified
public accountants of the Company (and, if necessary, any other independent certified
public accountants of any subsidiary of the Company or of any business acquired by the
Company for which financial statements and financial data are, or are required to be,
included in the Registration Statement), addressed to each selling Holder of Securities or
New Securities registered thereunder and the Underwriters, if any, in customary form and
covering matters of the type customarily covered in “cold comfort” letters in connection
with primary underwritten offerings; and

     (vi) deliver such documents and certificates as may be reasonably requested by the
Majority Holders and the Managing Underwriters, if any, including those to
evidence compliance with Section 5(k) and with any customary conditions contained in
the underwriting agreement or other agreement entered into by the Company and the
Guarantors.

The actions set forth in clauses (iii), (iv), (v) and (vi) of this Section shall be performed at
(A) the effectiveness of such Registration Statement and each post-effective amendment thereto; and
(B) each closing under any underwriting or similar agreement as and to the extent required
thereunder.

          (r) In the case of any Exchange Offer Registration Statement, the Company and the Guarantors
shall upon the request of an Exchanging Dealer:

     (i) make reasonably available for inspection by the Initial Purchaser or Exchanging
Dealer, and any attorney, accountant or other agent retained by the Initial Purchaser or
Exchanging Dealer, all relevant financial and other records, pertinent corporate documents
and properties of the Company and its subsidiaries;

     (ii) cause the Company’s officers, directors and employees to supply all relevant
information reasonably requested by the Initial Purchaser or Exchanging Dealer or any such
attorney, accountant or agent in connection with any such Registration Statement as is
customary for similar due diligence examinations; provided, however, that any information
that is designated in writing by the Company, in good faith, as confidential at the time of
delivery of such information shall be kept confidential by the Initial Purchaser or
Exchanging Dealer or any such attorney, accountant or agent, unless such disclosure is made
in connection with a court proceeding or required by law, or such information becomes
available to the public generally or through a third party without an accompanying
obligation of confidentiality;

     (iii) make such representations and warranties to the Initial Purchaser or Exchanging
Dealer, in form, substance and scope as are customarily made by issuers to Underwriters in
primary underwritten offerings and covering matters including, but not limited to, those
set forth in the Purchase Agreement;

     (iv) obtain opinions of counsel to the Company and the Guarantors and updates thereof,
which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory
to the Initial Purchaser or Exchanging Dealer and their respective counsel, addressed to
the Initial Purchaser or Exchanging Dealer, covering such matters as are customarily
covered in opinions requested in underwritten offerings and such other matters as may be
reasonably requested by the Initial Purchaser or Exchanging Dealer or their respective
counsel;

     (v) obtain “cold comfort” letters and updates thereof from the independent certified
public accountants of the Company (and, if necessary, any other independent certified
public accountants of any subsidiary of the Company or of any business acquired by the
Company for which financial statements and financial data are, or are required to be,
included in the Registra-

-12-

 

tion Statement), addressed to the Initial Purchaser or Exchanging
Dealer, in customary form and covering matters of the type customarily covered in “cold
comfort” letters in connection with primary underwritten offerings, or if requested by the
Initial Purchaser or Exchanging Dealer or their respective counsel in lieu of a “cold
comfort” letter, an agreed-upon procedures letter under Statement on Auditing
Standards No. 35, covering matters requested by the Initial Purchaser or Exchanging
Dealer or their respective counsel; and

     (vi) deliver such documents and certificates as may be reasonably requested by the
Initial Purchaser or Exchanging Dealer or their respective counsel, including those to
evidence compliance with Section 5(k) and with conditions customarily contained in
underwriting agreements.

The foregoing actions set forth in clauses (iii), (iv), (v), and (vi) of this Section if so
requested shall be performed at the close of the Registered Exchange Offer and the effective date
of any post-effective amendment to the Exchange Offer Registration Statement.

          (s) If a Registered Exchange Offer is to be consummated, upon delivery of the Securities by
Holders to the Company (or to such other Person as directed by the Company) in exchange for the New
Securities, the Company shall mark, or caused to be marked, on the Securities so exchanged that
such Securities are being canceled in exchange for the New Securities. In no event shall the
Securities be marked as paid or otherwise satisfied.

          (t) The Company and the Guarantors will use their commercially reasonable best efforts to
confirm the ratings of the Securities will apply to the Securities or the New Securities, as the
case may be, covered by a Shelf Registration Statement.

          (u) In the event that any Broker-Dealer shall underwrite any Securities or New Securities or
participate as a member of an underwriting syndicate or selling group or “assist in the
distribution” (within the meaning of the Rules of Fair Practice and the By-Laws of the National
Association of Securities Dealers, Inc.) thereof, whether as a Holder of such Securities or New
Securities or as an Underwriter, a placement or sales agent or a broker or dealer in respect
thereof, or otherwise, assist such Broker-Dealer in complying with the requirements of such Rules
and By-Laws, including, without limitation, by:

     (i) if such Rules or By-Laws shall so require, engaging a “qualified independent
underwriter” (as defined in such Rules) to participate in the preparation of the
Registration Statement, to exercise usual standards of due diligence with respect thereto
and, if any portion of the offering contemplated by such Registration Statement is an
underwritten offering or is made through a placement or sales agent, to recommend the yield
of such Securities or New Securities;

     (ii) indemnifying any such qualified independent underwriter to the extent of the
indemnification of Underwriters provided in Section 7 hereof; and

     (iii) providing such information to such Broker-Dealer as may be required in order for
such Broker-Dealer to comply with the requirements of such Rules.

             (iv) The Company and the Guarantors shall use their respective commercially reasonable best
efforts to take all other steps necessary to effect the registration of the Securities or the New
Securities, as the case may be, covered by a Registration Statement.

-13-

 

          Section 6. Registration Expenses. The Company and the Guarantors shall bear all
expenses incurred in connection with the performance of their obligations under Sections 2, 3 and 5
hereof and, in the event of any Shelf Registration Statement, will reimburse the Holders for the
reasonable fees and disbursements of one firm or counsel designated by the
Majority Holders to act as counsel for the Holders in connection therewith, and, in the case
of any Exchange Offer Registration Statement, will reimburse the Initial Purchaser for the
reasonable fees and disbursements of counsel acting in connection therewith if the Initial
Purchaser shall resell Securities or New Securities pursuant to the prospectus contained in such
Exchange Offer Registration Statement.

          Section 7. Indemnification and Contribution. (a) The Company and the Guarantors,
jointly and severally, agree to indemnify and hold harmless each Holder of Securities or New
Securities, as the case may be, covered by any Registration Statement (including the Initial
Purchaser and, with respect to any Prospectus delivery as contemplated in Section 5(h) hereof, each
Exchanging Dealer), the directors, officers, employees and agents of each such Holder and each
Person who controls any such Holder within the meaning of either the Act or the Exchange Act
against any and all Losses, joint or several, to which they or any of them may become subject under
the Act, the Exchange Act or other Federal or state statutory law or regulation, at common law or
otherwise, insofar as such Losses arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement as originally filed or
in any amendment thereof, or in any preliminary Prospectus or the Prospectus, or in any amendment
thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to make the statements
therein not misleading, and agree to reimburse each such indemnified party, as incurred, for any
legal or other expenses reasonably incurred by them in connection with investigating or defending
any such loss, claim, damage, liability or action; provided, however, that the Company and the
Guarantors will not be liable in any case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in conformity with written
information furnished to the Company and the Guarantors by or on behalf of any such Holder
specifically for inclusion therein. This indemnity agreement will be in addition to any liability
which the Company and the Guarantors may otherwise have.

          The Company and the Guarantors also, jointly and severally, agree to indemnify or contribute
as provided in Section 7(d) to Losses of any Underwriter of Securities or New Securities, as the
case may be, registered under a Shelf Registration Statement, their directors, officers, employees
or agents and each Person who controls such Underwriter on substantially the same basis as that of
the indemnification of the Initial Purchaser and the selling Holders provided in this Section 7(a)
and shall, if requested by any Holder, enter into an underwriting agreement reflecting such
agreement, as provided in Section 5(p) hereof.

          (b) Each Holder of Securities or New Securities covered by a Registration Statement (including
the Initial Purchaser and, with respect to any Prospectus delivery as contemplated in Section 5(h)
hereof, each Exchanging Dealer) severally agrees to indemnify and hold harmless the Company and the
Guarantors, each of their directors, officers, employees and agents and each Person who controls
the Company or any of the Guarantors within the meaning of either the Act or the Exchange Act, to
the same extent as the foregoing indemnity from the Company and the Guarantors to each such Holder,
but only with reference to written information relating to such Holder furnished to the Company and
the Guarantors by or on behalf of such Holder specifically for inclusion in the documents referred
to in the foregoing indemnity. This indemnity agreement will be in addition to any liability which
any such Holder may otherwise have.

-14-

 

          (c) Promptly after receipt by an indemnified party under this Section 7 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party under this Section, notify the
indemnifying party in writing of the commencement thereof; but the failure so to notify the
indemnifying party (i) will not relieve it from liability under paragraph (a) or (b) above unless
and to the extent it did not otherwise learn of such action and such failure results in the
forfeiture by the indemnifying party of substantial rights and defenses; and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b) above. The indemnifying party shall be
entitled to appoint counsel of the indemnifying party’s choice at the indemnifying party’s expense
to represent the indemnified party in any action for which indemnification is sought (in which case
the indemnifying party shall not thereafter be responsible for the fees and expenses of any
separate counsel retained by the indemnified party or parties except as set forth below); provided,
however, that such counsel shall be satisfactory to the indemnified party. Notwithstanding the
indemnifying party’s election to appoint counsel to represent the indemnified party in an action,
the indemnified party shall have the right to employ separate counsel (including local counsel),
and the indemnifying party shall bear the reasonable fees, costs and expenses of such separate
counsel if (i) the use of counsel chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest; (ii) the actual or potential
defendants in, or targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded that there may be
legal defenses available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party; (iii) the indemnifying party shall not
have employed counsel satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of the institution of such action; or (iv) the indemnifying
party shall authorize the indemnified party to employ separate counsel at the expense of the
indemnifying party. An indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any judgment with respect to
any pending or threatened claim, action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or consent includes
an unconditional release of each indemnified party from all liability arising out of such claim,
action, suit or proceeding. An indemnifying party shall not be liable under this Section 7 to any
indemnified party regarding any settlement or compromise or consent to the entry of any judgment
with respect to any pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless such settlement, compromise or consent
is consented to by such indemnifying party, which consent shall not be unreasonably withheld.

          (d) In the event that the indemnity provided in paragraph (a) or (b) of this Section is
unavailable to or insufficient to hold harmless an indemnified party for any reason, then each
applicable indemnifying party shall have a joint and several obligation to contribute to the
aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably
incurred in connection with investigating or defending the same) (collectively “Losses”) to which
such indemnified party may be subject in such proportion as is appropriate to reflect the relative
benefits received by such indemnifying party, on the one hand, and such indemnified party, on the
other hand, from the Initial Placement and the Registration Statement which resulted in such
Losses; provided, however, that in no case shall the Initial Purchaser or any subsequent Holder of
any Security or New Security be responsible, in the aggregate, for any amount in excess of the
purchase discount or commission applicable to such Security, or in the case of a New Security,
applicable to the Security that was exchangeable into such New Security, as set forth in the
Purchase Agreement, nor shall any Underwriter be responsible for any amount in excess of the
underwriting discount or commission applicable to the securities purchased by such Underwriter
under the Registration Statement which resulted in such Losses. If the allocation provided by
the immediately preceding

-15-

 

sentence is unavailable for any reason, the indemnifying party and the
indemnified party shall contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of such indemnifying party, on the one hand, and such
indemnified party, on the other hand, in connection with the statements or omissions which resulted
in such Losses as well as any other relevant equitable considerations. Benefits received by the
Company and the Guarantors shall be deemed to be equal to the sum of (x) the total net proceeds
from the Initial Placement (before deducting expenses) as set forth in the Purchase Agreement (y)
the total amount of additional interest that the Company and the Guarantors were not required to
pay as a result of registering the Securities or New Securities covered by the Registration
Statement which resulted in such Losses. Benefits received by the Initial Purchaser shall be
deemed to be equal to the total purchase discounts and commissions as set forth in the Purchase
Agreement, and benefits received by any other Holders shall be deemed to be equal to the value of
receiving Securities or New Securities, as applicable, registered under the Act. Benefits received
by any Underwriter shall be deemed to be equal to the total underwriting discounts and commissions,
as set forth on the cover page of the Prospectus forming a part of the Registration Statement which
resulted in such Losses. Relative fault shall be determined by reference to, among other things,
whether any alleged untrue statement or omission relates to information provided by the
indemnifying party, on the one hand, or by the indemnified party, on the other hand, the intent of
the parties and their relative knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The parties agree that it would not be just and
equitable if contribution were determined by pro rata allocation (even if the Holders were treated
as one entity for such purpose) or any other method of allocation which does not take account of
the equitable considerations referred to above. Notwithstanding the provisions of this paragraph
(d), no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section, each Person who controls a Holder within the
meaning of either the Act or the Exchange Act and each director, officer, employee and agent of
such Holder shall have the same rights to contribution as such Holder, and each Person who controls
the Company or any of the Guarantors within the meaning of either the Act or the Exchange Act and
each officer, employee, agent or director of the Company or any of the Guarantors who would be
entitled to indemnity under this Agreement shall have the same rights to contribution as the
Company, subject in each case to the applicable terms and conditions of this paragraph (d).

          (e) The provisions of this Section will remain in full force and effect, regardless of any
investigation made by or on behalf of any Holder or the Company and the Guarantors or any of the
officers, directors or controlling Persons referred to in this Section hereof, and will survive the
sale by a Holder of Securities or New Securities covered by a Registration Statement.

          Section 8. Underwritten Registrations. (a) If any of the Securities or New
Securities, as the case may be, covered by any Shelf Registration Statement are to be sold in an
underwritten offering, the Managing Underwriters shall be selected by the Majority Holders.

          (b) No Person may participate in any underwritten offering pursuant to any Shelf Registration
Statement, unless such Person (i) agrees to sell such Person’s Securities or New Securities, as the
case may be, on the basis reasonably provided in any underwriting arrangements approved by the
Persons entitled hereunder to approve such arrangements; and (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such underwriting
arrangements.

          Section 9. No Inconsistent Agreements. The Company has not, as of the date hereof,
entered into, nor shall it, on or after the date hereof, enter into, any agreement with respect to
its

-16-

 

securities that is inconsistent with the rights granted to the Holders herein or otherwise
conflicts with the provisions hereof.

          Section 10. Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, qualified, modified or supplemented, and waivers
or consents to departures from the provisions hereof may not be given, unless the Company has
obtained the written consent of the Majority Holders; provided that, with respect to any matter
that directly or indirectly affects the rights of the Initial Purchaser, the Company shall obtain
the written consent of the Initial Purchaser against which such amendment, qualification,
supplement, waiver or consent is to be effective. Notwithstanding the foregoing (except the
foregoing proviso), a waiver or consent to departure from the provisions hereof with respect to a
matter that relates exclusively to the rights of Holders whose Securities or New Securities, as the
case may be, are being sold pursuant to a Registration Statement and that does not directly or
indirectly affect the rights of other Holders may be given by the Majority Holders, determined on
the basis of Securities or New Securities, as the case may be, being sold rather than registered
under such Registration Statement.

          Section 11. Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand-delivery, first-class mail, telex, telecopier or air
courier guaranteeing overnight delivery:

     (a) if to a Holder, at the most current address given by such Holder to the Company in
accordance with the provisions of this Section, which address initially is, with respect to
each Holder, the address of such Holder maintained by the registrar under the Indenture,
with a copy in like manner to Deutsche Bank Securities Inc.;

     (b) if to you, initially at the address set forth in the Purchase Agreement; and

     (c) if to the Company or the Guarantors, initially at its or their address set forth
in the Purchase Agreement.

          All such notices and communications shall be deemed to have been duly given when received.

          The Initial Purchaser, the Company or any Guarantor by notice to the other parties may
designate additional or different addresses for subsequent notices or communications.

          Section 12. Successors. This Agreement shall inure to the benefit of and be binding
upon the successors and assigns of each of the parties, including, without the need for an express
assignment or any consent by the Company or any Guarantor thereto, subsequent Holders of Securities
or New Securities. The Company and the Guarantors hereby agree to extend the benefits of this
Agreement to any Holder of Securities and the New Securities, and any such Holder may specifically
enforce the provisions of this Agreement as if an original party hereto.

          Section 13. Counterparts. This Agreement may be in signed counterparts, each of which
shall be an original and all of which together shall constitute one and the same agreement.

          Section 14. Headings. The headings used herein are for convenience only and shall not
affect the construction hereof.

-17-

 

          Section 15. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made and to be performed
in the State of New York.

          Section 16. Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions hereof shall not be in any way
impaired or affected thereby, it being intended that all of the rights and privileges of the
parties shall be enforceable to the fullest extent permitted by law.

          Section 17. Securities Held by the Company, etc. Whenever the consent or approval of
Holders of a specified percentage of principal amount of Securities or New Securities is required
hereunder, Securities or New Securities, as applicable, held by the Company or its Affiliates
(other than subsequent Holders of Securities or New Securities if such subsequent Holders are
deemed to be Affiliates solely by reason of their holdings of such Securities or New Securities)
shall not be counted in determining whether such consent or approval was given by the Holders of
such required percentage.

-18-

 

          If the foregoing is in accordance with your understanding of our agreement, please sign and
return to us the enclosed duplicate hereof, whereupon this Agreement and your acceptance shall
represent a binding agreement among the Company, the Guarantors and the Initial Purchaser.

	 	 	 	 	 	 	 	 	 
	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	TECHNICAL OLYMPIC USA, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ David J. Keller	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	David J. Keller	 	 
	 

	 	 	 	Title:
	 	Senior Vice President, Chief Financial	 	 
	 

	 	 	 	 	 	Officer and Treasurer	 	 

The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.

	 	 	 	 	 	 	 
	DEUTSCHE BANK SECURITIES INC.	 	 
	 
	 	 	 	 	 	 
	By:	 	/s/ Edwin E. Roland	 	 
	 	 	 	 	 
	 

	 	Name:
	 	Edwin E. Roland	 	 
	 

	 	Title:
	 	Managing Director	 	 
	 
	 	 	 	 	 	 
	By:	 	/s/ David J. Flannery	 	 
	 	 	 	 	 
	 

	 	Name:
	 	David J. Flannery	 	 
	 

	 	Title:
	 	Managing Director	 	 

-19-

 

	 	 	 
	 

	 	SUBSIDIARY GUARANTORS:
	 
	 	 
	 

	 	ENGLE HOMES DELAWARE, INC.
	 

	 	NEWMARK HOMES, L.P.
	 

	 	NEWMARK HOMES PURCHASING, L.P.
	 

	 	SILVERLAKE INTERESTS, L.C.
	 

	 	TOI, LLC
	 

	 	TOUSA HOMES, L.P.
	 

	 	TOUSA, LLC
	 

	 	TOUSA HOMES INVESTMENT #1, L.P.
	 

	 	TOUSA HOMES INVESTMENT #2, LLC
	 

	 	TOUSA HOMES INVESTMENT #1, INC.
	 

	 	TOUSA HOMES INVESTMENT #2, INC.
	 

	 	TOUSA INVESTMENT #2, INC.
	 

	 	TOUSA INVESTMENT #1, LLC
	 

	 	TOUSA INVESTMENT #2, LLC
	 

	 	TOUSA INVESTMENT #3, LLC
	 

	 	TOUSA INVESTMENT #4, LLC
	 

	 	TOUSA INVESTMENT #5, LLC
	 

	 	TOUSA MID-ATLANTIC INVESTMENT, LLC
	 

	 	TOUSA REALTY, INC.
	 

	 	TOUSA/WEST HOLDINGS, INC.

	 	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ David J. Keller	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	David J. Keller	 	 
	 

	 	 	 	Title:
	 	Vice President	 	 

	 	 	 
	 

	 	ENGLE HOMES RESIDENTIAL CONSTRUCTION, L.L.C.
	 

	 	ENGLE/JAMES, LLC
	 

	 	MCKAY LANDING LLC
	 

	 	NEWMARK HOMES, L.L.C.
	 

	 	PREFERRED BUILDERS REALTY, INC.
	 

	 	TOUSA DELAWARE, INC.
	 

	 	TOUSA FUNDING, LLC
	 

	 	TOUSA HOMES, INC.
	 

	 	TOUSA VENTURES LLC

	 	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ David J. Keller	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	David J. Keller	 	 
	 

	 	 	 	Title:
	 	Vice President and Treasurer	 	 

-20-

 

	 	 	 	 	 	 	 	 	 
	 	 	TOUSA ASSOCIATES SERVICES COMPANY	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Patricia M. Petersen	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Patricia M. Petersen	 	 
	 

	 	 	 	Title:
	 	Vice President and Secretary	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	NEWMARK HOMES BUSINESS TRUST	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Randy Kotler	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Randy Kotler	 	 
	 

	 	 	 	Title:
	 	Managing Trustee	 	 

-21-

 

ANNEX A

          Each Broker-Dealer that receives New Securities for its own account pursuant to the
Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of
such New Securities. The Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a Broker-Dealer will not be deemed to admit that it is an “underwriter” within the
meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to
time, may be used by a Broker-Dealer in connection with resales of New Securities received in
exchange for Securities where such Securities were acquired by such Broker-Dealer as a result of
market-making activities or other trading activities. The Company has agreed that, for the 180-day
period following the consummation of the Registered Exchange Offer, or such shorter period as will
terminate when all New Securities held by Exchanging Dealers or the Initial Purchaser have been
sold pursuant hereto, it will make this Prospectus available to any Broker-Dealer for use in
connection with any such resale. See “Plan of Distribution.”

 

 

ANNEX B

          Each Broker-Dealer that receives New Securities for its own account in exchange for
Securities, where such Securities were acquired by such Broker-Dealer as a result of market-making
activities or other trading activities, must acknowledge that it will deliver a prospectus in
connection with any resale of such New Securities. See “Plan of Distribution.”

 

 

ANNEX C

PLAN OF DISTRIBUTION

          Each Broker-Dealer that receives New Securities for its own account pursuant to the Exchange
Offer must acknowledge that it will deliver a prospectus in connection with any resale of such New
Securities. This Prospectus, as it may be amended or supplemented from time to time, may be used
by a Broker-Dealer in connection with resales of New Securities received in exchange for Securities
where such Securities were acquired as a result of market-making activities or other trading
activities. The Company and the Guarantors have agreed that, for the 180-day period following the
consummation of the Registered Exchange Offer, or such shorter period as will terminate when all
New Securities held by Exchanging Dealers or the Initial Purchaser have been sold pursuant hereto,
it will make this Prospectus, as amended or supplemented, available to any Broker-Dealer for use in
connection with any such resale. In addition, until                     , 200___, all dealers effecting
transactions in the New Securities may be required to deliver a prospectus.

          The Company will not receive any proceeds from any sale of New Securities by broker-dealers.
New Securities received by Broker-Dealers for their own account pursuant to the Exchange Offer may
be sold from time to time in one or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the New Securities or a combination of such methods
of resale, at market prices prevailing at the time of resale, at prices related to such prevailing
market prices or negotiated prices. Any such resale may be made directly to purchasers or to or
through brokers or dealers who may receive compensation in the form of commissions or concessions
from any such Broker-Dealer and/or the purchasers of any such New Securities. Any Broker-Dealer
that resells New Securities that were received by it for its own account pursuant to the Exchange
Offer and any broker or dealer that participates in a distribution of such New Securities may be
deemed to be an “underwriter” within the meaning of the Securities Act and any profit of any such
resale of New Securities and any commissions or concessions received by any such Persons may be
deemed to be underwriting compensation under the Securities Act. The Letter of Transmittal states
that by acknowledging that it will deliver and by delivering a prospectus, a Broker-Dealer will not
be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

          For the 180-day period following the consummation of the Registered Exchange Offer, or such
shorter period as will terminate when all New Securities held by Exchanging Dealers or the Initial
Purchaser have been sold pursuant hereto, the Company and the Guarantors will promptly send
additional copies of this Prospectus and any amendment or supplement to this Prospectus to any
Broker-Dealer that requests such documents in the Letter of Transmittal. The Company has agreed to
pay all expenses incident to the Exchange Offer (including the expenses of one counsel for the
holder of the Securities) other than commissions or concessions of any brokers or dealers and will
indemnify the holders of the Securities (including any Broker-Dealers) against certain liabilities,
including liabilities under the Securities Act.

[If applicable, add information required by Regulation S-K Items 507 and/or 508.]

 

 

ANNEX D

Rider A

	 	 	 	 	 	 	 
	 	 	CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF
THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.
	 
	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

Rider B

If the undersigned is not a Broker-Dealer, the undersigned represents that it acquired the New
Securities in the ordinary course of its business, it is not engaged in, and does not intend to
engage in, a distribution of New Securities and it has no arrangements or understandings with any
Person to participate in a distribution of the New Securities. If the undersigned is a
Broker-Dealer that will receive New Securities for its own account in exchange for Securities, it
represents that the Securities to be exchanged for New Securities were acquired by it as a result
of market-making activities or other trading activities and acknowledges that it will deliver a
prospectus in connection with any resale of such New Securities; however, by so acknowledging and
by delivering a prospectus, the undersigned will not be deemed to admit that it is an “underwriter”
within the meaning of the Securities Act.<PAGE>

EXHIBIT 10.1

                       SENIOR MANAGER AMENDED AND RESTATED
                           RESTRICTED STOCK AGREEMENT

          This Senior Manager Amended and Restated Restricted Stock Agreement
(this "Agreement") is made as of this 17th day of April, 2006 (the "Effective
Date") between Simmons Company, a Delaware corporation (the "Company"), and the
undersigned (the "Restricted Shareholder"). Certain capitalized terms used
herein are defined in Section 6 hereof.

          WHEREAS, the Company believes it to be in the best interests of the
Company and its shareholders to take action to promote work-force stability, to
reward performance and otherwise align the Restricted Shareholder's interests
with those of the Company;

          WHEREAS, accordingly, the Company issued restricted stock to the
Restricted Shareholder in accordance with the provisions of a Senior Manager
Restricted Stock Agreement between the Company and the Restricted Shareholder
dated as of December 19, 2003 (the "Original Agreement");

          WHEREAS, the Company desires to be assured that the confidential
information and goodwill of the Company will be preserved for the exclusive
benefit of the Company; and

          WHEREAS, the Company and the Restricted Shareholder desire to amend
and restate the Original Agreement in its entirety as set forth herein and to
cause the Original Agreement to be of no further force and effect as of the
Effective Date hereof.

          NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:

          1. PURCHASE AND SALE OF RESTRICTED SHAREHOLDER STOCK.

          (a) Upon execution of the Original Agreement and payment of the
Original Purchase Price (as hereinafter defined), the Company issued to the
Restricted Shareholder that number of shares of Class B Common Stock, par value
$0.01 per share, of the Company (the "Class B Common Stock") set forth below
such Restricted Shareholder's name on the signature page attached hereto, for a
purchase price of $0.01 per share (the "Original Purchase Price"). All of such
shares of Class B Common Stock purchased by the Restricted Shareholder pursuant
to the Original Agreement are referred to herein as "Restricted Shareholder
Stock." To secure the Company's rights under the Repurchase Option in Section 3,
the Company has retained possession of the certificates representing the
Restricted Shareholder Stock and has provided the Restricted Shareholder with
copies thereof.

          (b) The Restricted Shareholder, in his or her sole discretion, may
have made an effective election with the Internal Revenue Service (the "IRS")
under Section 83(b) of the Code and the regulations promulgated thereunder. The
Restricted Shareholder understands that under applicable law such election must
have been filed with the IRS no later than thirty (30) days after any
acquisition of the Restricted Shareholder Stock to be effective. If the
Restricted Shareholder filed an effective election, the excess of the fair
market value of the Restricted Shareholder Stock

                                       5

<PAGE>

(which the IRS may assert is different from the fair market value determined by
the parties) covered by such election over the amount paid by the Restricted
Shareholder for the stock would have been treated as ordinary income received by
the Restricted Shareholder, and the Company or its subsidiary, Simmons Bedding
Company, would have withheld from the Restricted Shareholder's compensation all
amounts required under applicable law. If the Restricted Shareholder did not
file an effective election, all appreciation on the Restricted Shareholder Stock
from the date of the Original Agreement would generally be taxable as ordinary
income when such stock vests pursuant to the Original Agreement, as amended and
restated hereby.

          (c) In connection with the acquisition of the Restricted Shareholder
Stock pursuant to the Original Agreement, the Restricted Shareholder represented
and warranted to the Company, and hereby reaffirms such representations and
warranties as of the date hereof, that:

               (i) the Restricted Shareholder Stock acquired by the Restricted
     Shareholder has been acquired for the Restricted Shareholder's own account,
     for investment only and not with a view to, or intention of, distribution
     thereof in violation of the Securities Act, or any applicable state
     securities laws, and the Restricted Shareholder Stock will not be disposed
     of in contravention of the Securities Act or any applicable state
     securities laws or this Agreement or the Securityholders' Agreement;

               (ii) the Restricted Shareholder, either alone or acting in
     conjunction with a Purchaser Representative (as such term is defined in
     Regulation D of the Securities Act), generally has such knowledge and
     experience in business and financial matters and with respect to
     investments in securities of privately held companies so as to enable the
     Restricted Shareholder to understand and evaluate the risks and benefits of
     his or her investment in the Restricted Shareholder Stock;

               (iii) the Restricted Shareholder has no need for liquidity in his
     or her investment in the Restricted Shareholder Stock and is able to bear
     the economic risk of his or her investment in the Restricted Shareholder
     Stock for an indefinite period of time and understands that the Restricted
     Shareholder Stock has not been registered or qualified under the Securities
     Act or any applicable state securities laws, by reason of the issuance of
     the Restricted Shareholder Stock in a transaction exempt from the
     registration and qualification requirements of the Securities Act or such
     state securities laws and, therefore, cannot be sold unless subsequently
     registered or qualified under the Securities Act or such state securities
     laws or an exemption from such registration or qualification is available;

               (iv) the Restricted Shareholder acknowledges that he or she is
     aware that the Shares may not be sold pursuant to Rule 144 promulgated
     under the Securities Act unless all of the conditions of that Rule are met.
     Among the current conditions for use of Rule 144 by certain holders is the
     availability to the public of current information about the Company. Such
     information is not now available, and the Company has no current plans to
     make such information available;

               (v) the Restricted Shareholder has had an opportunity to ask
     questions and receive answers concerning the terms and conditions of the
     offering of the Restricted

                                       6

<PAGE>

     Shareholder Stock and has had full access to or been provided with such
     other information concerning the Company as the Restricted Shareholder has
     requested; and

               (vi) This Agreement constitutes the legal, valid and binding
     obligation of the Restricted Shareholder, enforceable in accordance with
     its terms, and the execution, delivery and performance of this Agreement by
     the Restricted Shareholder does not and will not conflict with, violate or
     cause a breach of any agreement, contract or instrument to which the
     Restricted Shareholder is a party or any judgment, order or decree to which
     the Restricted Shareholder is subject.

          (d) As an inducement to the Company to issue the Restricted
Shareholder Stock to the Restricted Shareholder and as a condition thereto, the
Restricted Shareholder acknowledged and agreed, and hereby reaffirms as of the
date hereof, that:

               (i) neither the issuance of the Restricted Shareholder Stock to
     the Restricted Shareholder nor any provision contained herein shall entitle
     the Restricted Shareholder to remain on the Board of or in the employment
     of the Company or any of its Subsidiaries, if any, or affect the rights of
     the Company, its shareholders or any of its Subsidiaries to terminate the
     Restricted Shareholder's service to or employment with the Company or any
     of its Subsidiaries at any time for any reason; and

               (ii) except as provided in any other agreement between the
     Company and/or Simmons Bedding Company or any Subsidiary thereof and the
     Restricted Shareholder, the Company shall have no duty or obligation to
     disclose to the Restricted Shareholder, and the Restricted Shareholder
     shall have no right to be advised of, any material information regarding
     the Company and its Subsidiaries, if any, at any time prior to, upon or in
     connection with the forfeiture of the Restricted Shareholder Stock upon the
     termination of the Restricted Shareholder's service to or employment with
     the Company or a Subsidiary thereof.

          (e) In connection with the issuance and sale by the Company to the
Restricted Shareholder of the Restricted Shareholder Stock, the Company
represented and warranted, and hereby reaffirms as of the date hereof, that:

               (i) the Company is a corporation duly organized, validly existing
     and in good standing under the laws of the jurisdiction of its
     incorporation and has all requisite corporate power and authority to own,
     lease and operate the assets used in its business, to carry on its business
     as presently conducted, to enter into this Agreement, to perform its
     obligations hereunder, and to consummate the transactions contemplated
     hereby;

               (ii) the Company has taken all corporate action necessary to
     authorize its execution and delivery of this Agreement, its performance of
     its obligations thereunder, and its consummation of the transactions
     contemplated thereby;

               (iii) this Agreement constitutes a valid and binding obligation
     of the Company, enforceable in accordance with its terms; and

                                       7

<PAGE>

               (iv) the Restricted Shareholder Stock has been duly authorized
     and validly issued, fully paid and nonassessable and, as of the date of the
     Original Agreement was free of all Encumbrances created by or through the
     Company. For purposes of this clause, "Encumbrance" means any security
     interest, mortgage, lien, pledge, charge, easement, reservation,
     restriction, or similar right of any third party.

          2. VESTING OF RESTRICTED SHAREHOLDER STOCK.

          (a) General.

          (i) Vesting. The shares of Restricted Shareholder Stock granted
hereunder (the "Shares") will be deemed "vested" (the "Vested Shares") as
follows: (a) 18.75% of the Shares shall be deemed Vested Shares as of the date
hereof and (b) Shares that are not Vested Shares as of the date hereof shall
become Vested Shares in accordance with this Section 2, based upon the Company's
achievement of the Consolidated Adjusted EBITDA targets set forth below (each,
the "Target EBITDA") for each of the Company's fiscal years ending December 30,
2006, December 29, 2007 and December 27, 2008 (the "Measurement Years").

                                 EBITDA Targets
                              (dollars in millions)

<TABLE>
<CAPTION>
MEASUREMENT                     CUMULATIVE    90% OF TARGET   90% OF CUMULATIVE   ELIGIBLE
   YEARS      TARGET EBITDA   TARGET EBITDA       EBITDA        TARGET EBITDA      SHARES
-----------   -------------   -------------   -------------   -----------------   --------
<S>           <C>             <C>             <C>             <C>                 <C>
    2006
    2007
    2008
</TABLE>

The minimum Target EBITDA numbers set forth above shall be equitably adjusted by
the Board for acquisitions and dispositions made by the Company (whether by
purchase or sale of assets or stock, merger, consolidation or otherwise) and
such adjustments may take into account the pro forma annual Consolidated
Adjusted EBITDA of any acquired business, as determined by the Board.

          (A) Performance Based Vesting. At the end of each Measurement Year, on
the Measurement Date, the percentage of Shares set forth above shall be eligible
to vest (the "Eligible Shares"). On each Measurement Date, 50% of the Eligible
Shares shall become Vested Shares if at least 90% of the Target EBITDA amount
was met for the prior Measurement Year. If more than 90% of the Target EBITDA
amount was met for the prior Measurement Year, then the Eligible Shares shall
become Vested Shares on a straight line basis such that an additional 5% of
Eligible Shares shall become Vested Shares for each 1% that actual Consolidated
Adjusted EBITDA exceeds 90% of the Target EBITDA amount.

                                       8

<PAGE>

          (ii) Change of Control.

               (A) Shares that are not Vested Shares will accelerate as set
forth below upon a Change of Control solely if the Company (a) achieves at least
90% of the Target EBITDA for the Measurement Year immediately preceding the year
in which the Change of Control occurs, and (b) the actual Consolidated Adjusted
EBITDA for the Measurement Year immediately preceding the year in which the
Change of Control occurs exceeds the actual Consolidated Adjusted EBITDA for the
preceding year. If (x) the conditions set forth in clauses (a) and (b) above are
met, and (y) the Company achieves 90% of the Cumulative Target EBITDA above for
the Measurement Year completed immediately prior to the Change of Control, then
50% of the Shares that were Eligible Shares but which did not previously become
Vested Shares (the "Missed Shares") and 50% of the Shares that are not yet
Eligible Shares shall become Vested Shares. If the Company achieves more than
90% of the Cumulative Target EBITDA above for the immediately preceding
Measurement Year, then a number of Missed Shares and Shares that are not yet
Eligible Shares will become Vested Shares, determined on a straight line basis
such that an additional 5% of the Missed Shares and 5% of the Shares that are
not yet Eligible Shares will become Vested Shares for each 1% that actual
Consolidated Adjusted EBITDA for the immediately preceding Measurement Year
exceeds 90% of the Cumulative Target EBITDA set forth above.

               (B) Notwithstanding the foregoing paragraph, Shares that are not
Vested Shares will accelerate upon a Change of Control which occurs in the
Measurement Year ending December 30, 2006 as follows: if the Company achieves
90% of the 2006 Year to Date Target EBITDA (as defined below) for the month
completed immediately prior to the Change of Control, then 50% of the Shares
that are not yet Eligible Shares shall become Vested Shares. The Target EBITDA
for each month in 2006 is set forth below and the 2006 Year to Date Target
EBITDA represents the cumulative Target EBITDA for the period commencing January
1, 2006 and ending on the last day of such month (the "Year to Date Target
EBITDA"). If the Company achieves more than 90% of the 2006 Year to Date Target
EBITDA for the month completed immediately prior to the Change of Control, then
a number of Shares that are not yet Eligible Shares will become Vested Shares,
determined on a straight line basis such that an additional 5% of the Shares
that are not yet Eligible Shares will become Vested Shares for each 1% that
actual Consolidated Adjusted EBITDA for the period commencing January 1, 2006
and ending on the last day of the month immediately preceding the Change of
Control exceeds 90% of the 2006 Year to Date Target EBITDA.

                                       9

<PAGE>

<TABLE>
<CAPTION>
                 2006 MONTHLY         2006 YEAR TO DATE
                TARGET EBITDA           TARGET EBITDA
  MONTH     (DOLLARS IN MILLIONS)   (DOLLARS IN MILLIONS)
---------   ---------------------   ---------------------
<S>         <C>                     <C>
 January
February
  March
  April
   May
  June
  July
 August
September
 October
November
December
</TABLE>

          (b) In the event the Restricted Shareholder ceases to serve on the
Board of, or be employed by the Company or any of its Subsidiaries on a
full-time basis for any reason, then (i) all Shares of Restricted Shareholder
Stock shall cease vesting effective as of the date upon which the Restricted
Shareholder ceases to so serve or be so employed (the "Termination Date") and,
(ii) in the event that the Company achieves the Target EBITDA with respect to
the Measurement Year in which such termination occurs, then the Eligible Shares
with respect to such year multiplied by a fraction, the numerator of which shall
equal the number of whole months during such year that the Restricted
Shareholder served on the Board or remained employed with the Company and the
denominator of which is 12, shall become Vested Shares as of the end of such
year.

          3. REPURCHASE OF SHARES.

          (a) In the event that the Restricted Shareholder ceases to serve on
the Board of, or be employed by the Company or any of its Subsidiaries on a
full-time basis for any reason, then all Shares of Restricted Shareholder Stock
(whether held by the Restricted Shareholder or by one or more of the Restricted
Shareholder's transferees) which as of the date of termination:

               (i) have not vested pursuant to Section 2 hereof, will be subject
     to repurchase by the Company, at its option (the "Non-Vested Repurchase
     Option"), for the

                                       10

<PAGE>

     lower of the Original Purchase Price of the Restricted Shareholder Stock
     and Fair Market Value as of the date of repurchase;

               (ii) have vested pursuant to Section 2 hereof, will be subject to
     repurchase by the Company, at its option (the "Vested Repurchase Option"),
     for Fair Market Value as of the date of repurchase.

          (b) In the event of a Change of Control, then all Shares of Restricted
Shareholder Stock (whether held by the Restricted Shareholder or by one or more
of the Restricted Shareholder's transferees) which, as of the date of such
Change of Control, have not become Vested Shares pursuant to Section 2, will be
subject to repurchase by the Company, at its option (the "Non-Vested Change of
Control Repurchase Option") for the lower of the Original Purchase Price of the
Restricted Shareholder Stock and Fair Market Value.

          (c) The Non-Vested Change of Control Repurchase Option, together with
the Non-Vested Repurchase Option and the Vested Repurchase Option, are referred
to collectively as the "Repurchase Options." The Repurchase Options shall be
exercised by the Company, or its designee, from time to time, by delivering to
the Restricted Shareholder a written notice of exercise and a check in the
amount of the Original Purchase Price or Fair Market Value, as determined in
accordance with Sections 3(a) and (b) above. Upon delivery of such notice and
payment of the purchase price as described above, the Company, or its designee,
shall become the legal and beneficial owner of the Shares of Restricted
Shareholder Stock being repurchased and all rights and interest therein or
related thereto, and the Company, or its designee, shall have the right to
transfer to its own name the number of Shares of Restricted Shareholder Stock
being repurchased without further action by the Restricted Shareholder or any of
his or her transferees. If the Company or its designee elect to exercise the
repurchase rights pursuant to this Section 3 and the Restricted Shareholder or
his or her transferee fails to deliver the Shares of Restricted Shareholder
Stock in accordance with the terms hereof, the Company, or its designee, may, at
its option, in addition to all other remedies it may have, deposit the purchase
price in an escrow account administered by an independent third party (to be
held for the benefit of and payment over to the Restricted Shareholder or his or
her transferee in accordance herewith), whereupon the Company shall by written
notice to the Restricted Shareholder cancel on its books the certificates(s)
representing such Shares of Restricted Shareholder Stock registered in the name
of the Restricted Shareholder and all of the Restricted Shareholder's or his or
her transferee's right, title, and interest in and to such Shares of Restricted
Shareholder Stock shall terminate in all respects.

          (d) Notwithstanding the foregoing, if at any time the Company elects
to purchase any Class B Common Stock pursuant to this Section 3, the Company
shall pay the purchase price for the Class B Common Stock it purchases (i)
first, by offsetting indebtedness, if any, owing from such Restricted
Shareholder to the Company and (ii) then, by the Company's delivery of cash for
the remainder of the purchase price, if any, against delivery of the
certificates or other instruments representing the Class B Common Stock so
purchased, duly endorsed; provided that, if any such cash payment at the time
such payment is required to be made would result (A) in a violation of any law,
statute, rule, regulation, policy, order, writ, injunction, decree or judgment
promulgated or entered by any federal, state, local or foreign court or
governmental authority applicable to the Company or any of its Subsidiaries or
any of its or their property or

                                       11

<PAGE>

(B) after giving effect thereto, a Financing Default, or (C) if the Board
determines in good faith that immediately prior to such purchase there shall
exist a Financing Default which prohibits such purchase, dividend or
distribution ((A) through (C) collectively the "Cash Deferral Conditions"), the
portion of the cash payment so affected may be made by the Company's delivery of
a promissory note or senior preferred shares of the Company with a liquidation
preference equal to the balance of the purchase price. The promissory note or
senior preferred shares shall accrue interest or yield, as the case may be,
annually at the "prime rate" published in The Wall Street Journal on the date of
issuance, which interest or yield, as the case may be, shall be payable at
maturity or upon payment of distributions by the Company. The value of each such
senior preferred share shall as of its issuance be deemed to equal (A) the
portion of the cash payment paid by the issuance of such preferred shares
divided by (B) the number of senior preferred shares so issued. Any senior
preferred shares or the promissory note shall be redeemed or payable when and to
the extent the Cash Deferral Condition which prompted their issuance no longer
exists.

          (e) In the event that Restricted Shareholder Stock is repurchased
pursuant to this Section 3, the Restricted Shareholder and his or her
successors, assigns or Representatives shall take (at the Company's expense) all
steps necessary and desirable to obtain all required third-party, governmental
and regulatory consents and approvals and take all other actions necessary and
desirable to facilitate consummation of such repurchase in a timely manner.

          4. LEGEND.

          The certificates representing the Restricted Shareholder Stock will
bear the following legend:

          "THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
     REPURCHASE AND CERTAIN OTHER AGREEMENTS SET FORTH IN A SENIOR MANAGER
     AMENDED AND RESTATED RESTRICTED STOCK AGREEMENT DATED AS OF APRIL 17, 2006
     BETWEEN THE COMPANY AND THE OTHER SIGNATORY THERETO. A COPY OF SUCH
     AGREEMENT MAY BE OBTAINED BY THE HOLDER HEREOF AT THE COMPANY'S PRINCIPAL
     PLACE OF BUSINESS WITHOUT CHARGE.

          THE SALE, TRANSFER, ASSIGNMENT, PLEDGE, OR ENCUMBRANCE OF THE
     SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE RIGHTS OF THE HOLDER OF
     SUCH SECURITIES IN RESPECT OF THE ELECTION OF DIRECTORS ARE SUBJECT TO A
     SECURITYHOLDERS' AGREEMENT DATED DECEMBER 19, 2003 AMONG THL BEDDING
     HOLDING COMPANY AND CERTAIN HOLDERS OF ITS OUTSTANDING CAPITAL STOCK.
     COPIES OF SUCH AGREEMENT MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE
     BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THL BEDDING
     HOLDING COMPANY.

          THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
     INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
     AS AMENDED, OR ANY STATE SECURITIES

                                       12

<PAGE>

     OR BLUE SKY LAWS. THESE SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE
     ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT OR
     LAWS."

          5. RESTRICTIONS ON TRANSFER, CONVERSION AND VOTING.

          (a) The Company and the Restricted Shareholder acknowledge and agree
that the Shares of Restricted Shareholder Stock are subject to and restricted by
the Securityholders' Agreement and with respect to such Shares of Restricted
Shareholder Stock, the Restricted Shareholder shall be an "Employee" or "Senior
Manager," as the case may be, and as each such term is used in the
Securityholders' Agreement. Notwithstanding anything to the contrary contained
in the Securityholders' Agreement, no Shares of Restricted Shareholder Stock
that have not become Vested Shares pursuant to Section 2 hereof may be
transferred to any Person and no Shares of Restricted Shareholder Stock that are
Vested Shares may be transferred to any Person who is not an Affiliate of the
Restricted Shareholder. The Vested Shares may be transferred by will or the laws
of descent and distribution.

          (b) Prior to any Transfer, the transferee shall agree, by execution of
a Joinder Agreement, to be bound by this Agreement as holder of Restricted
Shareholder Stock and by the Securityholders' Agreement as an "Employee" or
"Senior Manager", as the case may be. Any Transfer or attempted Transfer of any
Restricted Shareholder Stock in violation of the preceding sentence shall be
void, and the Company shall not record such Transfer on its books or treat any
purported transferee of such Restricted Shareholder Stock as the owner of such
stock for any purpose.

          (c) The Restricted Shareholder agrees that so long as the Restricted
Shareholder owns Shares of Restricted Shareholder Stock which have not become
Vested Shares pursuant to Section 2 hereof, the Restricted Shareholder shall be
obligated to vote all of his, her or its Shares of Restricted Shareholder Stock
which have not become Vested Shares pursuant to Section 2 hereof in the same
manner and proportions as the votes cast by the holders of a majority of the
Company's voting capital stock not subject to such repurchase rights. If the
Restricted Shareholder fails or refuses to vote his, her or its Shares of
Restricted Shareholder Stock which have not become Vested Shares pursuant to
Section 2 hereof as required by, or votes his, her or its Shares of Restricted
Shareholder Stock which have not become Vested Shares pursuant to Section 2
hereof in contravention of this Section 5(c), then the Restricted Shareholder
hereby grants to each of the President and Treasurer of the Company, acting
solely in his or her capacity as such, an irrevocable proxy, coupled with an
interest, to vote such Shares in accordance with Section 5(c).

          6. DEFINITIONS.

          The following terms shall have the meanings ascribed below:

          "Affiliate" of any particular Person means any other Person
controlling, controlled by or under common control with such particular Person
or, with respect to any individual, such individual's spouse and descendants
(whether natural or adopted) and any trust, partnership, limited liability
company or similar vehicle established and maintained solely for the

                                       13

<PAGE>

benefit of (or the sole members or partners of which are) such individual, such
individual's spouse and/or such individual's descendants.

          "Board" means the Board of Directors of the Company.

          "Change of Control" shall mean the consummation of a transaction,
whether in a single transaction or in a series of related transactions that are
consummated contemporaneously (or consummated pursuant to contemporaneous
agreements), with any other party or parties, other than an Affiliate of THL, on
an arm's-length basis, pursuant to which (a) a party or group (as defined under
Rule 13d under the Securities Exchange Act of 1934, as amended) who is not a
stockholder of the Company on the Effective Date, acquires, directly or
indirectly (whether by merger, stock purchase, recapitalization, reorganization,
redemption, issuance of capital stock or otherwise), more than 50% of the voting
stock of the Company, (b) such party or parties, directly or indirectly, acquire
assets constituting all or substantially all of the assets of the Company and
its Subsidiaries on a consolidated basis, or (c) prior to an initial public
offering of the Company common stock pursuant to an offering registered under
the Securities Act, Thomas H. Lee Equity Fund V, L.P., a Delaware limited
partnership, and its affiliates cease to have the ability to elect, directly or
indirectly, a majority of the Board.

          "Class A Common Stock" means the Company's Class A Common Stock, $0.01
par value per share.

          "Class B Common Stock" has the meaning set forth in Section 1(a)
hereof.

          "Code" shall mean the Internal Revenue Code of 1986, as amended.

          "Consolidated Adjusted EBITDA" has the meaning set forth in the Credit
Agreement.

          "Credit Agreement" shall mean the Amended and Restated Credit and
Guaranty Agreement, dated as of August 27, 2004, among Simmons Bedding Company,
as Company, THL-SC Bedding Company and certain subsidiaries of the Company, as
Guarantors, the financial institutions listed therein, as Lenders, UBS
Securities LLC, as Joint Lead Arranger and as Co-Syndication Agent, Deutsche
Bank AG, New York Branch, as Administrative Agent and Collateral Agent, General
Electric Capital Corporation, as Co-Documentation Agent, CIT Lending Services
Corporation, as Co-Documentation Agent, and Goldman Sachs Credit Partners L.P.,
as Sole Bookrunner, a Joint Lead Arranger and as Co-Syndication Agent.

          "Fair Market Value" shall be determined by the Board in good faith.
Upon such determination, the Company shall promptly provide the Restricted
Shareholder with notice of the Fair Market Value so determined (the "Board
Notice"). In the event of a determination of Fair Market Value with respect to
Class B Common Stock owned by a Senior Manager, such Senior Manager shall have
the right to contest such determination in good faith, by delivery of written
notice to the Company within ten (10) days of delivery of the Board Notice. If
the Senior Manager does not notify the Company of any disagreement therewith,
then the Fair Market Value shall be as set forth in the Board Notice. If the
Senior Manager does notify the Company of his or her disagreement with the Fair
Market Value set forth in the Board Notice within such 10-day time period, then
the Company must retain an independent third party appraiser to make

                                       14

<PAGE>

such Fair Market Value determination (the "Final Determination"), and such Final
Determination shall govern; provided, however, that if the Final Determination
of Fair Market Value equals less than 110% of the Fair Market Value set forth in
the Board Notice, then the Senior Manager shall pay for all costs and expenses
of the third party appraiser.

          "Financing Default" means any event of default or breach under (i) the
Credit Agreement, (ii) that certain senior unsecured floating rate loan facility
by and among THL-SC Bedding Company, certain of its subsidiaries, certain
lenders, party thereto and Deutsche Bank, A.G., Cayman Islands Branch, as
administrative agent, as amended, modified, restated or refinanced from time to
time, (iii) the covenant contained in the Indenture which permits repurchases by
the Company of employee stock not exceeding a specified amount in the aggregate,
or (iv) any other similar notes or instruments that the Company or its
Subsidiaries may issue from time to time.

          "Fully Diluted Shares" means, as of any date of determination, the
number of shares of Class A Common Stock and Class B Common Stock outstanding,
plus (without duplication) shares of Class A Common Stock and Class B Common
Stock issuable, whether at such time or upon the passage of time or the
occurrence of future events, upon the exercise, conversion or exchange of all
then-outstanding rights, warrants, options, convertible securities, or
exchangeable securities or indebtedness, or other rights, exercisable for or
convertible or exchangeable into, directly or indirectly, Class A Common Stock
or Class B Common Stock or securities exercisable for or convertible or
exchangeable into Class A Common Stock or Class B Common Stock, as the case may
be, whether at the time of issuance or upon the passage of time or the
occurrence of some future event.

          "Indenture" shall mean that certain Indenture, dated as of December
19, 2003, governing the Company's Senior Subordinated Notes due 2013, as
amended, modified, restated or refinanced from time to time.

          "Measurement Date" shall mean the date upon which the Company shall
have received its audited financial statements for the prior Measurement Year,
beginning with the Measurement Year ending December 30, 2006.

          "Person" shall be construed broadly and shall include, without
limitation, an individual, a partnership, an investment fund, a limited
liability company, a corporation, an association, a joint stock company, a
trust, a joint venture, an unincorporated organization and a governmental entity
or any department, agency or political subdivision thereof.

          "Representative" means, with respect to the deceased Restricted
Shareholder, the duly appointed, qualified and acting personal representative
(or personal representatives collectively) of the estate of the deceased
Restricted Shareholder (or portion of such estate that includes Restricted
Shareholder Stock), whether such personal representative holds the position of
executor, administrator or other similar position qualified to act on behalf of
such estate.

          "Restricted Shareholder Stock" has the meaning set forth in Section
1(a) hereof. The Restricted Shareholder Stock will continue to be Restricted
Shareholder Stock in the hands of any holder other than the Restricted
Shareholder (except for the Company and except for

                                       15

<PAGE>

transferees in a Public Sale) and, except as otherwise provided herein, each
such other holder of the Restricted Shareholder Stock will succeed to all rights
and obligations attributable to the Restricted Shareholder as a holder of the
Restricted Shareholder Stock hereunder. The Restricted Shareholder Stock will
also include shares of the Company's capital stock issued with respect to the
Restricted Shareholder Stock by way of a stock split, stock dividend or other
recapitalization.

          "Securities Act" means the Securities Act of 1933, as amended, or any
successor federal law then in force.

          "Securityholders' Agreement" means the Securityholders' Agreement
dated December 19, 2003 between the Company and certain stockholders of the
Company, as amended, modified or supplemented from time to time.

          "Senior Manager" shall mean each of Charles Roy Eitel, William S.
Creekmuir, and Rhonda C. Rousch, and/or any other Persons designated by the
Board as Senior Managers (collectively, the "Senior Managers").

          "Subsidiary" means any Person of which (i) a majority of the
outstanding share capital, voting securities or other equity interests are
owned, directly or indirectly, by the Company or (ii) the Company is entitled,
directly or indirectly, to appoint a majority of the board of directors or
managers or comparable supervisory body of such Person.

          "THL" means Thomas H. Lee Equity Fund V, L.P., a Delaware limited
partnership, Thomas H. Lee Parallel Fund V, L.P., Thomas H. Lee Cayman Fund V,
L.P., 1997 Thomas H. Lee Nominee Trust, Thomas H. Lee Investors Limited
Partnership, Putnam Investments Holdings, LLC, Putnam Investments Employees'
Securities Company I LLC, and Putnam Investments Employees' Securities Company
II, LLC.

          "Transfer" means the sale, transfer, assignment, pledge or other
disposal (whether with or without consideration and whether voluntarily or
involuntarily or by operation of law) of any Restricted Shareholder Stock.

          7. GENERAL PROVISIONS.

          (a) Severability. It is the desire and intent of the parties hereto
that the provisions of this Agreement be enforced to the fullest extent
permissible under the laws and public policies applied in each jurisdiction in
which enforcement is sought. Accordingly, if any particular provision of this
Agreement shall be adjudicated by a court of competent jurisdiction to be
invalid, prohibited or unenforceable for any reason, such provision, as to such
jurisdiction, shall be ineffective, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of this
Agreement or affecting the validity or enforceability of such provision in any
other jurisdiction. Notwithstanding the foregoing, if such provision could be
more narrowly drawn so as not to be invalid, prohibited or unenforceable in such
jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without
invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.

                                       16

<PAGE>

          (b) Entire Agreement. This Agreement and the Securityholders'
Agreement embody the complete agreement and understanding among the parties
hereto with respect to the subject matter hereof and supersedes and preempts any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way,
including the Original Agreement.

          (c) Counterparts. This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.

          (d) Successors and Assigns. Except as otherwise provided herein, this
Agreement shall bind and inure to the benefit of and be enforceable by the
Restricted Shareholder, the Company, and their respective successors, assigns,
heirs, representative and estate, as the case may be (including subsequent
holders of Restricted Shareholder Stock); provided that the rights and
obligations of the Restricted Shareholder under this Agreement shall not be
assignable except in connection with a permitted transfer of Restricted
Shareholder Stock hereunder.

          (e) Governing Law and Remedies. The parties acknowledge and agree that
they are bound by their arbitration obligations under Exhibit A attached hereto,
which the parties also hereby agree to execute contemporaneously and is an
integral part of this Agreement. The parties agree and acknowledge that all
provisions of this Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware exclusively and without reference to
principles of conflict of laws. The Federal Arbitration Act ("FAA") will
supersede state laws to the extent inconsistent. The Arbitrator(s) shall have no
authority to apply the law of any other jurisdiction.

/S/CRE RESTRICTED SHAREHOLDER'S INITIALS TO ACKNOWLEDGE AGREEMENT TO GOVERNING
LAW AND REMEDIES PROVISION IN SECTION 7(E).

          (f) Remedies. Each of the parties to this Agreement and any such
Person granted rights hereunder whether or not such Person is a signatory hereto
shall be entitled to enforce its rights under this Agreement specifically to
recover damages and costs (including reasonable attorney's fees) for any breach
of any provision of this Agreement and to exercise all other rights existing in
its favor. The parties hereto agree and acknowledge that money damages may not
be an adequate remedy for any breach of the provisions of this Agreement and
that any party and any such Person granted rights hereunder whether or not such
Person is a signatory hereto may in its sole discretion submit the matter to
arbitration for specific performance and/or other injunctive relief (without
posting any bond or deposit) in order to enforce or prevent any violations of
the provisions of this Agreement.

          (g) Amendment and Waiver. The provisions of this Agreement may be
amended and waived only with the prior written consent of the Company and the
Restricted Shareholder and no course of conduct or failure or delay in enforcing
the provisions of this Agreement shall be construed as a waiver of such
provisions or affect the validity, binding effect or enforceability of this
Agreement or any provision hereof.

                                       17

<PAGE>

          (h) Notices. Any notice provided for in this Agreement must be in
writing and must be either personally delivered, transmitted via facsimile,
mailed by first class mail (postage prepaid and return receipt requested) or
sent by reputable overnight courier service (charges prepaid) to the recipient
at the address below indicated or at such other address or to the attention of
such other person as the recipient party has specified by prior written notice
to the sending party. Notices will be deemed to have been given hereunder and
received when delivered personally, when received if transmitted via facsimile,
five (5) days after deposit in the U.S. mail and one (1) day after deposit with
a reputable overnight courier service.

                    If to the Company, to:

                       Simmons Company
                       One Concourse Parkway, Suite 800
                       Atlanta, GA 30328
                       Attention: Chief Financial Officer and General Counsel

                    With a copy to:

                    Thomas H. Lee Partners, L.P.
                       100 Federal Street, 35th Floor
                       Boston, MA 02110
                       Attention: Scott A. Schoen
                       Todd M. Abbrecht
                       George Taylor

If to the Restricted Shareholder, to the address set forth underneath the
Restricted Shareholder's name on the signature pages hereto.

          (i) Business Days. If any time period for giving notice or taking
action hereunder expires on a day which is a Saturday, Sunday or holiday in the
state in which the Company's chief executive office is located, the time period
for giving notice or taking action shall be automatically extended to the
business day immediately following such Saturday, Sunday or holiday.

          (j) Survival of Representations, Warranties and Agreements. All
representations, warranties and agreements contained herein shall survive the
consummation of the transactions contemplated hereby and the termination of this
Agreement indefinitely.

          (k) Descriptive Headings. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.

          (l) Construction. Where specific language is used to clarify by
example a general statement contained herein, such specific language shall not
be deemed to modify, limit or restrict in any manner the construction of the
general statement to which it relates. The language used in this Agreement shall
be deemed to be the language chosen by the parties to express their mutual
intent, and no rule of strict construction shall be applied against any party.

                                       18

<PAGE>

          (m) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.

          (n) Nouns and Pronouns. Whenever the context may require, any pronouns
used herein shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns and pronouns shall include the plural and vice
versa.

          (o) Acknowledgement and Waiver; Termination of Original Agreement. The
Restricted Shareholder hereby represents and warrants that he or she has access
to adequate information regarding the terms of this Agreement, the scope and
effect of the provisions set forth herein, including the effect of this
Agreement on the vesting provisions contained in the Original Agreement, and all
other matters encompassed by this Agreement, to make an informed and
knowledgeable decision with regard to enter into this Agreement. The Restricted
Shareholder further represents and warrants that he or she has not relied on the
Company in deciding to enter into this Agreement and has instead made his or her
own independent analysis and decision to enter into this Agreement. By execution
of this Agreement, the Restricted Shareholder hereby agrees and acknowledges
that the Original Agreement shall be of no further force and effect as of the
date hereof.

                  [Remainder of Page Intentionally Left Blank]

                                       19

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Senior Manager
Amended and Restated Restricted Stock Agreement as of the date first written
above.

                                       SIMMONS COMPANY

                                       By: /s/ William S. Creekmuir
                                           -------------------------------------
                                           William S. Creekmuir
                                           Executive Vice  President and
                                           Chief Financial Officer

<PAGE>

                                       RESTRICTED SHAREHOLDER:

                                       The Charles Roy Eitel Revocable Trust

                                       /s/ The Charles Roy Eitel Revocable Trust
                                       -----------------------------------------
                                       Signature

                                       Address:
                                                --------------------------------

                                                --------------------------------

                                                --------------------------------

                                       Shares of Restricted Shareholder Stock
                                       Purchased 183529

<PAGE>

                         EXHIBIT A - ARBITRATION CLAUSE

     (1) In consideration of the benefits described in the Senior Manager
Amended and Restated Restricted Stock Agreement executed by THE CHARLES ROY
EITEL REVOCABLE TRUST (the "Restricted Shareholder" or "you") and SIMMONS
COMPANY, a Delaware corporation (the "Company"), on the same date hereto and
into which this Exhibit A is incorporated, ("Agreement"), the Company and you
hereby agree that any controversy or claim arising under federal, state and
local statutory or common or contract law between the Company and you involving
the construction or application of any of the terms, provisions, or conditions
of the Agreement, including, but not limited to, breach of contract, tort,
and/or fraud, must be submitted to arbitration on the written request of either
party served on the other. Arbitration shall be the exclusive forum for any such
controversy. For example, if the Company and you have a dispute concerning the
interpretation or enforceability of one or more restrictive covenants, the
parties will resolve the dispute exclusively through arbitration. The
Arbitrator's decision shall be final and binding on both parties.

     (2) If any claim or cause of action at law or in equity is filed by either
party in any state or federal court which results in arbitration being compelled
and/or the claim or cause of action being dismissed, stayed, and/or removed to
arbitration pursuant to this Agreement, the party who instituted the claim or
cause of action in state or federal court, either wholly or in substantial part,
shall, at the discretion of the Arbitrator(s), reimburse the respondent for its
reasonable attorneys' fees, costs, and necessary disbursements to the extent
permitted by law, in addition to any other relief to which it may be entitled,
related to the state or federal court claim or action.

     (3) Excluding the initial filing fee, which shall be borne by the claimant,
the cost of arbitration shall be borne by the Company, unless the Arbitrator
determines that any claim(s) brought by you was/were wholly frivolous or
fraudulent. If an arbitration or any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party, either
wholly or in substantial part, shall, at the discretion of the Arbitrator, be
entitled to its reasonable attorneys' fees, costs, and necessary disbursements
to the extent permitted by law, in addition to any other relief to which it may
be entitled.

     (4) If the Restricted Shareholder submits any controversy or claim to
arbitration, the arbitration will be conducted in Atlanta, Georgia and all
claims shall be submitted to and administered by the American Arbitration
Association's Southeast Case Management Center in Atlanta, Georgia. If the
Company submits any controversy or claim to arbitration, the arbitration shall
be conducted at the American Arbitration Association's Local or Regional Office
that is geographically closest to the Restricted Shareholder's place of
residence and all claims shall be submitted to and administered by the American
Arbitration Association's corresponding Case Management Center.

     (5) The arbitration shall comply with and be governed by the American
Arbitration Association's Commercial Arbitration Rules ("Rules") effective as of
the execution date below, to the extent such Rules are not contrary to the
express provisions of this Agreement. The parties also agree that the American
Arbitration Association Optional Rules for Emergency Measures of Protection
("Emergency Rules") shall apply to proceedings brought by either party. The
above

<PAGE>

Rules and Emergency Rules can be found at the following page of the American
Arbitration Association's website, www.adr.org:
http://www.adr.org/sp.asp?id=22440. You acknowledge that you should read these
Rules and Emergency Rules and that it is your responsibility to be familiar with
them prior to signing the Agreement. If you are unable to access the Rules
and/or Emergency Rules at the above website, you can request a copy of them from
a Company official prior to signing the Agreement.

     (6) The parties agree and acknowledge that all provisions of this Agreement
shall be governed by and construed in accordance with the laws of the State of
Delaware exclusively and without reference to principles of conflict of laws.
The Federal Arbitration Act ("FAA") will supersede state laws to the extent
inconsistent. Any claim(s) involving the construction or application of this
Agreement must be submitted to arbitration within the statute of limitations
period for such claim(s) under Delaware state law and shall be dismissed if the
statute of limitations period is not met. The Arbitrator(s) shall have no
authority to apply the law of any other jurisdiction.

     (7) The dispute shall be heard and determined by one Arbitrator, unless
both parties mutually consent in writing signed by you and an authorized
representative of Company to a panel of three (3) Arbitrators. Unless both
parties mutually consent otherwise, the parties agree and request that the
Arbitrator(s) issue a reasoned award in accordance with Commercial Arbitration
Rule R-42(b).

     I UNDERSTAND THAT BY SIGNING THIS AGREEMENT I AM GIVING UP MY RIGHT TO A
JURY TRIAL.

Executed effective as of this 17th day of April, 2006

                                            Simmons Company

/s/ The Charles Roy Eitel Revocable Trust   By: /s/ William S. Creekmuir
-----------------------------------------       --------------------------------
The Charles Roy Eitel Revocable Trust           William S. Creekmuir
                                                Executive Vice President and
                                                Chief Financial Officer

Social Security #:
                   ----------------------

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