Document:

Exhibit 10.19

 

EXECUTION COPY

 

 

THIRD AMENDED AND
RESTATED CREDIT AGREEMENT

 

Dated as of August 25, 2006

 

among

 

SEALY MATTRESS COMPANY,

as Borrower

 

SEALY CANADA LTD./LTEE,

as Canadian Borrower

 

CERTAIN SUBSIDIARIES OF BORROWER,

as Guarantors

 

SEALY MATTRESS CORPORATION,

as Holdings and a Guarantor

 

SEALY CORPORATION,

as Parent

 

The Several Lenders

from Time to Time Parties Hereto

 

JPMORGAN CHASE BANK, N.A.

as Administrative Agent

 

J.P. MORGAN SECURITIES INC.,

as Joint Lead Arranger and Joint Bookrunner

 

CITIGROUP GLOBAL MARKETS INC.,

as Joint Lead Arranger and Joint Bookrunner

 

CITIBANK, N.A.,

as Syndication Agent

 

 GENERAL ELECTRIC CAPITAL CORPORATION,

as Co-Documentation Agent

 

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Co-Documentation Agent

 

and

 

LASALLE BANK NATIONAL ASSOCIATION,

as Co-Documentation Agent

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   SECTION 1.

  	
   

  	
  Definitions

  	
   

  	
  2

  
	
  1.1.

  	
   

  	
  Defined Terms

  	
   

  	
  2

  
	
  1.2.

  	
   

  	
  Exchange Rates

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   SECTION 2.

  	
   

  	
  Amount and Terms of Credit

  	
   

  	
  43

  
	
  2.1.

  	
   

  	
  Commitments

  	
   

  	
  43

  
	
  2.2.

  	
   

  	
  Minimum Amount of Each
  Borrowing; Maximum Number of Borrowings

  	
   

  	
  46

  
	
  2.3.

  	
   

  	
  Notice of Borrowing

  	
   

  	
  46

  
	
  2.4.

  	
   

  	
  Disbursement of Funds

  	
   

  	
  48

  
	
  2.5.

  	
   

  	
  Repayment of Loans;
  Evidence of Debt

  	
   

  	
  49

  
	
  2.6.

  	
   

  	
  Conversions and
  Continuations

  	
   

  	
  52

  
	
  2.7.

  	
   

  	
  Pro Rata Borrowings

  	
   

  	
  53

  
	
  2.8.

  	
   

  	
  Interest

  	
   

  	
  53

  
	
  2.9.

  	
   

  	
  Interest Periods

  	
   

  	
  54

  
	
  2.10.

  	
   

  	
  Increased Costs,
  Illegality, etc.

  	
   

  	
  56

  
	
  2.11.

  	
   

  	
  Compensation

  	
   

  	
  59

  
	
  2.12.

  	
   

  	
  Change of Lending Office

  	
   

  	
  59

  
	
  2.13.

  	
   

  	
  Notice of Certain Costs

  	
   

  	
  59

  
	
  2.14.

  	
   

  	
  Bankers’ Acceptances

  	
   

  	
  60

  
	
  2.15.

  	
   

  	
  Incremental Facilities

  	
   

  	
  62

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   SECTION 3.

  	
   

  	
  Letters of Credit

  	
   

  	
  64

  
	
  3.1.

  	
   

  	
  Letters of Credit

  	
   

  	
  64

  
	
  3.2.

  	
   

  	
  Letter of Credit Requests

  	
   

  	
  65

  
	
  3.3.

  	
   

  	
  Letter of Credit
  Participations

  	
   

  	
  65

  
	
  3.4.

  	
   

  	
  Agreement to Repay Letter
  of Credit Drawings

  	
   

  	
  68

  
	
  3.5.

  	
   

  	
  Increased Costs

  	
   

  	
  69

  
	
  3.6.

  	
   

  	
  Successor Letter of Credit
  Issuer

  	
   

  	
  70

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   SECTION 4.

  	
   

  	
  Fees; Commitments

  	
   

  	
  71

  
	
  4.1.

  	
   

  	
  Fees

  	
   

  	
  71

  
	
  4.2.

  	
   

  	
  Voluntary Reduction of
  Revolving Credit Commitments

  	
   

  	
  72

  
	
  4.3.

  	
   

  	
  Mandatory Termination of
  Commitments

  	
   

  	
  73

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   SECTION 5.

  	
   

  	
  Payments

  	
   

  	
  73

  
	
  5.1.

  	
   

  	
  Voluntary Prepayments

  	
   

  	
  73

  
	
  5.2.

  	
   

  	
  Mandatory Prepayments

  	
   

  	
  74

  
	
  5.3.

  	
   

  	
  Method and Place of
  Payment

  	
   

  	
  78

  
	
  5.4.

  	
   

  	
  Net Payments

  	
   

  	
  78

  
	
  5.5.

  	
   

  	
  Computations of Interest
  and Fees

  	
   

  	
  82

  
	
  5.6.

  	
   

  	
  Limit on Rate of Interest

  	
   

  	
  82

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   SECTION 6.

  	
   

  	
  Conditions Precedent to
  Initial Borrowing

  	
   

  	
  83

  
	
  6.1.

  	
   

  	
  Credit Documents

  	
   

  	
  83

  
	
  6.2.

  	
   

  	
  Collateral

  	
   

  	
  83

  

 

i

 

	
  6.3.

  	
   

  	
  Legal Opinions

  	
   

  	
  84

  
	
  6.4.

  	
   

  	
  No Default

  	
   

  	
  84

  
	
  6.5.

  	
   

  	
  Consent

  	
   

  	
  84

  
	
  6.6.

  	
   

  	
  [Reserved]

  	
   

  	
  84

  
	
  6.7.

  	
   

  	
  Effective Date
  Certificates

  	
   

  	
  84

  
	
  6.8.

  	
   

  	
  Corporate Proceedings of
  Each Credit Party

  	
   

  	
  84

  
	
  6.9.

  	
   

  	
  Corporate Documents

  	
   

  	
  84

  
	
  6.10.

  	
   

  	
  Fees

  	
   

  	
  84

  
	
  6.11.

  	
   

  	
  Representations and
  Warranties

  	
   

  	
  85

  
	
  6.12.

  	
   

  	
  Governmental
  Authorizations and Consents

  	
   

  	
  85

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   SECTION 7.

  	
   

  	
  Conditions Precedent to
  All Credit Events

  	
   

  	
  85

  
	
  7.1.

  	
   

  	
  No Default; Representations
  and Warranties

  	
   

  	
  85

  
	
  7.2.

  	
   

  	
  Notice of Borrowing;
  Letter of Credit Request

  	
   

  	
  85

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   SECTION 8.

  	
   

  	
  Representations,
  Warranties and Agreements

  	
   

  	
  86

  
	
  8.1.

  	
   

  	
  Corporate Status

  	
   

  	
  86

  
	
  8.2.

  	
   

  	
  Corporate Power and
  Authority

  	
   

  	
  86

  
	
  8.3.

  	
   

  	
  No Violation

  	
   

  	
  86

  
	
  8.4.

  	
   

  	
  Litigation

  	
   

  	
  86

  
	
  8.5.

  	
   

  	
  Margin Regulations

  	
   

  	
  87

  
	
  8.6.

  	
   

  	
  Governmental Approvals

  	
   

  	
  87

  
	
  8.7.

  	
   

  	
  Investment Company Act

  	
   

  	
  87

  
	
  8.8.

  	
   

  	
  True and Complete
  Disclosure

  	
   

  	
  87

  
	
  8.9.

  	
   

  	
  Financial Condition;
  Financial Statements

  	
   

  	
  87

  
	
  8.10.

  	
   

  	
  Tax Returns and Payments

  	
   

  	
  88

  
	
  8.11.

  	
   

  	
  Compliance with ERISA

  	
   

  	
  88

  
	
  8.12.

  	
   

  	
  Subsidiaries

  	
   

  	
  89

  
	
  8.13.

  	
   

  	
  Patents, etc.

  	
   

  	
  89

  
	
  8.14.

  	
   

  	
  Environmental Laws

  	
   

  	
  89

  
	
  8.15.

  	
   

  	
  Properties

  	
   

  	
  90

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   SECTION 9.

  	
   

  	
  Affirmative Covenants

  	
   

  	
  90

  
	
  9.1.

  	
   

  	
  Information Covenants

  	
   

  	
  90

  
	
  9.2.

  	
   

  	
  Books, Records and
  Inspections

  	
   

  	
  93

  
	
  9.3.

  	
   

  	
  Maintenance of Insurance

  	
   

  	
  93

  
	
  9.4.

  	
   

  	
  Payment of Taxes

  	
   

  	
  94

  
	
  9.5.

  	
   

  	
  Consolidated Corporate
  Franchises

  	
   

  	
  94

  
	
  9.6.

  	
   

  	
  Compliance with Statutes,
  Obligations, etc.

  	
   

  	
  94

  
	
  9.7.

  	
   

  	
  ERISA

  	
   

  	
  94

  
	
  9.8.

  	
   

  	
  Good Repair

  	
   

  	
  95

  
	
  9.9.

  	
   

  	
  Transactions with
  Affiliates

  	
   

  	
  95

  
	
  9.10.

  	
   

  	
  End of Fiscal Years; Fiscal
  Quarters

  	
   

  	
  95

  
	
  9.11.

  	
   

  	
  Additional Guarantors and
  Grantors

  	
   

  	
  95

  
	
  9.12.

  	
   

  	
  Pledges of Additional
  Stock and Evidence of Indebtedness

  	
   

  	
  96

  
	
  9.13.

  	
   

  	
  Use of Proceeds

  	
   

  	
  97

  
	
  9.14.

  	
   

  	
  Changes in Business

  	
   

  	
  97

  

 

ii

 

	
  9.15.

  	
   

  	
  Further Assurances

  	
   

  	
  97

  
	
  9.16.

  	
   

  	
  Canadian Borrower

  	
   

  	
  98

  
	
  9.17.

  	
   

  	
  Post-Closing Covenant

  	
   

  	
  98

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   SECTION 10.

  	
   

  	
  Negative Covenants

  	
   

  	
  99

  
	
  10.1.

  	
   

  	
  Limitation on Indebtedness

  	
   

  	
  99

  
	
  10.2.

  	
   

  	
  Limitation on Liens

  	
   

  	
  102

  
	
  10.3.

  	
   

  	
  Limitation on Fundamental
  Changes

  	
   

  	
  102

  
	
  10.4.

  	
   

  	
  Limitation on Sale of
  Assets

  	
   

  	
  105

  
	
  10.5.

  	
   

  	
  Limitation on Investments

  	
   

  	
  106

  
	
  10.6.

  	
   

  	
  Limitation on Dividends

  	
   

  	
  108

  
	
  10.7.

  	
   

  	
  Limitations on Debt
  Payments and Amendments

  	
   

  	
  109

  
	
  10.8.

  	
   

  	
  Limitations on Sale
  Leasebacks

  	
   

  	
  110

  
	
  10.9.

  	
   

  	
  Consolidated Total Debt to
  Consolidated EBITDA Ratio

  	
   

  	
  110

  
	
  10.10.

  	
   

  	
  Consolidated EBITDA to
  Consolidated Interest Expense Ratio

  	
   

  	
  110

  
	
  10.11.

  	
   

  	
  Capital Expenditures

  	
   

  	
  111

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   SECTION 11.

  	
   

  	
  Events of Default

  	
   

  	
  112

  
	
  11.1.

  	
   

  	
  Payments

  	
   

  	
  112

  
	
  11.2.

  	
   

  	
  Representations, etc.

  	
   

  	
  112

  
	
  11.3.

  	
   

  	
  Covenants

  	
   

  	
  112

  
	
  11.4.

  	
   

  	
  Default Under Other
  Agreements

  	
   

  	
  113

  
	
  11.5.

  	
   

  	
  Bankruptcy, etc.

  	
   

  	
  113

  
	
  11.6.

  	
   

  	
  ERISA

  	
   

  	
  114

  
	
  11.7.

  	
   

  	
  Guarantee

  	
   

  	
  114

  
	
  11.8.

  	
   

  	
  Pledge Agreement

  	
   

  	
  114

  
	
  11.9.

  	
   

  	
  Security Agreement

  	
   

  	
  114

  
	
  11.10.

  	
   

  	
  Mortgages

  	
   

  	
  114

  
	
  11.11.

  	
   

  	
  Foreign Guarantees

  	
   

  	
  114

  
	
  11.12.

  	
   

  	
  Canadian Security
  Documents

  	
   

  	
  115

  
	
  11.13.

  	
   

  	
  Subordination

  	
   

  	
  115

  
	
  11.14.

  	
   

  	
  Judgments

  	
   

  	
  115

  
	
  11.15.

  	
   

  	
  Change of Control

  	
   

  	
  115

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   SECTION 12.

  	
   

  	
  The Administrative Agent

  	
   

  	
  116

  
	
  12.1.

  	
   

  	
  Appointment

  	
   

  	
  116

  
	
  12.2.

  	
   

  	
  Delegation of Duties

  	
   

  	
  116

  
	
  12.3.

  	
   

  	
  Exculpatory Provisions

  	
   

  	
  116

  
	
  12.4.

  	
   

  	
  Reliance by Administrative
  Agent

  	
   

  	
  117

  
	
  12.5.

  	
   

  	
  Notice of Default

  	
   

  	
  117

  
	
  12.6.

  	
   

  	
  Non-Reliance on
  Administrative Agent and Other Lenders

  	
   

  	
  117

  
	
  12.7.

  	
   

  	
  Indemnification

  	
   

  	
  118

  
	
  12.8.

  	
   

  	
  Administrative Agent in
  its Individual Capacity

  	
   

  	
  118

  
	
  12.9.

  	
   

  	
  Successor Agent

  	
   

  	
  118

  
	
  12.10.

  	
   

  	
  Withholding Tax

  	
   

  	
  119

  
	
  12.11.

  	
   

  	
  Canadian Administrative
  Agent

  	
   

  	
  119

  
	
  12.12.

  	
   

  	
  Quebec

  	
   

  	
  119

  

 

iii

 

	
   SECTION 13.

  	
   

  	
  Collateral Allocation
  Mechanism

  	
   

  	
  120

  
	
  13.1.

  	
   

  	
  Implementation of CAM

  	
   

  	
  120

  
	
  13.2.

  	
   

  	
  Letters of Credit

  	
   

  	
  121

  
	
  13.3.

  	
   

  	
  Net Payments Upon
  Implementation of CAM Exchange

  	
   

  	
  122

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   SECTION 14.

  	
   

  	
  Miscellaneous

  	
   

  	
  123

  
	
  14.1.

  	
   

  	
  Amendments and Waivers

  	
   

  	
  123

  
	
  14.2.

  	
   

  	
  Notices

  	
   

  	
  125

  
	
  14.3.

  	
   

  	
  No Waiver; Cumulative
  Remedies

  	
   

  	
  126

  
	
  14.4.

  	
   

  	
  Survival of
  Representations and Warranties

  	
   

  	
  126

  
	
  14.5.

  	
   

  	
  Payment of Expenses and
  Taxes

  	
   

  	
  127

  
	
  14.6.

  	
   

  	
  Successors and Assigns;
  Participations and Assignments

  	
   

  	
  127

  
	
  14.7.

  	
   

  	
  Replacements of Lenders
  under Certain Circumstances

  	
   

  	
  132

  
	
  14.8.

  	
   

  	
  Adjustments; Set-off

  	
   

  	
  132

  
	
  14.9.

  	
   

  	
  Counterparts

  	
   

  	
  133

  
	
  14.10.

  	
   

  	
  Severability

  	
   

  	
  133

  
	
  14.11.

  	
   

  	
  Integration

  	
   

  	
  133

  
	
  14.12.

  	
   

  	
  GOVERNING LAW

  	
   

  	
  133

  
	
  14.13.

  	
   

  	
  Submission to
  Jurisdiction; Waivers

  	
   

  	
  133

  
	
  14.14.

  	
   

  	
  Acknowledgments

  	
   

  	
  134

  
	
  14.15.

  	
   

  	
  WAIVERS OF JURY TRIAL

  	
   

  	
  134

  
	
  14.16.

  	
   

  	
  Confidentiality

  	
   

  	
  134

  
	
  14.17.

  	
   

  	
  Judgment Currency

  	
   

  	
  135

  
	
  14.18.

  	
   

  	
  USA PATRIOT Act

  	
   

  	
  136

  
	
  14.19.

  	
   

  	
  Reaffirmation and Grant of
  Security Interest

  	
   

  	
  136

  
	
  14.20.

  	
   

  	
  Amendment and Restatement

  	
   

  	
  136

  

 

 

	
  SCHEDULES

  	
   

  
	
   

  	
   

  
	
  Schedule
  1.1 (b)

  	
  Mortgaged
  Properties

  
	
  Schedule
  1.1(d)

  	
  EBITDA
  Add-Backs

  
	
  Schedule 1.1
  (c)

  	
  Commitments
  of Lenders

  
	
  Schedule
  1.1(e)

  	
  Excluded
  Subsidiaries

  
	
  Schedule
  8.11(ii)

  	
  Canadian
  Pension Plan Disclosures

  
	
  Schedule 8.12

  	
  Subsidiaries

  
	
  Schedule 10.1

  	
  Closing
  Date Indebtedness

  
	
  Schedule 10.2

  	
  Closing
  Date Liens

  
	
  Schedule 10.5

  	
  Closing
  Date Investments

  
	
  Schedule
  10.5(o)

  	
  Investments
  in newly formed Puerto Rican Subsidiary

  
	
   

  
	
   

  
	
  EXHIBITS

  
	
   

  
	
  Exhibit A-1

  	
  Form of
  Canadian Guarantee

  
	
  Exhibit A-2

  	
  Forms
  of Canadian Pledge Agreements

  
	
  Exhibit A-3

  	
  Form of
  Canadian Security Agreement

  
			

 

iv

 

	
  Exhibit C

  	
  Form of
  Guarantee

  
	
  Exhibit D

  	
  Form of
  Mortgage (Real Property)

  
	
  Exhibit E

  	
  Form of
  Perfection Certificate

  
	
  Exhibit F

  	
  Form of
  Pledge Agreement

  
	
  Exhibit G

  	
  Form of
  Security Agreement

  
	
  Exhibit H-1

  	
  Form of
  US Letter of Credit Request

  
	
  Exhibit H-2

  	
  Form of
  Canadian Letter of Credit Request

  
	
  Exhibit I-1

  	
  Form of
  Legal Opinion of Simpson Thacher & Bartlett LLP

  
	
  Exhibit I-2

  	
  Form of
  Legal Opinions of Osler, Hoskin & Harcourt LLP

  
	
  Exhibit I-3

  	
  Form of
  Legal Opinion of Calfee, Halter & Griswold LLP

  
	
  Exhibit I-4

  	
  Form of
  Legal Opinion of general counsel

  
	
  Exhibit J

  	
  Form of
  Effective Date Certificate

  
	
  Exhibit K

  	
  Form of
  Assignment and Acceptance

  
	
  Exhibit L-1

  	
  Form of
  Promissory Note (Term Loans)

  
	
  Exhibit L-2

  	
  Form of
  Promissory Note (Revolving Credit and Swingline Loans)

  
	
  Exhibit M

  	
  Form of
  Joinder Agreement

  
	
  Exhibit N

  	
  Form of
  Lender Addendum

  

 

v

 

THIRD AMENDED AND RESTATED CREDIT AGREEMENT dated as
of August 25, 2006, among SEALY MATTRESS COMPANY, an Ohio corporation (the
“Borrower”), SEALY CANADA LTD./LTEE, a company organized under the laws
of Canada (the “Canadian Borrower”), SEALY MATTRESS CORPORATION, a
Delaware Corporation (“Holdings”), SEALY CORPORATION, a Delaware
corporation (“Parent”), the lending institutions from time to time
parties hereto (each a “Lender” and, collectively, the “Lenders”),
J.P. MORGAN SECURITIES INC., as Joint Lead
Arranger and Joint Bookrunner,  CITIGROUP
GLOBAL MARKETS INC., as Joint Lead Arranger and Joint Bookrunner, CITIBANK,
N.A., as Syndication Agent,  JPMORGAN CHASE BANK, N.A. (as Administrative
Agent (such term and each other capitalized term used but not defined in this
introductory statement having the meaning provided in Section 1), JPMORGAN CHASE BANK, N.A.,
TORONTO BRANCH, as Canadian Administrative Agent, and GENERAL ELECTRIC
CAPITAL CORPORATION, WACHOVIA BANK, NATIONAL ASSOCIATION, and LASALLE BANK
NATIONAL ASSOCIATION, as Co-Documentation Agents.

 

WHEREAS, Borrower, Canadian Borrower, Holdings, Parent, the
Guarantors, certain financial institutions and other persons (the “Existing
Lenders”), J.P. Morgan Securities Inc., as joint lead arranger and joint
bookrunner, Goldman Sachs Credit Partners L.P., as joint lead arranger, joint
bookrunner and syndication agent, JPMorgan Chase Bank, as administrative agent,
JPMorgan Chase Bank, N.A., Toronto Branch, as Canadian administrative agent,
and General Electric Capital Corporation and Royal Bank of Canada, as
co-documentation agents, are parties to that certain Second Amended and
Restated Credit Agreement dated as of April 14, 2005 (as heretofore
amended, supplemented or otherwise modified, the “Existing Credit Agreement”),
pursuant to which the Existing Lenders have extended certain credit facilities
to Company, the proceeds of which have been used to consummate the
Recapitalization and for working capital and general corporate purposes;

 

WHEREAS, Borrower desires that certain Existing Lenders and
other Lenders party hereto agree to amend and restate the Existing Credit
Agreement in its entirety to (i) refinance the existing term loans made
under the Existing Credit Agreement (the “Existing Term Loans”) with the
Tranche A Term Loans and Tranche E Term Loans made hereunder; (ii) permit
the reduction in certain mandatory prepayments; (iii) permit certain
prepayments of the Subordinated Debt; (iv) permit certain dividend
payments; and (v) make certain other changes as more fully set forth
herein, which amendment and restatement shall become effective upon
satisfaction of the conditions precedent set forth herein;

 

WHEREAS, (i) the
proceeds of the Tranche A Term Loans and the Tranche E Term Loans made on the
Effective Date shall be used by the Borrower to repay in full the outstanding
Existing Term Loans; (ii) the proceeds of the Revolving Credit Loans and
Swingline Loans made on and after the Effective Date will continue to be used
by the Borrower and the Canadian Borrower for general corporate purposes
(including Permitted Acquisitions); and (iii) Letters of Credit will
continue to be used by the Borrower and the Canadian Borrower for general
corporate purposes;

 

WHEREAS, Borrower has agreed to secure all of its
Obligations by reaffirming its grant to Administrative Agent, for the benefit
of Secured Parties, of a Lien on certain of its assets consistent with such
liens existing on the Effective Date, including a pledge of all of the

 

 

Capital Stock of each of its Domestic
Subsidiaries and 65% of all the Capital Stock of each of its Foreign
Subsidiaries;

 

WHEREAS, it is the intent of the parties hereto that this
Agreement not constitute a novation of the obligations and liabilities of the
parties under the Existing Credit Agreement and that this Agreement amend and
restate in its entirety the Existing Credit Agreement; and

 

WHEREAS, it is the intent of the Credit Parties to confirm
that all Obligations of the Credit Parties under the other Credit Documents
shall continue in full force and effect and that, from and after the Effective
Date, all references to the “Credit Agreement” contained therein shall
be deemed to refer to this Agreement.

 

The parties hereto hereby agree as follows:

 

SECTION 1.           Definitions

 

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

 

“ABR” shall mean, for any day, a rate per
annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to the
greatest of (a) the Prime Rate in effect on such day and (b) the
Federal Funds Effective Rate in effect on such day plus 1⁄2 of 1%.  Any change in the ABR due to a change in the
Prime Rate or the Federal Funds Effective Rate shall be effective as of the
opening of business on the effective day of such change in the Prime Rate or
the Federal Funds Effective Rate, respectively.

 

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

 

“Acquired EBITDA” shall mean, with respect to
any Acquired Entity or Business, any Converted Restricted Subsidiary, any Sold
Entity or Business or any Converted Unrestricted Subsidiary (any of the
foregoing, a “Pro Forma Entity”) for any period, the amount for such
period of Consolidated EBITDA of such Pro Forma Entity (determined using such
definitions as if references to Holdings and its Subsidiaries therein were to
such Pro Forma Entity and its Subsidiaries), all as determined on a consolidated
basis for such Pro Forma Entity in accordance with GAAP.

 

“Acquired Entity or Business” shall have the
meaning provided in the definition of the term “Consolidated EBITDA”.

 

“Adjusted Canadian Total Revolving Credit
Commitment” shall mean at any time the Canadian Total Revolving Credit
Commitment less the aggregate Canadian Revolving Credit Commitments of all
Defaulting Lenders.

 

2

 

“Adjusted US Total Revolving Credit Commitment”
shall mean at any time the US Total Revolving Credit Commitment less the
aggregate US Revolving Credit Commitments of all Defaulting Lenders.

 

“Adjusted Total Term Loan Commitment” shall
mean at any time the Total Term Loan Commitment less (i) the Tranche A
Term Loan Commitments of all Defaulting Lenders, (ii) the Tranche E Term
Loan Commitments of all Defaulting Lenders and (iii) the New Term Loan
Commitments, if any, of all Defaulting Lenders.

 

“Administrative Agent” shall mean JPMorgan
Chase Bank, together with its affiliates, as the arranger of the Commitments
and as the administrative agent for the Lenders under this Agreement and the
other Credit Documents.  With respect to
Borrowings by the Canadian Borrower, the Canadian Administrative Agent may be
an Affiliate of JPMorgan Chase Bank for purposes of administering such
Borrowings, and all references herein to the term “Administrative Agents” shall
be deemed to refer to both the Administrative Agent and the Canadian
Administrative Agent, as the context requires.

 

“Administrative Agent’s
Office” shall mean (a) in respect of all Credit Events for the account
of the Borrower, the office of the Administrative Agent located at 270 Park Avenue,
5th Floor, New York, NY 10017, or such other office as the Administrative
Agent may hereafter designate in writing as such to the other parties hereto
and (b) in respect of all Credit Events for the account of the Canadian
Borrower, the office of the Canadian Administrative Agent located at 200 Bay
Street, Royal Bank Plaza, South Tower, Toronto, Ontario M5J 2J2, or such other
office in Canada as the Canadian Administrative Agent may hereafter designate
in writing as such to the other parties hereto and all references to the term “Canadian
Administrative Agent’s Office” shall mean the office referred to in this clause
(b).

 

“Affiliate” shall mean, with respect to any
Person, any other Person directly or indirectly controlling, controlled by, or
under direct or indirect common control with such Person.  A Person shall be deemed to control a corporation
if such Person possesses, directly or indirectly, the power (a) to vote
10% or more of the securities having ordinary voting power for the election of
directors of such corporation or (b) to direct or cause the direction of
the management and policies of such corporation, whether through the ownership
of voting securities, by contract or otherwise.

 

“Agents” shall mean each Joint Lead Arranger,
the Administrative Agent, the Canadian Administrative Agent, the Syndication
Agent and the Co-Documentation Agents.

 

“Aggregate Canadian Revolving Credit Outstanding”
shall have the meaning provided in Section 5.2(b)(ii).

 

“Aggregate US Revolving Credit Outstanding”
shall have the meaning provided in Section 5.2(b)(i).

 

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

 

3

 

“Amortization Amount” shall have the meaning
provided in Section 5.2(c).

 

“Applicable ABR Margin” shall mean at any
date, (i) with respect to each ABR Loan, Cdn ABR Loan and Canadian Prime
Loan that is a Revolving Credit or Swingline Loan, the applicable percentage
per annum set forth below based upon the Status in effect on such date:

 

	
  Status

  	
   

  	
  Applicable
  ABR Margin for

  Revolving Credit and Swingline

  Loans (including ABR Loans,

  Cdn ABR Loans and Canadian

  Prime Loans)

  	
   

  
	
  Level I Status

  	
   

  	
  1.25

  	
  %

  
	
  Level II Status

  	
   

  	
  1.00

  	
  %

  
	
  Level III Status

  	
   

  	
  0.75

  	
  %

  
	
  Level IV Status

  	
   

  	
  0.50

  	
  %

  

 

(ii) with respect to
Tranche A Term Loans only, (a) initially, 0.25% per annum and (b) commencing
at the end of the first interest period so long as the Consolidated Total Debt
to Consolidated EBITDA Ratio is (x) greater than 4.50 to 1.00 as of such
date, 0.50%, or (y) less than 2.25 to 1.00 as of such date, 0.0% per
annum, and (iii) with respect to Tranche E Term Loans only, 0.50% per
annum.

 

“Applicable Eurodollar
Margin” shall mean at any date, (i) with respect to each
Eurodollar Loan that is a Revolving Credit or Swingline Loan, the applicable
percentage per annum set forth below based upon the Status in effect on such
date:

 

	
  Status

  	
   

  	
  Applicable
  Eurodollar

  Margin for Revolving

  Credit and Swingline Loans

  	
   

  
	
  Level I Status

  	
   

  	
  2.50

  	
  %

  
	
  Level II Status

  	
   

  	
  2.25

  	
  %

  
	
  Level III Status

  	
   

  	
  2.00

  	
  %

  
	
  Level IV Status

  	
   

  	
  1.75

  	
  %

  

 

(ii) with respect to
Tranche A Term Loans only, (a) initially, 1.25% per annum and (b) commencing
at the end of the first interest period so long as the Consolidated Total Debt
to Consolidated EBITDA Ratio is (x) greater than 4.50 to 1.00 as of such
date, 1.50%, or (y) less than 2.25 to 1.00 as of such date, 1.0% per
annum, and (iii) with respect to Tranche E Term Loans only, 1.50% per
annum.

 

“Applicable Stamping Fee” shall
mean, with respect to each accepted or advanced BA Loan by a Lender on any
date, the applicable percentage per annum set forth below based on the Status
in effect on such date:

 

4

 

	
  Status

  	
   

  	
  Applicable Stamping Fee

  	
   

  
	
  Level I Status

  	
   

  	
  2.50

  	
  %

  
	
  Level II Status

  	
   

  	
  2.25

  	
  %

  
	
  Level III Status

  	
   

  	
  2.00

  	
  %

  
	
  Level IV Status

  	
   

  	
  1.75

  	
  %

  

 

Notwithstanding the foregoing, the term “Applicable
Stamping Fee” shall mean, 2.50% per annum, during the period from and including
the Closing Date to but excluding the Initial Financial Statement Delivery
Date.

 

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

 

“Asset Sale Prepayment Event” shall mean any
sale, transfer or other disposition of any business units, assets or other
properties of the Borrower or any of the Restricted Subsidiaries not in the
ordinary course of business (including any sale, transfer or other disposition
of any capital stock of any Subsidiary of the Borrower owned by the Borrower or
a Restricted Subsidiary). 
Notwithstanding the foregoing, the term “Asset Sale Prepayment Event”
shall not include any transaction permitted by Section 10.4, other than
transactions permitted by Sections 10.4(b) and (e).

 

“Assignment and Acceptance” shall mean an
assignment and acceptance substantially in the form of Exhibit K.

 

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

 

“Available Amount” shall mean, on any date
(the “Reference Date”), an amount equal at such time to (a) the sum
of, without duplication, (i) for the purposes of (x) Section 10.5(j),
Section 10.5(m) and Section 10.11(b), $125,000,000 in the
aggregate and (y) the first proviso to Section 10.7(a), to the extent
that (a) the Consolidated Senior Debt to Consolidated EBITDA Ratio at such
time and after giving effect to the prepayment, repurchase, redemption or
defeasance, as applicable, to be completed on the Reference Date is less than
3.50 to 1.00, $62,500,000 in the aggregate and (b) the Consolidated Total
Debt to Consolidated EBITDA Ratio at such time and after giving effect to the
prepayment, repurchase, redemption or defeasance, as applicable, to be
completed on the Reference Date is less than 2.25 to 1.00, an additional
$62,500,000 in the aggregate, (ii) an amount equal to (x) the
cumulative amount of Excess Cash Flow for all fiscal years completed after the
Closing Date and prior to the Reference Date minus (y) the portion
of such Excess Cash Flow that has been after the Closing Date and on or prior
to the Reference Date (or will be) applied to the prepayment of Loans in
accordance with Section 5.2(a)(ii), (iii) the amount of any capital
contributions (other than the Equity Proceeds) made in cash to the Borrower
from and including the Business Day immediately following the Closing Date
through and including the Reference Date, including contributions with the
proceeds from any issuance of equity securities by Holdings, (iv) the
aggregate amount of all cash dividends and other cash distributions received by
the Borrower or any Guarantor from any Minority Investments or Unrestricted
Subsidiaries after the Closing Date and on or prior to the

 

5

 

Reference Date (other than
the portion of any such dividends and other distributions that is used by the
Borrower or any Guarantor to pay taxes), (v) the aggregate amount of all
cash repayments of principal received by the Borrower or any Guarantor from any
Minority Investments or Unrestricted Subsidiaries after the Closing Date and on
or prior to the Reference Date in respect of loans made by the Borrower or any
Guarantor to such Minority Investments or Unrestricted Subsidiaries and (vi) the
aggregate amount of all net cash proceeds received by the Borrower or any
Guarantor in connection with the sale, transfer or other disposition of its
ownership interest in any Minority Investment or Unrestricted Subsidiary after
the Closing Date and on or prior to the Reference Date minus (b) in
the case of clauses (a)(i)(x), (a)(i)(y), (a)(ii), (iii), (iv), (v) and
(vi), the aggregate portion of such amounts used for (i) any investments
(including loans) made by the Borrower or any Restricted Subsidiary pursuant to
Section 10.5(j) or Section 10.5(m) after the Closing Date
and on or prior to the Reference Date, (ii) Capital Expenditures made by
the Borrower or any of the Restricted Subsidiaries after the Closing Date and
on or prior to the Reference Date pursuant to Section 10.11(b) and (iii) any
prepayment, repurchase or redemption of the Subordinated Notes pursuant to Section 10.7(a) or
10.7(b), respectively, after the Closing Date and on or prior to the Reference
Date, in each case without duplication in respect thereof from Excess Cash Flow
for any period included in such Available Amount.

 

“Available Canadian Commitment” shall mean an
amount equal to the excess, if any, of (a) the Dollar Equivalent of the
amount of the Canadian Total Revolving Credit Commitment over (b) the sum
of (i) the aggregate principal amount of all Canadian Revolving Credit
Loans (but not Swingline Loans) then outstanding and (ii) the aggregate
Canadian Letter of Credit Outstanding at such time.

 

“Available US Commitment” shall mean an
amount equal to the excess, if any, of (a) the Dollar Equivalent of the
amount of the US Total Revolving Credit Commitment over (b) the sum of (i) the
aggregate principal amount of all US Revolving Credit Loans (but not Swingline
Loans) then outstanding and (ii) the aggregate US Letter of Credit
Outstanding at such time.

 

“BA
Discount Proceeds” shall mean, with respect to any BA Loan, an
amount (rounded to the nearest full Canadian cent with one-half of one Canadian
cent being rounded up), calculated on the date of acceptance or advance of such
BA Loan which is equal to the face or principal amount of such BA Loan divided
by the sum of one plus the product of (i) the BA Discount Rate applicable
to such BA Loan multiplied by (ii) a fraction, the numerator of which is
the term of such BA Loan measured in days (commencing on the date of acceptance
and purchase or advance and ending on, but excluding, the maturity date
thereof) and the denominator of which is 365; with such product being rounded
up or down to the fifth decimal place and .000005 being rounded up.

 

“BA
Discount Rate” shall mean:

 

(a) with respect to an issue of Bankers’
Acceptances to be accepted by a Schedule I Lender hereunder, the CDOR Rate at
or about 10:00 a.m. on the date of issuance and acceptance of such Bankers’
Acceptance for bankers’ acceptances having a comparable face value and an
identical maturity date to the face value and maturity date of such Bankers’ Acceptances;
and

 

6

 

(b) with respect to an issue of Bankers’
Acceptances or a BA Equivalent Loan to be accepted or advanced by another
Canadian Lender hereunder, the lesser of:

 

(i) the rate determined by the Canadian
Administrative Agent as being the arithmetic average (rounded upwards to the
nearest multiple of 0.01%) of the discount rates, calculated on the basis of a
year of 365 days, of the Schedule II/III Reference Lenders determined in
accordance with their normal practices at or about 10:00 a.m. (New York
time) on the date of issue and acceptance of such Bankers’ Acceptances or
advance of such BA Equivalent Loans for bankers’ acceptances having a
comparable face amount and an identical maturity date to the face or principal
amount and maturity date of such Bankers’ Acceptance or BA Equivalent Loans;
and

 

(ii)  the rate established in (a) above
plus 0.10% per annum.

 

“BA Equivalent
Loans” shall mean, in relation to a Loan by way of BA Loans, an
advance in Canadian Dollars made by a Non-Acceptance Lender pursuant to Section 2.14(i).

 

“BA Loans”
shall mean Bankers’ Acceptances and BA Equivalent Loans; provided that
reference to the amount or principal amount of a BA Loan shall mean the full
face amount of the applicable Bankers’ Acceptances or Discount Notes issued in
connection therewith.

 

“Bankers’
Acceptance” shall mean a Draft denominated in Dollars drawn by the
Canadian Borrower and accepted by a Canadian Lender as provided in Section 2.14
and includes a depository bill issued in accordance with the Depository Bills and Notes Act (Canada).

 

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

 

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

 

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

 

“Borrowing” shall mean and include (a) the
incurrence of Swingline Loans from the Swingline Lender on a given date, (b) the
incurrence of one Type of Tranche A Term Loan on the Effective Date (or
resulting from conversions on a given date after the Effective Date) having, in
the case of Eurodollar Term Loans, the same Interest Period (provided
that ABR Loans incurred pursuant to Section 2.10(b) shall be
considered part of any related Borrowing of Eurodollar Term Loans), (c) the
incurrence of one Type of Tranche E Term Loan on the Effective Date (or
resulting from conversions on a given date after the Effective Date) having, in
the case of Eurodollar Term Loans, the same Interest Period (provided
that ABR Loans incurred pursuant to Section 2.10(b) shall be
considered part of any related Borrowing of Eurodollar Term Loans) and (d) the
incurrence of one Type of Revolving Credit Loan on a given date (or resulting
from conversions on a given date) having, in the case of Eurodollar Revolving
Credit Loans or BA Loans, the same Interest Period (provided that ABR
Loans, Cdn ABR Loans or Canadian Prime Loans incurred pursuant to Section 2.10(b) or
2.10(c)  shall be considered part of any related Borrowing of Eurodollar
Revolving Credit Loans or BA Loans, as the case may be).

 

7

 

“Business Day” shall mean any day excluding
Saturday, Sunday and any day that shall be in The City of New York or Toronto,
Canada a legal holiday or a day on which banking institutions are authorized by
law or other governmental actions to close.

 

“Calculation Date” means (a) the Closing
Date, (b) each date on which a Borrowing of Canadian Revolving Credit Loans
is made, (c) the last Business Day of each calendar month, (d) if at
any time (i) the Aggregate US Revolving Credit Outstandings exceed 75% of
the US Total Revolving Credit Commitment or (ii) the Aggregate Canadian
Revolving Credit Outstandings exceed 75% of the Canadian Total Revolving Credit
Commitment, the last Business Day of each week and (e) if a Default or an
Event of Default shall have occurred and be continuing, such additional dates
as the Administrative Agent or the Required Lenders shall specify.

 

“CAM” shall mean the mechanism for the
allocation and exchange of interests in the Credit Facilities and collections
thereunder established under Section 13.

 

“CAM Exchange” shall mean the exchange of the
Lender’s interests provided for in Section 13.1.

 

“CAM Exchange Date” shall mean the date on
which (a) any event referred to in Section 11.5 shall occur in
respect of any of Holdings, the Borrower or any Specified Subsidiary or (b) an
acceleration of the maturity of the Loans pursuant to Section 11 shall
occur.

 

“CAM Percentage” shall mean, as to each
Lender, a fraction, expressed as a decimal, of which (a) the numerator
shall be the aggregate Dollar Equivalent (determined on the basis of Exchange
Rates prevailing on the CAM Exchange Date) of the Specified Obligations owed to
such Lender and such Lender’s participation in the aggregate Letter of Credit
Outstanding immediately prior to the CAM Exchange Date and (b) the
denominator shall be the aggregate Dollar Equivalent (as so determined) of the
Specified Obligations owed to all the Lenders and the aggregate Letter of
Credit Outstanding immediately prior to such CAM Exchange Date.  For purposes of computing each Lender’s CAM
Percentage, all Specified Obligations which are denominated in Canadian Dollars
shall be translated into Dollars at the Exchange Rate in effect on the CAM
Exchange Date.

 

“Canadian Administrative Agent” shall mean
JPMorgan Chase Bank, an authorized foreign bank under the Bank Act  (Canada), acting through its
Toronto Branch, as the Canadian administrative agent for the Lenders under this
Agreement and the other Credit Documents, together with any of its permitted
successors appointed pursuant to Section 12.

 

“Canadian Benefit Plans” shall mean all
material employee benefit plans of any nature or kind whatsoever that are not
Canadian Pension Plans and are maintained or contributed to by any Credit Party
in relation to employees that it may have in Canada.

 

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

 

“Canadian Borrowing” shall mean a Borrowing
by the Canadian Borrower.

 

8

 

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

 

“Canadian Guarantee” shall mean the Canadian
Guarantee Agreement, made by each of the Canadian Guarantors in favor of the
Canadian Administrative Agent for the benefit of the Lenders to the Canadian
Borrower, substantially in the form of Exhibit A-1, as the same may be
amended, supplemented or otherwise modified from time to time.

 

“Canadian Guarantors” shall mean (a) each
Subsidiary of the Canadian Borrower on the Effective Date and (b) each
Subsidiary of the Borrower that becomes a party to the Canadian Guarantee after
the Effective Date pursuant to Section 9.11.

 

“Canadian
Hypothec” means a trust deed of hypothec granted or to be granted by any
Credit Party in favor of the Canadian Administrative Agent on moveable or
immoveable property pursuant to the laws of the Province of Quebec, together
with all bonds, debentures and pledges or hypothecs thereof, as amended,
supplemented or otherwise modified from time to time.

 

“Canadian Lenders” means each Lender
that has a Canadian Revolving Credit Commitment or that holds Canadian
Revolving Credit Loans; provided, that (a) as of the Effective
Date, any such Lender shall be a Canadian Resident and (b) to the extent
that all or any portion of such Loans or Commitments of such Lender shall be
allocated to the Borrower, the relevant Canadian Lender in respect of such
allocation shall also be a “United States person” as specified in Section 2.1(b)(ii) or
the Related Affiliate of such Canadian Revolving Credit Lender, if any,
designated by such Lender in accordance with Section 2.1(b)(ii).

 

“Canadian Letter of Credit” shall mean a
Letter of Credit issued by the Canadian Letter of Credit Issuer.

 

“Canadian Letter of Credit Commitment” shall
mean $10,000,000, as the same may be reduced from time to time pursuant to Section 3.1.

 

“Canadian Letter of Credit Exposure” shall
mean, with respect to any Canadian Lender, at any time, the sum of (a) the
Dollar Equivalent of the amount of any Unpaid Drawings in respect of which such
Canadian Lender has made (or is required to have made) payments to the Canadian
Letter of Credit Issuer pursuant to Section 3.4(a) at such time and (b) such
Canadian Lender’s Canadian Revolving Credit Commitment Percentage of the
Canadian Letter of Credit Outstanding at such time (excluding the portion
thereof consisting of Unpaid Drawings in respect of which the Canadian Lenders
have made (or are required to have made) payments to the Canadian Letter of
Credit Issuer pursuant to Section 3.4(a)).

 

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

 

“Canadian Letter of Credit Issuer” shall mean
JPMorgan Chase Bank, N.A., Toronto Branch or any affiliate thereof, or any
other Canadian Lender with a Canadian Revolving Credit Commitment designated as
the Canadian Letter of Credit Issuer in a written notice from the Canadian
Administrative Agent and the Canadian 
Borrower to the Lenders with a Canadian Revolving Credit Commitment; provided
that to the extent that any Canadian Letter

 

9

 

of Credit shall be issued
for the account of the Borrower, the Canadian Issuing Lender shall, if it is
not a “US person” (as defined in Section 7701(a)(30) of the Code), make
such Letters of Credit available through its Related Affiliate in accordance
with Section 3.1(a), and such Related Affiliate shall be deemed to be the
Canadian Letter of Credit Issuer for such purpose.

 

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

 

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

 

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

 

“Canadian
Pension Plans” shall mean each plan which is a registered pension plan for
the purposes of the Tax Act established, maintained or contributed to by any
Credit Party in relation to any employees that it may have in Canada.

 

“Canadian Pledge Agreements” shall mean the
Canadian Pledge Agreement, entered into by the parent of the Canadian Borrower,
the Canadian Borrower, certain other Restricted Subsidiaries and the Canadian
Administrative Agent for the benefit of the Canadian Lenders in each case,
substantially in the form of Exhibit A-2, as the same may be amended,
supplemented or otherwise modified from time to time.

 

“Canadian Prime Loan” shall mean a Loan the
rate of interest of which is based on the Canadian Prime Rate.

 

“Canadian Prime Rate” shall mean the higher
of (a) the rate of interest publicly announced by the Canadian
Administrative Agent as being its reference rate then in effect for determining
interest rates on C$ denominated commercial loans made in Canada, and (b) the
one-month CDOR Rate plus 1% per annum.

 

“Canadian Resident” shall mean, at any time,
a Person who at that time is (a) not a non-resident of Canada for purposes
of the Tax Act or (b) an authorized foreign bank deemed to be resident in
Canada for purposes of the Tax Act in respect of all amounts paid or credited
to such Person under the Canadian Revolving Credit Commitment or Canadian
Letter of Credit Commitment pursuant to this Agreement.

 

“Canadian Revolving Credit Commitment” shall
mean, (a) with respect to each Lender that is a Lender on the Closing
Date, the amount set forth opposite such Lender’s name on Schedule 1.1(c) as
such Lender’s “Canadian Revolving Credit Commitment” and (b) in the case
of any Lender that becomes a Lender after the Closing Date, the amount
specified as such Lender’s “Canadian Revolving Credit Commitment” in the
Assignment and Acceptance pursuant to which such Lender assumed a portion of
the Canadian Total Revolving Credit Commitment, in each case as the same may be
changed from time to time pursuant to the terms hereof.  The aggregate amount of the Canadian
Revolving Credit Commitments as of the Closing Date is US $25,000,000.

 

10

 

“Canadian Revolving Credit Commitment Percentage”
shall mean at any time, for each Canadian Lender, the percentage obtained by
dividing (a) such Lender’s Canadian Revolving Credit Commitment by (b) the
aggregate amount of the Canadian Revolving Credit Commitments, provided
that at any time when the Canadian Total Revolving Credit Commitment shall have
been terminated, each Canadian Lender’s Canadian Revolving Credit Commitment
Percentage shall be its Canadian Revolving Credit Commitment Percentage as in
effect immediately prior to such termination.

 

“Canadian Revolving Credit Exposure” shall
mean, with respect to any Canadian Lender at any time, the sum of (a) the
aggregate principal amount of the Dollar Equivalent of the Canadian Revolving
Credit Loans of such Lender then outstanding, and (b) such Lender’s
Canadian Letter of Credit Exposure at such time.

 

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

 

“Canadian Security Agreement” shall mean the
Canadian Security Agreement entered into by the Canadian Borrower, certain
other Restricted Subsidiaries and the Canadian Administrative Agent for the
benefit of the Lenders to the Canadian Borrower, substantially in the form of Exhibit A-3,
as the same may be amended, supplemented or otherwise modified from time to
time.

 

“Canadian Security Documents” shall mean,
collectively, (a) the Canadian Guarantee, (b) the Canadian Pledge
Agreements, (c) the Canadian Security Agreement, and the Canadian
Hypothecs, if any, with respect to collateral located in Quebec, (d) any
Mortgage or Canadian Hypothec, if applicable, over Mortgaged Property of a
Canadian Subsidiary and (e) any security document entered into by a
Canadian Subsidiary pursuant to Section 9.11 or 9.12.

 

“Canadian Subsidiary Guarantees” shall mean
the Canadian Guarantee and any guarantee agreement entered into by a Restricted
Foreign Subsidiary pursuant to Section 9.11 or 9.12.

 

“Canadian Subsidiary Guarantors” shall mean
the Canadian Guarantors and any Subsidiary that becomes a Canadian Subsidiary
Guarantor pursuant to Section 9.11.

 

“Canadian Total Revolving Credit Commitment”
shall mean the sum of the Canadian Revolving Credit Commitments.

 

“Capital Expenditures” shall mean, for any
period, the aggregate of all expenditures (whether paid in cash or accrued as
liabilities and including in all events all amounts expended or capitalized
under Capital Leases, but excluding any amount representing capitalized
interest) by the Borrower and the Restricted Subsidiaries during such period
that, in conformity with GAAP, are or are required to be included as additions
during such period to property, plant or equipment reflected in the
consolidated balance sheet of the Borrower and its Subsidiaries, provided
that the term “Capital Expenditures” shall not include (a) expenditures
made in connection with the replacement, substitution or restoration of assets (i) to
the extent financed from insurance proceeds paid on account of the loss of or
damage to the assets being replaced or restored or (ii) with awards of
compensation arising from the taking by eminent

 

11

 

domain or condemnation of
the assets being replaced, (b) the purchase price of equipment that is
purchased simultaneously with the trade-in of existing equipment to the extent
that the gross amount of such purchase price is reduced by the credit granted
by the seller of such equipment for the equipment being traded in at such time,
(c) the purchase of plant, property or equipment made within one year of
the sale of any asset to the extent purchased with the proceeds of such sale or
(d) expenditures that constitute any part of Consolidated Lease Expense.

 

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

 

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

 

“Cdn ABR” shall mean, for any day, a rate per
annum equal to the higher of (a) the rate of interest per annum publicly
announced from time to time by the Canadian Administrative Agent as its
reference rate of interest then in effect for determining interest rates on
commercial loans denominated in Dollars made by it in Canada and (b) the
Federal Funds Effective Rate in effect on such day plus 1⁄2 of 1% per annum.

 

“Cdn ABR Loans” shall mean Loans the rate of
interest applicable to which is based upon the Cdn ABR.

 

“Cdn L/C Participants” shall have the
meaning provided in Section 3.3(b).

 

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

 

“CDOR Rate” shall mean, as of any
day with respect to a BA Loan and the Interest Period selected by the
Canadian Borrower for such BA Loan, or otherwise as applicable, the
average interest rate equal to:

 

(a)                                  the average of the annual
rates for Canadian Dollar bankers acceptances for a term equal to such Interest
Period (or a term as closely possible comparable to such Interest Period) or
such other specified period quoted (at approximately 10:00 a.m. New York
time on such day) on the Reuters Monitor Money Rates Service, CDOR page “Canadian
Interbank Bid BA Rates”; and

 

(b)                                 if such rate is not available
on such day, the rate for such date will be the annual discount rate (rounded
upward to the nearest whole multiple of 1/100 of 1%) as of 10:00 a.m. (New
York time) on such day at which the Canadian Administrative Agent is then
offering to purchase Canadian Dollar bankers acceptances for a term
approximately equal to such Interest Period (or a term as closely possible
comparable to such Interest Period), or such other specified period, accepted
by it.

 

12

 

“Change of Control” shall mean and be deemed
to have occurred if (a) (i) KKR, its Affiliates, Permitted Investors
and the Management Investors shall at any time not own, in the aggregate,
directly or indirectly, beneficially and of record, at least 35% of the
outstanding Voting Stock of Holdings (other than as the result of one or more
widely distributed offerings of Holdings or Parent common stock, in each case
whether by Holdings, Parent or by KKR, its Affiliates, Permitted Investors or
the Management Investors) and/or (ii) any person, entity or “group”
(within the meaning of Section 13(d) or 14(d) of the Securities
Exchange Act of 1934, as amended) shall at any time have acquired direct or
indirect beneficial ownership of a percentage of the outstanding Voting Stock
of Holdings that exceeds the percentage of such Voting Stock then beneficially
owned, in the aggregate, by KKR, its Affiliates, Permitted Investors and the
Management Group, unless, in the case of either clause (i) or (ii) above,
KKR, its Affiliates, Permitted Investors and the Management Investors have, at
such time, the right or the ability by voting power, contract or otherwise to
elect or designate for election a majority of the Board of Directors of
Holdings; provided, however, for purposes of this definition,
Permitted Investors shall be deemed to own no more than the aggregate amount of
Voting Stock of Holdings that such Permitted Investors owned as of the
Effective Date; and/or (b) at any time Continuing Directors shall not
constitute a majority of the Board of Directors of Holdings; and/or (c) any
Person, other than Holdings acquires ownership, directly or indirectly,
beneficially or of record, of any equity interest (other than any management or
employee equity interests) of any nature in the Borrower; (d) any Person,
other than Parent acquires ownership, directly or indirectly, beneficially or
of record, of any equity interest of any nature in Holdings and/or (e) a
Change of Control (as defined in the Subordinated Note Indenture) shall have
occurred.

 

“Class”, when used in reference to any Loan
or Borrowing, refers to whether such Loan, or the Loans comprising such
Borrowing, are Revolving Credit Loans, New Revolving Loans, Canadian Revolving
Credit Loans, Tranche A Term Loans, Tranche E Term Loans, New Term Loans of
each Series or Swingline Loans and, when used in reference to any
Commitment, refers to whether such Commitment is a Revolving Credit Commitment,
a New Revolving Loan Commitment, a Canadian Revolving Credit Commitment,
Tranche A Term Loan Commitment, Tranche E Term Loan Commitment or a New Term
Loan Commitment.

 

“Closing Date” means the date of the initial
Borrowing under the Initial Credit Agreement, which date was April 6,
2004.

 

“Co-Documentation Agents” shall mean General
Electric Capital Corporation, together with its affiliates, Wachovia Bank,
National Association, together with its affiliates, and LaSalle Bank National
Association, together with its affiliates, as the co-documentation agents for
the Lenders under this Agreement and the other Credit Documents.

 

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

 

“Collateral” shall have the meaning provided
in the Pledge Agreement, the Security Agreement, any Foreign Security Document
or any Mortgage, as applicable.

 

13

 

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

 

	
  Status

  	
   

  	
  Commitment

     Fee Rate

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Level I Status

  	
   

  	
  0.500

  	
  %

  
	
  Level II Status

  	
   

  	
  0.500

  	
  %

  
	
  Level III Status

  	
   

  	
  0.500

  	
  %

  
	
  Level IV Status

  	
   

  	
  0.375

  	
  %

  

 

Notwithstanding the foregoing, the term “Commitment
Fee Rate” shall mean 0.500%, during the period from and including the Closing
Date to but excluding the Initial Financial Statement Delivery Date.

 

“Commitments” shall mean, with respect to
each Lender, such Lender’s Tranche A Term Loan Commitment, Tranche E Term Loan
Commitment, Revolving Credit Commitment, New Revolving Loan Commitment or New
Term Loan Commitment.

 

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

 

“Confidential Information Memorandum” shall
mean the Confidential Information Memorandum of the Borrower dated March, 2004,
delivered to the Lenders in connection with this Agreement.

 

“Consolidated Earnings” shall mean, for any
period, “income (loss) before the deduction of income taxes” of Holdings, the
Borrower and the Restricted Subsidiaries, excluding extraordinary items, for
such period, determined in a manner consistent with the manner in which such
amount was determined in accordance with the audited financial statements
referred to in Section 9.1(a).

 

“Consolidated EBITDA” shall mean, for any
period, the sum, without duplication, of the amounts for such period of (a) Consolidated
Earnings and to the extent already deducted in arriving at Consolidated
Earnings: (b) Consolidated Interest Expense, (c) depreciation
expense, (d) amortization expense, including amortization of deferred
financing fees, (e) extraordinary losses and unusual or non-recurring
charges (including severance, relocation costs and one-time compensation
charges), (f) non-cash charges (provided that if any such non-cash charges
represent an accrual or reserve for potential cash items in any future period,
the cash payment in respect thereof in such future period shall be subtracted
from Consolidated EBITDA to such extent, and excluding amortization of a
prepaid cash item that was paid in a prior period), (g) losses on asset
sales, (h) restructuring charges or reserves (including costs related to
closure of facilities), (i) in the case of any period that includes a
period ending during the fiscal year ending November 28, 2004, Transaction
Expenses, to the extent deducted in determining Consolidated Earnings, (j) any
expenses or charges incurred in connection with any issuance of debt, equity
securities or any refinancing transaction, (k) any fees and expenses
related to Permitted Acquisitions, (l) any deduction for minority interest
expense, (m) the amount of

 

14

 

management, monitoring,
consulting and advisory fees and related expenses paid to KKR and (n) those
items described on Schedule 1.1(d) annexed hereto, less the sum of
the amounts for such period of (o) extraordinary gains and non-recurring
gains, (p) non-cash gains (excluding any such non-cash gain to the extent
it represents the reversal of an accrual or reserve for potential cash item in
any prior period) and (q) gains on asset sales, all as determined on a
consolidated basis for Holdings, the Borrower and the Restricted Subsidiaries
in accordance with GAAP, provided that (i) except as provided in
clause (iv) below, there shall be excluded from Consolidated Earnings
for any period the income from continuing operations before income taxes and
extraordinary items of all Unrestricted Subsidiaries for such period to the
extent otherwise included in Consolidated Earnings, except to the extent
actually received in cash by Holdings, the Borrower or its Restricted
Subsidiaries during such period through dividends or other distributions, (ii) there
shall be excluded from Consolidated Earnings for any period the income from
continuing operations before income taxes and extraordinary items of each
Foreign Joint Venture for such period corresponding to the percentage of
capital stock or other equity interests in such Foreign Joint Venture not owned
by the Borrower or its Restricted Subsidiaries (other than Foreign Joint
Ventures), (iii) there shall be excluded in determining Consolidated
EBITDA non-operating currency transaction
gains and losses and (iv) (x) there shall be included in
determining Consolidated EBITDA for any period (A) the Acquired EBITDA of
any Person, property, business or asset (other than an Unrestricted Subsidiary)
acquired to the extent not subsequently sold, transferred or otherwise disposed
of (but not including the Acquired EBITDA of any related Person, property,
business or assets to the extent not so acquired) by the Borrower or any
Restricted Subsidiary during such period (each such Person, property, business
or asset acquired and not subsequently so disposed of, an “Acquired Entity
or Business”), and the Acquired EBITDA of any Unrestricted Subsidiary that
is converted into a Restricted Subsidiary during such period (each, a “Converted
Restricted Subsidiary”), in each case based on the actual Acquired EBITDA
of such Acquired Entity or Business or Converted Restricted Subsidiary for such
period (including the portion thereof occurring prior to such acquisition or
conversion) and (B) for the purposes of the definition of the term “Permitted
Acquisition” and Sections 10.3, 10.9 and 10.10, an adjustment in respect
of each Acquired Entity or Business equal to the amount of the Pro Forma
Adjustment with respect to such Acquired Entity or Business for such period
(including the portion thereof occurring prior to such acquisition or
conversion) as specified in the Pro Forma Adjustment Certificate delivered to
the Lenders and the Administrative Agent and (y) for purposes of
determining the Consolidated Total Debt to Consolidated EBITDA Ratio only,
there shall be excluded in determining Consolidated EBITDA for any period the
Acquired EBITDA of any Person, property, business or asset (other than an
Unrestricted Subsidiary) sold, transferred or otherwise disposed of, closed or
classified as discontinued operations by the Borrower or any Restricted
Subsidiary during such period (each such Person, property, business or asset so
sold or disposed of, a “Sold Entity or Business”), and the Acquired
EBITDA of any Restricted Subsidiary that is converted into an Unrestricted
Subsidiary during such period (each, a “Converted Unrestricted Subsidiary”),
in each case based on the actual Acquired EBITDA of such Sold Entity or
Business or Converted Unrestricted Subsidiary for such period (including the
portion thereof occurring prior to such sale, transfer, disposition or
conversion).

 

“Consolidated EBITDA to Consolidated Interest
Expense Ratio” shall mean, as of any date of determination, the ratio of (a) Consolidated
EBITDA for the relevant Test Period to (b) Consolidated Interest Expense
for such Test Period.

 

15

 

“Consolidated Interest Expense” shall mean,
for any period, the cash interest expense (including that attributable to
Capital Leases in accordance with GAAP), net of cash interest income, of
Holdings, the Borrower and the Restricted Subsidiaries on a consolidated basis
with respect to all outstanding Indebtedness of Holdings, the Borrower and the
Restricted Subsidiaries, including all commissions, discounts and other fees
and charges owed with respect to letters of credit and bankers’ acceptance
financing and net costs under Hedge Agreements (other than currency swap
agreements, currency future or option contracts and other similar agreements),
but excluding, however, amortization of deferred financing costs and any other
amounts of non-cash interest, all as calculated on a consolidated basis in
accordance with GAAP, provided that (a) except as provided in
clause (b) below, there shall be excluded from Consolidated Interest
Expense for any period the cash interest expense (or income) of all
Unrestricted Subsidiaries for such period to the extent otherwise included in
Consolidated Interest Expense and (b) for purposes of the definition of
the term “Permitted Acquisition” and Sections 10.3, 10.9 and 10.10, there
shall be included in determining Consolidated Interest Expense for any period
the cash interest expense (or income) of any Acquired Entity or Business
acquired during such period and of any Converted Restricted Subsidiary
converted during such period, in each case based on the cash interest expense
(or income) of such Acquired Entity or Business or Converted Restricted
Subsidiary for such period (including the portion thereof occurring prior to
such acquisition or conversion) assuming any Indebtedness incurred or repaid in
connection with any such acquisition or conversion had been incurred or prepaid
on the first day of such period.

 

“Consolidated Lease Expense” shall mean, for
any period, all rental expenses of Holdings, the Borrower and the Restricted
Subsidiaries during such period under operating leases for real or personal
property (including in connection with Permitted Sale Leasebacks), excluding
real estate taxes, insurance costs and common area maintenance charges and net
of sublease income, other than (a) obligations under vehicle leases
entered into in the ordinary course of business, (b) all such rental
expenses associated with assets acquired pursuant to a Permitted Acquisition to
the extent that such rental expenses relate to operating leases in effect at
the time of (and immediately prior to) such acquisition and (c) Capitalized
Lease Obligations, all as determined on a consolidated basis in accordance with
GAAP, provided that there shall be excluded from Consolidated Lease
Expense for any period the rental expenses of all Unrestricted Subsidiaries for
such period to the extent otherwise included in Consolidated Lease Expense.

 

“Consolidated Net Income” shall mean, for any
period, the consolidated net income (or loss) after the deduction of income
taxes of Holdings, the Borrower and the Restricted Subsidiaries, determined on
a consolidated basis in accordance with GAAP.

 

“Consolidated Net Sales” shall mean, for any
fiscal year or any Test Period, as the case may be, “net sales” of Holdings,
the Borrower and the Restricted Subsidiaries as set forth in the Section 9.1
Financials with respect to such Test Period or fiscal year, as applicable.

 

“Consolidated Senior Debt” shall mean, as of
any date of determination, (x) the sum of all Indebtedness of Holdings,
the Borrower and the Restricted Subsidiaries for borrowed money outstanding on
such date minus (y) the sum of (i) the Subordinated Notes and (ii) other
subordinated Indebtedness issued or incurred by Holdings, the Borrower and the
Restricted

 

16

 

Subsidiaries subordinated in
right of payment to the payment in full of the Obligations outstanding on such
date.

 

“Consolidated Senior Debt to Consolidated EBITDA
Ratio” shall mean, as of any date of determination, the ratio of (a) Consolidated
Senior Debt as of the last day of the relevant Test Period to (b) Consolidated
EBITDA for such Test Period.

 

“Consolidated Total Debt” shall mean, as of
any date of determination, (a) the sum of (i) all Indebtedness of
Holdings, the Borrower and the Restricted Subsidiaries for borrowed money
outstanding on such date and (ii) all Capitalized Lease Obligations of
Holdings, the Borrower and the Restricted Subsidiaries outstanding on such
date, all calculated on a consolidated basis in accordance with GAAP minus
(b) the aggregate amount of cash included in the cash accounts listed on
the consolidated balance sheet of Holdings, the Borrower and the Restricted
Subsidiaries as at such date up to a maximum amount of $45,000,000 to the
extent the use thereof for application to payment of Indebtedness is not
prohibited by law or any contract to which the Borrower or any of the
Restricted Subsidiaries is a party.

 

“Consolidated Total Debt to Consolidated EBITDA
Ratio” shall mean, as of any date of determination, the ratio of (a) Consolidated
Total Debt as of the last day of the relevant Test Period to (b) Consolidated
EBITDA for such Test Period.

 

“Consolidated Working Capital” shall mean, at
any date, the excess of (a) the sum of all amounts (other than cash, cash
equivalents and bank overdrafts) that would, in conformity with GAAP, be set
forth opposite the caption “total current assets” (or any like caption) on a
consolidated balance sheet of Holdings, the Borrower and the Restricted
Subsidiaries at such date over (b) the sum of all amounts that would, in
conformity with GAAP, be set forth opposite the caption “total current
liabilities” (or any like caption) on a consolidated balance sheet of Holdings,
the Borrower and the Restricted Subsidiaries on such date, but excluding (i) the
current portion of any Funded Debt, (ii) without duplication of clause (i) above,
all Indebtedness consisting of Loans and Letter of Credit Exposure to the
extent otherwise included therein and (iii) the current portion of
deferred income taxes.

 

“Continuing Director” shall mean, at any
date, an individual (a) who is a member of the Board of Directors of
Holdings on the date hereof, (b) who, as at such date, has been a member
of such Board of Directors for at least the 12 preceding months, (c) who
has been nominated to be a member of such Board of Directors, directly or
indirectly, by KKR or one of its Affiliates or Persons nominated by KKR or one
of its Affiliates or (d) who has been nominated to be a member of such
Board of Directors by a majority of the other Continuing Directors then in
office.

 

“Converted Restricted
Subsidiary” shall have the meaning provided in the definition of the term “Consolidated
EBITDA”.

 

“Converted Unrestricted Subsidiary” shall
have the meaning provided in the definition of the term “Consolidated EBITDA”.

 

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

 

17

 

“Credit Event” shall mean and include the
making (but not the conversion or continuation) of a Loan and the issuance of a
Letter of Credit.

 

“Credit Facility” shall mean a category of
Commitments and extensions of credit thereunder.

 

“Credit Party” shall mean each of the
Borrower, the Canadian Borrower, the Guarantors, the Canadian Subsidiary
Guarantors and each other Subsidiary of the Borrower that is a party to a
Credit Document.

 

“Cumulative Consolidated Net Income Available to
Stockholders” shall mean, as of any date of determination, Consolidated Net
Income less cash dividends paid by Holdings with respect to its capital stock
for the period (taken as one accounting period) commencing on the Closing Date
and ending on the last day of the most recent fiscal quarter for which Section 9.1
Financials have been delivered to the Lenders under Section 9.1.

 

“Debt Incurrence Prepayment Event” shall mean
any issuance or incurrence by the Borrower or any of the Restricted
Subsidiaries of any Indebtedness (including any issuance by the Borrower of
Permitted Additional Subordinated Notes but excluding any other Indebtedness
permitted to be issued or incurred under Section 10.1A other than Section 10.1A(o)).

 

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

 

“Defaulting Lender” shall mean any Lender
with respect to which a Lender Default is in effect.

 

“Discount
Note” shall mean a non-interest-bearing promissory note or
depository note (within the meaning of the Depository Bills
and  Notes Act (Canada))
denominated in Dollars issued by the Borrower to a Non-Acceptance Lender to
evidence a BA Equivalent Loan.

 

“Dividends” shall have the meaning provided
in Section 10.6.

 

“Dollar Borrowing” shall mean a Borrowing
denominated in Dollars.

 

“Dollar Equivalent” shall mean, on any date
of determination, (a) with respect to any amount denominated in Dollars,
such amount, and (b) with respect to any amount denominated in any
Canadian Dollars, the equivalent in Dollars of such amount, determined by the
Administrative Agent pursuant to Section 1.2(b) using the applicable
Exchange Rate with respect to such Canadian Dollars at the time in effect under
the provisions of such Section 1.2.

 

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

 

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

 

18

 

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

 

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

 

“Eligible Lender” shall mean, at any time, a
Person who, on any date on which interest is payable under this Agreement, is a
Person which is beneficially entitled to the interest payable to it under this
Agreement.

 

“Environmental Claims” shall mean any and all
administrative, regulatory or judicial actions, suits, demands, demand letters,
claims, liens, notices of noncompliance or violation, investigations (other
than internal reports prepared by the Borrower or any of the Subsidiaries (a) in
the ordinary course of such Person’s business or (b) as required in
connection with a financing transaction or an acquisition or disposition of
real estate) or proceedings relating in any way to any Environmental Law or any
permit issued, or any approval given, under any such Environmental Law
(hereinafter, “Claims”), including (i) any and all Claims by
governmental or regulatory authorities for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental Law and (ii) any and all Claims by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Materials or arising from alleged
injury or threat of injury to health, safety or the environment.

 

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

 

“Equity Proceeds” shall have the meaning
provided in the Initial Credit Agreement.

 

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

 

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

 

“Eurodollar Loan” shall mean any Eurodollar
Term Loan or Eurodollar Revolving Credit Loan.

 

“Eurodollar Rate” shall mean, in the case of
any Eurodollar Term Loan or Eurodollar Revolving Credit Loan, with respect to
each day during each Interest Period pertaining to such Eurodollar Loan, (a) the
rate of interest determined on the basis of the rate for

 

19

 

deposits in Dollars for a
period equal to such Interest Period commencing on the first day of such
Interest Period appearing on Page 3750 of the Telerate screen as of 11:00 a.m.
(London time) two Business Days prior to the beginning of such Interest Period
multiplied by (b) the Statutory Reserve Rate.  In the event that any such rate does not
appear on the applicable Page of the Telerate Service (or otherwise on
such service), the “Eurodollar Rate” for the purposes of this paragraph
shall be determined by reference to such other publicly available service for
displaying Eurodollar rates as may be agreed upon by the Administrative Agent
and the Borrower or, in the absence of such agreement, the “Eurodollar Rate”
for the purposes of this paragraph shall instead be the rate per annum notified
to the Administrative Agent by the Reference Lender as the rate at which the
Reference Lender is offered Dollar deposits at or about 11:00 a.m. (London
time) two Business Days prior to the beginning of such Interest Period in the
interbank Eurodollar market where the Eurodollar and foreign currency and
exchange operations in respect of its Eurodollar Loans are then being conducted
for delivery on the first day of such Interest Period for the number of days
comprised therein and in an amount comparable to the amount of its Eurodollar
Term Loan or Eurodollar Revolving Credit Loan, as the case may be, to be outstanding
during such Interest Period.

 

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

 

“Eurodollar Term Loan” shall mean any Tranche
A Term Loan or Tranche E Term Loan bearing interest at a rate determined by
reference to the Eurodollar Rate.

 

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

 

“Excess Cash Flow” shall mean, for any
period, an amount equal to the excess of (a) the sum, without duplication,
of (i) Consolidated Net Income for such period, (ii) an amount equal
to the amount of all non-cash charges to the extent deducted in arriving at
such Consolidated Net Income, (iii) decreases in Consolidated Working
Capital for such period and (iv) an amount equal to the aggregate net
non-cash loss on the sale, lease, transfer or other disposition of assets by
the Borrower and the Restricted Subsidiaries during such period (other than
sales in the ordinary course of business) to the extent deducted in arriving at
such Consolidated Net Income over (b) the sum, without duplication,
of (i) an amount equal to the amount of all non-cash credits included in
arriving at such Consolidated Net Income, (ii) the aggregate amount
actually paid by the Borrower and the Restricted Subsidiaries in cash during
such period on account of Capital Expenditures (excluding the principal amount
of Indebtedness incurred in connection with such Capital Expenditures, whether
incurred in such period or in a subsequent period), (iii) the aggregate
amount of all prepayments of Revolving Credit Loans and Swingline Loans made
during such period to the extent accompanying reductions of the US Total
Revolving Credit Commitments except to the extent not financed with the
proceeds of other Indebtedness of Holdings or its Restricted Subsidiaries, (iv) the
aggregate amount of all principal payments of Indebtedness of the Borrower or
the Restricted Subsidiaries (including any Term Loans and the principal
component of payments in respect of Capitalized Lease Obligations but excluding
Revolving Credit Loans, Swingline Loans and voluntary prepayments of Term Loans
pursuant to Section 5.1) made during such period (other than in respect of
any revolving credit facility to the extent there is not an equivalent
permanent reduction in commitments thereunder) except to the extent not
financed with the proceeds of other

 

20

 

Indebtedness of Holdings or
its Restricted Subsidiaries, (v) an amount equal to the aggregate net
non-cash gain on the sale, lease, transfer or other disposition of assets by
the Borrower and the Restricted Subsidiaries during such period (other than
sales in the ordinary course of business) to the extent included in arriving at
such Consolidated Net Income, (vi) increases in Consolidated Working
Capital for such period, (vii) payments by the Borrower and the Restricted
Subsidiaries during such period in respect of long-term liabilities of the
Borrower and the Restricted Subsidiaries other than Indebtedness, (viii) the
amount of investments made during such period pursuant to Section 10.5 to
the extent that such investments were financed with internally generated cash
flow of the Borrower and the Restricted Subsidiaries, (ix) the amount of
dividends paid during such period pursuant to clause (b), (c), (d) or
(e) of the proviso to Section 10.6 to the extent such dividends were
paid with the proceeds of any amount referred to in paragraph (a) of
this definition, (x) the aggregate amount of expenditures actually made by
the Borrower and the Restricted Subsidiaries in cash during such period
(including expenditures for the payment of financing fees) to the extent that
such expenditures are not expensed during such period and (xi) the aggregate
amount of any premium, make-whole or penalty payments actually paid in cash by
the Borrower and the Restricted Subsidiaries during such period that are
required to be made in connection with any prepayment of Indebtedness and that
are accounted for as extraordinary items.

 

“Exchange Rate” shall mean on any day (i) with
respect to any Foreign Currency, the rate at which such Foreign Currency may be
exchanged into Dollars, as set forth at approximately 11:00 a.m. (London
time) on such day on the Reuters World Currency Page for such Foreign
Currency; in the event that such rate does not appear on any Reuters World
Currency Page, the Exchange Rate shall be determined by reference to such other
publicly available service for displaying exchange rates as may be agreed upon
by the Administrative Agent and the Borrower, or, in the absence of such
agreement, such Exchange Rate shall instead be the arithmetic average of the
spot rates of exchange of the Administrative Agent in the market where its
foreign currency exchange operations in respect of such Foreign Currency are
then being conducted, at or about 10:00 a.m. (New York time) on such date
for the purchase of Dollars for delivery two Business Days later and (ii) with
respect to calculations in connection with Canadian Borrowings, the rate at
which Canadian Dollars may be exchanged into Dollars, computed by the Canadian
Administrative Agent at the Bank of Canada noon spot rate, after 12:00 noon
(New York time) on such day, provided that if at the time of any such
determination, for any reason, no such spot rate is being quoted, the Canadian
Administrative Agent, after consultation with the Borrower, may use any
reasonable method it deems appropriate to determine such rate, and such
determination shall be conclusive absent manifest error.

 

“Existing Credit Agreement” as defined in the
recitals hereto.

 

“Existing Indenture” shall mean the
Indenture, dated as of December 18, 1997, among the Borrower, the
subsidiary guarantors party thereto and The Bank of New York, as trustee.

 

“Existing Lenders” as defined in the recitals
hereto.

 

“Existing Term Loans” as defined in the
recitals hereto.

 

21

 

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

 

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

 

“Final Date” shall mean the date on which the
Revolving Credit Commitments shall have terminated, no Revolving Credit Loans
shall be outstanding and the Letter of Credit Outstandings shall have been
reduced to zero.

 

“Foreign Borrowing Base Amount” shall mean,
at any time, the sum of (i) 85% of the book value of all accounts
receivable of all Restricted Foreign Subsidiaries of Holdings and (ii) 60%
of the book value of all inventory of all Restricted Foreign Subsidiaries of
Holdings.

 

“Foreign Currencies” shall mean Canadian
Dollars, Euro and Sterling.

 

“Foreign Joint Venture” shall mean any
Restricted Foreign Subsidiary in which the Borrower and its Restricted
Subsidiaries own, collectively, less than 100% of the equity interests and
designated as such in a written notice to the Administrative Agent by the
Borrower, provided that in the event a Restricted Subsidiary not
previously designated by the Borrower as a Foreign Joint Venture is
subsequently re-designated as a Foreign Joint Venture, (x) such
re-designation shall be deemed to be an investment on the date of such
re-designation in a Foreign Joint Venture in an amount equal to the product of (i) the
net worth of such re-designated Restricted Subsidiary immediately prior to such
re-designation (such net worth to be calculated without regard to any guarantee
provided by such re-designated Restricted Subsidiary) and (ii) the
percentage of capital stock or other equity interests in such Foreign Joint
Venture owned by the Borrower or its Restricted Subsidiaries (other than
Foreign Joint Ventures) and (y) no Default or Event of Default would
result from such re-designation.

 

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

 

“Foreign Subsidiary Guarantors” shall mean
any Foreign Subsidiary that becomes a Foreign Subsidiary Guarantor pursuant to Section 9.11.

 

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

 

“Funded Debt” shall mean all indebtedness of
the Borrower and the Restricted Subsidiaries for borrowed money that matures
more than one year from the date of its creation or matures within one year
from such date that is renewable or extendable, at the option of the Borrower
or one of the Restricted Subsidiaries, to a date more than one year from such
date or arises under a revolving credit or similar agreement that obligates the
lender or lenders to extend credit during a period of more than one year from
such date, including all amounts of Funded Debt required to be paid or prepaid
within one year from the date of its creation and, in the case of the Borrower,
Indebtedness in respect of the Loans.

 

22

 

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

 

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

 

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

 

“Guarantee and Collateral Exception Amount”
shall mean, at any time: (a) $100,000,000 minus (b) the sum of
(i) the aggregate amount of Indebtedness incurred or assumed prior to such
time pursuant to Section 10.1(j) or (k) that is outstanding at
such time and that was used to acquire, or was assumed in connection with the
acquisition of, capital stock and/or assets in respect of which guarantees,
pledges and security have not been given pursuant to Sections 9.11 and
9.12, (ii) the lesser of (x) the aggregate Increased Commitment
Amount at such time and (y) $50,000,000 and (iii) any Indebtedness
incurred by any Foreign Joint Venture, provided that if such amount is a
negative number, the Guarantee and Collateral Exception Amount shall be zero.

 

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

 

23

 

“Guarantors” shall mean Holdings, the US
Subsidiary Guarantors and the Foreign Subsidiary Guarantors, other than the
immaterial Subsidiaries listed on Schedule 1.1(e).

 

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

 

“Hedge Agreements” shall mean interest rate
swap, cap or collar agreements, interest rate future or option contracts,
currency swap agreements, currency future or option contracts, commodity price
protection agreements or other commodity price hedging agreements, and other
similar agreements entered into by the Borrower or the Canadian Borrower in the
ordinary course of business (and not for speculative purposes) in order to
protect the Borrower, the Canadian Borrower or any of the Restricted
Subsidiaries against fluctuations in interest rates, currency exchange rates or
commodity prices.

 

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

 

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

 

“Increased Amount Date” as defined in Section 2.15.

 

“Increased Commitment Amount” shall have the
meaning given to that term in Section 14.1.

 

“Indebtedness” of any Person shall mean (a) all
indebtedness of such Person for borrowed money, (b) the deferred purchase
price of assets or services that in accordance with GAAP would be included as
liabilities in the balance sheet of such Person, (c) the face amount of
all letters of credit issued for the account of such Person and, without
duplication, all drafts drawn thereunder, (d) all Indebtedness of a second
Person secured by any Lien on any property owned by such first Person, whether
or not such Indebtedness has been assumed, (e) all Capitalized Lease
Obligations of such Person, (f) all obligations of such Person under
interest rate swap, cap or collar agreements, interest rate future or option
contracts, currency swap agreements, currency future or option contracts,
commodity price protection agreements or other commodity price hedging
agreements and other similar agreements and (g) without duplication, all
Guarantee Obligations of such Person, provided that Indebtedness shall
not include trade payables and accrued expenses, in each case payable directly
or through a bank clearing arrangement and arising in the ordinary course of
business.

 

24

 

“Initial Credit Agreement” shall mean the
Credit Agreement, dated as of April 6, 2004, among Borrower, Holdings, the
lenders from time to time party thereto, the Administrative Agent, the Joint
Lead Arrangers and the other parties thereto.

 

“Initial Financial Statement Delivery Date”
shall mean the date on which Section 9.1 Financials are delivered to the
Lenders under Section 9.1 for the first full fiscal quarter commencing
after the Closing Date.

 

“Interest Period” shall mean, with respect to
any Tranche A Term Loan, Tranche E Term Loan or Revolving Credit Loan, the
interest period applicable thereto, as determined pursuant to Section 2.9.

 

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

 

“Joinder Agreement” means an agreement
substantially in the form of Exhibit M.

 

“Judgment Currency” shall have the meaning
set forth in Section 14.17.

 

“Judgment Currency Conversion Date” shall
have the meaning set forth in Section 14.17.

 

“Junior Subordinated Seller Notes” means the
Junior Subordinated Seller Notes issued in the initial principal amount of
$25,000,000 on December 18, 1997 by Holdings in favor of Zell/Chilmark
Fund, L.P., and any additional amount of such notes as are permitted to be
issued under the Existing Credit Agreement.

 

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

 

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

 

“L/C Participants”: means collectively the Cdn
L/C Participants and the US L/C Participants and each is an “L/C Participant”

 

“L/C Reserve Account” shall have the meaning
provided in Section 13.2(a)

 

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

 

“Lender Addendum” shall mean a lender
addendum substantially in the form of Exhibit N.

 

“Lender Default” shall mean (a) the
failure (which has not been cured) of a Lender to make available its portion of
any Borrowing or to fund its portion of any unreimbursed payment under Section 3.3
or (b) a Lender having notified the Administrative Agent and/or the
Borrower that it does not intend to comply with the obligations under Section 2.1(b),
2.1(d) or 3.3, in the case of either clause (a) or clause (b) above,
as a result of the appointment of a

 

25

 

receiver or conservator with
respect to such Lender at the direction or request of any regulatory agency or
authority.

 

“Letter of Credit” shall mean each standby
letter of credit issued pursuant to Section 3.1.

 

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

 

“Letter of Credit Issuers” means a collective
reference to the US Letter of Credit Issuer and the Canadian Letter of Credit
Issuer and each is a “Letter of Credit Issuer.”

 

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

 

“Level I Status” shall mean, on any
date, the Consolidated Total Debt to Consolidated EBITDA Ratio is greater than
or equal to 5.25 to 1.00 as of such date.

 

“Level II Status” shall mean, on any
date, the circumstance that Level I Status does not exist and the
Consolidated Total Debt to Consolidated EBITDA Ratio is greater than or equal
to 4.50 to 1.00 as of such date.

 

“Level III Status” shall mean, on any
date, the circumstance that neither Level I Status nor Level II
Status exists and the Consolidated Total Debt to Consolidated EBITDA Ratio is
greater than or equal to 4.00 to 1.00 as of such date.

 

“Level IV Status” shall mean, on any
date, the circumstance that the Consolidated Total Debt to Consolidated EBITDA
Ratio is less than 4.00 to 1.00 as of such date.

 

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

 

“Loan” shall mean any Revolving Credit Loan,
Swingline Loan, Tranche A Term Loan, Tranche E Term Loan or New Term Loan made
by any Lender hereunder.

 

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

 

“Management Investors”
means the management officers and employees of Holdings and its Subsidiaries
who are investors in Holdings on the Effective Date.

 

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

 

“Material Adverse Change” shall mean any
change in the business, assets, operations, properties or financial condition
of Holdings, the Borrower and its Subsidiaries, taken as a whole, that would
materially adversely affect the ability of Holdings, the Borrower

 

26

 

and the other Credit
Parties, taken as a whole, to perform their obligations under this Agreement or
any of the other Credit Documents.

 

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

 

“Material Subsidiary” shall mean, at any date
of determination, each Restricted Subsidiary of the Borrower (a) whose
total assets at the last day of the Test Period ending on the last day of the
most recent fiscal period for which Section 9.1 Financials have been
delivered were equal to or greater than 5% of the consolidated total assets of
the Borrower and the Restricted Subsidiaries at such date or (b) whose
gross revenues for such Test Period were equal to or greater than 5% of the
consolidated gross revenues of the Borrower and the Restricted Subsidiaries for
such period, in each case determined in accordance with GAAP.

 

“Maturity Date” shall mean the Tranche A Term
Loan Maturity Date, Tranche E Term Loan Maturity Date or the Revolving Credit
Maturity Date.

 

“Merger” shall have the meaning provided in
the Initial Credit Agreement.

 

“Merger Agreement” shall mean that certain
Agreement and Plan of Merger dated as of March 3, 2004, by and among Sealy
Corporation and SAC (as assignee of the rights and obligations of Posturepedic
Acquisition Corp.).

 

“Minimum Borrowing Amount” shall mean (a) with
respect to a Dollar Borrowing of Term Loans or Revolving Credit Loans,
$2,000,000, (b) with respect to a C$ - denominated Borrowing of Canadian
Revolving Loans, C$1,000,000 and (c) with respect to a Borrowing of
Swingline Loans, $100,000.

 

“Minority Investment” shall mean any Person
(other than a Subsidiary) in which the Borrower or any Restricted Subsidiary
owns capital stock or other equity interests.

 

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

 

“Mortgage” shall mean a Mortgage, Assignment
of Leases and Rents, Security Agreement and Financing Statement or other
security document entered into by the owner of a Mortgaged Property and the
Administrative Agent for the benefit of the Lenders in respect of that
Mortgaged Property, substantially in the form of Exhibit D or, in the case
of Mortgaged Properties located outside the United States of America, in such
form as agreed between the Borrower and the Administrative Agent or the
Canadian Administrative Agent, as applicable, as the same may be amended,
supplemented or otherwise modified from time to time.

 

27

 

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

 

“Net Cash Proceeds” shall mean, with respect
to any Prepayment Event or the issuance after the Closing Date by the Borrower
of any capital stock, (a) the gross cash proceeds (including payments from
time to time in respect of installment obligations, if applicable) received by
or on behalf of Holdings, the Borrower or any of the Restricted Subsidiaries in
respect of such Prepayment Event or issuance, as the case may be, less (b) the
sum of:

 

(i)            in the case of any Prepayment Event,
the amount, if any, of all taxes paid or estimated to be payable by any of
Holdings, the Borrower or any of the Restricted Subsidiaries in connection with
such Prepayment Event,

 

(ii)           in the case of any Prepayment Event,
the amount of any reasonable reserve established in accordance with GAAP
against any liabilities (other than any taxes deducted pursuant to clause (i) above)
(x) associated with the assets that are the subject of such Prepayment
Event and (y) retained by any of Holdings, the Borrower or any of the
Restricted Subsidiaries, provided that the
amount of any subsequent reduction of such reserve (other than in connection
with a payment in respect of any such liability) shall be deemed to be Net Cash
Proceeds of such a Prepayment Event occurring on the date of such reduction,

 

(iii)          in the case of any Prepayment Event,
the amount of any Indebtedness secured by a Lien on the assets that are the
subject of such Prepayment Event to the extent that the instrument creating or
evidencing such Indebtedness requires that such Indebtedness be repaid upon
consummation of such Prepayment Event,

 

(iv)          in the case of any Asset Sale
Prepayment Event (other than a transaction permitted by Section 10.4(e)),
the amount of any proceeds of such Asset Sale Prepayment Event that the
Borrower has reinvested (or intends to reinvest within one year of the date of
such Asset Sale Prepayment Event) in the business of the Borrower or any of the
Restricted Subsidiaries (subject to Section 9.14), provided that any portion of such proceeds that has not been so
reinvested within such one-year period shall (x) be deemed to be Net Cash
Proceeds of an Asset Sale Prepayment Event occurring on the last day of such
one-year period and (y) be applied to the repayment of Term Loans in
accordance with Section 5.2(a)(i); provided further that, for purposes of the preceding proviso, such one-year
period shall be extended by up to twelve months (or, if less, extended by up to
the shortest period of time in excess of one year that such a reinvestment
period exists pursuant to, or may be extended under the terms of, any
instrument governing any publicly offered or privately placed Indebtedness of
Holdings or the Borrower) from the last day of such one-year period so long as (A) such
proceeds are to be reinvested within such additional twelve-month period under
the Borrower’s business plan as most recently adopted in good faith by its
Board of Directors and (B) the Borrower believes in good faith that such
proceeds will be so reinvested within such additional twelve-month period, and

 

28

 

(v)           in the case of any Prepayment Event
or the issuance by the Borrower of any capital stock, reasonable and customary
fees, commissions, expenses, issuance costs, discounts and other costs paid by
Holdings, the Borrower or any of the Restricted Subsidiaries, as applicable, in
connection with such Prepayment Event or issuance, as the case may be (other
than those payable to Holdings, the Borrower or any Subsidiary of the
Borrower), in each case only to the extent not already deducted in arriving at
the amount referred to in clause (a) above.

 

“New Revolving Loan Commitments” as defined in Section 2.15.

 

“New Revolving Loan Lender” as defined in Section 2.15.

 

“New Revolving Loans” as defined in Section 2.15.

 

“New Term Loan Commitments” as defined in Section 2.15.

 

“New Term Loan Lender” as defined in Section 2.15.

 

“New Term Loan Maturity Date” means the date
that New Term Loans of  a Series shall
become due and payable in full hereunder, as specified in the applicable
Joinder Agreement, including by acceleration or otherwise.

 

“New Term Loans” as defined in Section 2.15.

 

“Non-Acceptance Lender” shall mean a Canadian
Lender that does not accept Bankers’ Acceptances.

 

“Non-Defaulting Lender” shall mean and
include each Lender other than a Defaulting Lender.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Perfection Certificate” shall mean a
certificate of the Borrower and the Canadian Borrower in the form of Exhibit E
or any other form approved by the Administrative Agent.

 

29

 

“Permitted Acquisition” shall mean the
acquisition, by merger or otherwise, by the Borrower or any of the Restricted
Subsidiaries of assets or capital stock or other equity interests, so long as (a) such
acquisition and all transactions related thereto shall be consummated in
accordance with applicable law; (b) such acquisition shall result in the
issuer of such capital stock or other equity interests becoming (i) a
Restricted Subsidiary and (ii) (x) in the case of a Restricted
Domestic Subsidiary, a Subsidiary Guarantor or (y) in the case of a
Restricted Foreign Subsidiary, a Foreign Subsidiary Guarantor, in each case to
the extent required by Section 9.11; (c) such acquisition shall
result in the Administrative Agent or the Canadian Administrative Agent, as
applicable, for the benefit of the applicable Lenders, being granted a security
interest in any capital stock or any assets so acquired to the extent required
by Sections 9.11, 9.12 and/or 9.15; (d) after giving effect to such
acquisition, no Default or Event of Default shall have occurred and be
continuing; and (e) the Borrower shall be in compliance, on a pro forma
basis after giving effect to such acquisition (including any Indebtedness
assumed or permitted to exist or incurred pursuant to Sections 10.1(j) and
10.1(k), respectively, and any related Pro Forma Adjustment), with the covenants
set forth in Sections 10.9 and 10.10, as such covenants are recomputed as
at the last day of the most recently ended Test Period under such Sections as
if such acquisition had occurred on the first day of such Test Period.

 

“Permitted Additional Subordinated Notes”
shall mean Subordinated Notes other than Subordinated Notes issued as Permitted
Subordinated Debt, provided that the aggregate principal amount of
Permitted Additional Subordinated Notes outstanding at any time shall not
exceed $100,000,000, plus accrued interest thereon as provided in the
Subordinated Note Indenture.

 

“Permitted Capital Expenditure Amount” shall
have the meaning given to such term in Section 10.11.

 

“Permitted Investments” shall mean (a) securities
issued or unconditionally guaranteed by the United States government or any
agency or instrumentality thereof, in each case having maturities of not more
than 24 months from the date of acquisition thereof; (b) securities issued
by any state of the United States of America or any political subdivision of
any such state or any public instrumentality thereof or any political
subdivision of any such state or any public instrumentality thereof having
maturities of not more than 24 months from the date of acquisition thereof and,
at the time of acquisition, having an investment grade rating generally
obtainable from either S&P or Moody’s (or, if at any time neither S&P
nor Moody’s shall be rating such obligations, then from another nationally
recognized rating service); (c) commercial paper issued by any Lender or
any bank holding company owning any Lender; (d) commercial paper maturing
no more than 12 months after the date of creation thereof and, at the time
of acquisition, having a rating of at least A-2 or P-2 from either S&P or
Moody’s (or, if at any time neither S&P nor Moody’s shall be rating such
obligations, an equivalent rating from another nationally recognized rating
service); (e) domestic and Eurodollar certificates of deposit or bankers’
acceptances maturing no more than two years after the date of acquisition
thereof issued by any Lender or any other bank having combined capital and
surplus of not less than $250,000,000 in the case of domestic banks and
$100,000,000 (or the dollar equivalent thereof) in the case of foreign banks; (f) repurchase
agreements with a term of not more than 30 days for underlying securities
of the type described in clauses (a), (b) and (e) above entered into
with any bank meeting the qualifications specified in clause (e) above or
securities dealers of recognized

 

30

 

national standing; (g) marketable
short-term money market and similar securities, having a rating of at least A-2
or P-2 from either S&P or Moody’s (or, if at any time neither S&P nor
Moody’s shall be rating such obligations, an equivalent rating from another
nationally recognized rating service); (h) shares of investment companies
that are registered under the Investment Company Act of 1940 and invest solely
in one or more of the types of securities described in clauses (a) through
(g) above; and (i) in the case of investments by any Restricted
Foreign Subsidiary or investments made in a country outside the United States
of America, other customarily utilized high-quality investments in the country
where such Restricted Foreign Subsidiary is located or in which such investment
is made.

 

“Permitted Investors” shall mean the
Management Investors and certain other investors in Parent as of the Effective
Date.

 

“Permitted Liens” shall mean (a) Liens
for taxes, assessments or governmental charges or claims not yet due or which
are being contested in good faith and by appropriate proceedings for which
appropriate reserves have been established in accordance with GAAP; (b) Liens
in respect of property or assets of the Borrower or any of the Subsidiaries
imposed by law, such as carriers’, warehousemen’s and mechanics’ Liens and
other similar Liens arising in the ordinary course of business, in each case so
long as such Liens arise in the ordinary course of business and do not
individually or in the aggregate have a Material Adverse Effect; (c) Liens
arising from judgments or decrees in circumstances not constituting an Event of
Default under Section 11.14; (d) Liens incurred or deposits made in
connection with workers’ compensation, unemployment insurance and other types
of social security, or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government contracts,
performance and return-of-money bonds and other similar obligations incurred in
the ordinary course of business; (e) ground leases in respect of real
property on which facilities owned or leased by the Borrower or any of its
Subsidiaries are located; (f) easements, rights-of-way, restrictions,
minor defects or irregularities in title and other similar charges or
encumbrances not interfering in any material respect with the business of
Holdings, the Borrower and its Subsidiaries, taken as a whole or the Canadian
Borrower and its Subsidiaries, taken as a whole; (g) any interest or title
of a lessor or secured by a lessor’s interest under any lease permitted by this
Agreement; (h) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in connection with the
importation of goods; (i) Liens on goods the purchase price of which is
financed by a documentary letter of credit issued for the account of the
Borrower or any of its Subsidiaries, provided that such Lien secures
only the obligations of the Borrower or such Subsidiaries in respect of such
letter of credit to the extent permitted under Section 10.1; (j) leases
or subleases granted to others not interfering in any material respect with the
business of Holdings, the Borrower and its Subsidiaries, taken as a whole; and (k) Liens
created in the ordinary course of business in favor of banks and other
financial institutions over credit balances of any bank accounts of any of
Holdings, the Borrower and the Restricted Subsidiaries held at such banks or
financial institutions, as the case may be, to facilitate the operation of cash
pooling and/or interest set-off arrangements in respect of such bank accounts
in the ordinary course of business.

 

“Permitted Sale Leaseback” shall mean any
Sale Leaseback consummated by the Borrower or any of the Restricted
Subsidiaries after the Closing Date, provided that such Sale Leaseback
is consummated for fair value as determined at the time of consummation in good

 

31

 

faith by the Borrower and,
in the case of any Sale Leaseback (or series of related Sales Leasebacks) the
aggregate proceeds of which exceed $20,000,000, the Board of Directors of the
Borrower (which such determination may take into account any retained interest
or other investment of the Borrower or such Restricted Subsidiary in connection
with, and any other material economic terms of, such Sale Leaseback).

 

“Permitted Subordinated Debt” shall mean the
Subordinated Notes, provided that the aggregate principal amount of such
Subordinated Notes outstanding at any time shall not exceed $490,000,000.

 

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

 

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

 

“Pledge Agreement” shall mean the Pledge
Agreement, entered into by any of Holdings, the Borrower, the other pledgors
party thereto and the Administrative Agent for the benefit of the Lenders,
substantially in the form of Exhibit F, as the same may be amended,
supplemented or otherwise modified from time to time.

 

“Prepayment Event” shall mean any Asset Sale
Prepayment Event, Debt Incurrence Prepayment Event or any Permitted Sale
Leaseback.

 

“Prime Rate” shall mean the rate of interest
per annum publicly announced from time to time by the Administrative Agent as
its reference rate in effect at its principal office in New York City (the
Prime Rate not being intended to be the lowest rate of interest charged by
JPMCB in connection with extensions of credit to debtors).

 

“Pro Forma Adjustment” shall mean, for any
test period that includes any of the six fiscal quarters first ending following
any Permitted Acquisition, with respect to the Acquired EBITDA of the
applicable Acquired Entity or Business or the Consolidated EBITDA of the
Borrower affected by such acquisition, the pro forma increase or decrease in
such Acquired EBITDA or such Consolidated EBITDA, as the case may be, projected
by the Borrower in good faith as a result of reasonably identifiable and
factually supportable net cost savings or additional net costs, as the case may
be, realizable during such period by combining the operations of such Acquired
Entity or Business with the operations of the Borrower and its Subsidiaries, provided
that so long as such net cost savings or additional net costs will be
realizable at any time during such six-quarter period, it may be assumed, for
purposes of projecting such pro forma increase or decrease to such
Acquired EBITDA or such Consolidated EBITDA, as the case may be, that such net
cost savings or additional net costs will be realizable during the entire such
period; provided further that any such pro forma
increase or decrease to such Acquired EBITDA or such Consolidated EBITDA, as
the case may be, shall be without duplication for net cost savings or

 

32

 

additional net costs
actually realized during such period and already included in such Acquired
EBITDA or such Consolidated EBITDA, as the case may be.

 

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

 

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

 

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

 

“Recalculation Date” shall have the meaning
provided in Section 1.2.

 

“Recapitalization” shall mean the
consummation of the Merger and the Refinancing (as such term is defined in the
Initial Credit Agreement).

 

“Reference Lender” shall mean JPMCB.

 

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

 

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

 

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

 

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

 

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

 

“Related Affiliate” shall mean with respect
to any Lender with a Canadian Revolving Credit Commitment, an Affiliate or
lending office of such Lender designated by it to

 

33

 

make its Canadian Revolving
Credit Commitment, Canadian Letters of Credit and Canadian Revolving Credit
Loans available to the Borrower under this Agreement.

 

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

 

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

 

“Required Canadian Revolving Credit Lenders”
shall mean, at any date, (a) Non-Defaulting Lenders having or holding a
majority of the Dollar Equivalent of the Adjusted Canadian Total Revolving
Credit Commitment that relates to Canadian Revolving Credit Loans at such date
or (b) if the Canadian Total Revolving Credit Commitment has been
terminated, the holders (excluding Defaulting Lenders) of a majority of the
outstanding principal amount of the Dollar Equivalent of the Canadian Revolving
Credit Loans in the aggregate at such date.

 

“Required Lenders” shall mean, at any date, (a) Non-Defaulting
Lenders having or holding a majority of the sum of (i) the Adjusted US
Total Revolving Credit Commitment at such date, (ii) the Adjusted Canadian
Total Revolving Credit Commitment at such date, (iii) the Adjusted Total
Term Loan Commitment at such date,  (iv) the
outstanding principal amount of the Tranche A Term Loans (excluding the Tranche
A Term Loans held by Defaulting Lenders) at such date, (v)  the
outstanding principal amount of the Tranche E Term Loans (excluding the Tranche
E Term Loans held by Defaulting Lenders) at such date and (vi) the
outstanding principal amount of the New Term Loans (excluding the New Term
Loans held by Defaulting Lenders) or (b) if the US Total Revolving Credit
Commitment, the Canadian Total Revolving Credit Commitment and the Total Term
Loan Commitment have been terminated or for the purposes of acceleration pursuant
to Section 11, the holders (excluding Defaulting Lenders) of a majority of
the outstanding principal amount of the Loans and Letter of Credit Exposures
(excluding the Loans and Letter of Credit Exposures of Defaulting Lenders) in
the aggregate at such date.

 

“Required US Revolving Credit Lenders” shall
mean, at any date, (a) Non-Defaulting Lenders having or holding a majority
of the Adjusted US Total Revolving Credit Commitment that relates to US
Revolving Credit Loans at such date or (b) if the US Total Revolving
Credit Commitment has been terminated, the holders (excluding Defaulting
Lenders) of a majority of the outstanding principal amount of the US Revolving
Credit Loans and Letter of Credit Exposures (excluding the Loans and Letter of
Credit Exposures of Defaulting Lenders) in the aggregate at such date.

 

“Required Term Lenders” shall mean, at any
date, Non-Defaulting Lenders having or holding a majority of the sum of (a) the
portion of the Adjusted Total Term Loan Commitment that relates to Total Term
Loan Commitments at such date and (b) the outstanding principal amount of
the Term Loans (excluding the Term Loans held by Defaulting Lenders) in the
aggregate at such date.

 

34

 

“Required Tranche A Term Lenders” shall mean,
at any date, Non-Defaulting Lenders having or holding a majority of the sum of (a) the
portion of the Adjusted Total Term Loan Commitment that relates to Tranche A
Term Loan Commitments at such date and (b) the outstanding principal
amount of the Tranche A Term Loans (excluding the Tranche A Term Loans held by
Defaulting Lenders) in the aggregate at such date.

 

“Required Tranche E Term Lenders” shall mean,
at any date, Non-Defaulting Lenders having or holding a majority of the sum of (a) the
portion of the Adjusted Total Term Loan Commitment that relates to Tranche E
Term Loan Commitments at such date and (b) the outstanding principal
amount of the Tranche E Term Loans (excluding the Tranche E Term Loans held by
Defaulting Lenders) in the aggregate at such date.

 

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

 

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

 

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

 

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

 

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

 

“Revolving Credit Maturity Date” shall mean
the date that is six years after the Closing Date, or, if such date is not a
Business Day, the next preceding Business Day.

 

“SAC” shall have the meaning provided in the
Initial Credit Agreement.

 

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

 

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

 

“Schedule II/III Reference Lenders” means
specified Canadian Lenders that are banks named in Schedule II or Schedule III
to the Bank Act (Canada) and approved by the Canadian Borrower and the
Canadian Administrative Agent.

 

35

 

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

 

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

 

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

 

“Security Agreement” shall mean the Security
Agreement entered into by the Borrower, the other grantors party thereto and
the Administrative Agent for the benefit of the Lenders, substantially in the
form of Exhibit G, as the same may be amended, supplemented or otherwise
modified from time to time.

 

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

 

“Series” as defined in Section 2.15.

 

“Sold Entity or Business” shall have the
meaning provided in the definition of the term “Consolidated EBITDA”.

 

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

 

“Specified Obligations” shall mean
Obligations consisting of (a) the principal and interest on Loans and (b) reimbursement
obligations in respect of Letters of Credit.

 

“Specified Subsidiary” shall mean, at any
date of determination, (a) any Material Subsidiary or (b) any
Unrestricted Subsidiary (i) whose total assets at the last day of the Test
Period ending on the last day of the most recent fiscal period for which Section 9.1
Financials have been delivered were equal to or greater than 15% of the
consolidated total assets of the Borrower and the Subsidiaries at such date or (ii) whose
gross revenues for such Test Period

 

36

 

were equal to or greater
than 15% of the consolidated gross revenues of the Borrower and the
Subsidiaries for such period, in each case determined in accordance with GAAP.

 

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

 

“Status” shall mean, as to the Borrower as of
any date, the existence of Level I Status, Level II Status, Level III
Status or Level IV Status, as the case may be on such date.  Changes in Status resulting from changes in
the Consolidated Total Debt to Consolidated EBITDA Ratio shall become effective
(the date of such effectiveness, the “Effective Date”) as of the first
day following the last day of the most recent fiscal year or period for which (a) Section 9.1
Financials are delivered to the Lenders under Section 9.1 and (b) an
officer’s certificate is delivered by the Borrower to the Lenders setting
forth, with respect to such Section 9.1 Financials, the then-applicable
Status, and shall remain in effect until the next change to be effected
pursuant to this definition, provided that (i) if the Borrower
shall have made any payments in respect of interest or commitment fees during
the period (the “Interim Period”) from and including the Effective Date
to but excluding the day any change in Status is determined as provided above,
then the amount of the next such payment due on or after such day shall be
increased or decreased by an amount equal to any underpayment or overpayment so
made by the Borrower during such Interim Period and (ii) each
determination of the Consolidated Total Debt to Consolidated EBITDA Ratio
pursuant to this definition shall be made with respect to the Test Period
ending at the end of the fiscal period covered by the relevant financial
statements.

 

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

 

“Subordinated Note Indenture” shall mean the
Indenture dated as of the Closing Date, among the Borrower, the guarantors
party thereto and The Bank of New York, as trustee, pursuant to which the
Subordinated Notes are issued, as the same may be amended, supplemented or
otherwise modified from time to time to the extent permitted by Section 10.7(b).

 

“Subordinated Notes” shall mean (a) the
Subordinated Notes defined in the Initial Credit Agreement and (b) any
replacement or refinancing thereof having terms no more adverse to the
interests of the Lenders than the terms thereof, provided that any such
amendment,

 

37

 

replacement or refinancing
shall bear a rate of interest determined by the Board of Directors of the
Borrower to be a market rate of interest at the date of such amendment,
replacement or refinancing and have other terms customary for similar issuances
under similar market conditions or otherwise be on terms reasonably acceptable
to the Administrative Agent.

 

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

 

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

 

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

 

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

 

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

 

“Syndication Agent” shall mean Citibank,
N.A., together with its affiliates, as the syndication agent for the Lenders
under this Agreement and the other Credit Documents.

 

“Tax Act” means the Income Tax Act (Canada), as amended from
time to time, and regulations promulgated thereunder.

 

“Term Loans” shall mean, collectively, the
Tranche A Term Loans and the Tranche E Term Loans.

 

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

 

“Total Commitment” shall mean the sum of the
Total Term Loan Commitment, the US Total Revolving Credit Commitment and the
Canadian Total Revolving Credit Commitment.

 

“Total Credit Exposure” shall mean, at any date,
the sum of (a) the US Total Revolving Credit Commitment at such date, (b) the
Canadian Total Revolving Credit Commitment at such date, (c) the Total
Term Loan Commitment at such date and (d) the outstanding principal amount
of all Term Loans at such date.

 

38

 

“Total Term Loan Commitment” shall mean the
sum of the Tranche A Term Loan Commitments, Tranche E Term Loan Commitments and
New Term Loan Commitments, if applicable, of all the Lenders.

 

“Tranche A Repayment Amount” shall have the
meaning provided in Section 2.5(b)(i).

 

“Tranche A Repayment Date” shall have the
meaning provided in Section 2.5(b)(i).

 

“Tranche A Term Loan” shall have the meaning
provided in Section 2.1(a)(i).

 

“Tranche A Term Loan Commitment” shall mean, (a) in
the case of each Lender that is a Lender on the date hereof, the amount set
forth opposite such Lender’s name on Schedule 1.1(c) as such Lender’s
“Tranche A Term Loan Commitment” and (b) in the case of any Lender that
becomes a Lender after the date hereof, the amount specified as such Lender’s “Tranche
A Term Loan Commitment” in the Assignment and Acceptance pursuant to which such
Lender assumed a portion of the Total Term Loan Commitment, in each case as the
same may be changed from time to time pursuant to the terms hereof.  The aggregate amount of the Tranche A Term
Loan Commitments as of the Effective Date is $300,000,000.

 

“Tranche A Term Loan Maturity Date” shall
mean the date that is five years after the Effective Date, or, if such date is
not a Business Day, the next preceding Business Day.

 

“Tranche E Repayment Amount” shall have the
meaning provided in Section 2.5(b)(ii).

 

“Tranche E Repayment Date” shall have the
meaning provided in Section 2.5(b)(ii).

 

“Tranche E Term Loan”
shall have the meaning provided in Section 2.1(a)(ii).

 

“Tranche E Term Loan Commitment” shall mean, (a) in
the case of each Lender that is a Lender on the date hereof, the amount set
forth opposite such Lender’s name on Schedule 1.1(c) as such Lender’s
“Tranche E Term Loan Commitment” and (b) in the case of any Lender that
becomes a Lender after the date hereof, the amount specified as such Lender’s “Tranche
E Term Loan Commitment” in the Assignment and Acceptance pursuant to which such
Lender assumed a portion of the Total Term Loan Commitment, in each case as the
same may be changed from time to time pursuant to the terms hereof.  The aggregate amount of the Tranche E Term
Loan Commitments as of the Effective Date is $140,000,000.

 

“Tranche E Term Loan Maturity Date” shall
mean the date that is six years after the Effective Date, or, if such date is
not a Business Day, the next preceding Business Day.

 

39

 

“Transaction Expenses” shall mean any fees or
expenses incurred or paid by Holdings or any of its Subsidiaries in connection
with the Recapitalization, this Agreement and the other Credit Documents and
the transactions contemplated hereby and thereby.

 

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

 

“Type” shall mean (a) as to any Term
Loan, its nature as an ABR Loan or a Eurodollar Term Loan, (b) as to
any US Revolving Credit Loan, its nature as an ABR Loan or a Eurodollar
Revolving Credit Loan and (c) as to any Canadian Revolving Credit Loan,
its nature as a BA Loan or a Canadian Prime Loan.

 

“Unfunded Current Liability” of any Plan
shall mean the amount, if any, by which the present value of the accrued
benefits under the Plan as of the close of its most recent plan year,
determined in accordance with Statement of Financial Accounting Standards No. 87
as in effect on the date hereof, based upon the actuarial assumptions that
would be used by the Plan’s actuary in a termination of the Plan, exceeds the
fair market value of the assets allocable thereto and in relation to a Canadian
Pension Plan shall mean the amount, if any, by which (A) the present value
of the accrued benefits under the Canadian Pension Plan as of the close of
business of its most recent plan year, determined in accordance with (I) the
Statement of Financial Accounting Standards No. 87 as in effect on the
date hereof, or (II) if in the normal course of business, no such
determination is made in relation to the Canadian Pension Plans, the Canadian
equivalent of Statement of Financial Accounting Standards No. 87 as in
effect on the date hereof, in either case such determination being based upon
the actuarial assumptions that would be used by the actuary for the Canadian
Pension Plan in the termination of that Canadian Pension Plan, exceeds (B) the
fair market value of the assets allocable thereto.

 

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

 

“Unrestricted Subsidiary”
shall mean (a) any Subsidiary of the Borrower that is formed or acquired
after the Closing Date (other than a Subsidiary that becomes or is required to
become a Credit Party hereunder), provided that at such time (or
promptly thereafter) the Borrower designates such Subsidiary an Unrestricted
Subsidiary in a written notice to the Administrative Agent, (b) any
Restricted Subsidiary (other than a Restricted Subsidiary that is or becomes a
Credit Party) subsequently re-designated as an Unrestricted Subsidiary by the
Borrower in a written notice to the Administrative Agent, provided that (x) such
re-designation shall be deemed to be an investment on the date of such
re-designation in an Unrestricted Subsidiary in an amount equal to the sum of (i) the
net worth of such re-designated Restricted Subsidiary immediately prior to such
re-designation (such net worth to be calculated without regard to any guarantee
provided by such re-designated Restricted Subsidiary) and (ii) the
aggregate principal amount of any Indebtedness owed by such re-designated
Restricted Subsidiary to the Borrower or any other Restricted Subsidiary
immediately prior to such re-designation, all calculated, except as set forth
in the parenthetical to clause (i), on a consolidated basis in accordance with
GAAP and (y) no Default or Event of Default would result from such
re-designation and (c) each Subsidiary of an Unrestricted Subsidiary; provided,
however, that at the time of any written re-designation by the Borrower
to the Administrative Agent that any Unrestricted Subsidiary shall no longer
constitute an Unrestricted Subsidiary, such Unrestricted Subsidiary shall cease
to be an Unrestricted Subsidiary to the extent no Default or Event of

 

40

 

Default would result from
such re-designation.  On or promptly
after the date of its formation, acquisition or re-designation, as applicable,
each Unrestricted Subsidiary (other than an Unrestricted Subsidiary that is a
Foreign Subsidiary) shall have entered into a tax sharing agreement containing
terms that, in the reasonable judgment of the Administrative Agent, provide for
an appropriate allocation of tax liabilities and benefits.

 

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

 

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

 

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

 

“US Letter of Credit Exposure” shall mean,
with respect to any Lender, at any time, the sum of (a) the Dollar
Equivalent of the amount of any Unpaid Drawings in respect of which such Lender
has made (or is required to have made) payments to the US Letter of Credit
Issuer pursuant to Section 3.4(a) at such time and (b) such
Lender’s Revolving Credit Commitment Percentage of the US Letter of Credit
Outstanding at such time (excluding the portion thereof consisting of Unpaid
Drawings in respect of which the Lenders have made (or are required to have
made) payments to the US Letter of Credit Issuer pursuant to Section 3.4(a)).

 

“US Letter of Credit Issuer” shall mean
JPMCB, any of its Affiliates or any successor pursuant to Section 3.6.  The Letter of Credit Issuer may, in its
discretion, arrange for one or more Letters of Credit to be issued by
Affiliates of the Letter of Credit Issuer, and in each such case the term “Letter
of Credit Issuer” shall include any such Affiliate with respect to Letters of
Credit issued by such Affiliate.  In the
event that there is more than one Letter of Credit Issuer at any time,
references herein and in the other Credit Documents to the Letter of Credit
Issuer shall be deemed to refer to the Letter of Credit Issuer in respect of
the applicable Letter of Credit or to all Letter of Credit Issuers, as the
context requires.

 

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

 

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

 

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

 

“US Revolving Credit Commitment Percentage”
shall mean at any time, for each Lender, the percentage obtained by dividing (a) such
Lender’s US Revolving Credit Commitment by (b) the aggregate amount of the
US Revolving Credit Commitments, provided

 

41

 

that at any time when the US
Total Revolving Credit Commitment shall have been terminated, each Lender’s US
Revolving Credit Commitment Percentage shall be its US Revolving Credit
Commitment Percentage as in effect immediately prior to such termination.

 

“US Revolving Credit Exposure” shall mean,
with respect to any Lender at any time, the sum of (a) the aggregate
principal amount of the US Revolving Credit Loans of such Lender then
outstanding, and (b) such Lender’s US Letter of Credit Exposure at such
time.

 

“US Revolving Credit Loan” shall mean a
Revolving Credit Loan denominated in Dollars and made pursuant to Section 2.1(b).

 

“US Subsidiary Guarantors” shall mean (a) each
Domestic Subsidiary (other than an Unrestricted Subsidiary) on the Closing Date
and (b) each Domestic Subsidiary that becomes a party to the Guarantee
after the Closing Date pursuant to Section 9.11.

 

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

 

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

 

(b)           The words “hereof,”
“herein” and “hereunder” and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement, and Section references are to Sections of
this Agreement unless otherwise specified. 
The words “include,” “includes” and “including” shall be deemed to be
followed by the phrase “without limitation”.

 

1.2.          Exchange Rates. (a)     Not
later than 1:00 p.m. (New York time) on each Calculation Date, the
Administrative Agent shall (i) determine the Exchange Rate as of such
Calculation Date with respect to Canadian Dollars to be used for calculating
the Dollar Equivalent and (ii) give notice thereof to the Lenders and the
Borrower.  The Exchange Rates so
determined shall become effective on the first Business Day immediately
following the relevant Calculation Date (a “Recalculation Date”), shall
remain effective until the next succeeding Recalculation Date, and shall for
all purposes of this Agreement (other than any provision expressly requiring
the use of a current Exchange Rate) be the Exchange Rates employed in
converting any amounts between Dollars and Canadian Dollars.

 

(b)           Not later
than 5:00 p.m. (New York time) on each Recalculation Date and each
date on which Canadian Revolving Loans are made, the Administrative Agent shall
(i) determine the aggregate amount of the Dollar Equivalents of the
principal amounts of the Canadian Revolving Loans then outstanding (after
giving effect to any Canadian Revolving Loans made or repaid on such date), and
(ii) notify the Lenders and the Borrower of the results of such
determination.

 

(c)           For
purposes of determining compliance under Sections 10.4, 10.5, 10.6, 10.9,
10.10 and 10.11 with respect to any amount in a Foreign Currency, such amount
shall be deemed to equal the Dollar Equivalent thereof based on the average
Exchange Rate for a Foreign

 

42

 

Currency for the most recent twelve-month period immediately
prior to the date of determination determined in a manner consistent with that
used in calculating Consolidated EBITDA for the related period.  For purposes of determining compliance with
Sections 10.1 and 10.2, with respect to any amount of Indebtedness in a Foreign
Currency, compliance will be determined at the time of incurrence thereof using
the Dollar Equivalent thereof at the Exchange Rate in effect at the time of
such incurrence.

 

SECTION 2.           Amount and Terms of Credit

 

2.1.          Commitments. (a)     (i) 
Subject to and upon the terms and conditions herein set forth, each Lender
having a Tranche A Term Loan Commitment severally agrees to make a loan or
loans (each a “Tranche A Term Loan”) to the Borrower in
Dollars, which Tranche A Term Loans shall not exceed for any such Lender the
Tranche A Term Loan Commitment of such Lender; and

 

Such Tranche A Term Loans (i) shall be made on
the Effective Date, (ii) may at the option of the Borrower be incurred and
maintained as, and/or converted into, ABR Loans or Eurodollar Term Loans, provided
that all such Tranche A Term Loans made by each of the Lenders pursuant to the
same Borrowing shall, unless otherwise specifically provided herein, consist
entirely of Tranche A Term Loans of the same Type, (iii) may be repaid or
prepaid in accordance with the provisions hereof, but once repaid or prepaid,
may not be reborrowed, (iv) shall not exceed for any such Lender the
Tranche A Term Loan Commitment, of such Lender and (v) shall not exceed in
the aggregate the total of all Tranche A Term Loan Commitments.  On the Tranche A Term Loan Maturity Date, all
Tranche A Term Loans shall be repaid in full.

 

(ii)  Subject to and upon the terms and
conditions herein set forth, each Lender having a Tranche E Term Loan
Commitment severally agrees to make a loan or loans (each a “Tranche E Term Loan”) to the Borrower in
Dollars, which Tranche E Term Loans shall not exceed for any such Lender the
Tranche E Term Loan Commitment of such Lender; and

 

Such Tranche E Term Loans (i) shall be made on
the Effective Date, (ii) may at the option of the Borrower be incurred and
maintained as, and/or converted into, ABR Loans or Eurodollar Term Loans, provided
that all such Tranche E Term Loans made by each of the Lenders pursuant to the
same Borrowing shall, unless otherwise specifically provided herein, consist
entirely of Tranche E Term Loans of the same Type, (iii) may be repaid or
prepaid in accordance with the provisions hereof, but once repaid or prepaid,
may not be reborrowed, (iv) shall not exceed for any such Lender the
Tranche E Term Loan Commitment, of such Lender and (v) shall not exceed in
the aggregate the total of all Tranche E Term Loan Commitments.  On the Tranche E Term Loan Maturity Date, all
Tranche E Term Loans shall be repaid in full.

 

(b)           (i) 
Subject to and upon the terms and conditions herein set forth, each Lender
having a US Revolving Credit Commitment severally agrees to make a loan or
loans denominated in Dollars (each a “US Revolving Credit Loan” and,
collectively, the “US Revolving Credit Loans” and, together with the
Canadian Revolving Credit Loans, the “Revolving Credit Loans”) to the
Borrower which US Revolving Credit Loans (A) shall be made at any time and
from time to time on and after the Closing Date and prior to the Revolving
Credit Maturity Date, (B) may, at the option of the Borrower be incurred
and maintained as, and/or

 

43

 

converted into, ABR Loans or Eurodollar Revolving Credit
Loans, provided that all US Revolving Credit Loans made by each of the
Lenders pursuant to the same Borrowing shall, unless otherwise specifically
provided herein, consist entirely of US Revolving Credit Loans of the same
Type, (C) may be repaid and reborrowed in accordance with the provisions
hereof, (D) shall not, for any such Lender at any time, after giving
effect thereto and to the application of the proceeds thereof, result in such
Lender’s US Revolving Credit Exposure at such time exceeding such Lender’s US
Revolving Credit Commitment at such time and (E) shall not, after giving
effect thereto and to the application of the proceeds thereof, result at any
time in the aggregate amount of the Lenders’ US Revolving Credit Exposures at
such time exceeding the US Total Revolving Credit Commitment then in effect.

 

(ii)           Subject
to and upon the terms and conditions herein set forth, each Canadian Lender
having a Canadian Revolving Credit Commitment severally agrees to make a loan
or loans denominated in Canadian Dollars or Dollars to the Canadian Borrower or
a loan or loans denominated in Dollars to the Borrower (each a “Canadian
Revolving Credit Loan” and, collectively, the “Canadian Revolving Credit
Loans”) which Canadian Revolving Credit Loans (A) shall be made at any
time and from time to time on and after the Closing Date and prior to the
Revolving Credit Maturity Date, (B) shall be incurred and maintained (x) as
Canadian Prime Loans or BA Loans if denominated in C$ or (y) as Cdn ABR
Loans or Eurodollar Loans if denominated in US$ and made to the Canadian
Borrower, or (z) as ABR Loans or Eurodollar Loans if denominated in US$
and made to the Borrower; provided that all Canadian Revolving Credit
Loans made by each of the Canadian Lenders pursuant to the same Borrowing
shall, unless otherwise specifically provided herein, consist entirely of
Canadian Revolving Credit Loans of the same Type made to the same Borrower, (C) may
be repaid and reborrowed in accordance with the provisions hereof, (D) shall
not, for any such Canadian Lender at any time, after giving effect thereto and
to the application of the proceeds thereof, result in such Canadian Lender’s
Canadian Revolving Credit Exposure allocated to the Canadian Borrower at such
time exceeding such Canadian Lender’s Canadian Revolving Credit Commitment
allocated to the Canadian Borrower at such time, (E) shall not, for any
such Canadian Lender at any time, after giving effect thereto and to the
application of the proceeds thereof, result in such Lender’s Canadian Revolving
Credit Exposure allocated to the Borrower at such time exceeding such Canadian
Lender’s Canadian Revolving Credit Commitment allocated to the Borrower at such
time, (F) shall not, after giving effect thereto and to the application of
the proceeds thereof, result at any time in the aggregate amount of the
Canadian Lenders’ Canadian Revolving Credit Exposures at such time exceeding the
Canadian Total Revolving Credit Commitment then in effect, and (G) if made
to the Canadian Borrower shall be made by a Canadian Lender that is a Canadian
Resident or a permitted assignee of such Canadian Lender pursuant to Section 14.6(b)(ii).  The allocation of the Canadian Total
Revolving Credit Commitment as between the Borrower (the “Borrower
Allocation”) on the one hand and the Canadian Borrower (the “Canadian
Borrower Allocation”) on the other hand shall be fixed by the Borrower at
the beginning of each calendar month by providing written notice to the
Administrative Agent and the Canadian Administrative Agent (which notice must
be received by each such agent prior to 10:00 a.m. (New York time), three (3) Business
Days before the date on which such allocations shall be revised) specifying the
revised allocation of the Canadian Total Revolving Credit Commitment as between
the Borrower and the Canadian Borrower, respectively.  As of the Closing Date, $0 of the Canadian
Revolving Credit Commitment is allocated to the Borrower and $25,000,000 of the
Canadian Revolving Credit Commitment is allocated to the Canadian

 

44

 

Borrower.  The portion of each Canadian Lender’s
Canadian Revolving Credit Commitment allocated to the Borrower and the Canadian
Borrower, respectively, shall be its Canadian Revolving Credit Percentage of
the Borrower Allocation and the Canadian Borrower Allocation,
respectively.  Each Canadian Lender, if
it is not a “United States person” (as such term is defined in Section 7701(a)(30)
of the Code), shall designate by notice in writing to the Administrative Agent
and the Canadian Administrative Agent on the Closing Date, and otherwise from
time to time, a Related Affiliate of such Lender which is either a “United
States person” (as such term is defined in Section 7701(a)(30) of the
Code) or is a Non-US Lender that has fulfilled the requirements in Section 5.4(b),
for the purposes of making Canadian Revolving Credit Loans available to the
Borrower.

 

(iii)          Each Lender may at its option make any
Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such
Lender to make such Loan, provided that (A) any exercise of such
option shall not affect the obligation of the Borrower or the Canadian
Borrower, as the case may be, to repay such Loan, (B) in exercising such
option, such Lender shall use its reasonable efforts to minimize any increased
costs to the Borrower or the Canadian Borrower, as the case may be, resulting
therefrom (which obligation of the Lender shall not require it to take, or
refrain from taking, actions that it determines would result in increased costs
for which it will not be compensated hereunder or that it determines would be
otherwise disadvantageous to it and in the event of such request for costs for
which compensation is provided under this Agreement, the provisions of Section 3.5
shall apply) and (C) if a Eurodollar Loan is made to the Canadian
Borrower, it shall be made by a Canadian Lender that is a Canadian resident or
a permitted assignee of such Canadian Lender pursuant to Section 14.6(b)(ii).  On the Revolving Credit Maturity Date, all
Revolving Credit Loans shall be repaid in full.

 

(c)           Subject to and upon the terms and
conditions herein set forth, the Swingline Lender in its individual capacity
agrees, at any time and from time to time on and after the Closing Date and
prior to the Swingline Maturity Date, to make a loan or loans (each a “Swingline
Loan” and, collectively, the “Swingline Loans”) to the Borrower in
Dollars, which Swingline Loans (i) shall be ABR Loans, (ii) shall
have the benefit of the provisions of Section 2.1(d), (iii) shall not
exceed at any time outstanding the Swingline Commitment, (iv) shall not,
after giving effect thereto and to the application of the proceeds thereof,
result at any time in the aggregate amount of the Lenders’ US Revolving Credit
Exposures at such time exceeding the US Total Revolving Credit Commitment then
in effect and (v) may be repaid and reborrowed in accordance with the
provisions hereof.  On the Swingline
Maturity Date, each outstanding Swingline Loan shall be repaid in full.  The Swingline Lender shall not make any Swingline
Loan after receiving a written notice from the Borrower, the Canadian Borrower
or any Lender stating that a Default or Event of Default exists and is
continuing until such time as the Swingline Lender shall have received written
notice of (i) rescission of all such notices from the party or parties
originally delivering such notice or (ii) the waiver of such Default or
Event of Default in accordance with the provisions of Section 14.1.

 

(d)           On any Business Day, the Swingline
Lender may, in its sole discretion, give notice to the Lenders that all
then-outstanding Swingline Loans shall be funded with a Borrowing of US
Revolving Credit Loans, in which case US Revolving Credit Loans constituting
ABR Loans (each such Borrowing, a “Mandatory Borrowing”) shall be made
on the 

 

45

 

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

 

2.2.         Minimum Amount of Each Borrowing;
Maximum Number of Borrowings.  The
aggregate principal amount of each Borrowing of Tranche A Term Loans, Tranche E
Term Loans or Revolving Credit Loans shall be in a multiple of $1,000,000 or
C$100,000 (in the case of a Borrowing denominated in C$) and Swingline Loans
shall be in a multiple of $100,000 and, in each case, shall not be less than
the Minimum Borrowing Amount with respect thereto (except that Mandatory
Borrowings shall be made in the amounts required by Section 2.1(d)).  More than one Borrowing may be incurred on
any date, provided that at no time shall there be outstanding more than
20 Borrowings of Eurodollar Loans and BA loans under this Agreement.

 

2.3.         Notice of Borrowing.  (a)  
The Borrower shall give the Administrative Agent at the Administrative
Agent’s Office (i) prior to 12:00 Noon (New York time) at least three
Business Days’ prior written notice (or telephonic notice promptly confirmed in
writing) of the Borrowing of Tranche A Term Loans or Tranche E Term Loans if
all or any of such Tranche A Term Loans or Tranche E Term Loans are to be
initially Eurodollar Loans, and (ii) prior written notice (or telephonic
notice promptly confirmed in writing) prior to 10:00 a.m. (New York time)
on the date of the Borrowing of Tranche A Term Loans or Tranche E Term Loans if
all such Tranche A Term Loans or Tranche E Term Loans are to be ABR Loans.  Such notice (together with each notice of a
Borrowing of Revolving Credit Loans pursuant to Section 2.3(b) and
each notice of a Borrowing of Swingline Loans pursuant to Section 2.3(d),
a “Notice of Borrowing”) shall be irrevocable and shall specify (i) the
aggregate principal amount of such Tranche A Term Loans or Tranche E Term Loans
to be made, (ii) the date of the borrowing (which shall be the Effective
Date) and (iii) whether such Tranche A Term Loans or Tranche E Term Loans
shall consist of ABR Loans and/or Eurodollar Term Loans and, if such Tranche A 

 

46

 

Term Loans or Tranche E Term
Loans are to include Eurodollar Term Loans, the Interest Period to be initially
applicable thereto.  The Administrative
Agent shall promptly give each Lender written notice (or telephonic notice
promptly confirmed in writing) of the proposed Borrowing of Tranche A Term
Loans or Tranche E Term Loans, of such Lender’s proportionate share thereof and
of the other matters covered by the related Notice of Borrowing.

 

(b)           Whenever the Borrower desires to
incur US Revolving Credit Loans or Canadian Revolving Credit Loans in Dollars
(subject to its allocated portion of the Canadian Revolving Credit Commitment)
hereunder (other than Mandatory Borrowings or borrowings to repay Unpaid
Drawings), it shall give the Administrative Agent at the Administrative Agent’s
Office, (i) prior to 12:00 Noon (NY Time) at least three Business Days’
prior written notice (or telephonic notice promptly confirmed in writing) of
each Borrowing of Eurodollar Revolving Credit Loans, and (ii) prior to
12:00 Noon (New York time) at least one Business Day’s prior written
notice (or telephonic notice promptly confirmed in writing) of each Borrowing
of ABR Loans.  Each such Notice of
Borrowing, except as otherwise expressly provided in Section 2.10, shall
be irrevocable and shall specify (i) whether the Revolving Credit Loans
are Canadian Revolving Credit Loans or US Revolving Credit Loans, as
applicable, (ii) the aggregate principal amount of the Revolving Credit
Loans to be made pursuant to such Borrowing, (iii) the date of Borrowing
(which shall be a Business Day) and (iv) whether the respective Borrowing
shall consist of ABR Loans or Eurodollar Revolving Credit Loans and, if
Eurodollar Revolving Credit Loans, the Interest Period to be initially
applicable thereto.  The Administrative
Agent shall promptly give each Lender written notice (or telephonic notice
promptly confirmed in writing) of each proposed Borrowing of Revolving Credit
Loans, of such Lender’s proportionate share thereof and of the other matters
covered by the related Notice of Borrowing.

 

(c)           Whenever the Canadian Borrower
desires to incur Canadian Revolving Credit Loans in Dollars or Canadian Dollars
(subject to its allocated portion of the Canadian Revolving Credit Commitment)
hereunder (other than Mandatory Borrowings or borrowings to repay Unpaid
Drawings), it shall give the Canadian Administrative Agent at the Canadian
Administrative Agent’s Office, (i) prior to 12:00 Noon (New York time) at
least three Business Days’ prior written notice (or telephonic notice promptly
confirmed in writing) of each Canadian Borrowing of BA Loans or Eurodollar
Loans, and (ii) prior to 12:00 Noon (New York time) at least one
Business Day’s prior written notice (or telephonic notice promptly confirmed in
writing) of each Canadian Borrowing of Cdn ABR or Canadian Prime Loans.  Each such Notice of Borrowing, except as
otherwise expressly provided in Section 2.10, shall be irrevocable and
shall specify (i) the aggregate principal amount of the Revolving Credit
Loans to be made pursuant to such Borrowing, (ii) the date of Borrowing
(which shall be a Business Day) and (iii) whether the respective Borrowing
shall consist of BA Loans, Eurodollar Loans, Canadian Prime Loans or Cdn ABR
Loans and, if BA Loans or Eurodollar Loans, the Interest Period to be initially
applicable thereto.  The Canadian
Administrative Agent shall promptly give each Lender written notice (or
telephonic notice promptly confirmed in writing) of each proposed Borrowing of
Revolving Credit Loans, of such Lender’s proportionate share thereof and of the
other matters covered by the related Notice of Borrowing.

 

(d)           Whenever the Borrower desires to
incur Swingline Loans hereunder, it shall give the Administrative Agent written
notice (or telephonic notice promptly confirmed in writing) of each Borrowing
of Swingline Loans prior to 2:30 p.m. (New York time) on the date 

 

47

 

of such Borrowing.  Each such notice shall be irrevocable and
shall specify (i) the aggregate principal amount of the Swingline Loans to
be made pursuant to such Borrowing and (ii) the date of Borrowing (which
shall be a Business Day).  The
Administrative Agent shall promptly give the Swingline Lender written notice
(or telephonic notice promptly confirmed in writing) of each proposed Borrowing
of Swingline Loans and of the other matters covered by the related Notice of
Borrowing.

 

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

 

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

 

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

 

2.4.         Disbursement of Funds.  (a)    
No later than 12:00 Noon (New York time) on the date specified in each
Notice of Borrowing (including Mandatory Borrowings), each Lender will make
available its pro rata portion, if any, of each Borrowing requested to be made
on such date in the manner provided below, provided that all Swingline Loans
shall be made available in the full amount thereof by the Swingline Lender no
later than 3:00 p.m. (New York time) on the date requested.

 

(b)           Each Lender shall make available all
amounts it is to fund to the Borrower under any Borrowing in the applicable
currency for its applicable Commitments, and in immediately available funds to
the Administrative Agent at the Administrative Agent’s Office and the Administrative
Agent will (except in the case of Mandatory Borrowings and Borrowings to repay
Unpaid Drawings) make available to the Borrower, by depositing to the
Borrower’s account at the Administrative Agent’s Office the aggregate of the
amounts so made available in Dollars. 
Each Canadian Lender shall make available all amounts it is to fund to
the Canadian Borrower under any Canadian Borrowing in the applicable currency
for its applicable Commitments, and in immediately available funds to the
Canadian Administrative Agent at the Canadian Administrative Agent’s Office and
the Canadian Administrative Agent will (except in the case of Mandatory
Borrowings and Borrowings to repay Unpaid Drawings) make available to the
Canadian Borrower, by depositing to the Canadian Borrower’s account (as
designated by it in a written notice to the Canadian Administrative Agent from
time to time) the aggregate of the amounts so made available in Canadian
Dollars or Dollars as applicable.  Unless
the Administrative Agent and the Canadian Administrative Agent (in the case of
Canadian Borrowings) shall have been notified by any Lender prior to the date
of any such Borrowing that 

 

48

 

such Lender does not intend
to make available to the Administrative Agent or the Canadian Administrative
Agent (in the case of Canadian Borrowings) its portion of the Borrowing or
Borrowings to be made on such date, the Administrative Agent or the Canadian
Administrative Agent (in the case of Canadian Borrowings) may assume that such
Lender has made such amount available to the Administrative Agent or the
Canadian Administrative Agent (in the case of Canadian Borrowings) on such date
of Borrowing, and the Administrative Agent and the Canadian Administrative
Agent (in the case of Canadian Borrowings), in reliance upon such assumption,
may (in its sole discretion and without any obligation to do so) make available
to the Borrower or the Canadian Borrower, as the case may be, a corresponding
amount.  If such corresponding amount is
not in fact made available to the Administrative Agent or the Canadian
Administrative Agent (in the case of Canadian Borrowings) by such Lender and
the Administrative Agent or the Canadian Administrative Agent (in the case of
Canadian Borrowings) has made available same to the Borrower or the Canadian
Borrower, as the case may be, the Administrative Agent or the Canadian
Administrative Agent (in the case of Canadian Borrowings) shall be entitled to
recover such corresponding amount from such Lender.  If such Lender does not pay such
corresponding amount forthwith upon the Administrative Agent’s or the Canadian
Administrative Agent (in the case of Canadian Borrowings) demand therefor the
Administrative Agent or the Canadian Administrative Agent (in the case of
Canadian Borrowings) shall promptly notify the Borrower or the Canadian
Borrower, as the case may be, and the Borrower or the Canadian Borrower, as the
case may be, shall immediately pay such corresponding amount to the
Administrative Agent or the Canadian Administrative Agent (in the case of
Canadian Borrowings).  The Administrative
Agent or the Canadian Administrative Agent (in the case of Canadian Borrowings)
shall also be entitled to recover from such Lender or the Borrower or the Canadian
Borrower, as the case may be, interest on such corresponding amount in respect
of each day from the date such corresponding amount was made available by the
Administrative Agent or the Canadian Administrative Agent (in the case of
Canadian Borrowings) to the Borrower or the Canadian Borrower, as the case may
be, to the date such corresponding amount is recovered by the Administrative
Agent or the Canadian Administrative Agent (in the case of Canadian
Borrowings), at a rate per annum equal to (i) if paid by such Lender, the
Federal Funds Effective Rate (or, in the case of an amount owing in respect of
a Canadian Borrowing, the rate reasonably determined by the Canadian
Administrative Agent to be the cost to it of funding such amount) or (ii) if
paid by the Borrower or the Canadian Borrower, as the case may be, the
then-applicable rate of interest or fees, calculated in accordance with Section 2.8,
for the respective Loans.

 

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

 

2.5.         Repayment of Loans; Evidence of Debt.  (a)    
The Borrower shall repay to the Administrative Agent, for the benefit of
the Lenders, (i) on the Tranche A Term Loan Maturity Date, the then-unpaid
Tranche A Term Loans, in Dollars and (ii) on the Tranche E Term Loan
Maturity Date, the then-unpaid Tranche E Term Loans, in Dollars.  The Borrower shall repay to the
Administrative Agent in Dollars, for the benefit of the applicable Lenders, on
the Revolving Credit Maturity Date, the then-unpaid US Revolving Credit Loans
and Canadian

 

49

 

Revolving Credit Loans made
to the Borrower.  The Canadian Borrower
shall repay to the Canadian Administrative Agent in Dollars or C$, as the case
may be, for the benefit of the applicable Lenders, on the Revolving Credit
Maturity Date, the then-unpaid Canadian Revolving Credit Loans made to the
Canadian Borrower.  The Borrower shall
repay to the Administrative Agent in Dollars, for the account of the Swingline
Lender, on the Swingline Maturity Date, the then-unpaid Swingline Loans.

 

(b)           (i) The Borrower shall repay to
the Administrative Agent, in Dollars, for the benefit of the Lenders of Tranche
A Term Loans, on each date set forth below (each a “Tranche A Repayment Date”),
the principal amount of the Tranche A Term Loans equal to (x) the
outstanding principal amount of Tranche A Term Loans immediately after closing
on the Effective Date multiplied by (y) the percentage set forth below
opposite such Repayment Date (each a “Tranche A Repayment Amount”):

 

	
  Number of Months

  From Effective Date

  	
   

  	
  Tranche A Term Loan

  Repayment Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
  0.0

  	
  %

  
	
  6

  	
   

  	
  0.0

  	
  %

  
	
  9

  	
   

  	
  0.0

  	
  %

  
	
  12

  	
   

  	
  0.0

  	
  %

  
	
  15

  	
   

  	
  1.25

  	
  %

  
	
  18

  	
   

  	
  1.25

  	
  %

  
	
  21

  	
   

  	
  1.25

  	
  %

  
	
  24

  	
   

  	
  1.25

  	
  %

  
	
  27

  	
   

  	
  1.25

  	
  %

  
	
  30

  	
   

  	
  1.25

  	
  %

  
	
  33

  	
   

  	
  1.25

  	
  %

  
	
  36

  	
   

  	
  1.25

  	
  %

  
	
  39

  	
   

  	
  1.25

  	
  %

  
	
  42

  	
   

  	
  1.25

  	
  %

  
	
  45

  	
   

  	
  1.25

  	
  %

  
	
  48

  	
   

  	
  1.25

  	
  %

  
	
  51

  	
   

  	
  21.25

  	
  %

  
	
  54

  	
   

  	
  21.25

  	
  %

  
	
  57

  	
   

  	
  21.25

  	
  %

  
	
  Tranche A Term Loan Maturity Date

  	
   

  	
  21.25

  	
  %

  

 

(ii) The
Borrower shall repay to the Administrative Agent, in Dollars, for the benefit
of the Lenders of Tranche E Term Loans, on each date set forth below (each a “Tranche
E Repayment Date”), the principal amount of the Tranche E Term Loans equal
to (x) the outstanding principal amount of Tranche E Term Loans
immediately after closing on the Effective Date multiplied by (y) the
percentage set forth below opposite such Repayment Date (each a “Tranche E
Repayment Amount”):

 

50

 

	
  Number of Months

  From Effective Date

  	
   

  	
  Tranche E Term Loan

  Repayment Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
  0.25

  	
  %

  
	
  6

  	
   

  	
  0.25

  	
  %

  
	
  9

  	
   

  	
  0.25

  	
  %

  
	
  12

  	
   

  	
  0.25

  	
  %

  
	
  15

  	
   

  	
  0.25

  	
  %

  
	
  18

  	
   

  	
  0.25

  	
  %

  
	
  21

  	
   

  	
  0.25

  	
  %

  
	
  24

  	
   

  	
  0.25

  	
  %

  
	
  27

  	
   

  	
  0.25

  	
  %

  
	
  30

  	
   

  	
  0.25

  	
  %

  
	
  33

  	
   

  	
  0.25

  	
  %

  
	
  36

  	
   

  	
  0.25

  	
  %

  
	
  39

  	
   

  	
  0.25

  	
  %

  
	
  42

  	
   

  	
  0.25

  	
  %

  
	
  45

  	
   

  	
  0.25

  	
  %

  
	
  48

  	
   

  	
  0.25

  	
  %

  
	
  51

  	
   

  	
  0.25

  	
  %

  
	
  54

  	
   

  	
  0.25

  	
  %

  
	
  57

  	
   

  	
  0.25

  	
  %

  
	
  60

  	
   

  	
  0.25

  	
  %

  
	
  63

  	
   

  	
  0.25

  	
  %

  
	
  66

  	
   

  	
  0.25

  	
  %

  
	
  69

  	
   

  	
  0.25

  	
  %

  
	
  Tranche E Term Loan Maturity Date

  	
   

  	
  94.25

  	
  %

  

 

; provided, in the
event any New Term Loans are made, such New Term Loans shall be repaid on each
Installment Date occurring on or after the applicable Increased Amount Date in
an amount equal to (i) the aggregate principal amount of New Term Loans of
the applicable Series of New Term Loans, times (ii) the ratio
(expressed as a percentage) of (y) the amount of all other Term Loans being
repaid on such Installment Date and (z) the total aggregate principal
amount of all other Term Loans outstanding on such Increased Amount Date.

 

(c)           Each Lender shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower and the Canadian Borrower, as the case may be, to
the appropriate lending office of such Lender resulting from each Loan made by
such lending office of such Lender from time to time, including the amounts of
principal and interest payable and paid to such lending office of such Lender
from time to time under this Agreement.

 

(d)           The Administrative Agent shall
maintain the Register pursuant to Section 14.6(b), and a subaccount for
each Lender, in which Register and subaccounts (taken together) shall be
recorded (i) the amount and currency of each Loan made hereunder, whether
such Loan is a Tranche A Term Loan, a Tranche E Term Loan, a US Revolving
Credit Loan, a Canadian Revolving Credit Loan or a Swingline Loan, the Type of
each Loan made and the 

 

51

 

Interest Period applicable
thereto, (ii) the amount of any principal or interest due and payable or
to become due and payable from the Borrower and the Canadian Borrower, as the
case may be, to each Lender or the Swingline Lender hereunder and (iii) the
amount of any sum received by the Administrative Agent and the Canadian
Administrative Agent hereunder from the Borrower and the Canadian Borrower, as
the case may be, and each Lender’s share thereof.

 

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

 

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

 

52

 

Term Loans, Tranche E Term
Loans or Revolving Credit Loans are to be converted into or continued as BA
Loans or Eurodollar Loans, the Interest Period to be initially applicable
thereto.  The Administrative Agent (or
the Canadian Administrative Agent, in the case of Canadian Borrowings) shall
give each Lender notice as promptly as practicable of any such proposed
conversion or continuation affecting any of its Tranche A Term Loans, Tranche E
Term Loans or Revolving Credit Loans.

 

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

 

2.7.         Pro Rata Borrowings.  Each Borrowing of Tranche A Term Loans and
Tranche E Term Loans under this Agreement shall be granted by the Lenders pro
rata on the basis of their then-applicable Tranche A Term Loan Commitments and
Tranche E Term Loan Commitments.  Each
Borrowing of US Revolving Credit Loans under this Agreement shall be granted by
the Lenders pro rata on the basis of their then-applicable US Revolving Credit
Commitments. Each Borrowing of Canadian Revolving Credit Loans under this Agreement
shall be granted by the Canadian Lenders (or their Related Affiliates if
applicable) pro rata on the basis of their then-applicable Canadian Revolving
Credit Commitments allocated to the Canadian Borrower or the Borrower, as
applicable.  Each Borrowing of New Term
Loans under this Agreement shall be granted by the Lenders pro rata on the
basis of their then-applicable New Term Loan Commitments.  It is understood that no Lender shall be
responsible for any default by any other Lender in its obligation to make Loans
hereunder and that each Lender shall be obligated to make the Loans provided to
be made by it hereunder, regardless of the failure of any other Lender to
fulfill its commitments hereunder.

 

2.8.         Interest.  (a)    
(i) The unpaid principal amount of each ABR Loan shall bear
interest from the date of the Borrowing thereof until maturity (whether by
acceleration or otherwise) at a rate per annum that shall at all times be the
Applicable ABR Margin plus the ABR in effect from time to time, (ii) the
unpaid principal amount of each Cdn ABR Loan shall bear interest from the date
of the Borrowing thereof until maturity (whether by acceleration or otherwise)
at a rate per annum that shall at all times be the Applicable ABR Margin plus
the Cdn ABR in effect from time to time, and (iii) the unpaid principal
amount of each Canadian Prime Loan shall bear interest from the date of the
Borrowing thereof until maturity (whether by acceleration or otherwise) at a
rate per annum that shall at all times be the Applicable ABR Margin plus the
Canadian Prime Rate in effect from time to time.

 

53

 

(b)           (i) The unpaid principal amount
of each Eurodollar Loan shall bear interest from the date of the Borrowing
thereof until maturity thereof (whether by acceleration or otherwise) at a rate
per annum that shall at all times be the Applicable Eurodollar Margin in effect
from time to time plus the relevant Eurodollar Rate and (ii) the Canadian
Borrower shall pay to each Lender that accepts or advances a BA Loan, as a
condition of and at the time of such acceptance or advance, a fee at the rate
of the then Applicable Stamping Fee calculated on the basis of a year of
365 days on the face amount at maturity (or the principal amount in the
case of a BA Equivalent Loan) of such Bankers’ Acceptance for the period from
and including the date of acceptance (or advance in the case of a BA Equivalent
Loan) of such Bankers’ Acceptance for the period from and including the date of
acceptance to but excluding the maturity date of such Bankers’ Acceptance.

 

(c)           If all or a portion of (i) the
principal amount of any Loan or (ii) any interest payable thereon shall
not be paid when due (whether at the stated maturity, by acceleration or
otherwise), such overdue amount shall bear interest at a rate per annum that is
(x) in the case of overdue principal, the rate that would otherwise be
applicable thereto plus 2% or (y) in the case of any overdue
interest, to the extent permitted by applicable law, the rate described in Section 2.8(a) plus
2% from and including the date of such non-payment to but excluding the date on
which such amount is paid in full (after as well as before judgment).

 

(d)           Interest on each Loan shall accrue
from and including the date of any Borrowing to but excluding the date of any
repayment thereof and shall be payable (i) in respect of each Canadian
Prime Loan, Cdn ABR Loan and ABR Loan, quarterly in arrears on the last day of
each March, June, September and December, (ii) in respect of each
Eurodollar Loan, on the last day of each Interest Period applicable thereto
and, in the case of an Interest Period in excess of three months, on each date
occurring at three-month intervals after the first day of such Interest Period,
(iii) in respect of each Loan (except, other than in the case of
prepayments, any Canadian Prime Loan, Cdn ABR Loan  or ABR Loan), on any prepayment (on the
amount prepaid), at maturity (whether by acceleration or otherwise) and, after
such maturity, on demand.

 

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

 

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

 

2.9.         Interest Periods.

 

(a)           At the time the Borrower or the Canadian
Borrower, as applicable, gives a Notice of Borrowing or Notice of Conversion or
Continuation in respect of the making of, or conversion into or continuation
as, a Borrowing of Eurodollar Loans (in the case of the initial Interest Period
applicable thereto) or prior to 10:00 a.m. (New York time) on the third
Business Day prior to the expiration of an Interest Period applicable to a
Borrowing of Eurodollar Loans, the Borrower or the Canadian Borrower, as
applicable, shall have the right to elect by giving the Administrative Agent or
the Canadian Administrative Agent (in the case of the Canadian 

 

54

 

Borrower) written notice (or
telephonic notice promptly confirmed in writing) the Interest Period applicable
to such Borrowing, which Interest Period shall, at the option of the Borrower
or the Canadian Borrower, as applicable, be a one, two, three, six or (in the
case of Revolving Credit Loans, if available to all the Lenders making such
loans as determined by such Lenders in good faith based on prevailing market
conditions) a nine or twelve month period, provided that the initial Interest
Period may be for a period less than one month if agreed upon by the Borrower
(on its own behalf and on behalf of the Canadian Borrower) and the Agents.  Notwithstanding anything to the contrary
contained above:

 

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

 

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

 

(iii)          if any Interest
Period would otherwise expire on a day that is not a Business Day, such
Interest Period shall expire on the next succeeding Business Day, provided
that if any Interest Period in respect of a Eurodollar Loan would otherwise
expire on a day that is not a Business Day but is a day of the month after
which no further Business Day occurs in such month, such Interest Period shall
expire on the next preceding Business Day; and

 

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

 

(b)           At the time the Canadian Borrower
gives a Notice of Borrowing or Notice of Continuation in respect of the making
of, or continuation into or continuation as, a Borrowing of BA Loans prior to
12:00 noon. (New York time) on the third Business Day prior to the applicable
date of making or continuation of such BA Loans, the Canadian Borrower shall
have the right to elect by giving the Canadian Administrative Agent written
notice (or telephonic notice promptly confirmed in writing) of the Interest
Period applicable to such Borrowing, which Interest Period shall, at the option
of the Canadian Borrower, be one, two, three or six months (or in the case of
Canadian Revolving Credit Loans, if available to all the Lenders making such
loans as determined by such Lenders in good faith based on prevailing market
conditions), a nine or twelve month period as well; provided that, in each
case, the initial Interest Period for BA Loans advanced on the Closing Date may
be for a period less than one month if agreed upon by the Canadian Borrower and
the Canadian Administrative Agent. 
Notwithstanding anything to the contrary contained above:

 

55

 

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

 

(ii)                                        the Canadian
Borrower shall not be entitled to elect any Interest Period in respect of any
BA Loan if such Interest Period would extend beyond the applicable Maturity
Date of such Loan;

 

(iii)                                     no BA Loan shall
mature on a day which is not a Business Day and if any Interest Period would
otherwise expire on a day that is not a Business Day, such Interest Period
shall expire on the next succeeding Business Day; and

 

(iv)                                    if the Canadian
Borrower fails to provide a Notice of Continuation within the time period
required in Section 2.6(a) in respect of BA Loans, such BA Loans
shall automatically be converted into Canadian Prime Loans on the last day of
the Interest period applicable thereto.

 

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

 

(i)            on any date for
determining the Eurodollar Rate for any Interest Period that (x) deposits
in the principal amounts of the Loans comprising such Eurodollar Borrowing are
not generally available in the relevant market or (y) by reason of any
changes arising on or after the Closing Date affecting the interbank Eurodollar
market, adequate and fair means do not exist for ascertaining the applicable
interest rate on the basis provided for in the definition of Eurodollar Rate;
or

 

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

 

(iii)          at any time, that
the making or continuance of any Eurodollar Loan has become unlawful by
compliance by such Lender in good faith with any law, governmental rule,
regulation, guideline or order (or would conflict with any such governmental
rule, regulation, guideline or order not having the force of law even though
the failure to comply therewith would not be unlawful), or has become
impracticable as a 

 

56

 

result
of a contingency occurring after the date hereof that materially and adversely
affects the interbank Eurodollar market;

 

then, and in any such event,
such Lender (or the Administrative Agent, in the case of clause (i) above)
shall within a reasonable time thereafter give notice (if by telephone,
confirmed in writing) to the Borrower (on its own behalf and on behalf of the
Canadian Borrower) and to the Administrative Agent of such determination (which
notice the Administrative Agent shall promptly transmit to each of the other
Lenders).  Thereafter (x) in the
case of clause (i) above, Eurodollar Term Loans and Eurodollar
Revolving Credit Loans shall no longer be available until such time as the
Administrative Agent notifies the Borrower (on its own behalf and on behalf of
the Canadian Borrower) and the Lenders that the circumstances giving rise to
such notice by the Administrative Agent no longer exist (which notice the
Administrative Agent agrees to give at such time when such circumstances no
longer exist), and any Notice of Borrowing or Notice of Conversion given by the
Borrower or the Canadian Borrower with respect to Eurodollar Term Loans or
Eurodollar Revolving Credit Loans that have not yet been incurred shall be
deemed rescinded by the Borrower or the Canadian Borrower (y) in the case
of clause (ii) above, the Borrower or the Canadian Borrower, as the
case may be, shall pay to such Lender, promptly after receipt of written demand
therefor such additional amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
reasonable discretion shall determine) as shall be required to compensate such
Lender for such increased costs or reductions in amounts receivable hereunder
(it being agreed that a written notice as to the additional amounts owed to
such Lender, showing in reasonable detail the basis for the calculation
thereof, submitted to the Borrower or the Canadian Borrower, as the case may
be, by such Lender shall, absent clearly demonstrable error, be final and
conclusive and binding upon all parties hereto) and (z) in the case of
clause (iii) above, the Borrower or the Canadian Borrower, as the
case may be, shall take one of the actions specified in Section 2.10(b) as
promptly as possible and, in any event, within the time period required by law.

 

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

 

(c)           In the event that the Canadian
Administrative Agent shall have reasonably determined (which determination
shall, absent clearly demonstrable error, be final and conclusive and binding
upon all parties hereto) that there does not exist a normal market in Canada
for the purchase and sale of bankers’ acceptances, then, and in any such event,
the Administrative Agent shall within a reasonable time thereafter give notice
(if by telephone confirmed in writing) to the Borrower, the Canadian Borrower
and each of the other Lenders of 

 

57

 

such determination.  Thereafter BA Loans shall no longer be
available until such time as the Administrative Agent notifies the Borrower,
the Canadian Borrower and the Lenders that the circumstances giving rise to
such notice by the Administrative Agent no longer exist (which notice the
Administrative Agent agrees to give at such time when such circumstances no
longer exist), and any Notice of Borrowing or Notice of Continuation given by
the Borrower with respect to BA Loans that have not yet been incurred shall be
deemed rescinded by the Borrower.  Any
maturing BA Loans shall thereafter, and until contrary notice is provided by
the Administrative Agent, be continued as a Canadian Prime Loan.

 

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

 

(e)           Notwithstanding the foregoing, in the
case of Canadian Revolving Credit Loans affected by the circumstances described
in Section 2.10(a)(i), as promptly as practicable but in no event later
than three Business Days after the giving of the required notice by the
Canadian Administrative Agent with respect to such circumstances, the
Administrative Agent (in consultation with the Lenders) shall negotiate with
the Borrower in good faith in order to ascertain whether a substitute interest
rate (a “Substitute Rate”) may be agreed upon for the maintaining of
existing Canadian Revolving Credit Loans. If a Substitute Rate is agreed upon
by the Borrower and all the Lenders, such Substitute Rate shall apply.  If a Substitute Rate is not so agreed upon by
the Borrower and all the Lenders within such time, each Lender’s Canadian
Revolving Credit Loans shall thereafter bear interest at a rate equal to the
sum of (i) the rate certified by such Lender to be its costs of funds (from
such sources as it may reasonably select 

 

58

 

out of those sources then
available to it) for such Canadian Revolving Credit Loans, plus (ii) the
Applicable Eurodollar Margin.

 

2.11.       Compensation.  If (a) any payment of principal of any
BA Loan or Eurodollar Loan is made by the Borrower or the Canadian Borrower, as
the case may be, to or for the account of a Lender other than on the last day
of the Interest Period for such BA Loan or Eurodollar Loan as a result of a
payment or conversion pursuant to Section 2.5, 2.6, 2.10, 5.1, 5.2 or
14.7, as a result of acceleration of the maturity of the Loans pursuant to Section 11
or for any other reason, (b) any Borrowing of BA Loan or Eurodollar Loans
is not made as a result of a withdrawn Notice of Borrowing, (c) any ABR
Loan is not converted into a Eurodollar Loan as a result of a withdrawn Notice
of Conversion or Continuation, (d) any Canadian Prime Loan is not
continued into a BA Loan as a result of a withdrawn Notice of Continuation, (e) any
BA Loan or Eurodollar Loan is not continued as a BA Loan or Eurodollar Loan, as
the case may be, as a result of a withdrawn Notice of Conversion or
Continuation or (f) any prepayment of principal of any BA Loan or
Eurodollar Loan is not made as a result of a withdrawn notice of prepayment
pursuant to Section 5.1 or 5.2, the Borrower or the Canadian Borrower, as
the case may be, shall, after receipt of a written request by such Lender
(which request shall set forth in reasonable detail the basis for requesting
such amount), pay to the Administrative Agent for the account of such Lender
any amounts required to compensate such Lender for any additional losses, costs
or expenses that such Lender may reasonably incur as a result of such payment,
failure to convert, failure to continue or failure to prepay, including any
loss, cost or expense (excluding loss of anticipated profits) actually incurred
by reason of the liquidation or reemployment of deposits or other funds
acquired by any Lender to fund or maintain such BA Loan or Eurodollar Loan.

 

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

 

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

 

59

 

2.14.       Bankers’ Acceptances

 

(a)           The Canadian Administrative Agent,
promptly following receipt of a Notice of Borrowing or Notice of Continuation,
requesting BA Loans, shall advise each applicable Canadian Lender of the face
or principal amount and term of each BA Loan to be accepted (and purchased) or
advanced by it.  The aggregate face or
principal amount of BA Loans to be accepted or advanced by a Canadian Lender
shall be determined by the Canadian Administrative Agent by reference to that
Canadian Lender’s applicable pro rata portion of the issue or advance of BA
Loans, except that the aggregate face amount of Bankers’ Acceptances to be
accepted by the applicable Canadian Lenders shall be increased or reduced by
the Canadian Administrative Agent in its sole discretion as may be necessary to
ensure that the face amount of the Bankers’ Acceptance to be accepted by each
applicable Canadian Lender would be C$100,000 or a whole multiple thereof.  For greater certainty, the foregoing
C$100,000 minimum face amount of Bankers’ Acceptances for each Lender shall not
apply to BA Equivalent Loans.

 

(b)           On the date specified in a Notice of
Borrowing or Notice of Continuation on which a BA Loan is to be made, the
Canadian Administrative Agent shall advise the Canadian Borrower as to the
Canadian Administrative Agent’s determination of the BA Discount Rate for the
BA Loans to be purchased or advanced, as the case may be.

 

(c)           The Canadian Borrower shall sell and
each Canadian Lender shall purchase the Bankers’ Acceptance accepted by it at
the applicable BA Discount Rate.  Subject
to clause (d) below, each Canadian Lender shall provide the Canadian
Administrative Agent, for the account of the Canadian Borrower, the BA Discount
Proceeds less the Applicable Stamping Fee payable by the Canadian Borrower with
respect to the Bankers’ Acceptance.

 

(d)           In the event the Canadian Borrower
requests a continuation of BA Loans for a further Interest Period, or requests
conversion from Canadian Prime Loans into BA Loans in accordance with Section 2.6,
the Canadian Administrative Agent shall make arrangements satisfactory to it to
ensure the BA Discount Proceeds from the replacement BA Loans are applied to
repay the face amount of the maturing BA Loans or the principal amount of such
loans to be converted (the “Maturing Amount”) and the Canadian Borrower
should concurrently pay to the Canadian Administrative Agent any positive
difference between the Maturing Amount and such BA Discount Proceeds.

 

(e)           Each Canadian Lender may from time to
time hold, sell, rediscount or otherwise dispose of any or all Bankers’
Acceptances accepted and purchased by it.

 

(f)            In order to facilitate the issuance
of Bankers’ Acceptances pursuant to this Agreement, the Canadian Borrower
hereby authorizes each of the Canadian Lenders, and appoints each of the
Canadian Lenders as the Canadian Borrower’s attorney, to complete, sign and
endorse drafts or depository bills (as defined in the Depository Bills and Notes Act (Canada)
(each such executed draft or bill being herein referred to as a “Draft”)
on its behalf in handwritten form or by facsimile or mechanical signature or
otherwise in accordance with the applicable Notice of Borrowing or Notice of
Continuation and, once so completed, signed and endorsed to accept them as
Bankers’ Acceptances under this Agreement and then if applicable, purchase,
discount or negotiate such Bankers’ Acceptances in accordance with the
provisions of this Agreement.  Drafts so
completed, signed, endorsed and negotiated on behalf of the Canadian 

 

60

 

Borrower by a Canadian
Lender shall bind the Canadian Borrower as fully and effectively as if so
performed by an Authorized Officer of the Canadian Borrower.  Each draft of a Bankers’ Acceptance
completed, signed or endorsed by a Canadian Lender shall mature on the last day
of the term thereof.  All Bankers’
Acceptances to be accepted by a particular Canadian Lender shall, at the option
of such Canadian Lender, be issued in the form of depository bills made payable
originally to and deposited with The Depository for Securities Limited pursuant
to the Depository Bills and Notes Act
(Canada).

 

(g)           Any Drafts to be used for Bankers’
Acceptances which are held by a Canadian Lender shall be held in safekeeping
with the same degree of care as if they were such Canadian Lender’s own
property being kept at the place at which they are to be held.  The Canadian Borrower may, by written notice
to the Canadian Administrative Agent, designate persons other than Authorized
Officers authorized to give the Canadian Administrative Agent instructions
regarding the manner in which Drafts are to be completed and the times at which
they are to be issued; provided however that receipt by the Canadian
Administrative Agent of a Notice of Borrowing or Notice of Continuation
requesting an advance or continuation into, Bankers’ Acceptances shall be
deemed to be sufficient authority from Authorized Officers or such designated
persons for each of the Canadian Lenders to complete, and issue drafts in
accordance with such notice.  None of the
Canadian Administrative Agent or the Canadian Lenders nor any of their
respective directors, officers, employees or representatives shall be liable
for any action taken or omitted to be taken by any of them under this Section 2.14(g) except
for their own respective gross negligence or willful misconduct as determined
by a final judgment of a court of competent jurisdiction.

 

(h)           The Canadian Borrower waives
presentment for payment and any other defense to the payment of any amounts due
to a Canadian Lender in respect of a Bankers’ Acceptance accepted and purchased
by it pursuant to this Agreement which might exist solely by reason of the
Bankers’ Acceptance being held, at the maturity thereof, by the Canadian Lender
in its own right and the Canadian Borrower agrees not to claim any days of grace
if the Canadian Lender as holder sues the Canadian Borrower on the Bankers’
Acceptance for payment of the amount payable by the Canadian Borrower
thereunder.  Each Bankers’ Acceptance
shall mature and the face amount thereof shall be due and payable on the last
day of the Interest Period applicable thereto.

 

(i)            Whenever the Canadian Borrower
requests a Loan under this Agreement by way of Bankers’ Acceptances, each
Non-Acceptance Lender shall, in lieu of accepting a Bankers’ Acceptance, make a
BA Equivalent Loan by way of Discount Note in an amount equal to the
Non-Acceptance Lender’s pro rata
portion of the BA Loan.  All terms of
this Agreement applicable to Bankers’ Acceptances shall apply equally to
Discount Notes evidencing BA Equivalent Loans with such changes as may in the
context be necessary.  For greater
certainty:

 

(i)                                           the term of a
Discount Note shall be the same as the Interest Period for Bankers’ Acceptances
accepted on the same date of the Borrowing in respect of the same BA Loan;

 

61

 

(ii)                                        an acceptance fee
will be payable in respect of a Discount Note and shall be calculated at the
same rate and in the same manner as the Applicable Stamping Fee in respect of a
Bankers’ Acceptance; and

 

(iii)                                     the proceeds from
a BA Equivalent Loan shall be equal to the BA Discount Proceeds of the Discount
Note.

 

2.15.       Incremental
Facilities

 

Borrower may by written
notice to Syndication Agent elect to request (A) prior to the Revolving
Credit Commitment Maturity Date, an increase to the existing US Revolving
Credit Commitments (any such increase, the “New Revolving Loan Commitments”)
and/or (B) the establishment of one or more new term loan commitments (the
“New Term Loan Commitments”), by an amount not in excess of $100,000,000
in the aggregate and not less than $25,000,000 individually (or such lesser
amount which shall be approved by Administrative Agent and Syndication Agent or
such lesser amount that shall constitute the difference between $100,000,000
and all such New Revolving Loan Commitments and New Term Loan Commitments
obtained prior to such date), and integral multiples of $5,000,000 in excess of
that amount.  Each such notice shall
specify (A) the date (each, an “Increased Amount Date”) on which
Borrower proposes that the New Revolving Loan Commitments or New Term Loan
Commitments, as applicable, shall be effective, which shall be a date not less
than 10 Business Days after the date on which such notice is delivered to
Syndication Agent and (B) the identity of each Lender or other Person that
is an eligible assignee pursuant to Section 14.6(b)  (each, a “New
Revolving Loan Lender” or “New Term Loan Lender”, as applicable) to
whom Borrower proposes any portion of such New Revolving Loan Commitments or
New Term Loan Commitments, as applicable, be allocated and the amounts of such
allocations; provided that Borrower shall first approach the Lenders to
provide all of the New Revolving Loan Commitments or New Term Loan Commitments
prior to approaching any other Person that is an eligible assignee pursuant to Section 14.6(b);
provided further that any Lender approached to provide all
or a portion of the New Revolving Loan Commitments or New Term Loan Commitments
may elect or decline, in its sole discretion, to provide a New Revolving Loan
Commitment or a New Term Loan Commitment. 
Such New Revolving Loan Commitments or New Term Loan Commitments shall
become effective, as of such Increased Amount Date; provided that (1) no
Default or Event of Default shall exist on such Increased Amount Date before or
after giving effect to such New Revolving Loan Commitments or New Term Loan
Commitments, as applicable; (2) both before and after giving effect to the
making of any Series of New Term Loans, each of the conditions set forth
in Section 7 shall be satisfied; (3) Borrower and its Subsidiaries
shall be in pro forma compliance with each of the covenants set forth in
Sections 10.9 and 10.10 as of the last day of the most recently ended fiscal
quarter after giving effect to such New Revolving Loan Commitments or New Term
Loan Commitments, as applicable; (4) the New Revolving Loan Commitments or
New Term Loan Commitments, as applicable, shall be effected pursuant to one or
more Joinder Agreements executed and delivered by Borrower, Syndication Agent
and Administrative Agent, and each of which shall be recorded in the Register
and shall be subject to the requirements set forth in Section 5.4(b); (5) Borrower
shall make any payments required pursuant to Section 2.11 in connection
with the New Revolving Loan Commitments or New Term Loan Commitments, as
applicable; and (6) Borrower shall deliver or cause to be delivered any
legal opinions or other documents reasonably 

 

62

 

requested by Administrative
Agent in connection with any such transaction. Any New Term Loans made on an
Increased Amount Date shall be designated, a separate series (a “Series”)
of New Term Loans for all purposes of this Agreement.

 

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

 

On any Increased Amount Date
on which any New Term Loan Commitments of any Series are effective,
subject to the satisfaction of the foregoing terms and conditions, (i) each
New Term Loan Lender of any Series shall make a Loan to Company (a “New
Term Loan”) in an amount equal to its New Term Loan Commitment of such
Series, and (ii) each New Term Loan Lender of any Series shall become
a Lender hereunder with respect to the New Term Loan Commitment of such Series and
the New Term Loans of such Series made pursuant thereto.

 

Administrative Agent shall
notify Lenders promptly upon receipt of Borrower’s notice of each Increased
Amount Date and in respect thereof (y) the New Revolving Loan Commitments
and the New Revolving Loan Lenders or the Series of New Term Loan
Commitments and the New Term Loan Lenders of such Series, as applicable, and (z) in
the case of each notice to any Lender with US Revolving Credit Loans, the
respective interests in such Lender’s Revolving Credit Loans, in each case subject
to the assignments contemplated by this Section.

 

The terms and provisions of
the New Term Loans and New Term Loan Commitments of any Series shall be,
except as otherwise set forth herein or in the Joinder Agreement, identical to
the Term Loans to the extent they are secured by the Collateral on a pari passu basis with the Term Loans.  The terms and provisions of the New Revolving
Loans shall be identical to the US Revolving Credit Loans.  In any event (i) the weighted average
life to maturity of all New Term Loans of any Series shall be no shorter
than the weighted average life to maturity of the Revolving Credit Loans and
the Terms Loans, (ii) the applicable New Term Loan Maturity Date of each Series shall
be no shorter than the final maturity of the Revolving Credit Loans and the
Term Loans, (iii) the rate of interest applicable to the New Term Loans of
each Series shall be determined by Borrower and the applicable new Lenders
and shall be set forth in each applicable Joinder Agreement; provided however
that the interest rate margin applicable to the New Term Loans shall not be
greater than the highest interest rate that may, 

 

63

 

under any circumstances
(including, without limitation, any issuance at a discount or as a result of
the payment of any fees), be payable with respect to the Term Loans plus
0.25% per annum unless the interest rate margin with respect to the Term Loans
is increased so as to be equal to, or be 0.25% per annum lower than, the interest
rate margin applicable to the New Term Loans, provided that such
limitation shall not apply to the extent such New Term Loans are junior in
collateral rights to the Term Loans, in which case customary terms shall apply
consistent with the other provisions of this Agreement and the then prevailing
market conditions.  Each Joinder
Agreement may, without the consent of any other Lenders, effect such amendments
to this Agreement and the other Credit Documents as may be necessary or
appropriate, in the opinion of the Syndication Agent and Administrative Agent,
to effect the provision of this Section 2.15.

 

SECTION 3.                            Letters of Credit

 

3.1.         Letters of Credit.  (a)    
Subject to and upon the terms and conditions herein set forth, at any
time and from time to time after the Closing Date and prior to the L/C Maturity
Date, (i) the Borrower, may request that the US Letter of Credit Issuer
issue for the account of the Borrower a standby letter of credit or letters of
credit in Dollars (the “US Letters of Credit”) and (ii) the
Canadian Borrower may request that the Canadian Letter of Credit Issuer issue
for the account of the Canadian Borrower a standby letter of credit or letters
of credit in Canadian Dollars (the “Canadian Letters of Credit” and with
the US Letters of Credit, the “Letters of Credit” and each a “Letter
of Credit”) in such form as may be approved by the US Letter of Credit
Issuer or the Canadian Letter of Credit Issuer, as the case may be, in its
reasonable discretion.

 

(b)           Notwithstanding the foregoing, (i) no
US Letter of Credit shall be issued the Stated Amount of which, when added to
the US Letter of Credit Outstanding at such time, would exceed the US Letter of
Credit Commitment then in effect; (ii) no US Letter of Credit shall be
issued the Stated Amount of which would cause the aggregate amount of the
Lender’s US Revolving Credit Exposures at such time to exceed the US Revolving
Credit Commitment then in effect; (iii) no Canadian Letter of Credit shall
be issued the Stated Amount of which when added to Canadian Letter of Credit
Outstanding would exceed the Canadian Letter of Credit Commitment then in
effect, (iv) no Canadian Letter of Credit shall be issued the Stated
Amount of which would cause the aggregate amount of the Canadian Lender’s Revolving
Credit Exposure at such time to exceed the Canadian Revolving Credit
Commitment, (v) each Letter of Credit shall have an expiration date
occurring no later than one year after the date of issuance thereof, unless
otherwise agreed upon by the Administrative Agent or the Canadian
Administrative Agent, as applicable, and the Letter of Credit Issuer, provided
that in no event shall such expiration date occur later than the
L/C Maturity Date; (vi) each US Letter of Credit shall be denominated
in Dollars; (vii) each Canadian Letter of Credit shall be denominated in
US Dollars or Canadian Dollars, (viii) no Letter of Credit shall be issued
if it would be illegal under any applicable law for the beneficiary of the
Letter of Credit to have a Letter of Credit issued in its favor; (ix) no
Letter of Credit shall be issued by a Letter of Credit Issuer after it has
received a written notice from the Borrower or the Canadian Borrower or any
Lender stating that a Default or Event of Default has occurred and is continuing
until such time as the Letter of Credit Issuer shall have received a written
notice of (x) rescission of such notice from the party or parties
originally delivering such notice or (y) the waiver of such Default or
Event of Default in accordance with the provisions of Section 14.1; and (x) any
Letter of Credit issued for the

 

64

 

account of the Canadian
Borrower shall be made by a Canadian Lender described in clause (a) of
that definition or a permitted assigned of such Canadian Lender that is a
Canadian Resident.  Notwithstanding
anything herein to the contrary, the issuance of US Letters of Credit for the
account of the Borrower shall be deemed a utilization of the US Revolving
Credit Commitments allocated to the Borrower, and the issuance of the Canadian
Letters of Credit for the account of the Canadian Borrower shall be deemed a
utilization of the Canadian Revolving Credit Commitments.

 

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

 

3.2.          Letter of Credit Requests.  (a)    
Whenever the Borrower desires that a US Letter of Credit be issued for
its account, it shall give the Administrative Agent and the US Letter of Credit
Issuer at least five (or such lesser number as may be agreed upon by the
Administrative Agent and the Letter of Credit Issuer) Business Days’ written
notice thereof.  Each notice shall be
executed by the Borrower and shall be in the form of Exhibit H-1 (each a “US
Letter of Credit Request”). The Administrative Agent shall promptly
transmit copies of each US Letter of Credit Request to each Lender.

 

(b)           Whenever the Canadian Borrower
desires that a Canadian Letter of Credit be issued for its account, it shall
give the Canadian Administrative Agent and the Canadian Letter of Credit Issuer
at least five (or such lesser number as may be agreed upon by the Canadian
Administrative Agent and the Canadian Letter of Credit Issuer) Business Days’
written notice thereof in the form of an executed Canadian Letter of Credit
Request in the form of Exhibit H-2 (which shall, among other things,
specify whether such Letter of Credit is to be denominated in Dollars or Canadian
Dollars) (each a “Canadian Letter of Credit Request” and, together with
the US Letter of Credit Request, the “Letter of Credit Request”).

 

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

 

3.3.          Letter of Credit Participations.  (a)    
Immediately upon the issuance by the US Letter of Credit Issuer of any
US Letter of Credit, the US Letter of Credit Issuer shall be deemed to have
sold and transferred to each other Lender that has a US Revolving Credit
Commitment (each such other Lender, in its capacity under this Section 3.3,
an “US L/C Participant”), and each such US L/C Participant shall be
deemed irrevocably and unconditionally to have purchased and received from the
US Letter of Credit Issuer, without recourse or warranty, an undivided interest
and participation (each an “US L/C Participation”), to the extent of
such US L/C Participant’s US Revolving Credit Commitment Percentage in such
Letter of Credit, each substitute letter of credit, each drawing made
thereunder and the obligations of the 

 

65

 

Borrower under this
Agreement with respect thereto, and any security therefor or guaranty
pertaining thereto (although Letter of Credit Fees will be paid directly to the
Administrative Agent for the ratable account of the US L/C Participants as
provided in Section 4.1(b) and the US L/C Participants shall have no
right to receive any portion of any Fronting Fees).

 

(b)           Immediately upon the issuance by the
Canadian Letter of Credit Issuer of any Canadian Letter of Credit on the account
of the Canadian Borrower, the Canadian Letter of Credit Issuer shall be deemed
to have sold and transferred to each other Canadian Lender that has a Canadian
Revolving Credit Commitment, to the extent 
the Canadian Letter of Credit Obligations are owed by the Canadian
Borrower, (each such other Lender, in its capacity under this Section 3.3,
an “Cdn L/C Participant”  and
collectively the “Cdn L/C Participants”), and each such Cdn L/C
Participant shall be deemed irrevocably and unconditionally to have purchased
and received from the Canadian Letter of Credit Issuer, without recourse or
warranty, an undivided interest and participation (each a “Cdn L/C
Participation”), to the extent of such Cdn L/C Participant’s Canadian
Revolving Credit Commitment Percentage in such Canadian Letter of Credit, each
substitute letter of credit, each drawing made thereunder and the obligations
of the Borrower and the Canadian Borrower, as the case may be, under this
Agreement with respect thereto, and any security therefor or guaranty
pertaining thereto.

 

(c)           Letter of Credit Fees will be paid
directly to the Canadian Administrative Agent for the ratable account of the
Cdn L/C Participants for Letters of Credit issued on behalf of the Canadian
Borrower as provided in Section 4.1(d). 
The Cdn L/C Participants shall have no right to receive any portion of
any Fronting Fees.

 

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

 

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

 

66

 

Credit Issuer.  If the Letter of Credit Issuer so notifies,
prior to 11:00 a.m. (New York time) on any Business Day, any L/C
Participant required to fund a payment under a Letter of Credit, such L/C
Participant shall make available to the Administrative Agent or the Canadian
Administrative Agent, as applicable, for the account of the Letter of Credit
Issuer such L/C Participant’s Revolving Credit Commitment Percentage of the
amount of such payment on such Business Day in immediately available
funds.  If and to the extent such L/C
Participant shall not have so made its Revolving Credit Commitment Percentage
of the amount of such payment available to the Administrative Agent or the
Canadian Administrative Agent, as applicable, for the account of the Letter of
Credit Issuer, such L/C Participant agrees to pay to the Administrative Agent
or the Canadian Administrative Agent, as applicable, for the account of the
Letter of Credit Issuer, forthwith on demand, such amount, together with
interest thereon for each day from such date until the date such amount is paid
to the Administrative Agent or the Canadian Administrative Agent, as
applicable, for the account of the Letter of Credit Issuer at the Federal Funds
Effective Rate.  The failure of any L/C
Participant to make available to the Administrative Agent or the Canadian
Administrative Agent, as applicable, for the account of the Letter of Credit
Issuer its Revolving Credit Commitment Percentage of any payment under any
Letter of Credit shall not relieve any other L/C Participant of its obligation
hereunder to make available to the Administrative Agent or the Canadian
Administrative Agent, as applicable, for the account of the Letter of Credit
Issuer its Revolving Credit Commitment Percentage of any payment under such
Letter of Credit on the date required, as specified above, but no L/C
Participant shall be responsible for the failure of any other L/C Participant
to make available to the Administrative Agent or the Canadian Administrative
Agent, as applicable, such other L/C Participant’s Revolving Credit Commitment
Percentage of any such payment.

 

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

 

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

 

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

 

(ii)           the existence of
any claim, set-off, defense or other right that the Borrower may have at any
time against a beneficiary named in a Letter of Credit, any 

 

67

 

transferee
of any Letter of Credit (or any Person for whom any such transferee may be
acting), the Administrative Agent, the Canadian Administrative Agent the Letter
of Credit Issuer, any Lender or other Person, whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated herein or any
unrelated transactions (including any underlying transaction between the
Borrower and the beneficiary named in any such Letter of Credit);

 

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

 

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

 

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

 

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

 

3.4.          Agreement to Repay Letter of Credit
Drawings.  (a)     The Borrower and the Canadian Borrower
hereby agree to reimburse the relevant Letter of Credit Issuer, by making
payment in the currency in which the relevant Letter of Credit was denominated
to the Administrative Agent (in the case of reimbursement made by the Borrower)
or the Canadian Administrative Agent (in the case of reimbursement made by the
Canadian Borrower) in immediately available funds for any payment or
disbursement made by the Letter of Credit Issuer under any Letter of Credit
(each such amount so paid until reimbursed, an “Unpaid Drawing”)
immediately after, and in any event on the date of, such payment, with interest
on the amount so paid or disbursed by the Letter of Credit Issuer, to the
extent not reimbursed prior to 5:00 p.m. (New York time) on the date of
such payment or disbursement, from and including the date paid or disbursed to
but excluding the date the Letter of Credit Issuer is reimbursed therefor at a
rate per annum that shall at all times be the Applicable ABR Margin plus the
ABR (or the Cdn ABR or Canadian Prime Rate, as applicable, in the case of the
Canadian Letter of Credit Issuer) as in effect from time to time, provided
that, notwithstanding anything contained in this Agreement to the contrary, (i) unless
the Borrower (or the Canadian Borrower) shall have notified the Administrative
Agent (or the Canadian Administrative Agent) and the relevant Letter of Credit
Issuer prior to 10:00 a.m. (New York time) on the date of such drawing
that the Borrower or the Canadian Borrower, as the case may be, intends to
reimburse the relevant Letter of Credit Issuer for the amount of such drawing
with funds other than the proceeds of Loans, the Borrower or the Canadian
Borrower, as the case may, be shall be deemed to have given a Notice of
Borrowing requesting that (A) with respect to US Letters of Credit, that
the Lenders with US Revolving Credit Commitments make US Revolving Credit Loans
(which shall be ABR Loans) and (B) with respect to Canadian Letters of
Credit, the Lenders with Canadian Revolving Credit Commitment make Canadian
Revolving Credit Loans (in the currency in which the Canadian 

 

68

 

Letter of Credit is
denominated which shall initially be Cdn ABR Loans or Canadian Prime Rate
Loans, as applicable) on the date on which such drawing is honored in an amount
equal to the amount of such drawing and (ii) the Administrative Agent or
the Canadian Administrative Agent shall promptly notify each relevant L/C
Participant of such drawing and the amount of its Revolving Credit Loan to be
made in respect thereof, and each L/C Participant shall be irrevocably
obligated to make a Revolving Credit Loan to the Borrower or the Canadian
Borrower, as applicable, in the manner deemed to have been requested in the
amount of its Revolving Credit Commitment Percentage of the applicable Unpaid
Drawing by 12:00 noon (New York time) on such Business Day by making the amount
of such Revolving Credit Loan available to the Administrative Agent (or the
Canadian Administrative Agent, as applicable). 
Such Revolving Credit Loans shall be made without regard to the Minimum
Borrowing Amount.  The Administrative
Agent (or the Canadian Administrative Agent, as applicable) shall use the
proceeds of such Revolving Credit Loans solely for purpose of reimbursing the
Letter of Credit Issuer for the related Unpaid Drawing.

 

(b)           The obligations of the Borrower and
the Canadian Borrower under this Section 3.4 to reimburse the Letter of
Credit Issuer with respect to Unpaid Drawings (including, in each case,
interest thereon) shall be absolute and unconditional under any and all
circumstances and irrespective of any set-off, counterclaim or defense to
payment that the Borrower, the Canadian Borrower or any other Person may have
or have had against the Letter of Credit Issuer, the Administrative Agent, the
Canadian Administrative Agent or any Lender (including in its capacity as an
L/C Participant), including any defense based upon the failure of any drawing
under a Letter of Credit (each a “Drawing”) to conform to the terms of
the Letter of Credit or any non-application or misapplication by the
beneficiary of the proceeds of such Drawing, provided that neither the
Borrower nor the Canadian Borrower shall be obligated to reimburse the Letter
of Credit Issuer for any wrongful payment made by the Letter of Credit Issuer
under the Letter of Credit issued by it as a result of acts or omissions
constituting willful misconduct or gross negligence on the part of the Letter
of Credit Issuer.

 

3.5.          Increased Costs.  If after the date hereof, the adoption of any
applicable law, rule or regulation, or any change therein, or any change
in the interpretation or administration thereof by any Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or actual compliance by the Letter of Credit Issuer or
any L/C Participant with any request or directive made or adopted after the
date hereof (whether or not having the force of law), by any such authority, central
bank or comparable agency shall either (a) impose, modify or make
applicable any reserve, deposit, capital adequacy or similar requirement
against letters of credit issued by the Letter of Credit Issuer, or any L/C
Participant’s L/C Participation therein, or (b) impose on the Letter of
Credit Issuer or any L/C Participant any other conditions affecting its
obligations under this Agreement in respect of Letters of Credit or L/C
Participations therein or any Letter of Credit or such L/C Participant’s L/C
Participation therein, and the result of any of the foregoing is to increase
the cost to the Letter of Credit Issuer or such L/C Participant of issuing,
maintaining or participating in any Letter of Credit, or to reduce the amount
of any sum received or receivable by the Letter of Credit Issuer or such L/C
Participant hereunder (other than any such increase or reduction attributable
to taxes) in respect of Letters of Credit or L/C Participations therein, then,
promptly after receipt of written demand to the Borrower by the Letter of
Credit Issuer or such L/C Participant, as the case may be, (a copy of which
notice shall be sent by the Letter of Credit 

 

69

 

Issuer or such L/C
Participant to the Administrative Agent (with respect to Letter of Credit
issued on account of the Borrower) and to the Canadian Administrative Agent
with respect to Letters of Credit issued on account of the Canadian Borrower)),
the Borrower or the Canadian Borrower, as applicable, shall pay to the Letter
of Credit Issuer or such L/C Participant such additional amount or amounts as
will compensate the Letter of Credit Issuer or such L/C Participant for such
increased cost or reduction, it being understood and agreed, however, that the
Letter of Credit Issuer or a L/C Participant shall not be entitled to such
compensation as a result of such Person’s compliance with, or pursuant to any
request or directive to comply with, any such law, rule or regulation as
in effect on the date hereof.  A
certificate submitted to the Borrower or the Canadian Borrower, as applicable,
by the relevant Letter of Credit Issuer or a L/C Participant, as the case
may be, (a copy of which certificate shall be sent by the Letter of Credit
Issuer or such L/C Participant to the Administrative Agent (with respect
to Letters of Credit issued on account of the Borrower) and to the Canadian
Administrative Agent with respect to Letters of Credit issued on account of the
Canadian Borrower)) setting forth in reasonable detail the basis for the
determination of such additional amount or amounts necessary to compensate the
Letter of Credit Issuer or such L/C Participant as aforesaid shall be
conclusive and binding on the Borrower or the Canadian Borrower, as applicable,
absent clearly demonstrable error.

 

3.6.          Successor Letter of Credit Issuer.  A Letter of Credit Issuer may resign as
Letter of Credit Issuer upon 60 days’ prior written notice to the
Administrative Agent, the Canadian Administrative Agent, the Lenders and the
Borrower.  If the US Letter of Credit
Issuer shall resign as US Letter of Credit Issuer under this Agreement, then
the Borrower shall appoint from among the Lenders with US Revolving Credit
Commitments a successor issuer of US Letters of Credit, whereupon such
successor issuer shall succeed to the rights, powers and duties of the US
Letter of Credit Issuer, and the term “US Letter of Credit Issuer” shall mean
such successor issuer effective upon such appointment.  At the time such resignation shall become
effective, the Borrower shall pay to the resigning US Letter of Credit Issuer
all accrued and unpaid fees pursuant to Sections 4.1(c) and (e).  The acceptance of any appointment as the US
Letter of Credit Issuer hereunder by a successor Lender shall be evidenced by
an agreement entered into by such successor, in a form satisfactory to the
Borrower and the Administrative Agent and, from and after the effective date of
such agreement, such successor Lender shall have all the rights and obligations
of the previous Letter of Credit Issuer under this Agreement and the other
Credit Documents.  If the Canadian Letter
of Credit Issuer shall resign as Canadian Letter of Credit Issuer under this
Agreement, then the Canadian Borrower shall appoint from among the Lenders with
Canadian Revolving Credit Commitments a successor issuer of Canadian Letters of
Credit, whereupon such successor issuer shall succeed to the rights, powers and
duties of the Canadian Letter of Credit Issuer, and the term “Canadian Letter
of Credit Issuer” shall mean such successor issuer effective upon such
appointment.  At the time such
resignation shall become effective, the Canadian Borrower and the Borrower, as
applicable shall pay to the resigning Letter of Credit Issuer all accrued and
unpaid fees pursuant to Sections 4.1(d ) and (e).  After the resignation of the Letter of Credit
Issuer hereunder, the resigning Letter of Credit Issuer shall remain a party
hereto and shall continue to have all the rights and obligations of a Letter of
Credit Issuer under this Agreement and the other Loan Documents with respect to
Letters of Credit issued by it prior to such resignation, but shall not be
required to issue additional Letters of Credit. 
After any retiring Letter of Credit Issuer’s resignation as Letter of
Credit Issuer, the provisions of this Agreement relating to the Letter of
Credit Issuer shall inure to its benefit as to 

 

70

 

any actions taken or omitted
to be taken by it (a) while it was Letter of Credit Issuer under this
Agreement or (b) at any time with respect to Letters of Credit issued by
such Letter of Credit Issuer.

 

SECTION 4.                                Fees; Commitments

 

4.1.          Fees.  (a)

 

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

 

(ii)           The Canadian
Borrower agrees to pay to the Canadian Administrative Agent for the account of
each Canadian Lender with a Canadian Revolving Credit Commitment allocated to
the Canadian Borrower (in each case pro rata according to the respective
Canadian Revolving Credit Commitments of all such Lenders), a commitment fee
for each day from and including the Closing Date to but excluding the Final
Date. Such commitment fee shall be payable in arrears (i) on the last day
of each March, June, September and December (for the three-month
period (or portion thereof) ended on such day for which no payment has been
received) and (ii) on the Final Date (for the period ended on such date
for which no payment has been received pursuant to clause (i) above),
and shall be computed for each day during such period at a rate per annum equal
to the Commitment Fee Rate in effect on such day on the portion of the
Available Canadian Commitments allocated to the Canadian Borrower on such day.

 

(iii)          The Borrower agrees
to pay to the Administrative Agent for the account of each Canadian Lender with
a Canadian Revolving Credit Commitment allocated to the Borrower (in each case
pro rata according to the respective Canadian Revolving Credit Commitments of
all such Lenders), a commitment fee for each day from and including the Closing
Date to but excluding the Final Date. Such commitment fee shall be payable in
arrears (i) on the last day of each March, June, September and December (for
the three-month period (or portion thereof) ended on such day for which no
payment has been received) and (ii) on the Final Date (for the period
ended on such date for which no payment has been received pursuant to
clause (i) above), and shall be computed for each day during such
period at a rate per annum equal to the Commitment Fee Rate in effect on such
day on the portion of the Available Canadian Commitments allocated to the
Borrower on such day.

 

71

 

(iv)          Notwithstanding the
foregoing, neither the Borrower nor the Canadian Borrower shall be obligated to
pay any amounts to any Defaulting Lender pursuant to this Section 4.1.

 

(b)           The Borrower agrees to pay to the
Administrative Agent in Dollars for the account of the Lenders pro rata
on the basis of their respective Letter of Credit Exposure, a fee in respect of
each Letter of Credit (the “Letter of Credit Fee”), for the period from
and including the date of issuance of such Letter of Credit to but excluding
the termination date of such Letter of Credit computed at the per annum rate
for each day equal to the Applicable Eurodollar Margin for Revolving Credit
Loans minus 0.125% per annum on the average daily Stated Amount of such Letter
of Credit.  Such Letter of Credit Fees shall
be due and payable quarterly in arrears on the last day of each March, June, September and
December and on the date upon which the US Total Revolving Credit
Commitment terminates and the Letter of Credit Outstanding shall have been
reduced to zero.

 

(c)           The Borrower agrees to pay to the
Administrative Agent in Dollars for the account of the US Letter of Credit
Issuer a fee in respect of each US Letter of Credit issued by it (the “Fronting
Fee”), for the period from and including the date of issuance of such US
Letter of Credit to but excluding the termination date of such US Letter of
Credit, computed at the rate for each day equal to 0.125% per annum on the
average daily Stated Amount of such US Letter of Credit.  Such Fronting Fees shall be due and payable
quarterly in arrears on the last day of each March, June, September and December and
on the date upon which the US Total Revolving Credit Commitment terminates and
the US Letter of Credit Outstandings shall have been reduced to zero.

 

(d)           The Canadian Borrower agrees to pay
to the Canadian Administrative Agent in for the account of the Lenders with a
Canadian Revolving Credit Commitment pro rata on the basis
of their respective Canadian Letter of Credit Exposure, a fee in respect of
each Canadian Letter of Credit (the “Canadian Letter of Credit Fee”),
for the period from and including the date of issuance of such Canadian Letter
of Credit to but excluding the termination date of such Canadian Letter of
Credit computed at the per annum rate for each day equal to the Applicable
Eurodollar Margin for Revolving Credit Loans minus 0.125% per annum on the
average daily Stated Amount of such Letter of Credit.  Such Letter of Credit Fees shall be due and
payable quarterly in arrears on the last day of each March, June, September and
December and on the date upon which the Canadian Total Revolving Credit
Commitment terminates and the Canadian Letter of Credit Outstandings shall have
been reduced to zero.

 

(e)           The Borrower agrees to pay directly
to the Letter of Credit Issuer in Dollars upon each issuance of, drawing under,
and/or amendment of, a Letter of Credit issued by it such amount as the Letter
of Credit Issuer and the Borrower shall have agreed upon for issuances of,
drawings under or amendments of, letters of credit issued by it.

 

4.2.          Voluntary Reduction of Revolving
Credit Commitments.  Upon at least
one Business Day’s prior written notice (or telephonic notice promptly
confirmed in writing) to the Administrative Agent at the Administrative Agent’s
Office (which notice the Administrative Agent shall promptly transmit to each
of the Lenders), the Borrower (on behalf of itself and the Canadian Borrower)
shall have the right, without premium or penalty, on any day, permanently 

 

72

 

to terminate or reduce the
Revolving Credit Commitments in whole or in part, provided that (a) any
such reduction shall apply proportionately and permanently to reduce the US
Revolving Credit Commitment or the Canadian Revolving Credit Commitment, as the
case may be, of each of the Lenders, (b) any partial reduction pursuant to
this Section 4.2 shall be in the amount of at least the Dollar Equivalent
of $1,000,000 and (c) after giving effect to such termination or reduction
and to any prepayments of the Loans made on the date thereof in accordance with
this Agreement, (i) the aggregate amount of the Lenders’ US Revolving
Credit Exposures shall not exceed the US Total Revolving Credit Commitment (ii) the
aggregate amount of the Canadian Lenders’ Canadian Revolving Credit Exposure to
the Canadian Borrower shall not exceed the portion of the Canadian Total
Revolving Credit Commitment allocated to the Canadian Borrower and (iii) the
aggregate amount of the Canadian Lenders’ Canadian Revolving Credit Exposures
to the Borrower shall not exceed the portion of the Canadian Total Revolving
Credit Commitment allocated to the Borrower.

 

4.3.          Mandatory Termination of
Commitments.  (a)     The Total Term Loan Commitments shall
terminate at 5:00 p.m. (New York time) on the Effective Date.

 

(b)           (i) The US Total Revolving
Credit Commitment shall terminate at 5:00 p.m. (New York time) on the
Revolving Credit Maturity Date and (ii) the Canadian Total Revolving
Credit Commitment shall terminate at 5:00 p.m. (New York time) on the
Revolving Credit Maturity Date.

 

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

 

SECTION 5.                                Payments

 

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

 

73

 

Loans or Eurodollar
Revolving Credit Loans made pursuant to a single Borrowing shall reduce the
outstanding Eurodollar Term Loans or Eurodollar Revolving Credit Loans made
pursuant to such Borrowing to an amount less than the Minimum Borrowing Amount
for Eurodollar Term Loans or Eurodollar Revolving Credit Loans; (c) any
prepayment of Eurodollar Term Loans or Eurodollar Revolving Credit Loans
pursuant to this Section 5.1 on any day other than the last day of an
Interest Period applicable thereto shall be subject to compliance by the
Borrower or the Canadian Borrower, as the case may be, with the applicable
provisions of Section 2.11 and (d) BA Loans may not be repaid on any
day other than the last day of an Interest Period applicable thereto except as
may be otherwise provided in this Agreement. 
Each prepayment in respect of any Term Loans pursuant to this Section 5.1
shall be (a) applied to Tranche A Term Loans and Tranche E Term Loans in
such manner as the Borrower may determine and (b) applied to reduce Tranche
A Repayment Amounts and Tranche E Repayment Amounts in such order as the
Borrower may determine; provided, that (i) each Tranche E Term Loan
Lender will have the right to refuse any such voluntary prepayment by giving
notice of such refusal to the Administrative Agent (and the Borrower shall not
prepay any such Tranche E Term Loans), (ii) any prepayment so refused
shall be applied to the Tranche A Term Loans in such manner as the Borrower may
determine and (iii) after the prepayment or repayment in full of the
Tranche A Term Loans, each Tranche E Term Loan Lender may not refuse any such
voluntary prepayments pursuant to this Section 5.1.  At the Borrower’s election (on its own behalf
and on behalf of the Canadian Borrower) in connection with any prepayment
pursuant to this Section 5.1, such prepayment shall not be applied to any
Tranche A Term Loan, Tranche E Term Loan or Revolving Credit Loan of a
Defaulting Lender.

 

5.2.          Mandatory Prepayments.  (a)    
Term Loan Prepayments.  (i)  On each occasion that
a Prepayment Event occurs, the Borrower shall, within one Business Day after
the occurrence of a Debt Incurrence Prepayment Event and within five Business
Days after the occurrence of any other Prepayment Event, prepay, in accordance
with paragraph (c) below, the principal amount of Term Loans in an
amount equal to 100% of the Net Cash Proceeds from such Prepayment Event,
provided that, at the option of the Borrower, the Net Cash Proceeds from any
transaction permitted by Section 10.4(e) (including pursuant to any
securitization) may be applied to repay Revolving Credit Loans, which repayment
shall automatically result in the reduction of the Revolving Credit Commitment
of each Lender by an amount equal to the amount of the Revolving Credit Loans
prepaid to such Lender.

 

(ii)           Not later than the
date that is ninety days after the last day of any fiscal year (commencing with
the fiscal year ending December 31, 2004), 
the Borrower shall  prepay, in
accordance with paragraph (c) below, the principal of Term Loans in
an amount equal to (x) 50% of Excess Cash Flow for such fiscal year (provided
such percentage shall be reduced to (i) 25% if the Consolidated Total Debt
to Consolidated EBITDA Ratio as of the end of such fiscal year is less than
4.00 to 1.00 and (ii) 0% if the Consolidated Total Debt to Consolidated
EBITDA Ratio as of the end of such fiscal year is less than 3.25 to 1.00), minus
(y) the amount of any such Excess Cash Flow that the Borrower has, after
the end of such fiscal year and prior to such date, reinvested in the business
of the Borrower or any of its Subsidiaries (subject to Section 9.14) and minus
(z) the principal amount of Term Loans voluntarily prepaid pursuant to Section 5.1
during such fiscal year.

 

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(b)                                 Repayment of Revolving Credit
Loans.

 

(i)                                     Aggregate US Revolving Credit
Outstandings.  If on any date the
aggregate amount of the Lenders’ US Revolving Credit Exposures (all the
foregoing, collectively, the “Aggregate US Revolving Credit Outstandings”)
exceeds 100% of the US Total Revolving Credit Commitment as then in effect, the
Borrower shall forthwith repay on such date the principal amount of Swingline
Loans and, after all Swingline Loans have been paid in full, Revolving Credit
Loans in an amount equal to such excess. 
If, after giving effect to the prepayment of all outstanding Swingline
Loans and Revolving Credit Loans, the Aggregate US Revolving Credit
Outstandings exceed the US Total Revolving Credit Commitment then in effect,
the Borrower shall pay to the Administrative Agent an amount in cash equal to
such excess and the Administrative Agent shall hold such payment for the
benefit of the Lenders as security for the obligations of the Borrower
hereunder (including obligations in respect of Letter of Credit Outstandings)
pursuant to a cash collateral agreement to be entered into in form and
substance satisfactory to the Administrative Agent (which shall permit certain
investments in Permitted Investments satisfactory to the Administrative Agent,
until the proceeds are applied to the secured obligations).

 

(ii)                                  Aggregate Canadian Revolving
Credit Outstandings.  If on any date the
aggregate amount of the Canadian Lenders’ Canadian Revolving Credit Exposures
(all the foregoing, collectively, the “Aggregate Canadian Revolving Credit
Outstandings”) exceeds 103% of the Canadian Total Revolving Credit
Commitment as then in effect, each of the Borrower and the Canadian Borrower,
as the case may be, shall forthwith repay on such date Canadian Revolving Credit
Loans owing by each of them, respectively, in an aggregate amount equal to such
excess.  If, after giving effect to the
prepayment of all outstanding Canadian Revolving Credit Loans (other than BA
Loans), the Aggregate Canadian Revolving Credit Outstandings exceed the
Canadian Total Revolving Credit Commitment then in effect, the Borrower and/or
the Canadian Borrower as the case may be, shall pay to the Canadian
Administrative Agent an amount in cash equal to such excess and the Canadian
Administrative Agent shall hold such payment for the benefit of the applicable
Lenders as security for the obligations of the Borrower and the Canadian
Borrower hereunder (including obligations in respect of Canadian Letter of
Credit Outstandings and BA Loans) pursuant to a cash collateral agreement to be
entered into in form and substance satisfactory to the Canadian Administrative
Agent (which shall permit certain investments in Permitted Investments
satisfactory to the Canadian Administrative Agent, until the proceeds are
applied to the secured obligations).

 

(c)                                  Application to Repayment Amounts. 
Each prepayment of Term Loans required by Section 5.2(a) shall
be applied to reduce Tranche A Repayment Amounts and Tranche E Repayment
Amounts in such order as the Borrower may determine up to an amount equal to
the aggregate amount of the applicable Tranche A Repayment Amounts and Tranche
E Repayment Amounts required to be made by the Borrower pursuant to Section 2.5(b) during
the two year period immediately following the date of the prepayment (such
amount being, the “Amortization Amount”); provided that to the
extent that the amount of the prepayment exceeds the Amortization Amount, such
excess shall be applied ratably to reduce the then remaining

 

75

 

Tranche A Repayment Amounts and Tranche E Repayment
Amounts.  With respect to each such
prepayment, (i) the Borrower will, not later than the date specified in Section 5.2(a) for
offering to make such prepayment, give the Administrative Agent telephonic
notice (promptly confirmed in writing) requesting that the Administrative Agent
provide notice of such prepayment to each Term Loan Lender, (ii) each
Tranche E Term Loan Lender will have the right to refuse any such prepayment by
giving written notice of such refusal to the Borrower within fifteen Business
Days after such Lender’s receipt of notice from the Administrative Agent of
such prepayment (and the Borrower shall not prepay any such Tranche E Term
Loans until the date that is specified in the immediately following clause), (iii) the
Borrower will make all such prepayments not so refused upon the earlier of (x) such
fifteenth Business Day and (y) such time as the Borrower has received
notice from each Lender that it consents to or refuses such prepayment and (iv) any
prepayment so refused may be retained by the Borrower, provided that any
prepayment so refused that relates to Net Cash Proceeds from a Debt Incurrence
Prepayment Event in respect of the issuance of Permitted Additional
Subordinated Notes shall be allocated to the then outstanding Term Loans on a
pro rata basis and shall be applied as set forth above in this
paragraph (c).

 

(d)                                 Application to Term Loans.  With respect to each
prepayment of Term Loans required by Section 5.2(a), the Borrower may
designate the Types of Loans that are to be prepaid and the specific Borrowing(s) pursuant
to which made, provided that (i) Eurodollar Term Loans may be
designated for prepayment pursuant to this Section 5.2 only on the last
day of an Interest Period applicable thereto unless all Eurodollar Term Loans
with Interest Periods ending on such date of required prepayment and all ABR
Loans have been paid in full; and (ii) Eurodollar Term Loans made pursuant
to a single Borrowing shall reduce the outstanding Term Loans made pursuant to
such Borrowing to an amount less than the Minimum Borrowing Amount for
Eurodollar Loans such Borrowing shall immediately be converted into ABR
Loans.  In the absence of a designation
by the Borrower as described in the preceding sentence, the Administrative
Agent shall, subject to the above, make such designation in its reasonable
discretion with a view, but no obligation, to minimize breakage costs owing
under Section 2.11.

 

(e)                                  Application to Revolving Credit
Loans.  With respect to each prepayment of Revolving
Credit Loans elected by the Borrower pursuant to Section 5.2(a) or
required by Section 5.2(b), the Borrower (on its own behalf and on behalf
of the Canadian Borrower) may designate (i) the Types of Loans that are to
be prepaid and the specific Borrowing(s) pursuant to which made and (ii) the
US Revolving Credit Loans or Canadian Revolving Credit Loans to be prepaid, provided
that (w) Eurodollar Revolving Credit Loans may be designated for prepayment
pursuant to this Section 5.2 only on the last day of an Interest Period
applicable thereto unless all Eurodollar Loans with Interest Periods ending on
such date of required prepayment and all ABR Loans have been paid in full; (x) if
any prepayment by the Borrower or the Canadian Borrower of Eurodollar Revolving
Credit Loans made pursuant to a single Borrowing shall reduce the outstanding
Dollar Equivalent of the Revolving Credit Loans made pursuant to such Borrowing
to an amount less than the Minimum Borrowing Amount for Eurodollar Revolving
Credit Loans, as the case may be, such Borrowing shall immediately be converted
into Cdn ABR Loans or ABR Loans, as applicable; (y) each prepayment of any
Loans made pursuant to a Borrowing shall be applied pro rata
among such Loans; and (z) notwithstanding the provisions of the preceding
clause (y), no prepayment made pursuant to Section 5.2(a) or Section 5.2(b) of
Revolving Credit Loans shall be applied to the Revolving Credit Loans of any
Defaulting

 

76

 

Lender.  In
the absence of a designation by the Borrower as described in the preceding
sentence, the Administrative Agent shall, subject to the above, make such
designation in its reasonable discretion with a view, but no obligation, to
minimize breakage costs owing under Section 2.11.

 

(f)                                    BA and Eurodollar Interest
Periods.  In lieu of making any payment pursuant to
this Section 5.2 in respect of any BA Loan or Eurodollar Loan other than
on the last day of the Interest Period therefor so long as no Default or Event
of Default shall have occurred and be continuing, the Borrower or the Canadian
Borrower, as the case may be, at its option may deposit with the Administrative
Agent an amount equal to the amount of the BA Loan or Eurodollar Loan to be
prepaid and such BA Loan or Eurodollar Loan, as the case may be, shall be
repaid on the last day of the Interest Period therefor in the required
amount.  Such deposit shall be held by
the Administrative Agent in a corporate time deposit account established on
terms reasonably satisfactory to the Administrative Agent, earning interest at
the then-customary rate for accounts of such type.  Such deposit shall constitute cash collateral
for the Obligations, provided that the Borrower or the Canadian
Borrower, as the case may be, may at any time direct that such deposit be
applied to make the applicable payment required pursuant to this Section 5.2.

 

(g)                                 Minimum Amount. 
No prepayment shall be required pursuant to Section 5.2(a)(i) unless
and until the amount at any time of Net Cash Proceeds from Prepayment Events
required to be applied at or prior to such time pursuant to such Section and
not yet applied at or prior to such time to prepay Term Loans pursuant to such Section exceeds
the Dollar Equivalent of $15,000,000 in the aggregate for all such Prepayment
Events.

 

(h)                                 Foreign Asset Sales. 
Notwithstanding any other provisions of this Section 5.2, (i) to
the extent that any of or all the Net Cash Proceeds of any asset sale by a
Restricted Foreign Subsidiary giving rise to an Asset Sale Prepayment Event (a “Foreign
Asset Sale”) or Excess Cash Flow are prohibited or delayed by applicable
local law from being repatriated to the United States, the portion of such Net Cash Proceeds or Excess Cash Flow so
affected will not be required to be applied to repay Term Loans at the times
provided in this Section 5.2 but may be retained by the applicable
Restricted Foreign Subsidiary so long, but only so long, as the applicable
local law will not permit repatriation to the United States (the Borrower
and the Canadian Borrower hereby agreeing to cause the applicable Restricted
Foreign Subsidiary to promptly take all actions required by the applicable
local law to permit such repatriation), and once such repatriation of any of
such affected Net Cash Proceeds or Excess Cash Flow is permitted under the
applicable local law, such repatriation will be immediately effected and such
repatriated Net Cash Proceeds or Excess Cash Flow will be promptly (and in any event
not later than two Business Days after such repatriation) applied (net of
additional taxes payable or reserved against as a result thereof) to the
repayment of the Term Loans pursuant to this Section 5.2 and (ii) to
the extent that the Borrower (on its own behalf and on behalf of the Canadian
Borrower) has determined in good faith that repatriation of any of or all the
Net Cash Proceeds of any Foreign Asset Sale or Excess Cash Flow would have a
material adverse tax cost consequence with respect to such Net Cash Proceeds or
Excess Cash Flow, the Net Cash Proceeds or Excess Cash Flow so affected may be
retained by the applicable Restricted Foreign Subsidiary, provided that,
in the case of this clause (ii), on or before the date on which any Net
Cash Proceeds so retained would otherwise have been required to be applied to
reinvestments or prepayments pursuant to Section 5.2(a) (or such
Excess Cash Flow would have

 

77

 

been so required if it were Net Cash Proceeds), (x) the
Borrower or the Canadian Borrower, as the case may be, applies an amount equal
to such Net Cash Proceeds or Excess Cash Flow to such reinvestments or
prepayments as if such Net Cash Proceeds or Excess Cash Flow had been received
by the Borrower or the Canadian Borrower, as the case may be, rather than such
Restricted Foreign Subsidiary, less the amount of additional taxes that would
have been payable or reserved against if such Net Cash Proceeds or Excess Cash
Flow had been repatriated (or, if less, the Net Cash Proceeds or Excess Cash
Flow that would be calculated if received by such Foreign Subsidiary) or (y) such
Net Cash Proceeds or Excess Cash Flow are applied to the repayment of
Indebtedness of a Restricted Foreign Subsidiary.

 

5.3.                              Method and Place of Payment. 
(a)     Except as otherwise
specifically provided herein, all payments under this Agreement shall be made
by the Borrower or the Canadian Borrower, without set-off, counterclaim or
deduction of any kind, to the Administrative Agent for the ratable account of
the Lenders entitled thereto, the Letter of Credit Issuer, the Canadian Letter
of Credit Issuer or the Swingline Lender, as the case may be, not later than
12:00 Noon (New York time) on the date when due and shall be made (i) in
the case of amounts payable in Dollars, in immediately available funds at the
Administrative Agent’s Office and (ii) in the case of amounts payable in a
Canadian Dollars, in immediately available funds at the Administrative Agent’s
Office or at such other office as the Administrative Agent shall specify for
such purpose by notice to the Borrower, it being understood that written or
facsimile notice by the Borrower or the Canadian Borrower, as the case may be,
to the Administrative Agent to make a payment from the funds in the Borrower’s
or the Canadian Borrower’s, as the case may be, account at the Administrative
Agent’s Office shall constitute the making of such payment to the extent of
such funds held in such account.  All
payments under each Credit Document (whether of principal, interest or
otherwise) shall be made (i) in the case of the principal of and interest
on each Loan, in the currency in which such Loan is denominated, (ii) in
the case of reimbursement obligations in respect of Letters of Credit, in the
currency in which such Letter of Credit is denominated or (iii) in the
case of any indemnification or expense reimbursement payment, in Dollars,
except as otherwise expressly provided herein. 
The Administrative Agent will thereafter cause to be distributed on the
same day (if payment was actually received by the Administrative Agent prior to
2:00 p.m. (New York time) on such day) like funds relating to the payment
of principal or interest or Fees ratably to the Lenders entitled thereto.

 

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

 

5.4.                              Net Payments. 
(a)     Subject to the
following sentence, all payments made by or on behalf of the Borrower and the
Canadian Borrower under this Agreement or any other Credit Document shall be
made free and clear of, and without deduction or withholding for or on account
of, any current or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority,
excluding (i) net income taxes and franchise taxes

 

78

 

(imposed in lieu of net income taxes) and capital
taxes imposed on the Administrative Agent, the Canadian Administrative Agent or
any Lender and (ii) any taxes imposed on the Administrative Agent, the
Canadian Administrative Agent or any Lender as a result of a current or former
connection between the Administrative Agent, the Canadian Administrative Agent
or such Lender and the jurisdiction of the Governmental Authority imposing such
tax or any political subdivision or taxing authority thereof or therein (other
than any such connection arising solely from the Administrative Agent, the
Canadian Administrative Agent or such Lender having executed, delivered or
performed its obligations or received a payment under, or enforced, this
Agreement).  If any such non-excluded
taxes, levies, imposts, duties, charges, fees, deductions or withholdings (“Non-Excluded
Taxes”) are required to be withheld from any amounts payable under this
Agreement, the Borrower or the Canadian Borrower, as applicable, shall increase
the amounts payable to the Administrative Agent, the Canadian Administrative
Agent or such Lender to the extent necessary to yield to the Administrative
Agent, the Canadian Administrative Agent or such Lender (after payment of all
Non-Excluded Taxes) interest or any such other amounts payable hereunder at the
rates or in the amounts specified in this Agreement; provided, however, that
the Borrower shall not be required to increase any such amounts payable to any
Lender that is not organized under the laws of the United States of America or
a state thereof (a “Non-U.S. Lender”) if such Lender fails to comply
with the requirements of paragraph (b) of this Section 5.4.  Whenever any Non-Excluded Taxes are payable
by the Borrower or the Canadian Borrower, as the case may be, as promptly as
possible thereafter such Borrower or Canadian Borrower shall send to the
Administrative Agent or the Canadian Administrative Agent for its own account
or for the account of such Lender, as the case may be, a certified copy of an
original official receipt (or other evidence acceptable to such Lender, acting
reasonably) received by such Borrower or Canadian Borrower showing payment
thereof.  If the Borrower or the Canadian
Borrower, as the case may be, fails to pay any Non-Excluded Taxes when due to
the appropriate taxing authority or fails to remit to the Administrative Agent
or the Canadian Administrative Agent the required receipts or other required
documentary evidence, such Borrower or Canadian Borrower shall indemnify the
Administrative Agent, the Canadian Administrative Agent and the Lenders for any
incremental taxes, interest, costs or penalties that may become payable by the
Administrative Agent, the Canadian Administrative Agent or any Lender as a
result of any such failure.  The
agreements in this Section 5.4(a) shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable
hereunder.

 

(b)                                 Each Non-U.S. Lender (other than
a Canadian Lender making Loans only to the Canadian Borrower) shall:

 

(i)                                     deliver to the Borrower and the
Administrative Agent two copies of either (x) in the case of Non-U.S.
Lender claiming exemption from U.S. Federal withholding tax under Section 871(h) or
881(c) of the Code with respect to payments of “portfolio interest”,
United States Internal Revenue Service Form W-8BEN (together with a
certificate representing that such Non-U.S. Lender is not a bank for purposes
of Section 881(c) of the Code, is not a 10-percent shareholder
(within the meaning of Section 871(h)(3)(B) of the Code) of the
Borrower and is not a controlled foreign corporation related to the Borrower
(within the meaning of Section 864(d)(4) of the Code)), or (y) Internal
Revenue Service Form W-8BEN or Form W-8ECI, in each case properly
completed and duly executed by such Non-U.S. Lender claiming complete

 

79

 

exemption
from, or reduced rate of, U.S. Federal withholding tax on payments by the
Borrower under this Agreement;

 

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

 

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

 

unless in any such case any change in treaty, law
or regulation has occurred prior to the date on which any such delivery would
otherwise be required that renders any such form inapplicable or would prevent
such Lender from duly completing and delivering any such form with respect to
it and such Lender so advises the Borrower and the Administrative Agent.  Each Person that shall become a Participant
pursuant to Section 14.6 or a Lender pursuant to Section 14.6 shall,
upon the effectiveness of the related transfer, be required to provide all the
forms and statements required pursuant to this Section 5.4(b), provided
that in the case of a Participant such Participant shall furnish all such
required forms and statements to the Lender from which the related
participation shall have been purchased.

 

(c)                                  The Borrower shall not be
required to indemnify any Non-U.S. Lender, or to pay any additional amounts to
any Non-U.S. Lender, in respect of U.S. Federal withholding tax pursuant to
paragraph (a) above to the extent that (i) the obligation to
withhold amounts with respect to U.S. Federal withholding tax existed on the
date such Non-U.S. Lender became a party to this Agreement (or, in the case of
a Participant that is not organized under the laws of the United States of
America or a state thereof (a “Non-U.S. Participant”), on the date such
Non-U.S. Participant became a Participant hereunder); provided, however,
that this clause (i) shall not apply to the extent that (x) the
indemnity payments or additional amounts any Lender (or Participant) would be
entitled to receive (without regard to this clause (i)) do not exceed the
indemnity payment or additional amounts that the person making the assignment,
participation or transfer to such Lender (or Participant) would have been
entitled to receive in the absence of such assignment, participation or
transfer, or (y) such assignment, participation or transfer had been
requested by the Borrower or the Canadian Borrower, (ii) the obligation to
pay such additional amounts would not have arisen but for a failure by such
Non-U.S. Lender or Non-U.S. Participant to comply with the provisions of
paragraph (b) above or (iii) any of the representations or
certifications made by a Non-U.S. Lender or Non-U.S. Participant pursuant to
paragraph (b) above are incorrect at the time a payment hereunder is made,
other than by reason of any change in treaty, law or regulation having effect
after the date such representations or certifications were made. The Canadian
Borrower shall not be required to indemnify or pay additional amounts to a
Lender or Administrative Agent in respect of Canadian withholding tax pursuant
to paragraph (a) above to the extent that such Non-Excluded Taxes result from
a failure by the Lender or Administrative Agent to comply with any
certification, identification, information, documentation or other reporting
requirement (collectively referred to in this Section 5.4(c) as a “Reporting
Requirement”) if (i) compliance is required by law, regulation,

 

80

 

administrative practice or any applicable tax
treaty as a precondition to exemption from or a reduction in the rate of
deduction or withholding of Non-Excluded Taxes, and (ii) the Canadian
Borrower has first made written request to the Lender or the Canadian
Administrative Agent, as applicable, that the Lender or Administrative Agent
comply with the particular Reporting Requirement (identified specifically in
such request) and the Lender or Administrative Agent, as applicable, has not
complied with such Reporting Requirement within 30 Business Days of such
written request; provided, however that the Canadian Borrower
shall not be relieved of its obligation to indemnify or pay additional amounts
to a Lender or Administrative Agent (x) in respect of certain payments
where the obligation to indemnify or pay additional amounts in respect of those
payments arose prior to Canadian Borrower’s written request to the Lender or
Canadian Administrative Agent, as applicable, respecting such Reporting
Requirement, (y) if, by reason of any change in any law, regulation,
administrative practice or applicable tax treaty occurring after the date
hereof, the Lender or Administrative Agent, as applicable, is unable to duly
comply with such Reporting Requirement, or (z) to the extent that the
additional payment or indemnity compensates the Lender or Administrative Agent
for an amount to which the Lender or Administrative Agent would have been entitled
to receive under paragraph (a) had the Lender or Administrative Agent, as
applicable complied with the Reporting Requirement.

 

(d)                                 If the Borrower or the Canadian
Borrower determines in good faith that a reasonable basis exists for contesting
any taxes for which indemnification has been demanded hereunder, the relevant
Lender, the Canadian Administrative Agent or the Administrative Agent, as
applicable, shall cooperate with such Borrower or Canadian Borrower in
challenging such taxes at Borrower’s or Canadian Borrower’s expense if so
requested by Borrower or Canadian Borrower. 
If any Lender, the Canadian Administrative Agent or the Administrative
Agent, as applicable, receives a refund of a tax for which a payment has been
made by the Borrower or the Canadian Borrower pursuant to this Agreement, which
refund in the good faith judgment of such Lender, the Canadian Administrative
Agent or Administrative Agent, as the case may be, is attributable to such
payment made by such Borrower or Canadian Borrower, then the Lender, the
Canadian Administrative Agent or the Administrative Agent, as the case may be,
shall reimburse Borrower or Canadian Borrower for such amount (together with
any interest received thereon) as the Lender, the Canadian Administrative Agent
or Administrative Agent, as the case may be, determines to be the proportion of
the refund as will leave it, after such reimbursement, in no better or worse
position than it would have been in if the payment had not been required.  A Lender, the Canadian Administrative Agent
or Administrative Agent shall claim any refund that it determines is available
to it, unless it concludes in its reasonable discretion that it would be
adversely affected by making such a claim. 
Neither the Lender, the Canadian Administrative Agent nor the
Administrative Agent shall be obliged to disclose any information regarding its
tax affairs or computations to the Borrower or the Canadian Borrower in
connection with this paragraph (d) or any other provision of this Section 5.4.

 

(e)                                  Each Lender represents and agrees
that, on the date hereof and at all times during the term of this Agreement, it
is not and will not be a conduit entity participating in a conduit financing
arrangement (as defined in Section 7701(1) of the Code and the
regulations thereunder) with respect to the Borrowings hereunder unless the
Borrower has consented to such arrangement prior thereto.

 

81

 

(f)                                    Notwithstanding Section 5.4(a),
the Canadian Borrower shall not be required to indemnify or pay any additional
amounts in respect of Canadian withholding tax imposed under Part XIII of
the Tax Act applicable to any amount payable with respect to Canadian Revolving
Credit Loans or Canadian Letters of Credit pursuant to Section 5.4(a) above
to any Lender that is not a Canadian Resident for the purposes of the Tax Act,
except if any such Loans were assigned, participated or transferred to such
Lender at the request of the Borrower or the Canadian Borrower or were assigned,
participated or transferred to such Lender following the occurrence of and
during the continuance of an Event of Default pursuant to Section 11.1 or
11.5.

 

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

 

(b)                                 Fees and Letter of Credit
Outstanding shall be calculated on the basis of a 365- (or 366-, as the case
may be) day year for the actual days elapsed.

 

5.6.                              Limit on Rate of Interest.

 

(a)                                  No Payment shall exceed Lawful
Rate.  Notwithstanding any other term of this
Agreement, neither the Borrower nor the Canadian Borrower shall be obliged to
pay any interest or other amounts under or in connection with this Agreement in
excess of the amount or rate permitted under or consistent with any applicable
law, rule or regulation.  In
particular, the Canadian Borrower shall not be obliged to pay any interest or
other amounts which would result in the receipt by any Lender of interest on
credit advanced at a rate in excess of the rate permitted under the Criminal Code (Canada).  For purposes of this Section 5.6, “interest”
and “credit advanced” have the meanings ascribed in the Criminal Code (Canada) and the “effective
annual rate of interest” shall be calculated in accordance with generally
accepted actuarial principles and practices.

 

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

 

(c)                                  Adjustment if any Payment exceeds
Lawful Rate.                             If any provision of this
Agreement or any of the other Credit Documents would obligate the Borrower or
the Canadian Borrower to make any payment of interest or other amount payable
to any Lender in an amount or calculated at a rate which would be prohibited by
any applicable law, rule or regulation, or in the case of the Canadian
Borrower, would result in a receipt by that Lender of interest at a criminal
rate (as such terms are construed under the Criminal
Code (Canada)), then notwithstanding such provision, such amount or
rate shall be deemed to have been adjusted with retroactive effect to the
maximum amount or rate of interest, as the case may be, as would not be

 

82

 

so prohibited by law (in the case of the Borrower
or the Canadian Borrower) or so result in a receipt by that Lender of interest
at a criminal rate (in the case of the Canadian Borrower), such adjustment to be
effected, to the extent necessary, as follows:

 

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

 

(ii)                                  thereafter, by reducing any fees,
commissions, premiums and other amounts required to be paid by the Borrower or
the Canadian Borrower to the affected Lender where, in the case of the Canadian
Borrower, such amounts would constitute interest for purposes of Section 347
of the Criminal Code (Canada).

 

Notwithstanding the foregoing, and after giving
effect to all adjustments contemplated thereby, if any Lender shall have
received from the Borrower or the Canadian Borrower an amount in excess of the
maximum permitted by any applicable law, rule or regulation or in the case
of the Canadian Borrower, an amount in excess of the maximum permitted under
the Criminal Code (Canada), then
the Borrower or the Canadian Borrower, as applicable, shall be entitled, by
notice in writing to the Administrative Agent or the Canadian Administrative
Agent, as applicable, to obtain reimbursement from that Lender in an amount
equal to such excess, and pending such reimbursement, such amount shall be
deemed to be an amount payable by that Lender to the Borrower or the Canadian
Borrower, as applicable.  Any amount or
rate of interest referred to in this Section 5.6(c) shall be
determined in accordance with generally accepted actuarial practices and
principles as an effective annual rate of interest over the term that any Loan
remains outstanding on the assumption, with respect to Canadian Borrowings,
that any charges, fees or expenses that fall within the meaning of “interest”
(as defined in the Criminal Code
(Canada)) shall, if the relate to a specific period of time, be pro-rated over that period of time and
otherwise be pro-rated over the
period from the Closing Date to the Maturity Date.

 

SECTION 6.                                Conditions Precedent to Initial
Borrowing

 

The
initial Borrowing of Term Loans under this Agreement is subject to the satisfaction
of the following conditions precedent:

 

6.1.                              Credit Documents. 
The Administrative Agent shall have received this Agreement, executed
and delivered by a duly authorized officer of each of Holdings, the Borrower,
the Canadian Borrower, Required Lenders under the Existing Credit Agreement
(whom may provide written consent via a consent supplement to this Agreement)
and each Term Loan Lender.

 

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

 

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6.3.                              Legal Opinions. 
The Administrative Agent shall have received the executed legal opinions
of (a) Simpson Thacher & Bartlett LLP, special New York counsel
to the Borrower, substantially in the form of Exhibit I-1 and (b) Kenneth
L. Walker, General Counsel to the Borrower. 
The Borrower, the Canadian Borrower, the other Credit Parties and the
Administrative Agent hereby instruct such counsel to deliver such legal
opinions.

 

6.4.                              No Default. 
After giving effect to the Borrowings on the Effective Date and the other
transactions contemplated hereby, no Default or Event of Default has occurred
and is continuing.

 

6.5.                              Consent. 
Borrower, Holdings, Required Lenders (as such term is defined under the
Existing Credit Agreement and whom may provide written consent via a consent
supplement to this Agreement) and the Term Loan Lenders shall have indicated
their consent by the execution and delivery of the signature pages hereof
to the Administrative Agent.

 

6.6.                              [Reserved].

 

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

 

6.8.                              Corporate Proceedings of Each
Credit Party.  The Administrative Agent shall
have received a copy of the resolutions, in form and substance satisfactory to
the Administrative Agent, of the Board of Directors of each Credit Party (or a
duly authorized committee thereof) authorizing (a) the execution, delivery
and performance of the Credit Documents (and any agreements relating thereto)
to which it is a party and (b) in the case of the Borrower and the
Canadian Borrower, the extensions of credit contemplated hereunder; provided
that in lieu of delivery of each of the resolutions set forth in this Section 6.8,
the Borrower may deliver a certificate executed by the President or any Vice
President of such Credit Party certifying that there have been no material
amendments to those resolutions previously delivered to the Administrative
Agent on the Closing Date pursuant to Section 6.8 of the Existing Credit Agreement.

 

6.9.                              Corporate Documents. 
The Administrative Agent shall have received true and complete
copies of the certificate of incorporation and by-laws (or equivalent
organizational documents) of each Credit Party; provided that in lieu of
delivery of each of the documents set forth in this Section 6.9, the
Borrower may deliver a certificate executed by the President or any Vice
President of such Credit Party certifying that there have been no material
amendments to those documents previously delivered to the Administrative Agent
on the Closing Date pursuant to Section 6.9 of the Existing Credit
Agreement.

 

6.10.                        Fees. 
(a)     The Lenders shall
have received the fees in the amounts previously agreed in writing by the
Agents and such Lenders to be received on the Effective Date and all expenses
(including the reasonable fees, disbursements and other charges of counsel) for
which invoices have been presented on or prior to the Effective Date shall have
been paid.

 

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6.11.                        Representations and Warranties. 
On the Effective Date, the representations and warranties made by each
of Holdings, the Borrower and the Canadian Borrower in Section 8, as they
relate to the Credit Parties at such time, shall be true and correct in all
material respects.

 

6.12.                        Governmental Authorizations and
Consents.  Each Credit Party shall have
obtained all approval and authorizations of Governmental Authorities and
all consents of other Persons, in each case that are necessary in connection
with the transactions contemplated by the Credit Documents and each of the
foregoing shall be in full force and effect. 
All applicable waiting periods shall have expired without any action
being taken or threatened by any competent authority which would restrain,
prevent or otherwise impose adverse conditions on the transactions contemplated
by the Credit Documents and no action, request for stay, petition for review or
rehearing, reconsideration, or appeal with respect to any of the foregoing
shall be pending, and the time for any applicable agency to take action to set
aside its consent on its own motion shall have expired.

 

SECTION 7.                                Conditions Precedent to All
Credit Events

 

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

 

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

 

7.2.                              Notice of Borrowing; Letter of
Credit Request.  (a)     Prior to the making of each Tranche A Term
Loan, each Tranche E Term Loan, each Revolving Credit Loan (other than any
Revolving Credit Loan made pursuant to Section 3.4(a)) and each Swingline
Loan, the Administrative Agent shall have received a Notice of Borrowing
(whether in writing or by telephone) meeting the requirements of Section 2.3.

 

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

 

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

 

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SECTION 8.                                Representations, Warranties and
Agreements

 

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

 

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

 

8.2.                              Corporate Power and Authority. 
Each Credit Party has the corporate or other organizational power and
authority to execute, deliver and carry out the terms and provisions of the
Credit Documents to which it is a party and has taken all necessary corporate
or other organizational action to authorize the execution, delivery and
performance of the Credit Documents to which it is a party.  Each Credit Party has duly executed and
delivered each Credit Document to which it is a party and each such Credit
Document constitutes the legal, valid and binding obligation of such Credit
Party enforceable in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency or similar laws affecting
creditors’ rights generally and subject to general principles of equity.

 

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

 

8.4.                              Litigation. 
There are no actions, suits, investigations or proceedings (including
Environmental Claims) pending or, to the knowledge of Holdings, the Borrower or
the Canadian Borrower, threatened with respect to Holdings, the Borrower, the
Canadian

 

86

 

Borrower or any of its Subsidiaries that could
reasonably be expected to result in a Material Adverse Effect.

 

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

 

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

 

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

 

8.8.                              True and Complete Disclosure. 
(a)     None of the factual
information and data (taken as a whole) heretofore or contemporaneously
furnished by any of Holdings, the Borrower, the Canadian Borrower, any of the
Subsidiaries or any of their respective authorized representatives in writing
to the Administrative Agent and/or any Lender on or before the Closing Date
(including (i) the Confidential Information Memorandum and (ii) all
information contained in the Credit Documents) for purposes of or in connection
with this Agreement or any transaction contemplated herein contained any untrue
statement or omitted to state any material fact necessary to make such
information and data (taken as a whole) not misleading at such time in light of
the circumstances under which such information or data was furnished, it being
understood and agreed that for purposes of this Section 8.8(a), such
factual information and data shall not include projections and pro forma
financial information.

 

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

 

8.9.                              Financial Condition; Financial
Statements.  The (a) unaudited
historical consolidated financial information of the Parent as set forth in the
Confidential Information Memorandum, and (b) the Historical Financial
Statements, in each case present or will, when provided, present fairly in all
material respects the combined financial position of the Borrower at the
respective dates of said information, statements and results of operations for
the respective periods covered thereby. 
The financial statements referred to in clause (b) of this Section 8.9
have been prepared in accordance with GAAP consistently applied except to the
extent provided in the notes to said financial statements.  There has been no Material Adverse Change
since November 30, 2003, other than solely as a result of changes in
general economic conditions.

 

87

 

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

 

8.11.                        Compliance with ERISA. 
(i) Each Plan is in compliance with ERISA, the Code and any
applicable Requirement of Law; no Reportable Event has occurred (or is
reasonably likely to occur) with respect to any Plan; no Plan is insolvent or
in reorganization (or is reasonably likely to be insolvent or in
reorganization), and no written notice of any such insolvency or reorganization
has been given to any of Holdings, the Borrower, any Subsidiary or any ERISA
Affiliate; no Plan (other than a multiemployer plan) has an accumulated or
waived funding deficiency (or is reasonably likely to have such a deficiency);
none of Holdings, the Borrower, any Subsidiary or any ERISA Affiliate has
incurred (or is reasonably likely expected to incur) any liability to or on
account of a Plan pursuant to Section 409, 502(i), 502(l), 515, 4062,
4063, 4064, 4069, 4201 or 4204 of ERISA or Section 4971 or 4975 of the
Code or has been notified in writing that it will incur any liability under any
of the foregoing Sections with respect to any Plan; no proceedings have been
instituted (or are reasonably likely to be instituted) to terminate or to
reorganize any Plan or to appoint a trustee to administer any Plan, and no
written notice of any such proceedings has been given to any of Holdings, the
Borrower, any Subsidiary or any ERISA Affiliate; and no lien imposed under the
Code or ERISA on the assets of any of Holdings, the Borrower or any Subsidiary
or any ERISA Affiliate exists (or is reasonably likely to exist) nor has
Holdings, the Borrower, any Subsidiary or any ERISA Affiliate been notified in
writing that such a lien will be imposed on the assets of any of Holdings, the
Borrower, any Subsidiary or any ERISA Affiliate on account of any Plan, except
to the extent that a breach of any of the representations, warranties or
agreements in this Section 8.11(i) would not result, individually or
in the aggregate, in an amount of liability that would be reasonably likely to
have a Material Adverse Effect or relates to any matter disclosed in the
financial statements of the Borrower contained in the Confidential Information
Memorandum.  No Plan (other than a
multiemployer plan) has an Unfunded Current Liability that would, individually
or when taken together with any other liabilities referenced in this Section 8.11(i),
be reasonably likely to have a Material Adverse Effect.  With respect to Plans that are multiemployer
plans (as defined in Section 3(37) of ERISA), the representations and
warranties in this Section 8.11(i), other than any made with respect to (a) liability
under Section 4201 or 4204 of ERISA or (b) liability for termination
or reorganization of such Plans under ERISA, are made to the best knowledge of
the Borrower.

 

(ii)                                  the Canadian Pension Plans are
duly registered under all applicable provincial pension benefits legislation;
all material obligations of each Credit Party and its Subsidiaries (including
fiduciary, funding, investment and administration obligations) required to be
performed in connection with the Canadian Pension Plans, the Canadian Benefit
Plans and the funding agreements therefore have been performed in accordance
with applicable laws and regulations; there are no outstanding disputes
concerning the assets held pursuant to any such

 

88

 

funding agreement; all contributions or premiums
required to be made by any Credit Party and any of its Subsidiaries to the
Canadian Pension Plans and the Canadian Benefit Plans have been made within the
time limits required by, and in accordance with, the terms of such plans and
applicable laws and regulations; all employee contributions to the Canadian
Pension Plans and the Canadian Benefit Plans required to be made by way of
authorized payroll deduction have been properly withheld and fully paid into
such plans within the time limits required by, and in accordance with, the
terms of such plans and applicable laws and regulations; all reports and disclosures
relating to the Canadian Pension Plans and Canadian Benefit Plans required by
any applicable laws or regulations have been filed or distributed in accordance
with applicable laws and regulations; no Credit Party has made any  improper withdrawals, or applications of,
the assets of any of the Canadian Pension Plans; other than as disclosed in
Schedule 8.11(ii), there have been no partial terminations of any Canadian
Pension Plan with a defined benefit provision; no amount is owing by any of the
Canadian Pension Plans under the Tax Act; no Credit Party has any knowledge,
nor any grounds for believing, that any of the Canadian Pension Plans is the
subject of an investigation, any other proceeding, an action or a claim other
than a routine claim for benefits; except to the extent that a breach of any of
the foregoing representations, warranties or agreements in this Section 8.11(ii) would
not result, individually or in the aggregate, in an amount of liability that
would be reasonably likely to have a Material Adverse Effect, or relates to any
matter disclosed in the financial statements of the Borrower contained in the
Confidential Information Memorandum; No Canadian Pension Plan has an Unfunded
Current Liability that would, individually or when taken together with any
other liabilities referenced in this Section 8.11(ii) be reasonably
likely to have a Material Adverse Effect;

 

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

 

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

 

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

 

89

 

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

 

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

 

SECTION 9.                                Affirmative Covenants

 

Each of Holdings, the Borrower and the Canadian
Borrower hereby covenants and agrees that on the Effective Date and thereafter,
until the Commitments, the Swingline Commitment and each Letter of Credit have
terminated and the Loans and Unpaid Drawings, together with interest, Fees and
all other Obligations incurred hereunder, are paid in full:

 

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

 

(a)                                  Annual Financial Statements. 
As soon as available and in any event on or before the date on which
such financial statements are required to be filed with the SEC (or, if such
financial statements are not required to be filed with the SEC, on or before
the date that is 90 days after the end of each such fiscal year), the
consolidated balance sheet of (i) Holdings, the Borrower and the
Restricted Subsidiaries and (ii) Holdings and its Subsidiaries, in each
case as at the end of such fiscal year, and the related consolidated statement
of operations and cash flows for such fiscal year, setting forth comparative
consolidated figures for the preceding fiscal year, and certified by
independent certified public accountants of recognized national standing whose
opinion shall not be qualified as to the scope of audit or as to the status of
Holdings, the Borrower, the Canadian Borrower or any of the Material
Subsidiaries as a going concern, together in any event with a certificate of
such accounting firm stating that in the course of its regular audit of the
business of Holdings, the Borrower, the Canadian Borrower and the Material
Subsidiaries, which audit was conducted in accordance with generally accepted
auditing standards, such accounting firm has obtained no knowledge of any
Default or Event of Default relating to Section 10.9 or 10.10 that has
occurred and is continuing or, if in the opinion of such accounting firm such a
Default or Event of Default has occurred and is continuing, a statement as to
the nature thereof.  The requirements of
this Section 9.1(a) shall be satisfied by delivery of financial
statements of Parent and its Subsidiaries which otherwise meet the requirements
hereof and are accompanied by reconciliations for any difference between what
is delivered hereunder and what would have been delivered by Holdings and its
Subsidiaries pursuit to this Section 9.1(a).

 

(b)                                 Quarterly Financial Statements. 
As soon as available and in any event on or before the date on which
such financial statements are required to be filed with the SEC with respect to
each of the first three quarterly accounting periods in each fiscal year of
Holdings (or,

 

90

 

 if such
financial statements are not required to be filed with the SEC, on or before
the date that is 45 days after the end of each such quarterly accounting
period), the consolidated balance sheet of (i) Holdings, the Borrower and
the Restricted Subsidiaries and (ii) Holdings and its Subsidiaries, in
each case as at the end of such quarterly period and the related consolidated
statement of operations for such quarterly accounting period and for the
elapsed portion of the fiscal year ended with the last day of such quarterly
period, and the related consolidated statement of cash flows for the elapsed
portion of the fiscal year ended with the last day of such quarterly period,
and setting forth comparative consolidated figures for the related periods in
the prior fiscal year or, in the case of such consolidated balance sheet, for
the last day of the prior fiscal year, all of which shall be certified by an
Authorized Officer of the Borrower, subject to changes resulting from audit and
normal year-end audit adjustments. The requirements of this Section 9.1(b) shall
be satisfied by delivery of financial statements of Parent and its Subsidiaries
which otherwise meet the requirements hereof and are accompanied by
reconciliations for any difference between what is delivered hereunder and what
would have been delivered by Holdings and its Subsidiaries pursuit to this Section 9.1(b).

 

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

 

(d)                                 Officer’s Certificates. 
At the time of the delivery of the financial statements provided for in
Sections 9.1(a) and (b), a certificate of an Authorized Officer of the
Borrower to the effect that no Default or Event of Default exists or, if any
Default or Event of Default does exist, specifying the nature and extent
thereof, which certificate shall set forth (i) the calculations required
to establish whether Holdings, the Borrower and the Subsidiaries were in
compliance with the provisions of Sections 10.9 and 10.10 as at the end of
such fiscal year or period, as the case may be, (ii) a specification of
any change in the identity of the Restricted Subsidiaries, Unrestricted
Subsidiaries and Foreign Subsidiaries as at the end of such fiscal year or
period, as the case may be, from the Restricted Subsidiaries, Unrestricted
Subsidiaries and Foreign Subsidiaries, respectively, provided to the Lenders on
the Closing Date or the most recent fiscal year or period, as the case may be, (iii) the
then applicable Status and (iv) the amount of any Pro Forma Adjustment not
previously set forth in a Pro Forma Adjustment Certificate or any change in the
amount of a Pro Forma Adjustment set forth in any Pro Forma Adjustment
Certificate previously provided and, in either case, in reasonable detail, the
calculations and basis therefor.  At the
time of the delivery of the financial statements provided for in Section 9.1(a),
(i) a certificate of an Authorized Officer of the Borrower setting forth
in reasonable detail the Available Amount as at the end of the fiscal year to
which such financial statements relate and (ii) a certificate of an
Authorized Officer and the chief legal officer of the Borrower (x) setting
forth the information required pursuant to Section 2 of the Perfection
Certificate or confirming that there has been no change in such information
since the Closing Date or the date of the most recent certificate delivered
pursuant to this subsection (d)(ii), as the case may be, and (ii) certifying
that all Uniform Commercial Code and Personal Property Security Act financing
statements (including fixture filings, as applicable) or other appropriate
filings, recordings or registrations, including all refilings, rerecordings and
reregistrations,

 

91

 

containing a description of the Collateral have
been filed of record in each governmental, municipal or other appropriate
office in each jurisdiction identified pursuant to clause (x) above
to the extent necessary to protect and perfect the security interests under the
Security Documents.

 

(e)                                  Notice of Default or Litigation. 
Promptly after an Authorized Officer of any of Holdings, the Borrower,
the Canadian Borrower or any of the Subsidiaries obtains knowledge thereof,
notice of (i) the occurrence of any event that constitutes a Default or
Event of Default, which notice shall specify the nature thereof, the period of
existence thereof and what action any of Holdings, the Borrower or the Canadian
Borrower proposes to take with respect thereto, and (ii) any litigation or
governmental proceeding pending against any of Holdings, the Borrower, the
Canadian Borrower or any of the Subsidiaries that could reasonably be expected
to result in a Material Adverse Effect.

 

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

 

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

 

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

 

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

 

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

 

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

 

(g)                                 Other Information. 
Promptly upon filing thereof, copies of any filings (including on Form 10-K,
10-Q or 8-K) or registration statements with, and reports to, the SEC or any
analogous Government Authority in any relevant jurisdiction by any of Holdings,
the Borrower, the Canadian Borrower or any of the Subsidiaries (other than
amendments to any registration statement (to the extent such registration
statement, in the form it becomes effective,

 

92

 

is delivered to the Lenders), exhibits to any
registration statement and, if applicable, any registration statements on Form S-8)
and copies of all financial statements, proxy statements, notices and reports
that Holdings, the Borrower, the Canadian Borrower or any of the Subsidiaries
shall send to the holders of any publicly issued debt of Holdings, the
Borrower, the Canadian Borrower and/or any of the Subsidiaries (including any
Subordinated Notes (whether publicly issued or not)) in their capacity as such
holders (in each case to the extent not theretofore delivered to the Lenders
pursuant to this Agreement) and, with reasonable promptness, such other
information (financial or otherwise) as the Administrative Agent on its own
behalf or on behalf of any Lender may reasonably request in writing from time
to time.

 

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

 

(i)                                     Perfection Certificate. 
The Borrower shall deliver to the Administrative Agent on the Closing
Date a completed Perfection Certificate dated the Closing Date and signed by an
Authorized Officer and the chief legal officer of the Borrower, together with
all attachments contemplated thereby.

 

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

 

9.3.                              Maintenance of Insurance. 
Each of Holdings, the Borrower and the Canadian Borrower will, and will cause
each of the Material Subsidiaries to, at all times maintain in full force and
effect, with insurance companies that the Borrower believes (in the good faith
judgment of the management of the Borrower) are financially sound and
responsible at the time the relevant coverage is placed or renewed, insurance
in at least such amounts and against at least such risks (and with such risk
retentions) as are usually insured against in the same general area by
companies engaged in the same or a similar business; and will furnish to the
Lenders, upon written request from the Administrative Agent, information
presented in reasonable detail as to the insurance so carried.

 

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

 

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

 

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

 

9.7.                              ERISA. 
Promptly after Holdings, the Borrower or any Subsidiary or any ERISA
Affiliate knows or has reason to know of the occurrence of any of the following
events that, individually or in the aggregate (including in the aggregate such
events previously disclosed or exempt from disclosure hereunder, to the extent
the liability therefor remains outstanding), would be reasonably likely to have
a Material Adverse Effect, the Parent Companies, Holdings or the Borrower will
deliver to each of the Lenders a certificate of an Authorized Officer or any
other senior officer of the Borrower setting forth details as to such
occurrence and the action, if any, that Holdings, the Borrower, such Subsidiary
or such ERISA Affiliate is required or proposes to take, together with any
notices (required, proposed or otherwise) given to or filed with or by
Holdings, the Borrower, such Subsidiary, such ERISA Affiliate, the PBGC, a Plan
participant (other than notices relating to an individual participant’s
benefits) or the Plan administrator with respect thereto: that a Reportable
Event has occurred; that an accumulated funding deficiency has been incurred or
an application is to be made to the Secretary of the Treasury for a waiver or
modification of the minimum funding standard (including any required
installment payments) or an extension of any amortization period under Section 412
of the Code with respect to a Plan; that a Plan having an Unfunded Current
Liability has been or is to be terminated, reorganized, partitioned or declared
insolvent under Title IV of ERISA (including the giving of written notice
thereof); that a Plan has an Unfunded Current Liability that has or will result
in a lien under ERISA or the Code; that proceedings will be or have been
instituted to terminate a Plan having an Unfunded Current Liability (including
the giving of written notice thereof); that a proceeding has been instituted
against the Borrower, a Subsidiary or an ERISA Affiliate pursuant to Section 515
of ERISA to collect a delinquent contribution to a Plan; that the PBGC has
notified Holdings, the Borrower, any Subsidiary or any ERISA Affiliate of its

 

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intention to appoint a trustee to administer any
Plan; that Holdings, the Borrower, any Subsidiary or any ERISA Affiliate has
failed to make a required installment or other payment pursuant to Section 412
of the Code with respect to a Plan; or that Holdings, the Borrower, any
Subsidiary or any ERISA Affiliate has incurred or will incur (or has been
notified in writing that it will incur) any liability (including any contingent
or secondary liability) to or on account of a Plan pursuant to Section 409,
502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA or Section 4971
or 4975 of the Code.

 

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

 

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

 

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

 

9.11.        Additional Guarantors and
Grantors.  (a)     Except as provided in Section 10.1(j) or
(k), each of Holdings, the Borrower and the Canadian Borrower will cause (i) any
direct or indirect Domestic Subsidiary (other than any Unrestricted Subsidiary)
formed or

 

95

 

otherwise purchased or acquired after the date
hereof (including pursuant to a Permitted Acquisition), (ii) any
Subsidiary (other than any Unrestricted Subsidiary) that is not a Domestic
Subsidiary on the date hereof but subsequently becomes a Domestic Subsidiary
(other than any Unrestricted Subsidiary) and (iii) any inactive Subsidiary
listed on Schedule 1.1(e) (unless such Subsidiary is designated an
Unrestricted Subsidiary in accordance with terms of this Agreement) which
acquires any material assets or is otherwise no longer deemed inactive, in each
case to execute a supplement to each of the Guarantee and the Security
Agreement, substantially in the form of Annex B or Annex 1, as applicable, to
the respective agreement in order to become a Guarantor under the Guarantee and
a grantor under the Security Agreement.

 

(b)           Except as provided in Section 10.1(j) or
(k), each of Holdings, the Borrower and the Canadian Borrower will cause each
Foreign Subsidiary that is a Restricted Foreign Subsidiary, or that is required
to become a Restricted Foreign Subsidiary for an investment to constitute a
Permitted Acquisition, in each case that makes an investment constituting a
Permitted Acquisition pursuant to Section 10.5(j) to enter into
guarantee and security arrangements in relation to the Obligations of the
Borrower and/or the Canadian Obligations of the Canadian Borrower, as the case
may be, in respect of the capital stock and/or assets acquired pursuant to such
Permitted Acquisition, in a form and to an extent agreed between the Borrower
and the Administrative Agent, but to be substantially consistent (taking into
account the scope of customary collateral arrangements in the applicable
jurisdiction) with the scope of the guarantee and collateral arrangements
entered into pursuant to the Guarantees and the Security Documents, and to
comply with Section 9.15 in respect of such arrangements, provided
that no such Restricted Foreign Subsidiary shall be required to enter into such
arrangements to the extent that such arrangements would (i) be prohibited
by the law of the jurisdiction of incorporation or formation of such Restricted
Subsidiary or of the entity whose capital stock is acquired or (ii) have
material adverse tax consequences for any of Holdings, the Borrower or any of
the Restricted Subsidiaries.

 

9.12.        Pledges of Additional Stock and
Evidence of Indebtedness.  (a)     Except as provided in Section 10.1(j) or
(k), the Borrower will pledge, and, if applicable, will cause each Domestic
Subsidiary to pledge, to the Administrative Agent, for the benefit of the
Secured Parties, (i) all the capital stock of each Domestic Subsidiary
(other than any Unrestricted Subsidiary) and each Foreign Subsidiary (other
than an Unrestricted Subsidiary or any capital stock representing in excess of
65% of the issued and outstanding capital stock in any Foreign Subsidiary) held
by the Borrower or a Domestic Subsidiary, in each case, formed or otherwise
purchased or acquired after the date hereof, in each case pursuant to a
supplement to the Pledge Agreement in form and substance reasonably
satisfactory to the Administrative Agent, (ii) all evidences of
Indebtedness in excess of $5,000,000 received by the Borrower or any of the
Domestic Subsidiaries (other than any Unrestricted Subsidiary) in connection with
any disposition of assets pursuant to Section 10.4(b), in each case
pursuant to a supplement to the Pledge Agreement, substantially in the form of
Annex A thereto and (iii) any global promissory notes executed after the
date hereof evidencing Indebtedness of any of Holdings, the Borrower and each
Subsidiary that is owing to any of the Borrower or any Domestic Subsidiary
(other than any Unrestricted Subsidiary), in each case pursuant to a supplement
to the Pledge Agreement, substantially in the form of Annex A thereto.

 

96

 

(b)           Except as provided in Section 10.1(j) or
(k), the Borrower will pledge, and, if applicable, will cause each Subsidiary
(other than any Foreign Joint Venture) to pledge, to the Canadian
Administrative Agent, for the benefit of the Lenders, to the Canadian Borrower,
(i) all the capital stock of each Subsidiary of the Canadian Borrower and
of any Canadian Subsidiary Guarantor formed or otherwise purchased or acquired
after the date hereof, in each case pursuant to a supplement to the applicable
Canadian Security Documents in form and substance reasonably satisfactory to
the Administrative Agent (or pledge arrangements in relation to the Canadian
Obligations of the Canadian Borrower, in a form and to an extent agreed between
the Borrower and the Administrative Agent, but to be substantially consistent
(taking into account the scope of customary collateral arrangements in the
applicable jurisdiction) with the scope of the pledge arrangements entered into
pursuant to the Canadian Security Documents) and (ii) all evidences of
Indebtedness with a Dollar Equivalent in excess of $5,000,000 received by any
of the Canadian Subsidiary Guarantors in connection with any disposition of
assets pursuant to Section 10.4(b), in each case pursuant to a supplement
to the applicable Canadian Security Documents in form and substance reasonably
satisfactory to the Administrative Agent (or pledge arrangements in relation to
the Obligations of the Canadian Borrower, in a form and to an extent agreed
between the Borrower and the Administrative Agent, but to be substantially
consistent (taking into account the scope of customary collateral arrangements
in the applicable jurisdiction) with the scope of the pledge arrangements
entered into pursuant to the Canadian Security Documents).

 

(c)           Holdings will pledge to the
Administrative Agent, for the benefit of the Lenders, all capital stock of the
Borrower acquired by it after the Effective Date (including any capital stock issued
in connection with (i) loans and advances made pursuant to Section 10.5(c)(i) and
(ii) dividends paid by the Borrower solely in its capital stock pursuant
to Section 10.6) and the Borrower will pledge to the Administrative Agent,
for the benefit of the Secured Parties, pursuant to the Pledge Agreement or the
Canadian Pledge Agreements, as the case may be, all capital stock of the
Canadian Borrower acquired by it after the Effective Date.

 

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

 

9.13.        Use of Proceeds. 
The Borrower and the Canadian Borrower will use the Letters of Credit
and the proceeds of all Loans for the purposes set forth in the recitals to
this Agreement.

 

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

 

9.15.        Further Assurances. 
(a)     Each of Holdings, the
Borrower and the Canadian Borrower will, and will cause each other Credit Party
to, execute any and all further documents, financing statements, agreements and
instruments, and take all such further actions

 

97

 

(including the filing and recording of financing
statements, fixture filings, mortgages, deeds of trust and other documents),
which may be required under any applicable law, or which the Administrative
Agent or the Required Lenders may reasonably request, in order to grant,
preserve, protect and perfect the validity and priority of the security
interests created or intended to be created by the Security Agreement, the
Pledge Agreement or any Mortgage, all at the expense of Holdings, the Borrower
and the Restricted Subsidiaries.

 

(b)           If any assets (including any real
estate or improvements thereto or any interest therein) with a book value or
fair market value in excess of $1,000,000 are acquired by the Borrower, the
Canadian Borrower or any other Credit Party after the Closing Date (other than
assets constituting Collateral under the Security Agreement that become subject
to the Lien of the Security Agreement upon acquisition thereof) that are of the
nature secured by the Security Agreement or any Mortgage, as the case may be,
the Borrower will notify the Administrative Agent and the Lenders thereof, and,
if requested by the Administrative Agent or the Required Lenders, the Borrower
will cause such assets to be subjected to a Lien securing the applicable
Obligations and will take, and cause the other Credit Parties to take, such
actions as shall be necessary or reasonably requested by the Administrative
Agent to grant and perfect such Liens consistent with the applicable
requirements of the Security Documents, including actions described in
paragraph (a) of this Section, all at the expense of the Credit
Parties.  Any Mortgage delivered to the Administrative
Agent in accordance with the preceding sentence shall be accompanied by (x) a
policy or policies of title insurance issued by a nationally recognized title
insurance company insuring the Lien of each Mortgage as a valid first Lien on
the Mortgaged Property described therein, free of any other Liens except as
expressly permitted by Section 10.2, together with such endorsements,
coinsurance and reinsurance as the Administrative Agent may reasonably request
and (y) an opinion of local counsel to the Borrower (or in the event a
Subsidiary of the Borrower is the Mortgagor, to such Subsidiary) substantially
in the form of Exhibit I-3.

 

9.16.        Canadian Borrower. 
Holdings and the Borrower shall ensure that the Canadian Borrower is on
the Effective Date, and shall at all times thereafter be, an indirect or direct
wholly owned Subsidiary of the Borrower, Holdings and the Borrower agree that
the Canadian Borrower is not permitted to be sold, transferred or otherwise
disposed of pursuant to Section 10.4.

 

9.17.        Post-Closing Covenant. 
Borrower shall deliver, furnish and/or cause to be furnished all of the
obligations set forth below within the time periods specified therewith: within
thirty (30) days after the Effective Date, (i) execute and deliver a
second modification of Mortgage, in favor of the Administrative Agent, for the
benefit of the Lenders, with respect to each Mortgaged Property, (ii) furnish
to the Administrative Agent in respect of each Mortgaged Property an
endorsement to the existing mortgagee’s title insurance policy to insure that (a) the
Mortgage insured thereby creates a valid first lien in such Mortgaged Property,
free and clear of all defects and encumbrances, except as disclosed therein, (b) names
the Administrative Agent for the benefit of the Lenders as the insured
thereunder and (c) to be issued by title companies reasonably satisfactory
to the Administrative Agent and the Borrower (including any such title
companies acting as co-insurers or reinsurers, at the option of the Administrative
Agent), and (iii) deliver flood certificates with respect to all Mortgaged
Properties in Schedule 1.1(b) and evidence of flood insurance with respect
to each Mortgaged Property that is located in a special

 

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flood hazard and is located in a community that
participates in the National Flood Insurance Program, in each case in
compliance with any applicable regulations of the Board, in form and substance
reasonably satisfactory to Collateral Agent; provided, such thirty (30)
day period may be extended an additional thirty (30) days with the consent of
Administrative Agent.

 

SECTION 10.                          Negative Covenants

 

Each of Holdings, the Borrower and the Canadian
Borrower hereby covenant and agree that on the Effective Date and thereafter,
until the Commitments, the Swingline Commitment and each Letter of Credit have
terminated and the Loans and Unpaid Drawings, together with interest, Fees and
all other Obligations incurred hereunder, are paid in full:

 

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

 

(a)           Indebtedness arising under the
Credit Documents;

 

(b)           Indebtedness of (i) the
Borrower to any Subsidiary of the Borrower and (ii) any Subsidiary to the
Borrower or any other Restricted Subsidiary of the Borrower;

 

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

 

(d)           except as provided in clauses (j) and
(k) below, Guarantee Obligations incurred by (i) Restricted
Subsidiaries in respect of Indebtedness of the Borrower or other Restricted
Subsidiaries that is permitted to be incurred under this Agreement and (ii) the
Borrower in respect of Indebtedness of the Restricted Subsidiaries that is
permitted to be incurred under this Agreement, provided that there shall
be no Guarantee (a) by a Restricted Foreign Subsidiary of any Indebtedness
of the Borrower and (b) in respect of the Permitted Subordinated Debt,
unless such Guarantee is made by a Guarantor and such Guarantee is unsecured
and subordinated to the Obligations to the same extent as the applicable
Permitted Subordinated Debt;

 

(e)           Guarantee Obligations incurred in
the ordinary course of business in respect of obligations of suppliers,
customers, franchisees, lessors and licensees;

 

(f)            (i) Indebtedness (including
Indebtedness arising under Capital Leases) incurred within 270 days of the
acquisition, construction or improvement of fixed or capital assets to finance
the acquisition, construction or improvement of such fixed or capital assets or
otherwise incurred in respect of Capital Expenditures permitted by Section 10.11,
(ii) Indebtedness arising under Capital Leases entered into in connection
with Permitted Sale Leasebacks and (iii) Indebtedness arising under
Capital Leases, other than Capital Leases in effect on the date hereof and
Capital Leases entered into pursuant to subclauses (i) and (ii) above,
provided that the aggregate amount of Indebtedness incurred pursuant to
this subclause (iii) shall not exceed $75,000,000 at any time
outstanding, and (iv) any refinancing, refunding, renewal or extension of
any Indebtedness specified in subclause (i), (ii) or (iii) above,

 

99

 

provided that the principal amount thereof is not increased
above the principal amount thereof outstanding immediately prior to such
refinancing, refunding, renewal or extension;

 

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

 

(h)           Indebtedness in respect of Hedge
Agreements;

 

(i)            Indebtedness in respect of
Permitted Subordinated Debt;

 

(j)            (i) Indebtedness of a Person
or Indebtedness attaching to assets of a Person that, in either case, becomes a
Restricted Subsidiary or Indebtedness attaching to assets that are acquired by
the Borrower or any Restricted Subsidiary, in each case after the Closing Date
as the result of a Permitted Acquisition, provided that (w) such
Indebtedness existed at the time such Person became a Restricted Subsidiary or
at the time such assets were acquired and, in each case, was not created in
anticipation thereof, (x) such Indebtedness is not guaranteed in any
respect by the Borrower or any Restricted Subsidiary (other than any such
person that so becomes a Restricted Subsidiary), (y)(A) the capital stock
of such Person is pledged to the Administrative Agent to the extent required
under Section 9.12 and (B) such Person executes a supplement to each
of the Guarantee, the Security Agreement and the Pledge Agreement (or alternative
guarantee and security arrangements in relation to the Obligations) to the
extent required under Sections 9.11 or 9.12, as applicable, provided
that the requirements of this subclause (y) shall not apply to an
aggregate amount at any time outstanding of up to (and including) the Guarantee
and Collateral Exception Amount at such time of the aggregate of (1) such
Indebtedness and (2) all Indebtedness as to which the proviso to
clause (k)(i)(y) below then applies, and (z) the aggregate
amount of such Indebtedness and all Indebtedness incurred under clause (k) below,
when taken together, does not exceed $150,000,000 in the aggregate at any time
outstanding, and (ii) any refinancing, refunding, renewal or extension of
any Indebtedness specified in subclause (i) above, provided
that, except to the extent otherwise permitted hereunder, (x) the
principal amount of any such Indebtedness is not increased above the principal
amount thereof outstanding immediately prior to such refinancing, refunding,
renewal or extension and (y) the direct and contingent obligors with
respect to such Indebtedness are not changed;

 

(k)           (i) Indebtedness of the
Borrower or any Restricted Subsidiary incurred to finance a Permitted
Acquisition, provided that (x) such Indebtedness is not guaranteed
in any respect by any Restricted Subsidiary (other than any Person acquired
(the “acquired Person”) as a result of such Permitted Acquisition or the
Restricted Subsidiary so incurring such Indebtedness) or, in the case of
Indebtedness of any Restricted Subsidiary, by the Borrower, (y)(A) the
Borrower pledges the capital stock of such acquired Person to the
Administrative Agent to the extent required under Section 9.12 and (B) such
acquired Person executes a supplement to the Guarantee, the Security Agreement
and the Pledge Agreement (or alternative guarantee and security arrangements in
relation to the Obligations) to the extent required under Sections 9.11 or
9.12, as applicable, provided that the requirements of this
subclause (y) shall not

 

100

 

apply to an aggregate amount at any time
outstanding of up to (and including) the amount of the Guarantee and Collateral
Exception Amount at such time of the aggregate of (1) such Indebtedness
and (2) all Indebtedness as to which the proviso to clause (j)(i)(y) above
then applies, and (z) the aggregate amount of such Indebtedness and all
Indebtedness assumed or permitted to exist under clause (j) above,
when taken together, does not exceed $150,000,000 in the aggregate at any time
outstanding, and (ii) any refinancing, refunding, renewal or extension of
any Indebtedness specified in subclause (i) above, provided
that (x) the principal amount of any such Indebtedness is not increased
above the principal amount thereof outstanding immediately prior to such
refinancing, refunding, renewal or extension and (y) the direct and
contingent obligors with respect to such Indebtedness are not changed, except
to the extent otherwise permitted hereunder;

 

(l)            Indebtedness of Restricted
Foreign Subsidiaries in an aggregate amount at any time outstanding not to
exceed the Dollar Equivalents of $125,000,000 (which amount shall include the
aggregate outstanding amount at any time of any Indebtedness of Restricted
Foreign Subsidiaries existing at the Closing Date);

 

(m)          (i) Indebtedness incurred in
connection with any Permitted Sale Leaseback and (ii) any refinancing,
refunding, renewal or extension of any Indebtedness specified in
subclause (i) above, provided that, except to the extent
otherwise permitted hereunder, (x) the principal amount of any such
Indebtedness is not increased above the principal amount thereof outstanding
immediately prior to such refinancing, refunding, renewal or extension and (y) the
direct and contingent obligors with respect to such Indebtedness are not
changed;

 

(n)           (i) additional Indebtedness,
provided that the aggregate amount of Indebtedness incurred and
remaining outstanding pursuant to this clause (n) shall not at any
time exceed $100,000,000; and (ii) any refinancing, refunding, renewal or
extension of any Indebtedness specified in subclause (i) above; and

 

(o)           Indebtedness in respect of
Permitted Additional Subordinated Notes to the extent that the Net Cash
Proceeds therefrom are, immediately after the receipt thereof, applied to the
prepayment of Term Loans in accordance with Section 5.2

 

(B)         Neither Parent nor Holdings will
create, incur, assume or suffer to exist any Indebtedness except (1) with
respect to Parent, Qualified PIK Securities and (2) the guarantee
obligations of Parent and Holdings of the Subordinated Notes under the
Subordinated Note Indenture (provided that Holdings shall not guarantee
the Subordinated Notes unless (i) Holdings also has guaranteed the
Obligations pursuant to the Guarantee, (ii) such guarantee of the
Subordinated Notes is unsecured and subordinated to such guarantee of the
Obligations on terms no less favorable to the Lenders than the subordination
provisions of the Subordinated Notes and (iii) such guarantee of the
Subordinated Notes provides for the release and termination thereof, without
action by any party, upon any release and termination of such guarantee of the
Obligations).

 

(C)           Neither of Parent, Holdings nor
the Borrower will, nor will they permit any Subsidiary to, issue any preferred
stock or other preferred equity interests, other than, in the case of Parent,
Qualified PIK Securities.

 

101

 

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

 

(a)           Liens arising under the Credit
Documents;

 

(b)           Permitted Liens;

 

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

 

(d)           Liens existing on the date hereof
and listed on Schedule 10.2;

 

(e)           the replacement, extension or
renewal of any Lien permitted by clauses (a) through (d) above and
clauses (f) and (g) of this Section 10.2 upon or in the same
assets theretofore subject to such Lien or the replacement, extension or
renewal (without increase in the amount or change in any direct or contingent
obligor except to the extent otherwise permitted hereunder) of the Indebtedness
secured thereby;

 

(f)            Liens existing on the assets of
any Person that becomes a Restricted Subsidiary, or existing on assets
acquired, pursuant to a Permitted Acquisition to the extent the Liens on such
assets secure Indebtedness permitted by Section 10.1(j), provided
that such Liens attach at all times only to the same assets that such Liens
attached to, and secure only the same Indebtedness that such Liens secured,
immediately prior to such Permitted Acquisition;

 

(g)           (i) Liens placed upon the
capital stock of any Restricted Subsidiary acquired pursuant to a Permitted
Acquisition to secure Indebtedness of the Borrower or any other Restricted
Subsidiary incurred pursuant to Section 10.1(k) in connection with
such Permitted Acquisition and (ii) Liens placed upon the assets of such
Restricted Subsidiary to secure a guarantee by such Restricted Subsidiary or
any such Indebtedness of the Borrower or any other Restricted Subsidiary; and

 

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

 

(B)           Neither Parent nor Holdings will
create, incur, assume or suffer to exist any Lien on any property or asset now
owned or hereafter acquired by it, or assign or sell any income or revenues
(including accounts receivable) or rights in respect thereof, except (a) liens
of the nature set forth in clauses (a), (c) and (h) of the
definition of the term “Permitted Liens” and (b) Liens created under the
Pledge Agreement.

 

10.3.        Limitation on Fundamental Changes. 
(A) Except as expressly permitted by Section 10.4 or 10.5,
each of Holdings, the Borrower and the Canadian Borrower will not, and will not
permit any of the Restricted Subsidiaries to, enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution),

 

102

 

or convey, sell, lease, assign, transfer or
otherwise dispose of, all or substantially all its business units, assets or
other properties, except that:

 

(a)           any Subsidiary of the Borrower or
any other Person may be merged or consolidated with or into the Borrower, provided
that (i) the Borrower shall be the continuing or surviving corporation or
the Person formed by or surviving any such merger or consolidation (if other
than the Borrower) shall be an entity organized or existing under the laws of
the United States, any state thereof, the District of Columbia or any territory
thereof (the Borrower or such Person, as the case may be, being herein referred
to as the “Successor Borrower”), (ii) the Successor Borrower (if
other than the Borrower) shall expressly assume all the obligations of the Borrower
under this Agreement and the other Credit Documents pursuant to a supplement
hereto or thereto in form reasonably satisfactory to the Administrative Agent, (iii) no
Default or Event of Default would result from the consummation of such merger
or consolidation, (iv) the Successor Borrower shall be in compliance, on a
pro forma basis after giving effect to such merger or consolidation, with the
covenants set forth in Sections 10.9 and 10.10, as such covenants are
recomputed as at the last day of the most recently ended Test Period under such
Section as if such merger or consolidation had occurred on the first day
of such Test Period, (v) each Guarantor, unless it is the other party to
such merger or consolidation, shall have by a supplement to the Guarantee
confirmed that its Guarantee shall apply to the Successor Borrower’s
obligations under this Agreement, (vi) each Subsidiary grantor and each
Subsidiary pledgor, unless it is the other party to such merger or
consolidation, shall have by a supplement to the Security Agreement or the
Pledge Agreement, as applicable, confirmed that its obligations thereunder
shall apply to the Successor Borrower’s obligations under this Agreement, (vii) each
mortgagor of a Mortgaged Property, unless it is the other party to such merger
or consolidation, shall have by an amendment to or restatement of the
applicable Mortgage confirmed that its obligations thereunder shall apply to
the Successor Borrower’s obligations under this Agreement, and (viii) the
Borrower shall have delivered to the Administrative Agent an officer’s
certificate and an opinion of counsel, each stating that such merger or
consolidation and such supplement to this Agreement or any Security Document
comply with this Agreement; provided  further that if the foregoing
are satisfied, the Successor Borrower (if other than the Borrower) will succeed
to, and be substituted for, the Borrower under this Agreement;

 

(b)           any Subsidiary of the Canadian
Borrower or any other Person may be merged, amalgamated or consolidated with or
into the Canadian Borrower, provided that (i) the Canadian Borrower
shall be the continuing or surviving corporation or the Person formed by or
surviving any such merger, amalgamation or consolidation (if other than the
Canadian Borrower) shall be a corporation organized or existing under the laws
of Canada (the Canadian Borrower or such Person, as the case may be, being
herein referred to as the “Successor Canadian Borrower”), (ii) the
Successor Canadian Borrower (if other than the Canadian Borrower) shall
expressly assume all the obligations of the Canadian Borrower under this
Agreement and the other Credit Documents pursuant to a supplement hereto or
thereto in form reasonably satisfactory to the Administrative Agent, (iii) no
Default or Event of Default would result from the consummation of such merger,
amalgamation or consolidation, (iv) the Borrower shall be in compliance,
on a pro forma basis after giving effect to such merger, amalgamation or
consolidation, with the covenants set forth in Sections 10.9 and 10.10, as
such covenants are recomputed as at the last day of the most recently ended
Test Period under such Section as if such merger, amalgamation or
consolidation had occurred on the first day of such Test Period,

 

103

 

(v) the Borrower, each Guarantor and each
Foreign Subsidiary Guarantor, unless it is the other party to such merger,
amalgamation or consolidation, shall have by a supplement to the Guarantee or
Canadian Subsidiary Guarantee, as the case may be, confirmed that its Guarantee
or Canadian Subsidiary Guarantee, as the case may be, shall apply to the
Successor Canadian Borrower’s obligations under this Agreement, (vi) each
grantor and each pledgor, unless it is the other party to such merger,
amalgamation or consolidation, shall have by a supplement to the applicable
Security Document confirmed that its obligations thereunder shall apply to the
Successor Canadian Borrower’s obligations under this Agreement, (vii) each
mortgagor of a Mortgaged Property, unless it is the other party to such merger,
amalgamation or consolidation, shall have by an amendment to or restatement of
the applicable Mortgage confirmed that its obligations thereunder shall apply
to the Successor Canadian Borrower’s obligations under this Agreement, and (viii) the
Canadian Borrower shall have delivered to the Administrative Agent an officer’s
certificate and an opinion of counsel, each stating that such merger,
amalgamation or consolidation, such supplement to this Agreement or any
Security Document and such amendment or restatement to any applicable Mortgage,
as the case may be, comply with this Agreement; provided further
that if the foregoing are satisfied, the Successor Canadian Borrower (if other
than the Canadian Borrower) will succeed to, and be substituted for, the
Canadian Borrower under this Agreement;

 

(c)           any Subsidiary of the Borrower
(other than the Canadian Borrower) or any other Person may be merged,
amalgamated or consolidated with or into any one or more Subsidiaries of the
Borrower (other than the Canadian Borrower), provided that (i) in
the case of any merger, amalgamation or consolidation involving one or more
Restricted Subsidiaries, (A) a Restricted Subsidiary shall be the
continuing or surviving corporation or (B) the Borrower shall take all
steps necessary to cause the Person formed by or surviving any such merger,
amalgamation or consolidation (if other than a Restricted Subsidiary) to become
a Restricted Subsidiary, (ii) in the case of any merger, amalgamation or
consolidation involving one or more Guarantors and/or Canadian Subsidiary
Guarantors, as the case may be, a Guarantor or Canadian Subsidiary Guarantor,
as the case may be, shall be the continuing or surviving corporation or the Person
formed by or surviving any such merger, amalgamation or consolidation (if other
than a Guarantor or Canadian Subsidiary Guarantor, as the case may be) shall
execute a supplement to the Guarantee Agreement, the Pledge Agreement and the
Security Agreement and any applicable Mortgage or the analogous Canadian
Security Documents, as the case may be, in form and substance reasonably
satisfactory to the Administrative Agent in order to become a Guarantor or
Canadian Subsidiary Guarantor, as the case may be, and pledgor, mortgagor and
grantor of Collateral for the benefit of the Secured Parties, (iii) no
Default or Event of Default would result from the consummation of such merger,
amalgamation or consolidation, (iv) the Borrower shall be in compliance,
on a pro forma basis after giving effect to such merger, amalgamation or
consolidation, with the covenants set forth in Sections 10.9 and 10.10, as
such covenants are recomputed as at the last day of the most recently ended
Test Period under such Section as if such merger or consolidation had
occurred on the first day of such Test Period, and (v) the Borrower shall
have delivered to the Administrative Agent an Officers’ Certificate stating
that such merger, amalgamation or consolidation and such supplements to any
Security Document comply with this Agreement;

 

(d)           any Restricted Subsidiary that is not a Guarantor or a Foreign
Subsidiary Guarantor may sell, lease, transfer or otherwise dispose of any or
all of its assets (upon voluntary

 

104

 

liquidation or otherwise) to the Borrower, the
Canadian Borrower, a Guarantor, a Foreign Subsidiary Guarantor or any other
Restricted Subsidiary of the Borrower;

 

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

 

(f)            any Restricted Subsidiary (other
than the Canadian Borrower) may liquidate or dissolve if (x) the Borrower
determines in good faith that such liquidation or dissolution is in the best
interests of the Borrower and is not materially disadvantageous to the Lenders
and (y) to the extent such Restricted Subsidiary is a Credit Party, any
assets or business not otherwise disposed of or transferred in accordance with Section 10.4
or 10.5, or, in the case of any such business, discontinued, shall be
transferred to, or otherwise owned or conducted by, another Credit Party after
giving effect to such liquidation or dissolution.

 

(B)           Holdings will not engage in any
business or activity other than (a) the ownership of all the outstanding
shares of capital stock of the Borrower, (b) maintaining its corporate
existence, (c) participating in tax, accounting and other administrative
matters as a member of the consolidated group of Holdings and Borrower, (d) the
performance of the Credit Documents to which it is a party, (e) making any
Dividend permitted by Section 10.6 or holding any cash received in
connection with Dividends made by the Borrower in accordance with Section 10.6
pending application thereof by Holdings in the manner contemplated by Section 10.6
and (f) activities incidental to the businesses or activities described in
clauses (a) to (e) of this Section 10.3(B).  Holdings will not own or acquire any assets
(other than shares of capital stock of the Borrower, cash and Permitted
Investments) or incur any liabilities (other than liabilities under the Credit
Documents, liabilities under its guarantee of the Subordinated Notes and
liabilities imposed by law, including tax liabilities, and other liabilities
incidental to its existence and business and activities permitted by this
Agreement).

 

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

 

10.4.        Limitation on Sale of Assets. 
Each of Holdings, the Borrower and the Canadian Borrower will not, and
will not permit any of the Restricted Subsidiaries to, (i) convey, sell,
lease, assign, transfer or otherwise dispose of any of its property, business
or assets

 

105

 

(including receivables and leasehold interests),
whether now owned or hereafter acquired (other than any such sale, transfer,
assignment or other disposition resulting from any casualty or condemnation, of
any assets of the Borrower or the Restricted Subsidiaries) or (ii) sell to
any Person (other than the Borrower, a Guarantor or a Restricted Foreign Subsidiary)
any shares owned by it of any Restricted Subsidiary’s capital stock, except
that:

 

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

 

(b)           the Borrower and the Restricted
Subsidiaries may sell, transfer or otherwise dispose of other assets (other
than accounts receivable) for fair value, provided that (i) the
aggregate amount of such sales, transfers and disposals by the Borrower and the
Restricted Subsidiaries, taken as a whole, pursuant to this clause (b) shall
not exceed in the aggregate $200,000,000, (ii) any consideration in excess
of $5,000,000 received by the Borrower or any Guarantor in connection with such
sales, transfers and other dispositions of assets pursuant to this clause (b) that
is in the form of Indebtedness shall be pledged to the Administrative Agent
pursuant to Section 9.12, (iii) with respect to any such sale,
transfer or disposition (or series of related sales, transfers or dispositions)
in an aggregate amount in excess of $10,000,000 the Borrower shall be in
compliance, on a pro forma basis after giving effect to such sale, transfer or
disposition, with the covenants set forth in Sections 10.9 and 10.10, as
such covenants are recomputed as at the last day of the most recently ended
Test Period under such Sections as if such sale, transfer or disposition had
occurred on the first day of such Test Period and (iv) after giving effect
to any such sale, transfer or disposition, no Default or Event of Default shall
have occurred and be continuing;

 

(c)           the Borrower and the Restricted
Subsidiaries may make sales of assets to the Borrower or to any Restricted
Subsidiary, provided that any such sales to Restricted Foreign
Subsidiaries shall be for fair value;

 

(d)           any Restricted Subsidiary may
effect any transaction permitted by Section 10.3; and

 

(e)           in addition to selling or
transferring accounts receivable pursuant to the other provisions hereof, the
Borrower and the Restricted Subsidiaries may (i) sell or discount without
recourse accounts receivable arising in the ordinary course of business in
connection with the compromise or collection thereof and (ii) sell or
transfer accounts receivable and related rights pursuant to customary
receivables financing facilities so long as, in the case of clauses (i) and
(ii), the Net Cash Proceeds thereof to the Borrower and its Restricted
Subsidiaries (except in the case of transactions permitted by Section 10.4(e)(i) to
the extent the Net Cash Proceeds of any such transaction do not exceed $10,000)
are promptly applied to the prepayment and/or commitment reductions as provided
for in Section 5.2.

 

10.5.        Limitation on Investments. 
Holdings and the Borrower will not, and will not permit any of the
Restricted Subsidiaries to, make any advance, loan, extensions of credit or
capital contribution to, or purchase any stock, bonds, notes, debentures or
other securities of or any assets of, or make any other investment in, any
Person, except:

 

106

 

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

 

(b)           Permitted Investments;

 

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

 

(d)           investments existing on the date
hereof and listed on Schedule 10.5 and any extensions, renewals or
reinvestments thereof, so long as the aggregate amount of all investments
pursuant to this clause (d) is not increased at any time above the
amount of such investments existing on the date hereof;

 

(e)           investments in Hedge Agreements
permitted by Section 10.1(h);

 

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

 

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

 

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

 

(i)            investments in any Guarantor
(other than Holdings), the Borrower, the Canadian Borrower or any Foreign
Subsidiary Guarantor;

 

(j)            investments constituting
Permitted Acquisitions, provided that the aggregate amount of any such
investment, as valued at the fair market value of such investment at the time
each such investment is made, made by the Borrower or any Restricted Subsidiary
in any Restricted Foreign Subsidiary, to the extent that such Restricted
Foreign Subsidiary does not become a Foreign Subsidiary Guarantor pursuant to Section 9.11
and does not enter into the guarantee and collateral arrangements contemplated
thereby, shall not exceed the Available Amount at the time of such investment
plus an amount equal to any repayments, interest, returns, profits,
distributions, income and similar amounts actually received in cash in respect
of any such investment (which amount shall not exceed the amount of such
investment valued at the fair market value of such investment at the time such
investment was made);

 

(k)           investments in the equity
interests of one or more newly formed persons that are received in
consideration of the contribution by the Borrower or its applicable Restricted
Subsidiaries of assets (including capital stock) to such person or persons, provided
that (i) the fair market value of such assets, determined on arms-length
basis, so contributed pursuant to this paragraph (k) shall not in the
aggregate exceed $50,000,000, (ii) with respect to investments in

 

107

 

Foreign Joint Ventures, the sum of all investments
in Foreign Joint Ventures made pursuant to this Section 10.5 (k) prior
to the date thereof and all investment in Foreign Joint Ventures made pursuant
to Section 10.5(m) below prior to the date thereof, when taken
together, as valued at the fair market value of such investment at the time
each such investment is made, does not exceed $50,000,000 plus an amount equal
to any repayments, interest, returns, profits, distributions, income and
similar amounts actually received in cash in respect of any such investment
(which amount shall not exceed the amount of such investment valued at the fair
market value of such investment at the time such investment was made) in the aggregate
and (iii) in respect of each such contribution, an Authorized Officer of
the Borrower shall certify, in a form to be agreed upon by the Borrower and the
Administrative Agent (x) after giving effect to such contribution, no
Default or Event of Default shall have occurred and be continuing, (y) the
fair market value of the assets so contributed and (z) that the
requirements of paragraph (i) of this proviso remain satisfied;

 

(l)            investments made to repurchase or
retire common stock of Holdings owned by any employee stock ownership plan or
key employee stock ownership plan of Holdings or the Borrower;

 

(m)          additional investments (including
investments in Minority Investments and Unrestricted Subsidiaries), as valued
at the fair market value of such investment at the time each such investment is
made, in an aggregate amount at the time of such investment not in excess of
the Available Amount at such time plus an amount equal to any repayments,
interest, returns, profits, distributions, income and similar amounts actually
received in cash in respect of any such investment (which amount shall not
exceed the amount of such investment valued at the fair market value of such
investment at the time such investment was made), provided, that with
respect to investments in Foreign Joint Ventures, the sum of all investments in
Foreign Joint Ventures made pursuant to Section 10.5 (k) above prior
to the date thereof and all investment in Foreign Joint Ventures made pursuant
to this Section 10.5(m) prior to the date thereof, when taken
together, as valued at the fair market value of such investment at the time
each such investment is made, does not exceed $50,000,000 plus an amount equal
to any repayments, interest, returns, profits, distributions, income and
similar amounts actually received in cash in respect of any such investment
(which amount shall not exceed the amount of such investment valued at the fair
market value of such investment at the time such investment was made) in the
aggregate;

 

(n)           investments permitted under Section 10.6;
and

 

(o)           the initial investment in a newly
formed Puerto Rican Subsidiary as described on Schedule 10.5(o).

 

10.6.        Limitation on Dividends. 
None of Holdings, the Borrower or the Canadian Borrower will declare or
pay any dividends (other than, (a) in respect of  Holdings, dividends payable solely in its
capital stock or rights, warrants or options to purchase its capital stock and (b) in
respect of the Borrower, dividends payable solely in its capital stock) or
return any capital to its stockholders or make any other distribution, payment
or delivery of property or cash to its stockholders as such, or redeem, retire,
purchase or otherwise acquire, directly or indirectly, for consideration, any
shares of any class of its capital stock or the capital stock of any

 

108

 

direct or indirect parent now or hereafter
outstanding (or any options or warrants or stock appreciation rights issued
with respect to any of its capital stock), or set aside any funds for any of
the foregoing purposes, or permit any of the Restricted Subsidiaries to
purchase or otherwise acquire for consideration (other than in connection with
an investment permitted by Section 10.5) any shares of any class of the
capital stock of Holdings or the Borrower, now or hereafter outstanding (or any
options or warrants or stock appreciation rights issued with respect to any of
its capital stock) (all of the foregoing “Dividends”), provided
that, so long as no Default or Event of Default exists or would exist after
giving effect thereto, (a) Holdings or the Borrower may redeem in whole or
in part any of its capital stock for another class of capital stock or rights
to acquire its capital stock or with proceeds from substantially concurrent
equity contributions or issuances of new shares of its capital stock (or pay
dividends with such proceeds), provided that such other class of capital stock
contains terms and provisions at least as advantageous to the Lenders in all
respects material to their interests as those contained in the capital stock
redeemed thereby, (b) Holdings or the Borrower may or may pay Dividends to
Parent to repurchase shares of its or Parent’s capital stock (or any options or
warrants or stock appreciation rights issued with respect to any of its or
Parent’s capital stock) held by officers, directors and employees of Parent,
Holdings and its Subsidiaries, with the proceeds of dividends from, seriatim,
the Borrower and Holdings, as applicable, which shall also be permitted, so
long as such repurchase is pursuant to, and in accordance with the terms of,
management and/or employee stock plans, stock subscription agreements or
shareholder agreements, (c) the Borrower and the Restricted Subsidiaries
may make investments permitted by Section 10.5, (d) Holdings may
declare and pay Dividends on its capital stock, with the proceeds of dividends
from, the Borrower, which shall also be permitted to declare and pay dividends
on its capital stock, provided that (i) subject to clause (ii) below,
the aggregate amount of such Dividends paid by Holdings pursuant to this
clause (d) shall not at any time exceed the sum of (x) $30,000,000
in the aggregate per annum and (y) 50% of Cumulative Consolidated Net
Income Available to Stockholders at such time less the amount of Dividends
previously paid pursuant to clause (i)(x) or (i)(y) of this proviso
following the last day of the most recent fiscal quarter for which Section 9.1
Financials have been delivered to the Lenders under Section 9.1, (ii) with
respect to each of clauses (x) and (y), at the time of the payment of any
such Dividends and after giving effect thereto, both (a) the Consolidated
Total Debt to Consolidated EBITDA Ratio on the date of such payment of such
dividends shall be less than 5.00:1.00 and (b) the Consolidated Senior
Debt to Consolidated EBITDA Ratio on the date of such payment of such dividends
shall be less than 3.50:1.00 and (e) the Borrower and Holdings may declare
and pay dividends and/or make distributions on its capital stock, as
applicable, the proceeds of which will be used by Parent or Holdings solely to
pay taxes of Parent, Holdings, the Borrower and the Subsidiaries as part of a
consolidated tax filing group for U.S. federal, state or local tax purposes,
along with franchise taxes, administrative and similar expenses related to its
existence and ownership of the Borrower, as applicable, provided that the
amount of such dividends does not exceed in any fiscal year the amount of such
taxes and expenses payable for such fiscal year (it being understood that such
expenses shall in no event exceed $1,000,000 in the aggregate per fiscal year).

 

10.7.        Limitations on Debt Payments and
Amendments.  (a)     The Borrower will not prepay, repurchase or
redeem or otherwise defease any Subordinated Notes (it being understood that
any payment of principal prior to April 6, 2014 shall be deemed a
prepayment for purposes of this Section 10.7); provided, however,
that so long as (i) no Default or Event of

 

109

 

Default has occurred and is continuing and (ii) on
the date of such determination the Consolidated Senior Debt to Consolidated
EBITDA Ratio is less than 3.50 to 1.00, the Borrower may prepay, repurchase or
redeem any Subordinated Notes; provided, that to the extent such
prepayment, repurchase or redemption is made with the proceeds of
subordinated Indebtedness that is permitted by Section 10.1 (other than
Permitted Additional Subordinated Notes), such subordinated Indebtedness shall
have terms material to the interests of the Lenders not materially less
advantageous to the Lenders than those of the Subordinated Notes.

 

(b)           The Borrower will not waive,
amend, modify, terminate or release the Subordinated Note Indenture to the
extent that any such waiver, amendment, modification, termination or release
would be adverse to the Lenders in any material respect.

 

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

 

10.9.        Consolidated Total Debt to
Consolidated EBITDA Ratio.  Holdings
and the Borrower will not permit the Consolidated Total Debt to Consolidated
EBITDA Ratio for any Test Period ending during any period set forth below to be
greater than the ratio set forth below opposite such period:

 

	
  Period

  	
   

  	
  Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  May 29,
  2006 to August 27, 2006

  	
   

  	
  5.00 to 1.00

  	
   

  
	
  August 28
  2006 to November 26, 2006

  	
   

  	
  5.00 to 1.00

  	
   

  
	
  November 27,
  2006 to February 25, 2007

  	
   

  	
  5.00 to 1.00

  	
   

  
	
  February 26,
  2007 to May 27, 2007

  	
   

  	
  4.75 to 1.00

  	
   

  
	
  May 28,
  2007 to August 26, 2007

  	
   

  	
  4.75 to 1.00

  	
   

  
	
  August 27,
  2007 December 2, 2007

  	
   

  	
  4.50 to 1.00

  	
   

  
	
  December 3,
  2007 to March 2, 2008

  	
   

  	
  4.50 to 1.00

  	
   

  
	
  March 3,
  2008 to June 1, 2008

  	
   

  	
  4.25 to 1.00

  	
   

  
	
  June 2,
  2008 to August 31, 2008

  	
   

  	
  4.25 to 1.00

  	
   

  
	
  September 1,
  2008 to November 30, 2008

  	
   

  	
  4.00 to 1.00

  	
   

  
	
  December 1,
  2008 and thereafter

  	
   

  	
  4.00 to 1.00

  	
   

  

 

10.10.      Consolidated EBITDA to
Consolidated Interest Expense Ratio.  Holdings
and the Borrower will not permit the Consolidated EBITDA to Consolidated
Interest Expense Ratio for any Test Period ending during any period set forth
below to be less than the ratio set forth below opposite such period:

 

110

 

	
  Period

  	
   

  	
  Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  May 29,
  2006 to August 27, 2006

  	
   

  	
  2.10 to 1.00

  	
   

  
	
  August 28
  2006 to November 26, 2006

  	
   

  	
  2.10 to 1.00

  	
   

  
	
  November 27,
  2006 to February 25, 2007

  	
   

  	
  2.10 to 1.00

  	
   

  
	
  February 26,
  2007 to May 27, 2007

  	
   

  	
  2.10 to 1.00

  	
   

  
	
  May 28,
  2007 to August 26, 2007

  	
   

  	
  2.20 to 1.00

  	
   

  
	
  August 27,
  2007 December 2, 2007

  	
   

  	
  2.20 to 1.00

  	
   

  
	
  December 3,
  2007 to March 2, 2008

  	
   

  	
  2.30 to 1.00

  	
   

  
	
  March 3,
  2008 to June 1, 2008

  	
   

  	
  2.30 to 1.00

  	
   

  
	
  June 2,
  2008 to August 31, 2008

  	
   

  	
  2.30 to 1.00

  	
   

  
	
  September 1,
  2008 to November 30, 2008

  	
   

  	
  2.30 to 1.00

  	
   

  
	
  December 1,
  2008 to March 1, 2009

  	
   

  	
  2.40 to 1.00

  	
   

  
	
  March 2,
  2009 to May 31, 2009

  	
   

  	
  2.40 to 1.00

  	
   

  
	
  June 1,
  2009 to August 30, 2009

  	
   

  	
  2.50 to 1.00

  	
   

  
	
  August 31,
  2009 to November 29, 2009

  	
   

  	
  2.50 to 1.00

  	
   

  
	
  November 30,
  2009 to February 28, 2010

  	
   

  	
  2.50 to 1.00

  	
   

  
	
  March 1,
  2010 to May 30, 2010

  	
   

  	
  2.50 to 1.00

  	
   

  
	
  June 1,
  2010 to August 29, 2010

  	
   

  	
  2.75 to 1.00

  	
   

  
	
  August 30,
  2010 to November 28, 2010

  	
   

  	
  2.75 to 1.00

  	
   

  
	
  November 29,
  2010 and thereafter

  	
   

  	
  2.75 to 1.00

  	
   

  

 

10.11.      Capital Expenditures. 
Holdings, the Borrower and the Canadian Borrower will not, and will not
permit any of the Restricted Subsidiaries to, make any Capital Expenditures
(other than Permitted Acquisitions that constitute Capital Expenditures), that
would cause the aggregate amount of such Capital Expenditures made by the
Borrower and the Restricted Subsidiaries in any fiscal year of the Borrower set
forth below to exceed (i) the sum of (a) the greater of (x) the
amount set forth in the table below opposite such fiscal year and (y) an
amount equal to 6.00% multiplied by Consolidated Net Sales for such fiscal year
(such greater amount, the “Permitted Capital Expenditure Amount”) and (b) the
Available Amount as of the last day of such fiscal year (provided that no
portion of the Available Amount may be used for Capital Expenditures until the
entire amount of the sum of (x) the Permitted Capital Expenditure Amount
for such year and (y) the carry-forward amount (as defined below in this Section 10.11)
for such year shall have been used to make Capital Expenditures) less (ii) to
the extent deducted in arriving at Consolidated Earnings in the prior fiscal
year, the amount of expenses related to the implementation of enterprise
resource planning systems of such prior fiscal year.

 

	
  Period

  	
   

  	
  Amount

  	
   

  
	
  March 1,
  2004 to November 28, 2004

  	
   

  	
  $

  	
  35,000,000

  	
   

  
	
  November 29,
  2004 to November 27, 2005

  	
   

  	
  $

  	
  45,000,000

  	
   

  
	
  November 28,
  2005 to November 26, 2006

  	
   

  	
  $

  	
  50,000,000

  	
   

  
	
  November 27,
  2006 to December 2, 2007

  	
   

  	
  $

  	
  40,000,000

  	
   

  

 

111

 

	
  Period

  	
   

  	
  Amount

  	
   

  
	
  December 3,
  2007 to November 30, 2008

  	
   

  	
  $

  	
  40,000,000

  	
   

  
	
  December 1,
  2008 to November 29, 2009

  	
   

  	
  $

  	
  40,000,000

  	
   

  
	
  November 30,
  2009 to November 28, 2010

  	
   

  	
  $

  	
  40,000,000

  	
   

  
	
  November 29,
  2010 to the Maturity Date

  	
   

  	
  $

  	
  40,000,000

  	
   

  

 

To the extent that Capital Expenditures (other than
Permitted Acquisitions that constitute Capital Expenditures) made by the
Borrower and the Restricted Subsidiaries during any fiscal year are less than
the Permitted Capital Expenditure Amount for such fiscal year, 100% of such
unused amount (each such amount, a “carry-forward amount”) may be
carried forward to the immediately succeeding fiscal year and utilized to make
such Capital Expenditures in such succeeding fiscal year in the event the
amount set forth above for such succeeding fiscal year has been used (it being
understood and agreed that (a) no carry-forward amount may be carried
forward beyond the first two fiscal years immediately succeeding the fiscal
year in which it arose, (b) no portion of the carry-forward amount
available for any fiscal year may be used until the entire amount of the
Permitted Capital Expenditure Amount for such fiscal year (without giving
effect to such carry-forward amount) shall have been used to make Capital
Expenditures and (c) if the carry-forward amount available for any fiscal
year is the sum of amounts carried forward from each of the two immediately
preceding fiscal years, no portion of such carry-forward amount from the
earlier of the two immediately preceding fiscal years may be used until the
entire portion of such carry-forward amount from the more recent immediately
preceding fiscal year shall have been used for such Capital Expenditures made
in such fiscal year).

 

SECTION 11.                          Events of Default

 

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

 

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

 

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

 

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

 

112

 

11.4.        Default Under Other Agreements. 
(a) Any of Holdings, the Borrower, the Canadian Borrower or any of
the Restricted Subsidiaries shall (i) default in any payment with respect
to any Indebtedness (other than the Obligations) in excess of $20,000,000 in
the aggregate, for Holdings, the Borrower, the Canadian Borrower and such
Subsidiaries, beyond the period of grace, if any, provided in the instrument or
agreement under which such Indebtedness was created or (ii) default in the
observance or performance of any agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement evidencing, securing
or relating thereto, or any other event shall occur or condition exist (other
than, with respect to Indebtedness consisting of any Hedge Agreements,
termination events or equivalent events pursuant to the terms of such Hedge
Agreements), the effect of which default or other event or condition is to
cause, or to permit the holder or holders of such Indebtedness (or a trustee or
agent on behalf of such holder or holders) to cause, any such Indebtedness to
become due prior to its stated maturity; or (b) without limiting the
provisions of clause (a) above, any such Indebtedness shall be
declared to be due and payable, or required to be prepaid other than by a
regularly scheduled required prepayment or as a mandatory prepayment (and, with
respect to Indebtedness consisting of any Hedge Agreements, other than due to a
termination event or equivalent event pursuant to the terms of such Hedge
Agreements), prior to the stated maturity thereof; or

 

11.5.        Bankruptcy, etc. 
Holdings, the Borrower, the Canadian Borrower or any Specified
Subsidiary shall commence a voluntary case, proceeding or action concerning
itself under (a) Title 11 of the United States Code entitled “Bankruptcy,”
or (b) in the case of the Canadian Borrower and any Foreign Subsidiary
that is a Specified Subsidiary, any domestic or foreign law relating to
bankruptcy, insolvency reorganization or relief of debtors legislation of its
jurisdiction of incorporation, in each case as now or hereafter in effect, or
any successor thereto (collectively, the “Bankruptcy Code”); or an
involuntary case, proceeding or action is commenced against any of Holdings,
the Borrower, the Canadian Borrower or any Specified Subsidiary and the
petition is not controverted within 10 days after commencement of the case,
proceeding or action; or an involuntary case, proceeding or action is commenced
against any of Holdings, the Borrower, the Canadian Borrower or any Specified
Subsidiary and the petition is not dismissed within 60 days after commencement
of the case, proceeding or action; or a custodian (as defined in the Bankruptcy
Code) receiver, receiver manager, trustee or similar person is appointed for,
or takes charge of, all or substantially all of the property of any of
Holdings, the Borrower, the Canadian Borrower or any Specified Subsidiary; or
any of Holdings, the Borrower, the Canadian Borrower or any Specified
Subsidiary commences any other proceeding or action under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction whether now or hereafter in
effect relating to any of Holdings, the Borrower, the Canadian Borrower or any
Specified Subsidiary; or there is commenced against any of Holdings, the
Borrower, the Canadian Borrower or any Specified Subsidiary any such proceeding
or action that remains undismissed for a period of 60 days; or any of Holdings,
the Borrower, the Canadian Borrower or any Specified Subsidiary is adjudicated
insolvent or bankrupt; or any order of relief or other order approving any such
case or proceeding or action is entered; or any of Holdings, the Borrower, the
Canadian Borrower or any Specified Subsidiary suffers any appointment of any
custodian receiver, receiver manager, trustee or the like for it or any
substantial part of its property to continue undischarged or unstayed for a
period of 60 days; or any of Holdings, the Borrower, the Canadian Borrower or
any Specified Subsidiary makes a general assignment for

 

113

 

the benefit of creditors; or any corporate action
is taken by any of Holdings, the Borrower, the Canadian Borrower or any
Specified Subsidiary for the purpose of effecting any of the foregoing; or

 

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

 

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

 

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

 

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

 

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

 

11.11.           Foreign Guarantees. 
The Canadian Guarantee or any material provision of the Canadian
Guarantee shall cease to be in full force or effect or any grantor thereunder
or any Credit Party shall deny or disaffirm in writing any grantors obligations
under the Canadian Guarantee; or

 

114

 

11.12.           Canadian Security Documents. 
Any Canadian Security Document or any material provision of any Canadian
Security Document shall cease to be in full force or effect (other than
pursuant to the terms hereof or thereof or as a result of acts or omissions of
the Administrative Agent or any Lender) or any grantor thereunder or any Credit
Party shall deny or disaffirm in writing any grantors obligations under any
Canadian Security Document; or

 

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

 

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

 

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

 

115

 

Borrower’s respective reimbursement obligations for
(x) Drawings that may subsequently occur thereunder, equal to the
aggregate Stated Amount of all Letters of Credit issued and then outstanding
and (y) the full face amount of Bankers’ Acceptances outstanding prior to
their maturity dates.

 

SECTION 12.                                          The Administrative Agent

 

12.1.        Appointment. 
Each Lender hereby irrevocably designates and appoints the
Administrative Agent as the agent of such Lender under this Agreement and the
other Credit Documents, and each such Lender irrevocably authorizes the
Administrative Agent, in such capacity, to take such action on its behalf under
the provisions of this Agreement and the other Credit Documents and to exercise
such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement and the other Credit
Documents, together with such other powers as are reasonably incidental thereto.  Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Administrative Agent shall not have any duties
or responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Credit Document or otherwise exist against the
Administrative Agent.  Neither the
Syndication Agent nor the Co-Documentation Agents, in their respective
capacities as such, shall have any obligations, duties or responsibilities
under this Agreement but shall be entitled to all benefits of this Section 12.

 

12.2.        Delegation of Duties. 
The Administrative Agent may execute any of its duties under this
Agreement and the other Credit Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties.  The
Administrative Agent shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact selected by it with reasonable care.

 

12.3.        Exculpatory Provisions. 
Neither the Administrative Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates shall be (a) liable for
any action lawfully taken or omitted to be taken by it or such Person under or
in connection with this Agreement or any other Credit Document (except for its
or such Person’s own gross negligence or willful misconduct) or (b) responsible
in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by the Borrower, the Canadian Borrower, any
Guarantor, any Canadian Subsidiary Guarantor, any other Credit Party or any
officer thereof contained in this Agreement or any other Credit Document or in
any certificate, report, statement or other document referred to or provided
for in, or received by the Administrative Agent under or in connection with,
this Agreement or any other Credit Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Credit Document or for any failure of the Borrower, the Canadian
Borrower, any Guarantor, any Canadian Subsidiary Guarantor or any other Credit
Party to perform its obligations hereunder or thereunder.  The Administrative Agent shall not be under
any obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Credit Document, or to inspect the properties, books or
records of the Borrower or the Canadian Borrower.

 

116

 

12.4.        Reliance by Administrative Agent. 
The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telecopy, telex or teletype message, statement,
order or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons
and upon advice and statements of legal counsel (including counsel to the
Borrower and/or the Canadian Borrower), independent accountants and other
experts selected by the Administrative Agent. 
The Administrative Agent may deem and treat the Lender specified in the
Register with respect to any amount owing hereunder as the owner thereof for
all purposes unless a written notice of assignment, negotiation or transfer
thereof shall have been filed with the Administrative Agent.  The Administrative Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Credit Document unless it shall first receive such advice or concurrence
of the Required Lenders as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability
and expense that may be incurred by it by reason of taking or continuing to
take any such action.  The Administrative
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement and the other Credit Documents in accordance with
a request of the Required Lenders, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Loans.

 

12.5.        Notice of Default. 
The Administrative Agent shall not be deemed to have knowledge or notice
of the occurrence of any Default or Event of Default hereunder unless the
Administrative Agent has received notice from a Lender or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a “notice of default”.  In the event that the Administrative Agent
receives such a notice, the Administrative Agent shall give notice thereof to
the Lenders.  The Administrative Agent
shall take such action with respect to such Default or Event of Default as
shall be reasonably directed by the Required Lenders, provided that unless and
until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders (except
to the extent that this Agreement requires that such action be taken only with
the approval of the Required Lenders or each of the Lenders, as applicable).

 

12.6.        Non-Reliance on Administrative
Agent and Other Lenders.  Each
Lender expressly acknowledges that neither the Administrative Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or Affiliates has
made any representations or warranties to it and that no act by the
Administrative Agent hereinafter taken, including any review of the affairs of
the Borrower, the Canadian Borrower, any Guarantor, any Canadian Subsidiary
Guarantor or any other Credit Party, shall be deemed to constitute any
representation or warranty by the Administrative Agent to any Lender.  Each Lender represents to the Administrative
Agent that it has, independently and without reliance upon the Administrative
Agent or any other Lender, and based on such documents and information as it
has deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of the Borrower, the Canadian Borrower, any Guarantor, any
Canadian Subsidiary Guarantor and any other Credit Party and made its own decision
to make its Loans hereunder and enter into this Agreement.  Each Lender also represents that it will,
independently and without reliance upon the Administrative Agent or any other
Lender, and based on such 

 

117

 

documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the other
Credit Documents, and to make such investigation as it deems necessary to
inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Borrower, the Canadian Borrower, any
Guarantor, any Canadian Subsidiary Guarantor and any other Credit Party.  Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any
duty or responsibility to provide any Lender with any credit or other information
concerning the business, assets, operations, properties, financial condition,
prospects or creditworthiness of the Borrower, the Canadian Borrower, any
Guarantor, any Canadian Subsidiary Guarantor or any other Credit Party that may
come into the possession of the Administrative Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates.

 

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

 

12.8.        Administrative Agent in its
Individual Capacity.  The Administrative Agent and
its Affiliates may make loans to, accept deposits from and generally engage in
any kind of business with the Borrower, the Canadian Borrower, any Guarantor,
any Canadian Subsidiary Guarantor and any other Credit Party as though the
Administrative Agent were not the Administrative Agent hereunder and under the
other Credit Documents.  With respect to
the Loans made by it, the Administrative Agent shall have the same rights and
powers under this Agreement and the other Credit Documents as any Lender and
may exercise the same as though it were not the Administrative Agent, and the
terms “Lender” and “Lenders” shall include the Administrative Agent in its
individual capacity.

 

12.9.        Successor Agent. 
The Administrative Agent may resign as Administrative Agent upon 20 days’
prior written notice to the Lenders and the Borrower.  If the Administrative Agent shall resign as
Administrative Agent under this Agreement and the other Credit

 

118

 

Documents, then the Required Lenders shall appoint
from among the Lenders a successor agent for the Lenders, which successor agent
shall be approved by the Borrower (which approval shall not be unreasonably
withheld), whereupon such successor agent shall succeed to the rights, powers
and duties of the Administrative Agent, and the term “Administrative Agent”
shall mean such successor agent effective upon such appointment and approval,
and the former Administrative Agent’s rights, powers and duties as
Administrative Agent shall be terminated, without any other or further act or
deed on the part of such former Administrative Agent or any of the parties to
this Agreement or any holders of the Loans. 
After any retiring Administrative Agent’s resignation as Administrative
Agent, the provisions of this Section 12 shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was Administrative
Agent under this Agreement and the other Credit Documents.

 

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

 

12.11.      Canadian Administrative Agent.(a)  Each of the Lenders hereby agrees
and confirms that the provisions of this Section 12 shall apply to
JPMorgan Chase Bank, N.A., Toronto Branch, as Canadian Administrative Agent
with respect to the Canadian Revolving Credit Loans upon the same terms and
subject to the same conditions as provided in this Section 12 mutatis
mutandis; provided, that any successor Canadian Administrative Agent
shall be a Canadian Resident with an office in Toronto, Canada or Montreal,
Canada having a combined capital and surplus of at least $500,000,000 or an
Affiliate of any such bank which is also a bank.

 

12.12.      Quebec. For greater certainty, and
without limiting the powers of the Agents or any other Person acting as an
agent, attorney-in-fact or mandatary for the Agents under this Agreement or
under any of the other Credit Documents, each Lender, hereby (a) irrevocably
constitutes, to the extent necessary, the Canadian Administrative Agent as the
holder of an irrevocable power of attorney (fondé de pouvoir within the
meaning of Article 2692 of the Civil Code of Québec) for the
purposes of holding any Liens, including hypothecs, granted or to be granted by
any Credit Party on movable or immovable property pursuant to the laws of the
Province of Quebec to secure obligations of a Credit Party under any bond
issued by a Credit Party; and (b) appoints and agrees that the Canadian
Administrative Agent, acting as agent for the Lenders, may act as the
bondholder and mandatary with respect to any bond that may be issued and
pledged from time to time for the benefit of the Lenders.

 

The said constitution of the fondé de pouvoir  (within the meaning of Article 2692
of the Civil Code of Quebec) as the holder of such irrevocable power of
attorney and of the Canadian Administrative Agent as bondholder and mandatary
with respect to any bond that may be issued

 

119

 

and pledged from time to time for the benefit of
the Lenders shall be deemed to have been ratified and confirmed by any assignee
by the execution of an Assignment and Acceptance.

 

Notwithstanding the provisions of Section 32
of An Act respecting the special powers of legal persons (Quebec), the
Canadian Administrative Agent may purchase, acquire and be the holder of any
bond issued by any Credit Party.  Each
Credit Party hereby acknowledges that any such bond shall constitute a title of
indebtedness, as such term is used in Article 2692 of the Civil Code of
Quebec.

 

The Canadian Administrative Agent herein appointed
as fondé de pouvoir shall have the same rights, powers and immunities as
the Agents as stipulated in this Article XII, which shall apply mutatis
mutandis.  Without limitation, the
provisions of Section 12.9 of this Agreement shall apply mutatis
mutandis to the resignation and appointment of a successor to the Canadian
Administrative Agent acting as fondé de pouvoir.

 

SECTION 13.                                          Collateral Allocation Mechanism

 

13.1.        Implementation of CAM.  (a)     On the CAM Exchange Date, (i) the
Commitments shall automatically and without further act be terminated as
provided in Section 11, (ii) the Lenders shall automatically and
without further act (and without regard to the provisions of Section 14.6)
be deemed to have exchanged interests in the Credit Facilities such that in
lieu of the interest of each Lender in each Credit Facility in which it shall
participate as of such date (including such Lender’s interest in the Specified
Obligations of each Credit Party in respect of each such Credit Facility), such
Lender shall hold an interest in every one of the Credit Facilities (including
the Specified Obligations of each Credit Party in respect of each such Credit
Facility and each L/C Reserve Account established pursuant to Section 13.2
below), whether or not such Lender shall previously have participated therein,
equal to such Lender’s CAM Percentage thereof and (iii) simultaneously
with the deemed exchange of interests pursuant to clause (ii) above, in the
case of (A) any Canadian Lender that has prior to the date thereof
notified the Canadian Administrative Agent and the Borrower in writing that it
has elected to have this clause (iii) apply to it, and (B) any other
Lender that has notified the Administrative Agent in writing that it desires to
have its deemed participation following the CAM Exchange Date converted to
Dollars, the interests in the Canadian Obligations to be received by such
Lender in such deemed exchange shall, automatically and with no further action
required, be converted into the Dollar Equivalent, determined using the
Exchange Rate calculated as of such date, of such amount and on and after such
date all amounts accruing and owed to such Lender in respect of such
Obligations shall accrue and be payable in Dollars at the rate otherwise
applicable hereunder, provided that such CAM Exchange will not affect the
aggregate amount of the Obligations of the Borrower and the Canadian Borrower
to the Lenders under the Credit Documents. 
Each Lender and each Credit Party hereby consents and agrees to the CAM
Exchange, and each Lender agrees that the CAM Exchange shall be binding upon
its successors and assigns and any person that acquires a participation in its
interests in any Credit Facility.  Each
Credit Party agrees from time to time to execute and deliver to the
Administrative Agent all promissory notes and other instruments and documents
as the Administrative Agent shall reasonably request to evidence and confirm
the respective interests of the Lenders after giving effect to the CAM
Exchange, and each Lender agrees to surrender any promissory notes originally
received by it in connection with its Loans hereunder to the Administrative
Agent

 

120

 

against delivery of new promissory notes evidencing
its interests in the Credit Facilities; provided, however, that the failure of
any Credit Party to execute or deliver or of any Lender to accept any such
promissory note, instrument or document shall not affect the validity or
effectiveness of the CAM Exchange.

 

(b)           As a result of the CAM Exchange,
upon and after the CAM Exchange Date, each payment received by the
Administrative Agent pursuant to any Credit Document in respect of the
Specified Obligations, and each distribution made by the Administrative Agent
pursuant to any Credit Document in respect of the Specified Obligations, shall
be distributed to the Lenders pro rata in accordance with their respective CAM
Percentages.  Any direct payment received
by a Lender upon or after the CAM Exchange Date, including by way of setoff, in
respect of a Specified Obligation shall be paid over to the Administrative
Agent for distribution to the Lenders in accordance herewith.

 

13.2.        Letters of Credit.  (a)     In the event that on the CAM Exchange Date
any Letter of Credit shall be outstanding and undrawn in whole or in part, or
any amount drawn under a Letter of Credit shall constitute an Unpaid Drawing,
each Lender with a U.S. Revolving Credit Commitment or Canadian Revolving
Credit Commitment, as applicable, in respect of Unpaid Drawings on Letters of
Credit shall, before giving effect to the CAM Exchange, promptly pay over to
the Administrative Agent, in immediately available funds and in the currency
that such Letters of Credit are denominated (or at the request of a Lender,
such amount in the Dollar Equivalent thereof at such time), an amount equal to
such Lender’s Revolving Credit Commitment Percentage (as notified to such
Lender by the Administrative Agent), of such Letter of Credit’s undrawn face
amount or (to the extent it has not already done so) such Letter of Credit’s
Unpaid Drawing, as the case may be, together with interest thereon from the CAM
Exchange Date to the date on which such amount shall be paid to the
Administrative Agent at the rate that would be applicable at the time to a
Revolving Credit Loan that is an ABR Loan in a principal amount equal to such
amount, as the case may be.  The
Administrative Agent shall establish a separate account or accounts for each
Lender (each, an “L/C Reserve Account”) for the amounts received with
respect to each such Letter of Credit pursuant to the preceding sentence.  The Administrative Agent shall deposit in
each Lender’s L/C Reserve Account such Lender’s CAM Percentage of the amounts
received from the Lenders as provided above. 
The Administrative Agent shall have sole dominion and control over each
L/C Reserve Account, and the amounts deposited in each L/C Reserve Account
shall be held in such L/C Reserve Account until withdrawn as provided in
paragraph (b), (c), (d) or (e) below.  The Administrative Agent shall maintain
records enabling it to determine the amounts paid over to it and deposited in
the L/C Reserve Accounts in respect of each Letter of Credit and the amounts on
deposit in respect of each Letter of Credit attributable to each Lender’s CAM
Percentage.  The amounts held in each
Lender’s L/C Reserve Account shall be held as a reserve against the Letter of
Credit Exposure, shall be the property of such Lender, shall not constitute
Loans to or give rise to any claim of or against any Credit Party and shall not
give rise to any obligation on the part of the Borrower or the Canadian
Borrower to pay interest to such Lender, it being agreed that the reimbursement
obligations in respect of Letters of Credit shall arise only at such times as
drawings are made thereunder, as provided in Section 3.

 

(b)           In the event that after the CAM
Exchange Date any drawing shall be made in respect of a Letter of Credit, the
Administrative Agent shall, at the request of the Letter of

 

121

 

Credit Issuer withdraw from the L/C Reserve Account
of each Lender any amounts, up to the amount of such Lender’s CAM Percentage of
such drawing, deposited in respect of such Letter of Credit and remaining on
deposit and deliver such amounts to the Letter of Credit Issuer in satisfaction
of the reimbursement obligations of the Lenders under Section 3 (but not
of the Borrower and the Canadian Borrower under Section 3,
respectively).  In the event any Lender
shall default on its obligation to pay over any amount to the Administrative
Agent in respect of any Letter of Credit as provided in this Section 13.2,
the Letter of Credit Issuer shall, in the event of a drawing thereunder, have a
claim against such Lender to the same extent as if such Lender had defaulted on
its obligations under Section 2.5(e), but shall have no claim against any
other Lender in respect of such defaulted amount, notwithstanding the exchange
of interests in the reimbursement obligations pursuant to Section 13.1.  Each other Lender shall have a claim against
such defaulting Lender for any damages sustained by it as a result of such
default, including, in the event such Letter of Credit shall expire undrawn,
its CAM Percentage of the defaulted amount.

 

(c)           In the event that after the CAM
Exchange Date any Letter of Credit shall expire undrawn, the Administrative
Agent shall withdraw from the L/C Reserve Account of each Lender the amount
remaining on deposit therein in respect of such Letter of Credit and distribute
such amount to such Lender.

 

(d)           With the prior written approval
of the Administrative Agent and the Letter of Credit Issuer, any Lender may
withdraw the amount held in its L/C Reserve Account in respect of the undrawn
amount of any Letter of Credit.  Any
Lender making such a withdrawal shall be unconditionally obligated, in the
event there shall subsequently be a drawing under such Letter of Credit, to pay
over to the  Administrative Agent, for
the account of the Letter of Credit Issuer on demand, its CAM Percentage of
such drawing.

 

(e)           Pending the withdrawal by any
Lender of any amounts from its L/C Reserve Account as contemplated by the above
paragraphs, the Administrative Agent will, at the direction of such Lender and
subject to such rules as the Administrative Agent may prescribe for the
avoidance of inconvenience, invest such amounts in Permitted Investments.  Each Lender that has not withdrawn its CAM
Percentage of amounts in its L/C Reserve Account as provided in paragraph (d) above
shall have the right, at intervals reasonably specified by the Administrative
Agent, to withdraw the earnings on investments so made by the Administrative
Agent with amounts in its L/C Reserve Account and to retain such earnings for
its own account.

 

13.3.        Net Payments Upon Implementation
of CAM Exchange.  Notwithstanding any other
provision of this Agreement, if, as a direct result of the implementation of
the CAM Exchange, the Borrower or the Canadian Borrower is required to withhold
Non-Excluded Taxes from amounts payable to the Administrative Agent, any Lender
or any Participant hereunder, the amounts so payable to the Administrative
Agent, such Lender or such Participant shall be increased to the extent
necessary to yield to the Administrative Agent, such Lender or such Participant
(after payment of all Non-Excluded Taxes) interest or any such other amounts
payable hereunder at the rates or in the amounts specified in this Agreement; provided,
however, that the Borrower and the Canadian Borrower shall not be
required to increase any such amounts payable to such Lender or Participant
under this Section 13.3 (but, rather, shall be required to increase any
such amounts payable to such Lender or Participant to the extent required by

 

122

 

Section 5.4) if such Lender or Participant was
prior to or on the CAM Exchange Date already a Lender or Participant with
respect to such Borrower or Canadian Borrower. 
If a Non-U.S. Lender (or Non-U.S. Participant), in its good faith
judgment, is eligible for an exemption from, or reduced rate of, U.S. Federal
withholding tax on payments by the Borrower under this Agreement, the Borrower
shall not be required to increase any such amounts payable to such Non-U.S.
Lender (or Non-U.S. Participant) if such Non-U.S. Lender (or Non-U.S.
Participant) fails to comply with the requirements of paragraph (b) of Section 5.4.  The Canadian Borrower shall not be required
to indemnify or pay any additional amounts to any Lender in respect of Canadian
withholding tax pursuant to this Section 13.3 to the extent that such
taxes result from a failure by the Lender to comply with any Reporting
Requirement described in Section 5.4(c) of this Agreement if (i) compliance
is required by law, regulation, administrative practice or any applicable tax
treaty as a precondition to exemption from or a reduction in the rate of
deduction or withholding of tax, and (ii) the Canadian borrower has first
made written request to the Lender that such Lender comply with the particular
Reporting Requirement (identified specifically in such request) and the Lender
has not complied with such Reporting Requirement within 30 Business Days of
such written request; provided, however that the Canadian
Borrower shall not be relieved of its obligation to indemnify or pay additional
amounts to a Lender (x) where such obligation arose prior to the Canadian
Borrower’s written request to the Lender respecting such Reporting Requirement,
(y) if, by reason of any change in any law, regulation, administrative
practice or applicable tax treaty occurring after the date hereof, the Lender,
as applicable, is unable to duly comply with such Reporting Requirement, or (z) to
the extent that the additional payment or indemnity compensates the Lender for
an amount to which the Lender would have been entitled to received under this Section 13.3
had the Lender complied with the Reporting Requirement.  Upon a CAM Exchange, a Lender (or
Participant) will use commercially reasonable efforts, and complete any
procedural formalities necessary, to become an Eligible Lender with respect to
the Canadian Borrower and, if such Lender (or Participant) fails to do so, the
Canadian Borrower shall not be required to increase any such amounts payable to
such Lender (or Participant) (unless such Lender is prohibited from becoming a
Canadian Lender by its governing documents). 
If the Borrower or the Canadian Borrower, as the case may be, fails to
pay any such Non-Excluded Taxes when due to the appropriate taxing authority or
fails to remit to the Administrative Agent the required receipts or other
required documentary evidence, such Borrower or Canadian Borrower shall
indemnify the Administrative Agent, the Lenders and the Participants for any
incremental taxes, interest, costs or penalties that may become payable by the
Administrative Agent, such Lenders or such Participants as a result of any such
failure.

 

SECTION 14.                                          Miscellaneous

 

14.1.        Amendments and Waivers.  Neither this Agreement nor any other Credit
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 14.1.  The Required Lenders may, or, with the
written consent of the Required Lenders, the Administrative Agent may, from
time to time, (a) enter into with the relevant Credit Party or Credit
Parties written amendments, supplements or modifications hereto and to the
other Credit Documents for the purpose of adding any provisions to this
Agreement or the other Credit Documents or changing in any manner the rights of
the Lenders or of the Credit Parties hereunder or thereunder or (b) waive,
on such terms and conditions as the Required Lenders or the Administrative Agent,
as the case may be, may specify in such instrument, any of the requirements of
this Agreement or the other Credit Documents or

 

123

 

any Default or
Event of Default and its consequences; provided, however, that no
such waiver and no such amendment, supplement or modification shall directly (i) forgive
any portion of any Loan or extend the final scheduled maturity date of any Loan
or reduce the stated rate, or forgive any portion, or extend the date for the
payment, of any interest or fee payable hereunder (other than as a result of
waiving the applicability of any post-default increase in interest rates), or
extend the final expiration date of any Lender’s Commitment or extend the final
expiration date of any Letter of Credit beyond the L/C Maturity Date, or
increase the aggregate amount of the Commitments of any Lender, or amend or
modify any provisions of Section 14.8(a), in each case without the written
consent of each Lender directly and adversely affected thereby, or (ii) amend,
modify or waive any provision of this Section 14.1 or reduce the
percentages specified in the definitions of the terms “Required Canadian
Revolving Credit Lenders”, “Required US Revolving Credit Lenders”,  “Required
Lenders” “Required Tranche A Term Lenders”, “Required Tranche E Term Lenders”
and  “Required Term Lenders” or consent to the assignment or transfer by the
Borrower or the Canadian Borrower of its rights and obligations under any
Credit Document to which it is a party (except as permitted pursuant to Section 10.3),
in each case without the written consent of each Lender directly and adversely
affected thereby, or (iii) amend, modify or waive any provision of Section 12
without the written consent of the then-current Administrative Agent, or (iv) amend,
modify or waive any provision of Section 3 without the written consent of
the Letter of Credit Issuer, or (v) amend, modify or waive any provisions
hereof relating to Swingline Loans without the written consent of the Swingline
Lender, or (vi) (a) change any Revolving Credit Commitment to a
Tranche A Term Loan Commitment or Tranche E Term Loan Commitment, (b) change
any Tranche A Term Loan Commitment or Tranche E Term Loan Commitment to a
Revolving Credit Commitment, (c) change any Tranche A Term Loan Commitment
to a Tranche E Term Loan Commitment or (d) change any Tranche E Term Loan
Commitment to a Tranche A Term Loan Commitment, in each case without the prior
written consent of each Lender directly and adversely affected thereby, or (vii) release
all or substantially all of the Guarantors under the Guarantee (except as
expressly permitted by the Guarantee), release all or substantially all of the
Canadian Subsidiary Guarantors under any Canadian Subsidiary Guarantee (except as
permitted by any Canadian Subsidiary Guarantee) or release all or substantially
all of the Collateral under the Pledge Agreement, the Security Agreement, the
Canadian Security Documents and the Mortgages, in each case without the prior
written consent of each Lender, or (viii) amend Section 2.9(a) so
as to permit Interest Period intervals greater than six months without regard
to availability to Lenders, without the written consent of each Lender directly
and adversely affected thereby, or (ix) decrease any Tranche A Repayment
Amount or Tranche E Repayment Amount, extend any scheduled Tranche A Repayment
Date or Tranche E Repayment Date or decrease the amount or allocation of any
mandatory prepayment to be received by any Lender holding any Tranche A Term
Loans or Tranche E Term Loans, in each case without the written consent of the
Required Tranche A Term Lenders and Tranche E Term Loans, as applicable, and; provided, further,
that at any time that no Default or Event of Default has occurred and is continuing,
the Revolving Credit Commitment of any Lender may be increased to finance a
Permitted Acquisition, with the consent of such Lender, the Borrower and the
Administrative Agent (which consent, in the case of the Administrative Agent,
shall not be unreasonably withheld) and without the consent of the Required
Lenders, so long as (i) the Increased Commitment Amount at such time, when
added to the amount of Indebtedness incurred pursuant to Section 10.1(k) and
outstanding at such time, does not exceed the limits set forth therein, (ii) the
Borrower or its applicable Restricted

 

124

 

Subsidiary shall pledge the capital stock of any
person acquired pursuant thereto to the Administrative Agent for the benefit of
the Lenders to the extent required under Section 9.12 and (iii) to
the extent determined by the Administrative Agent to be necessary to ensure pro
rata borrowings commencing with the initial borrowing after giving effect to
such increase, the Borrower shall prepay any BA Loans or Eurodollar Loans
outstanding immediately prior to such initial borrowing; as used herein, the “Increased
Commitment Amount” means, at any time, aggregate amount of all increases
pursuant to this proviso made at or prior to such time less the aggregate
amount of all voluntary reductions of the Revolving Credit Commitments made
prior to such time.  Any such waiver and
any such amendment, supplement or modification shall apply equally to each of
the affected Lenders and shall be binding upon the Borrower, the Canadian
Borrower, such Lenders, the Administrative Agent and all future holders of the
affected Loans.  In the case of any
waiver, the Borrower, the Lenders and the Administrative Agent shall be
restored to their former positions and rights hereunder and under the other
Credit Documents, and any Default or Event of Default waived shall be deemed to
be cured and not continuing, it being understood that no such waiver shall
extend to any subsequent or other Default or Event of Default or impair any
right consequent thereon.

 

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

 

	
  The Borrower and the
  Canadian Borrower:

  	
   

  	
  Sealy Mattress
  Company

  One Office
  Parkway

  Trinity, NC  27370

  Attention:
  Kenneth L. Walker

  Fax:  +-336-861-3786

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  with a copy to:

   

  Kohlberg Kravis Roberts & Co., L.P.

  9 West 57th Street

  Suite 4200

  New York, NY 
  10019

  Attention: Brian
  Carroll

  Fax:  212-750-0003

  

 

125

 

	
  The Administrative
  Agent:

  	
   

  	
  JPMorgan Chase Bank

  Agent Bank Services Group

  1111 Fannin, 10th Floor

  Houston,
  Texas  77002

  Attention: Vaughan Nguyen

  Fax: (713) 750-2932

   

  with a copy to:

   

  JPMorgan Chase Bank

  270 Park Avenue,
  4th Floor

  New York, New
  York 10017

  Attention:
  Kathryn Duncan

  Fax:
  212-270-6637

  
	
   

  	
   

  	
   

  
	
  The Canadian
  Administrative Agent:

  	
   

  	
  JPMorgan Chase Bank, N.A., Toronto Branch

  200 Bay Street, Suite 1800

  Royal Bank Plaza, South Tower

  Toronto, Ontario M5J 2J2

  Attention: Corporate Banker

  Fax: 416-981-9138

   

  with a copy to:

   

  JPMorgan Chase Bank, N.A., Toronto Branch

  200 Bay Street, Suite 1800

  Royal Bank Plaza, South Tower

  Toronto, Ontario M5J 2J2

  Attention: Corporate Banking Officer

  Fax: 416-981-9128

  

 

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

 

14.3.                        No Waiver; Cumulative Remedies. 
No failure to exercise and no delay in exercising, on the part of the
Administrative Agent or any Lender, any right, remedy, power or privilege
hereunder or under the other Credit Documents shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, remedy, power
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges
herein provided are cumulative and not exclusive of any rights, remedies,
powers and privileges provided by law.

 

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

 

126

 

14.5.                        Payment of Expenses and Taxes. 
The Borrower and the Canadian Borrower agree (a) to pay or
reimburse the Agents for all their reasonable out-of-pocket costs and expenses
incurred in connection with the development, preparation and execution of, and
any amendment, supplement or modification to, this Agreement and the other
Credit Documents and any other documents prepared in connection herewith or
therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, including the reasonable fees, disbursements
and other charges of counsel to the Agents, (b) to pay or reimburse each
Lender and the Administrative Agent for all its reasonable and documented costs
and expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the other Credit Documents and any such other
documents, including the reasonable fees, disbursements and other charges of
counsel to each Lender and of counsel to the Administrative Agent, (c) to
pay, indemnify, and hold harmless each Lender and the Administrative Agent
from, any and all recording and filing fees and any and all liabilities with
respect to, or resulting from any delay in paying, stamp, excise and other
similar taxes, if any, that may be payable or determined to be payable in
connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the other Credit Documents and any such other documents, and
(d) to pay, indemnify, and hold harmless each Lender and the
Administrative Agent and their respective directors, officers, employees,
trustees and agents from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever, including
reasonable and documented fees, disbursements and other charges of counsel,
with respect to the execution, delivery, enforcement, performance and
administration of this Agreement, the other Credit Documents and any such other
documents, including any of the foregoing relating to the violation of,
noncompliance with or liability under, any Environmental Law or any actual or
alleged presence of Hazardous Materials applicable to the operations of the
Borrower, any of its Subsidiaries or any of the Real Estate (all the foregoing
in this clause (d), collectively, the “indemnified liabilities”), provided
that the Borrower and the Canadian Borrower shall have no obligation hereunder
to the Administrative Agent or any Lender nor any of their respective
directors, officers, employees and agents with respect to indemnified
liabilities arising from (i) the gross negligence or willful misconduct of
the party to be indemnified or (ii) disputes among the Administrative
Agent, the Lenders and/or their transferees. 
The agreements in this Section 14.5 shall survive repayment of the
Loans and all other amounts payable hereunder.

 

14.6.                        Successors and Assigns; Participations
and Assignments.  (a)    
The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby (including any Affiliate of the Letter of Credit Issuer that
issues any Letter of Credit), except that (i) the Borrower and the
Canadian Borrower may not assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender (and any
attempted assignment or transfer by the Borrower or the Canadian Borrower
without such consent shall be null and void) and (ii) no Lender may assign
or otherwise transfer its rights or obligations hereunder except in accordance
with this Section.  Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby (including any Affiliate of the Letter of Credit Issuer that
issues any Letter of Credit), Participants (to the extent provided in paragraph
(c) of this Section) and, to 

 

127

 

the extent expressly contemplated hereby, the Related
Parties of each of the Administrative Agent, the Letter of Credit Issuer and
the Lenders) any legal or equitable right, remedy or claim under or by reason
of this Agreement.

 

(b)                                 (i)  Subject to the conditions set
forth in paragraph (b)(ii) below, any Lender may assign to one or more
assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitments and the Loans at the time owing
to it) with the prior written consent (such consent not be unreasonably
withheld; it being understood that, without limitation, the Borrower shall have
the right to withhold its consent to any assignment if, in order for such
assignment to comply with applicable law, the Borrower would be required to
obtain the consent of, or make any filing or registration with, any
Governmental Authority) of:

 

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

 

(B)                                the Administrative Agent, and, in the
case of Revolving Credit Commitments or Revolving Credit Loans or Canadian
Letters of Credit only, the Swingline Lender and the applicable Letter of
Credit Issuer, provided that no consent of the Administrative Agent, the
Swingline Lender or the Letter of Credit Issuer shall be required for an
assignment of (1) any Commitment to an assignee that is a Lender with a
Commitment of the same Class immediately prior to giving effect to such
assignment or (2) any Term Loan to a Lender, an Affiliate of a Lender or an
Approved Fund.

 

(ii)                                  Assignments shall be subject to the
following additional conditions:

 

(A)                              except in the case of an assignment to a
Lender, an Affiliate of a Lender or an Approved Fund or an assignment of the
entire remaining amount of the assigning Lender’s Commitment or Loans of any
Class, the amount of the Commitment or Loans of the assigning Lender subject to
each such assignment (determined as of the date the Assignment and Acceptance
with respect to such assignment is delivered to the Administrative Agent) shall
not be less than the Dollar Equivalent of $2,500,000 or, in the case of a
Tranche A Term Loan Commitment, Tranche E Term Loan Commitment, Tranche A Term
Loan or Tranche E Term Loan, the Dollar Equivalent of $1,000,000 unless each of
the Borrower and the Administrative Agent otherwise consents, provided
that no such consent of the Borrower shall be required if an Event of Default
under Section 11.1 or Section 11.5 has occurred and is continuing; provided further
that contemporaneous assignments to a single assignee made by Affiliate Lenders
shall be aggregated for purposes of meeting the minimum assignment amount
requirements stated above;

 

128

 

(B)                                each partial assignment shall be made as
an assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement, provided that this clause shall not be
construed to prohibit the assignment of a proportionate part of all the
assigning Lender’s rights and obligations in respect of one Class of
Commitments or Loans;

 

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

 

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

 

(E)                                 so long as no Event of Default has
occurred and is continuing, with respect to any assignment of the Canadian
Revolving Credit Commitments allocated to the Canadian Borrower in accordance
with Section 2.1(b)(ii), the Assignee shall be a Canadian Resident and a
pro rata portion of the Canadian Revolving Credit Commitments of the Canadian
Lender or its Related Affiliate, as applicable, allocated to the Borrower in
accordance with Section 2.1(b)(ii) shall be assigned to a Related
Affiliate, if applicable, of such assignee, that is either a “United States
person” (as such term is defined in Section 7701(a)(30) of the Code) or is
a Non-US Lender that has fulfilled the requirements of Section 5.4(b).

 

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

 

“Approved Fund”
means any Person (other than a natural person) that is engaged in making,
purchasing, holding or investing in bank loans and similar extensions of credit
in the ordinary course of its business and that is administered, advised or
managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an
entity or an Affiliate of an entity that administers, advises or manages a
Lender.

 

(iii)                               Subject to acceptance and recording
thereof pursuant to paragraph (b)(v) of this Section, from and after
the effective date specified in each Assignment and Acceptance, the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such Assignment and Acceptance, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Acceptance, be released from
its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 2.10, 2.11, 3.5, 5.4 and 14.5).  Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
Section 14.6 shall be treated for purposes of this Agreement as a sale by
such Lender of a 

 

129

 

participation in such rights
and obligations in accordance with paragraph (c) of this Section.

 

(iv)                              The Administrative Agent, acting for this
purpose as an agent of the Borrower and the Canadian Borrower, shall maintain
at the Administrative Agent’s Office a copy of each Assignment and Acceptance
delivered to it and a register for the recordation of the names and addresses
of the Lenders, and the Commitments of, and principal amount of the Loans and
any payment made by the Letter of Credit Issuer under any Letter of Credit owing
to, each Lender pursuant to the terms hereof from time to time (the “Register”).  In the case of a Lender in respect of a
Canadian Revolving Credit Commitment or a Canadian Letter of Credit Commitment,
the Register shall also record the address of the lending office of the Lender
through which such Lender acts under this Agreement and whether or not the
Lender is a Canadian Resident.  Further,
the Register shall contain the name and address of the Administrative Agent and
the Canadian Administrative Agent and the lending office through which each
such Person acts under this Agreement. 
The entries in the Register shall be conclusive, and the Borrower, the
Canadian Borrower, the Administrative Agent, the Letter of Credit Issuer and
the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary.  The Register shall be available for inspection
by the Borrower, the Canadian Borrower, the Letter of Credit Issuer and any
Lender, at any reasonable time and from time to time upon reasonable prior
notice.

 

(v)                                 Upon its receipt of a duly completed
Assignment and Acceptance executed by an assigning Lender and an assignee, the
assignee’s completed Administrative Questionnaire (unless the assignee shall
already be a Lender hereunder), the processing and recordation fee referred to
in paragraph (b) of this Section and any written consent to such
assignment required by paragraph (b) of this Section, the Administrative
Agent shall accept such Assignment and Acceptance and record the information
contained therein in the Register.  No
assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.

 

(c)                                  (i)  Any Lender may, without the
consent of the Borrower, the Canadian Borrower, the Administrative Agent, the
Letter of Credit Issuer or the Swingline Lender, sell participations to one or
more banks or other entities (each, a “Participant”) in all or a portion
of such Lender’s rights and obligations under this Agreement (including all or
a portion of its Commitments and the Loans owing to it), provided that
(A) such Lender’s obligations under this Agreement shall remain unchanged,
(B) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (C) the Borrower, the
Canadian Borrower, the Administrative Agent, the Letter of Credit Issuer and
the other Lenders shall continue to deal solely and directly with such Lender
in connection with such Lender’s rights and obligations under this
Agreement.  Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement or any
other Credit Document, provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant,
agree to any 

 

130

 

amendment, modification or waiver described in the
first proviso to Section 14.1 that affects such Participant.  Subject to paragraph (c)(ii) of
this Section, the Borrower and the Canadian Borrower agree that each
Participant shall be entitled to the benefits of Sections 2.10, 2.11 and 5.4 to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section.  To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 14.8(b) as
though it were a Lender, provided such Participant agrees to be subject
to Section 14.8(a) as though it were a Lender.

 

(ii)                                  A Participant shall not be entitled to
receive any greater payment under Section 2.10 or 5.4 than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
Participant is made with the Borrower’s prior written consent.  A Participant that would be a Non-U.S. Lender
if it were a Lender shall not be entitled to the benefits of Section 5.4
unless the Borrower is notified of the participation sold to such Participant
and such Participant agrees, for the benefit of the Borrower and the Canadian
Borrower, to comply with Section 5.4(b) as though it were a Lender.

 

(d)                                 Any Lender may, without the consent of
the Borrower or the Administrative Agent, at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to
any such pledge or assignment of a security interest, provided that no
such pledge or assignment of a security interest shall release a Lender from
any of its obligations hereunder or substitute any such pledgee or assignee for
such Lender as a party hereto.  In order
to facilitate such pledge or assignment, the Borrower and the Canadian Borrower
hereby agree that, upon request of any Lender at any time and from time to time
after the Borrower has made its initial borrowing hereunder, the Borrower or
the Canadian Borrower, as the case may be, shall provide to such Lender, at the
Borrower’s or the Canadian Borrower’s own expense, a promissory note,
substantially in the form of Exhibit L-1 or L-2, as the case may be,
evidencing the Tranche A Term Loans, Tranche E Term Loans and Revolving Credit
Loans and Swingline Loans, respectively, owing to such Lender.

 

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

 

(f)                                    Each Person that is or becomes a Lender
or Administrative Agent in respect of the Canadian Revolving Credit Commitment
or Canadian Letter of Credit Commitment shall (i) promptly direct the
Administrative Agent to record in the Register the information described in
Section 14.6(b)(iv) of this Agreement, (ii) upon written request
made by Canadian Borrower, deliver to the Canadian Borrower and the
Administrative Agent such certificates, forms, documents, or other evidence as
may be applicable and determined by the 

 

131

 

Canadian Borrower, acting reasonably, to be reasonably
satisfactory to determine whether such Person is a Canadian Resident, and
(iii) promptly direct the Administrative Agent to amend the Register to
reflect any change in the information contained therein with respect to such
Person.

 

14.7.                        Replacements of Lenders under Certain
Circumstances.  The Borrower (on its own behalf and on behalf
of the Canadian Borrower) shall be permitted to replace any Lender that
(a) requests reimbursement for amounts owing pursuant to
Section 2.10, 2.12, 3.5 or 5.4, (b) is affected in the manner
described in Section 2.10(a)(iii) and as a result thereof any of the
actions described in such Section is required to be taken or
(c) becomes a Defaulting Lender, with a replacement bank or other
financial institution, provided that (i) such replacement does not
conflict with any Requirement of Law, (ii) no Event of Default shall have
occurred and be continuing at the time of such replacement, (iii) the
Borrower and/or the Canadian Borrower, as applicable shall repay (or the
replacement bank or institution shall purchase, at par) all Loans and other
amounts (other than any disputed amounts), pursuant to Section 2.10, 2.11,
2.12, 3.5, 5.4 or 14.5, as the case may be, owing to such replaced Lender prior
to the date of replacement, (iv) the replacement bank or institution, if
not already a Lender, and the terms and conditions of such replacement, shall
be reasonably satisfactory to the Administrative Agent, (v) the replaced
Lender shall be obligated to make such replacement in accordance with the
provisions of Section 14.6 (provided that the Borrower shall be obligated
to pay the registration and processing fee referred to therein) and (vi) any
such replacement shall not be deemed to be a waiver of any rights that the
Borrower, the Canadian Borrower, the Administrative Agent or any other Lender
shall have against the replaced Lender.

 

14.8.                        Adjustments; Set-off. 
(a)     If any Lender (a “benefited
Lender”) shall at any time receive any payment of all or part of its Loans,
or interest thereon, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, pursuant to events or proceedings of
the nature referred to in Section 11.5, or otherwise), in a greater
proportion than any such payment to or collateral received by any other Lender,
if any, in respect of such other Lender’s Loans, or interest thereon, such
benefited Lender shall purchase for cash from the other Lenders a participating
interest in such portion of each such other Lender’s Loan, or shall provide
such other Lenders with the benefits of any such collateral, or the proceeds
thereof, as shall be necessary to cause such benefited Lender to share the
excess payment or benefits of such collateral or proceeds ratably with each of
the Lenders; provided, however, that if all or any portion of such excess
payment or benefits is thereafter recovered from such benefited Lender, such
purchase shall be rescinded, and the purchase price and benefits returned, to
the extent of such recovery, but without interest.

 

(b)                                 After the occurrence and during the
continuance of an Event of Default, in addition to any rights and remedies of
the Lenders provided by law, each Lender shall have the right, without prior
notice to the Borrower or the Canadian Borrower, any such notice being
expressly waived by the Borrower and the Canadian Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Borrower or the Canadian Borrower hereunder (whether at the stated maturity, by
acceleration or otherwise) to set-off and appropriate and apply against such
amount any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Lender or any branch or
agency thereof to or for 

 

132

 

the credit or the account of the Borrower or the
Canadian Borrower, as the case may be. 
Each Lender agrees promptly to notify the Borrower or the Canadian
Borrower, as the case may be, and the Administrative Agent after any such
set-off and application made by such Lender, provided that the failure
to give such notice shall not affect the validity of such set-off and
application.

 

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

 

14.10.                  Severability.  Any provision
of this Agreement that is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.

 

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

 

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

 

14.13.                  Submission to Jurisdiction; Waivers. 
The Borrower and the Canadian Borrower each hereby irrevocably and
unconditionally:

 

(a)                                  submits for itself and its property in
any legal action or proceeding relating to this Agreement and the other Credit
Documents to which it is a party, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general jurisdiction of the
courts of the State of New York, the courts of the United States of
America for the Southern District of New York and appellate courts from
any thereof;

 

(b)                                 consents that any such action or
proceeding may be brought in such courts and waives any objection that it may
now or hereafter have to the venue of any such action or proceeding in any such
court or that such action or proceeding was brought in an inconvenient court
and agrees not to plead or claim the same;

 

(c)                                  agrees that service of process in any
such action or proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form of mail),
postage prepaid, to the Borrower at its address set forth in Section 14.2
or at such other address of which the Administrative Agent shall have been
notified pursuant thereto;

 

133

 

(d)                                 agrees that nothing herein shall affect
the right to effect service of process in any other manner permitted by law or
shall limit the right to sue in any other jurisdiction; and

 

(e)                                  waives, to the maximum extent not
prohibited by law, any right it may have to claim or recover in any legal
action or proceeding referred to in this Section 14.13 any special,
exemplary, punitive or consequential damages.

 

14.14.                  Acknowledgments.  The Borrower
and the Canadian Borrower each hereby acknowledge that:

 

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

 

(b)                                 neither the Administrative Agent nor any
Lender has any fiduciary relationship with or duty to the Borrower or the
Canadian Borrower arising out of or in connection with this Agreement or any of
the other Credit Documents, and the relationship between Administrative Agent
and Lenders, on one hand, and the Borrower or the Canadian Borrower, on the
other hand, in connection herewith or therewith is solely that of debtor and
creditor; and

 

(c)                                  no joint venture is created hereby or by
the other Credit Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Borrower, the Canadian
Borrower and the Lenders.

 

14.15.              WAIVERS OF JURY TRIAL.  THE BORROWER, THE CANADIAN BORROWER, THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

14.16.                  Confidentiality.  The
Administrative Agent and each Lender shall hold all non-public information
furnished by or on behalf of the Borrower or the Canadian Borrower in
connection with such Lender’s evaluation of whether to become a Lender
hereunder or obtained by such Lender or the Administrative Agent pursuant to the
requirements of this Agreement (“Confidential Information”),
confidential in accordance with its customary procedure for handling
confidential information of this nature and (in the case of a Lender that is a
bank) in accordance with safe and sound banking practices and in any event may
make disclosure as required or requested by any governmental agency or
representative thereof or pursuant to legal process or to such Lender’s or the
Administrative Agent’s attorneys, or to any direct or indirect contractual
counterparty in swap agreements or such contractual counterparty’s professional
advisor (so long as such contractual counterparty or professional advisor to
such contractual party agrees to be bound by the provisions of this
Section 14.16.) or independent auditors or Affiliates, provided
that unless specifically prohibited by applicable law or court order, each
Lender and the Administrative Agent shall notify the Borrower of any request by
any governmental agency or representative thereof (other than any such request
in connection with an examination of the financial condition of such Lender by
such governmental agency) for disclosure of any such non-public information
prior to disclosure of such information, and

 

134

 

provided further that in no event shall any Lender
or the Administrative Agent be obligated or required to return any materials
furnished by the Borrower or any Subsidiary of the Borrower.  Each Lender and the Administrative Agent agrees
that it will not provide to prospective Transferees or to prospective direct or
indirect contractual counterparties in swap agreements to be entered into in
connection with Loans made hereunder any of the Confidential Information unless
such Person is advises of and agrees to be bound by the provisions of this
Section 14.16.

 

Notwithstanding anything express or implied to the
contrary herein or by the documents referred to or incorporated by reference
herein, or any other prior or future oral or written statements by any parties
hereto with respect to the transactions contemplated herein or by the other
Credit Documents, and whether or not any of them are legally binding, the
obligations of confidentiality contained herein and therein, as they relate to
the transactions contemplated by this Agreement, shall not apply to the tax
structure or tax treatment of such transactions, and each recipient (and its
employees, representatives, or other agents) may immediately disclose to any
and all persons, without limitation of any kind, the U.S. Federal income tax
structure and such recipient’s U.S. Federal income tax treatment of such
transactions and any opinions or other tax analyses that have been provided by
the parties hereto (or any agent thereof) to the recipient regarding such tax
structure or tax treatment.  However, no
such recipient shall disclose any information relating to such tax structure or
tax treatment to the extent that non-disclosure is reasonably necessary to
comply with applicable securities law. 
This paragraph is intended to cause the transactions contemplated by
this Agreement not to be treated as having been offered under conditions of
confidentiality for purposes of Section 1.6011-4(b)(3) (or any
successor provision) of the Treasury Regulations promulgated under
Section 6011 of the Internal Revenue Code of 1986, as amended, and shall
be construed in a manner consistent with such purpose.

 

14.17.                  Judgment Currency. 
(a)     The obligations of
the Borrower and the Canadian Borrower hereunder and under the other Loan
Documents to make payments in Dollars or in Canadian Dollars, as the case may
be (the “Obligation Currency”), shall not be discharged or satisfied by
any tender or recovery pursuant to any judgment expressed in or converted into
any currency other than the Obligation Currency, except to the extent that such
tender or recovery results in the effective receipt by the Administrative
Agent, the Canadian Administrative Agent or a Lender of the full amount of the
Obligation Currency expressed to be payable to the Administrative Agent, the
Canadian Administrative Agent or Lender under this Agreement or the other
Credit Documents.  If, for the purpose of
obtaining or enforcing judgment against the Borrower, the Canadian Borrower or
any other Credit Party in any court or in any jurisdiction, it becomes
necessary to convert into or from any currency other than the Obligation
Currency (such other currency being hereinafter referred to as the “Judgment
Currency”) an amount due in the Obligation Currency, the conversion shall
be made, at the rate of exchange prevailing, in each case, as of the date
immediately preceding the day on which the judgment is given (such Business Day
being hereinafter referred to as the “Judgment Currency Conversion Date”).

 

(b)                                 If there is a change in the rate of
exchange prevailing between the Judgment Currency Conversion Date and the date
of actual payment of the amount due, the Borrower and the Canadian Borrower
each covenant and agree to pay, or cause to be paid, such additional amounts, if
any (but in any event not a lesser amount), as may be necessary to ensure that
the amount paid in the Judgment Currency, when converted at the rate of
exchange 

 

135

 

prevailing on the date of payment, will produce the
amount of the Obligation Currency which could have been purchased with the
amount of Judgment Currency stipulated in the judgment or judicial award at the
rate of exchange prevailing on the Judgment Currency Conversion Date.

 

(c)                                  For purposes of determining the
prevailing rate of exchange, such amounts shall include any premium and costs
payable in connection with the purchase of the Obligation Currency.

 

14.18.                            USA PATRIOT Act. 
Each Lender hereby notifies the Borrower that pursuant to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the “Patriot
Act”), it is required to obtain, verify and record information that
identifies the Borrower, which information includes the name and address of the
Borrower and other information that will allow such Lender to identify the
Borrower in accordance with the Patriot Act.

 

14.19.                            Reaffirmation and Grant of Security
Interest.  (a) Each Credit Party has
(i) guarantied the Obligations and (ii) created Liens in favor of
Lenders on certain Collateral to secure its obligations hereunder, under the
Guarantee and the Canadian Guarantee, as the case may be.  Each Credit Party hereby acknowledges that it
has reviewed the terms and provisions of this Agreement and consents to the
amendment and restatement of the Existing Credit Agreement effected pursuant to
this Agreement.  Each Credit Party hereby
(i) confirms that each Credit Document to which it is a party or is
otherwise bound and all Collateral encumbered thereby will continue to
guarantee or secure, as the case may be, to the fullest extent possible in
accordance with the Credit Documents, the payment and performance of the
Obligations and all Guarantee Obligations, as the case may be, including without
limitation the payment and performance of all such Obligations and all
Guarantee Obligations which are joint and several obligations of each grantor
now or hereafter existing, and (ii) grants to the Administrative Agent for
the benefit of the Secured Parties a continuing lien on and security interest
in and to such Credit Party’s right, title and interest in, to and under all
Collateral as collateral security for the prompt payment and performance in
full when due of the Obligations and all Guarantee Obligations (whether at
stated maturity, by acceleration or otherwise).

 

(b)                                 Each Credit Party acknowledges and agrees
that any of the Credit Documents to which it is a party or otherwise bound
shall continue in full force and effect and that all of its obligations
thereunder shall be valid and enforceable and shall not be impaired or limited
by the execution or effectiveness of the amendment and restatement of the
Existing Credit Agreement.  Each Credit
Party represents and warrants that all representations and warranties contained
in the Credit Documents to which it is a party or otherwise bound are true,
correct and complete in all material respects on and as of the Effective Date
to the same extent as though made on and as of that date, except to the extent
such representations and warranties specifically relate to an earlier date, in
which case they were true, correct and complete in all material respects on and
as of such earlier date.

 

14.20.                                  Amendment and Restatement. 
It is the intention of each of the parties hereto that the Existing
Credit Agreement be amended and restated so as to preserve the perfection and
priority of all security interests securing indebtedness and obligations under
the Existing Credit Agreement and that all Indebtedness and Obligations and
Guarantee Obligations 

 

136

 

of Borrower and its Subsidiaries hereunder and
thereunder shall be secured by the Security Documents and that this Agreement
does not constitute a novation of the obligations and liabilities existing
under the Existing Credit Agreements. 
The parties hereto further acknowledge and agree that this Agreement
constitutes an amendment of the Existing Credit Agreement made under and in accordance
with the terms of subsection 14.1 of the Existing Credit Agreement.  In addition, unless specifically amended
hereby, each of the Credit Documents, the Exhibits and Schedules to the
Existing Credit Agreement shall continue in full force and effect and that,
from and after the Effective Date, all references to the “Credit Agreement”
contained therein shall be deemed to refer to this Agreement.

 

[Signature
Pages Follow]

 

137

 

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

 

	
   

  	
  SEALY MATTRESS COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
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  SEALY MATTRESS CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SEALY CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SEALY CANADA LTD./LTEE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

SUBSIDIARY GUARANTORS:

SEALY MATTRESS COMPANY OF PUERTO RICO

OHIO-SEALY MATTRESS MANUFACTURING CO., INC.

OHIO-SEALY MATTRESS MANUFACTURING CO.

SEALY MATTRESS COMPANY OF KANSAS CITY, INC.

SEALY MATTRESS COMPANY OF MEMPHIS

SEALY MATTRESS COMPANY OF ILLINOIS

SEALY MATTRESS COMPANY OF ALBANY, INC.

SEALY OF MARYLAND AND VIRGINIA, INC.

SEALY OF MINNESOTA, INC.

NORTH AMERICAN BEDDING COMPANY

SEALY, INC.

MATTRESS HOLDINGS INTERNATIONAL LLC

THE OHIO MATTRESS COMPANY LICENSING AND COMPONENTS
GROUP

SEALY MATTRESS MANUFACTURING COMPANY, INC.

SEALY TECHNOLOGY LLC

SEALY KOREA, INC.

SEALY REAL ESTATE, INC.

SEALY TEXAS MANAGEMENT, INC.

SEALY TEXAS HOLDINGS LLC

SEALY TEXAS L.P.

WESTERN MATTRESS COMPANY

GESTION CENTURION INC.

 

	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

	
   

  	
  JPMORGAN CHASE BANK, N.A.,

  as Administrative Agent and as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK, N.A.,

  
	
   

  	
  TORONTO BRANCH,

  
	
   

  	
  as Canadian Administrative Agent and as a Canadian
  Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

	
   

  	
  J.P. MORGAN SECURITIES INC.,

  as Joint Lead Arranger and Joint Bookrunner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

	
   

  	
  CITIGROUP GLOBAL MARKETS INC.,

  as Joint Lead Arranger and Joint Bookrunner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

	
   

  	
  CITIBANK, N.A.,

  as Syndication Agent and a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

	
   

  	
  GENERAL ELECTRIC CAPITAL CORPORATION,

  as Co-Documentation Agent and as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

	
   

  	
  WACHOVIA BANK, NATIONAL ASSOCIATION,

  as Co-Documentation Agent and as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

	
   

  	
  LASALLE BANK NATIONAL ASSOCIATION,

  as Co-Documentation Agent and as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

	
   

  	
  Institution Name:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
                                                                                          ,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

SCHEDULE
1.1(d)

 

EBITDA
ADD-BACKS

 

1.                                       Expenses related to the implementation of
enterprise resource planning systems in an aggregate amount not greater than
$45,000,000 less the amount of expenditures related thereto that are
capitalized.Exhibit
10.37

	
   

  	
   

  	
   

  

 

J.P.Morgan

 

CREDIT AGREEMENT

 

Dated as of May 13, 2009

 

among

 

SEALY MATTRESS COMPANY,

as Borrower

 

SEALY MATTRESS CORPORATION,

as Holdings and a Guarantor

 

SEALY CORPORATION,

as Parent

 

The Several Lenders

from Time to Time Parties Hereto

 

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent and Collateral Agent

 

J.P. MORGAN SECURITIES INC.,

as Joint Lead Arranger and Joint Bookrunner

 

GE CAPITAL MARKETS, INC.,

as Joint Lead Arranger and Joint Bookrunner

 

GENERAL ELECTRIC CAPITAL CORPORATION,

as Co-Collateral Agent,

 

CITIGROUP GLOBAL MARKETS INC.,

as Joint Lead Arranger and Joint Bookrunner

 

and

 

MIZUHO CORPORATE BANK, LTD.,

as Syndication Agent

	
   

  	
   

  	
   

  

 

	
   

  	
   

  	
   

  

 

TABLE CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 1.

  	
  DEFINITIONS

  	
   

  	
   

  
	
  1.1.

  	
  Defined Terms

  	
   

  	
  1

  
	
  1.2.

  	
  Exchange Rates

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.

  	
  AMOUNT AND TERMS OF CREDIT

  	
   

  	
   

  
	
  2.1.

  	
  Commitments

  	
   

  	
  36

  
	
  2.2. 

  	
  Minimum Amount of Each
  Borrowing; Maximum Number of Borrowings

  	
   

  	
  38

  
	
  2.3.

  	
  Notice of Borrowing

  	
   

  	
  38

  
	
  2.4.

  	
  Disbursement of Funds

  	
   

  	
  39

  
	
  2.5.

  	
  Repayment of Loans;
  Evidence of Debt

  	
   

  	
  40

  
	
  2.6.

  	
  Conversions and
  Continuations

  	
   

  	
  41

  
	
  2.7.

  	
  Pro rata Borrowings

  	
   

  	
  42

  
	
  2.8.

  	
  Interest

  	
   

  	
  42

  
	
  2.9.

  	
  Interest Periods

  	
   

  	
  43

  
	
  2.10.

  	
  Increased Costs,
  Illegality, etc

  	
   

  	
  43

  
	
  2.11.

  	
  Compensation

  	
   

  	
  45

  
	
  2.12.

  	
  Change of Lending Office

  	
   

  	
  46

  
	
  2.13.

  	
  Notice of Certain Costs

  	
   

  	
  46

  
	
  2.14.

  	
  Defaulting Lenders

  	
   

  	
  46

  
	
  2.15.

  	
  Incremental Facilities

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.

  	
  LETTERS OF CREDIT

  	
   

  	
   

  
	
  3.1.

  	
  Letters of Credit

  	
   

  	
  50

  
	
  3.2.

  	
  Letter of Credit Requests

  	
   

  	
  51

  
	
  3.3.

  	
  Letter of Credit
  Participations

  	
   

  	
  51

  
	
  3.4.

  	
  Agreement to Repay Letter
  of Credit Drawings

  	
   

  	
  53

  
	
  3.5.

  	
  Increased Costs

  	
   

  	
  54

  
	
  3.6.

  	
  Successor Letter of Credit
  Issuer

  	
   

  	
  54

  
	
  3.7.

  	
  Existing Letters of Credit

  	
   

  	
  55

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4.

  	
  FEES; COMMITMENTS

  	
   

  	
   

  
	
  4.1.

  	
  Fees

  	
   

  	
  55

  
	
  4.2.

  	
  Voluntary Reduction of
  Commitments

  	
   

  	
  56

  
	
  4.3.

  	
  Mandatory Termination of
  Commitments

  	
   

  	
  56

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
  PAYMENTS

  	
   

  	
   

  
	
  5.1.

  	
  Voluntary Prepayments

  	
   

  	
  56

  
	
  5.2.

  	
  Mandatory Prepayments

  	
   

  	
  57

  
	
   

  	
   

  	
   

  	
   

  

 

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  5.3.

  	
  Payments Generally

  	
   

  	
  58

  
	
  5.4.

  	
  Net Payments

  	
   

  	
  59

  
	
  5.5.

  	
  Computations of Interest
  and Fees

  	
   

  	
  62

  
	
  5.6.

  	
  Limit on Rate of Interest

  	
   

  	
  63

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
  CONDITIONS PRECEDENT TO INITIAL BORROWING

  	
   

  	
   

  
	
  6.1.

  	
  Credit Documents

  	
   

  	
  63

  
	
  6.2.

  	
  Collateral

  	
   

  	
  64

  
	
  6.3.

  	
  Legal Opinions

  	
   

  	
  64

  
	
  6.4.

  	
  No Default

  	
   

  	
  64

  
	
  6.5.

  	
  Concurrent Financings

  	
   

  	
  64

  
	
  6.6.

  	
  Existing Credit Agreement

  	
   

  	
  64

  
	
  6.7.

  	
  Effective Date Certificates

  	
   

  	
  64

  
	
  6.8.

  	
  Corporate Proceedings of
  Each Credit Party

  	
   

  	
  64

  
	
  6.9.

  	
  Corporate Documents

  	
   

  	
  64

  
	
  6.10.

  	
  Fees

  	
   

  	
  64

  
	
  6.11.

  	
  Representations and
  Warranties

  	
   

  	
  65

  
	
  6.12.

  	
  Borrowing Base Certificate

  	
   

  	
  65

  
	
  6.13.

  	
  Closing Availability

  	
   

  	
  65

  
	
  6.14.

  	
  Solvency

  	
   

  	
  65

  
	
  6.15.

  	
  Pledged Stock; Stock
  Powers; Pledged Notes

  	
   

  	
  65

  
	
  6.16.

  	
  Lien Searches

  	
   

  	
  65

  
	
  6.17.

  	
  Insurance

  	
   

  	
  65

  
	
  6.18.

  	
  Perfection Certificate

  	
   

  	
  65

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
  CONDITIONS PRECEDENT TO ALL CREDIT EVENTS

  	
   

  	
   

  
	
  7.1.

  	
  No Default;
  Representations and Warranties

  	
   

  	
  66

  
	
  7.2.

  	
  Notice of Borrowing;
  Letter of Credit Request

  	
   

  	
  66

  
	
  7.3.

  	
  Availability

  	
   

  	
  66

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8.

  	
  REPRESENTATIONS, WARRANTIES AND AGREEMENTS

  	
   

  	
   

  
	
  8.1.

  	
  Corporate Status

  	
   

  	
  66

  
	
  8.2.

  	
  Corporate Power and
  Authority

  	
   

  	
  66

  
	
  8.3.

  	
  No Violation

  	
   

  	
  67

  
	
  8.4.

  	
  Litigation

  	
   

  	
  67

  
	
  8.5.

  	
  Margin Regulations

  	
   

  	
  67

  
	
  8.6.

  	
  Governmental Approvals

  	
   

  	
  67

  
	
  8.7.

  	
  Investment Company Act

  	
   

  	
  67

  
	
  8.8.

  	
  True and Complete
  Disclosure

  	
   

  	
  67

  
	
  8.9.

  	
  Financial Condition;
  Financial Statements

  	
   

  	
  68

  
	
  8.10.

  	
  Tax Returns and Payments

  	
   

  	
  68

  
	
  8.11.

  	
  Compliance with ERISA

  	
   

  	
  68

  
	
  8.12.

  	
  Subsidiaries

  	
   

  	
  69

  
	
  8.13.

  	
  Labor Matters

  	
   

  	
  69

  
	
  8.14.

  	
  Patents, etc.

  	
   

  	
  69

  
	
  8.15.

  	
  Environmental Laws

  	
   

  	
  69

  

 

ii

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  8.16.

  	
  Properties

  	
   

  	
  70

  
	
  8.17.

  	
  Solvency

  	
   

  	
  70

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9.

  	
  AFFIRMATIVE COVENANTS

  	
   

  	
   

  
	
  9.1.

  	
  Information Covenants

  	
   

  	
  70

  
	
  9.2.

  	
  Books, Records and
  Inspections

  	
   

  	
  73

  
	
  9.3.

  	
  Maintenance of Insurance

  	
   

  	
  73

  
	
  9.4.

  	
  Payment of Taxes

  	
   

  	
  74

  
	
  9.5.

  	
  Consolidated Corporate
  Franchises

  	
   

  	
  74

  
	
  9.6.

  	
  Compliance with Statutes,
  Obligations, etc.

  	
   

  	
  74

  
	
  9.7.

  	
  ERISA

  	
   

  	
  74

  
	
  9.8.

  	
  Good Repair

  	
   

  	
  75

  
	
  9.9.

  	
  Transactions with
  Affiliates

  	
   

  	
  75

  
	
  9.10.

  	
  End of Fiscal Years;
  Fiscal Quarters

  	
   

  	
  76

  
	
  9.11.

  	
  Additional Subsidiary
  Guarantors and Grantors

  	
   

  	
  76

  
	
  9.12.

  	
  Pledges of Additional
  Stock and Evidence of Indebtedness

  	
   

  	
  76

  
	
  9.13.

  	
  Use of Proceeds

  	
   

  	
  77

  
	
  9.14.

  	
  Changes in Business

  	
   

  	
  77

  
	
  9.15.

  	
  Further Assurances

  	
   

  	
  77

  
	
  9.16.

  	
  Appraisals

  	
   

  	
  78

  
	
  9.17.

  	
  Field Examinations

  	
   

  	
  78

  
	
  9.18.

  	
  Asset Sales; Casualty and
  Condemnation

  	
   

  	
  78

  
	
  9.19.

  	
  Post-Closing Covenant

  	
   

  	
  78

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 10.

  	
  NEGATIVE COVENANTS

  	
   

  	
   

  
	
  10.1.

  	
  Limitation on Indebtedness

  	
   

  	
  81

  
	
  10.2.

  	
  Limitation on Liens

  	
   

  	
  83

  
	
  10.3.

  	
  Limitation on Fundamental
  Changes

  	
   

  	
  84

  
	
  10.4.

  	
  Limitation on Sale of
  Assets

  	
   

  	
  86

  
	
  10.5.

  	
  Limitation on Investments

  	
   

  	
  88

  
	
  10.6.

  	
  Limitation on Restricted
  Payments

  	
   

  	
  89

  
	
  10.7.

  	
  Limitations on Debt
  Payments and Certain Amendments

  	
   

  	
  90

  
	
  10.8.

  	
  Limitations on Sale
  Leasebacks

  	
   

  	
  91

  
	
  10.9.

  	
  Fixed Charge Coverage
  Ratio

  	
   

  	
  91

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 11.

  	
  EVENTS OF DEFAULT

  	
   

  	
   

  
	
  11.1.

  	
  Payments

  	
   

  	
  92

  
	
  11.2.

  	
  Representations, etc.

  	
   

  	
  92

  
	
  11.3.

  	
  Covenants

  	
   

  	
  92

  
	
  11.4.

  	
  Default Under Other
  Agreements

  	
   

  	
  92

  
	
  11.5.

  	
  Bankruptcy, etc.

  	
   

  	
  92

  
	
  11.6.

  	
  ERISA

  	
   

  	
  93

  
	
  11.7.

  	
  Guarantee

  	
   

  	
  93

  
	
  11.8.

  	
  Pledge Agreement

  	
   

  	
  93

  
	
  11.9.

  	
  Security Agreement

  	
   

  	
  94

  
	
  11.10.

  	
  Mortgages

  	
   

  	
  94

  

 

iii

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  11.11.

  	
  Subordination

  	
   

  	
  94

  
	
  11.12.

  	
  Judgments

  	
   

  	
  94

  
	
  11.13.

  	
  Change of Control

  	
   

  	
  94

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 12.

  	
  THE AGENTS

  	
   

  	
   

  
	
  12.1.

  	
  Appointment

  	
   

  	
  95

  
	
  12.2.

  	
  Delegation of Duties

  	
   

  	
  95

  
	
  12.3.

  	
  Exculpatory Provisions

  	
   

  	
  95

  
	
  12.4.

  	
  Reliance by Administrative
  Agent and Security Agents

  	
   

  	
  95

  
	
  12.5.

  	
  Notice of Default

  	
   

  	
  96

  
	
  12.6. 

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

  	
   

  	
  96

  
	
  12.7.

  	
  Indemnification

  	
   

  	
  97

  
	
  12.8. 

  	
  Administrative Agent and
  Security Agents in Their Individual Capacities

  	
   

  	
  97

  
	
  12.9.

  	
  Successor Agent

  	
   

  	
  97

  
	
  12.10.

  	
  Withholding Tax

  	
   

  	
  98

  
	
  12.11.

  	
  Reports

  	
   

  	
  98

  
	
  12.12.

  	
  Security Agents

  	
   

  	
  98

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 13.

  	
  [RESERVED]

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 14.

  	
  MISCELLANEOUS

  	
   

  	
   

  
	
  14.1.

  	
  Amendments and Waivers

  	
   

  	
  99

  
	
  14.2.

  	
  Notices

  	
   

  	
  100

  
	
  14.3.

  	
  No Waiver; Cumulative
  Remedies

  	
   

  	
  102

  
	
  14.4.

  	
  Survival of
  Representations and Warranties

  	
   

  	
  102

  
	
  14.5.

  	
  Payment of Expenses and
  Taxes

  	
   

  	
  102

  
	
  14.6.

  	
  Successors and Assigns;
  Participations and Assignments

  	
   

  	
  103

  
	
  14.7.

  	
  Replacements of Lenders
  under Certain Circumstances

  	
   

  	
  107

  
	
  14.8.

  	
  Adjustments; Set-off

  	
   

  	
  107

  
	
  14.9.

  	
  Counterparts

  	
   

  	
  108

  
	
  14.10.

  	
  Severability

  	
   

  	
  108

  
	
  14.11.

  	
  Integration

  	
   

  	
  108

  
	
  14.12.

  	
  GOVERNING LAW

  	
   

  	
  108

  
	
  14.13.

  	
  Submission to
  Jurisdiction; Waivers

  	
   

  	
  108

  
	
  14.14.

  	
  Acknowledgments

  	
   

  	
  109

  
	
  14.15.

  	
  WAIVERS
  OF JURY TRIAL

  	
   

  	
  109

  
	
  14.16.

  	
  Confidentiality

  	
   

  	
  109

  
	
  14.17.

  	
  USA PATRIOT Act

  	
   

  	
  110

  

 

iv

 

	
  SCHEDULES

  	
   

  
	
   

  	
   

  
	
  Schedule 1.1(a)

  	
  Mortgaged Properties

  
	
  Schedule 1.1(b)

  	
  Commitments of Lenders

  
	
  Schedule 1.1(c)

  	
  Immaterial Subsidiaries

  
	
  Schedule 1.1(d)

  	
  Existing Letters of Credit

  
	
  Schedule 8.12

  	
  Subsidiaries

  
	
  Schedule 10.1

  	
  Effective Date
  Indebtedness

  
	
  Schedule 10.2

  	
  Effective Date Liens

  
	
  Schedule 10.3

  	
  Effective Date Parent
  Assets

  
	
  Schedule 10.5

  	
  Effective Date Investments

  

 

v

 

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

 

The
parties hereto hereby agree as follows:

 

SECTION 1.             Definitions

 

1.1.            Defined Terms.

 

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

 

“ABR”
shall mean, for any day, a rate per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) equal to the greatest of (a) the Prime Rate in effect
on such day, (b) the Federal Funds Effective Rate in effect on such day
plus 1⁄2 of 1% and (c) the Eurodollar Rate for a three month Interest Period
on such day (or if such day is not a  Business
Day, the immediately preceding Business Day) plus 1%; provided that, for
the avoidance of doubt, the Eurodollar Rate for any day shall be calculated on
a daily basis in a manner consistent with the definition of “Eurodollar Rate”.
Any change in the ABR due to a change in the Prime Rate, the Federal Funds
Effective Rate or the Eurodollar Rate shall be effective as of the opening of
business on the effective day of such change in the Prime Rate, the Federal
Funds Effective Rate or the Eurodollar Rate, respectively.

 

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

 

“ABR
Margin” shall mean 3.00% per annum.

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

2

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

3

 

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

 

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

 

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

 

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

 

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

 

4

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

5

 

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

 

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

 

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

 

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

 

	
   

  	
   

  	
  Commitment

  	
   

  
	
  Status

  	
   

  	
  Fee Rate

  	
   

  
	
  Level I Status

  	
   

  	
  1.00

  	
  %

  
	
  Level II Status

  	
   

  	
  0.75

  	
  %

  

 

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

 

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

 

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

 

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

 

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

 

6

 

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

 

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

 

7

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

8

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

9

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

10

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

11

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

12

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

13

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

14

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Eurodollar
Margin” shall mean 4.00% per annum.

 

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

 

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

 

15

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

16

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

17

 

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

 

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

 

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

 

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

 

“Guarantors”
shall mean Holdings and the Subsidiary Guarantors.

 

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

 

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

 

18

 

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

 

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

 

	
  Ratings Agency

  	
   

  	
  Minimum
  Rating

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  S&P

  	
   

  	
  A- (stable)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Moody’s

  	
   

  	
  A3 (stable)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Fitch

  	
   

  	
  A- (stable)

  	
   

  

 

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

 

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

 

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

 

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

 

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

 

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

 

19

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

	
  Ratings Agency

  	
   

  	
  Minimum
  Rating

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  S&P

  	
   

  	
  BBB- (stable)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Moody’s

  	
   

  	
  Baa3 (stable)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Fitch

  	
   

  	
  BBB- (stable)

  	
   

  

 

20

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

21

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

22

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

23

 

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

 

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

 

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

 

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

 

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

 

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

 

24

 

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

 

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

 

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

 

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

 

25

 

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

 

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

 

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

 

26

 

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

 

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

 

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

 

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

 

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

 

27

 

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

 

“Prime
Rate” shall mean the rate of interest per annum publicly announced from
time to time by the Administrative Agent as its reference rate in effect at its
principal office in New York City (the Prime Rate not being intended to be the
lowest rate of interest charged by JPMCB in connection with extensions of
credit to debtors).

 

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

 

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

 

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

 

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

 

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

 

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

 

28

 

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

 

(E)             any applicable Pro
Forma Adjustment.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

29

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

30

 

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

 

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

 

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

 

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

 

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

 

31

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

32

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

33

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

34

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

35

 

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

 

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

 

SECTION 2.            Amount and Terms of Credit

 

2.1.            Commitments.

 

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

 

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

 

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

 

36

 

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

 

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

 

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

 

37

 

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

 

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

 

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

 

2.3.            Notice of Borrowing.

 

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

 

38

 

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

 

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

 

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

 

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

 

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

 

2.4.            Disbursement of Funds.

 

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

 

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

 

39

 

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

 

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

 

2.5.            Repayment of Loans; Evidence of
Debt.

 

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

 

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

 

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

 

40

 

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

 

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

 

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

 

2.6.            Conversions and Continuations.

 

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

 

41

 

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

 

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

 

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

 

2.8.            Interest.

 

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

 

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

 

(c)             If all or a portion of (i) the
principal amount of any Loan or (ii) any interest payable thereon or Fee
shall not be paid when due (whether at the stated maturity, by acceleration or
otherwise), such overdue amount shall bear interest at a rate per annum that is
(x) in the case of overdue principal, the rate that would otherwise be
applicable thereto plus 2% or (y) in the case of any overdue
interest or Fee, to the extent permitted by applicable law, the rate described
in Section 2.8(a) plus 2% from and including the date of such
non-payment to but excluding the date on which such amount is paid in full
(after as well as before judgment).

 

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

 

42

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

2.10.          Increased Costs,
Illegality, etc.

 

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

 

43

 

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

 

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

 

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

 

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

 

44

 

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

 

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

 

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

 

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

 

45

 

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

 

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

 

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

 

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

 

(a)           fees shall cease to
accrue on the Available Commitment of such Defaulting Lender pursuant to Section 4.1(a);

 

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

 

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

 

46

 

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

 

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

 

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

 

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

 

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

 

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

 

47

 

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

 

(d)           in the event that
the Administrative Agent, the Borrower, the Letter of Credit Issuer and the
Swingline Lender each agree that a Defaulting Lender has adequately remedied
all matters that caused such Lender to be a Defaulting Lender, then such Lender
shall cease to be a Defaulting Lender, and the Swingline Exposure and Letter of
Credit Exposure of the Lenders shall be readjusted to reflect the inclusion of
such Lender’s Commitment and on such date such Lender shall purchase at par
such of the Loans of the other Lenders (other than Swingline Loans) as the
Administrative Agent shall determine may be necessary in order for such Lender
to hold such Loans in accordance with its Applicable Percentage.

 

48

 

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

 

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

 

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

 

49

 

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

 

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

 

SECTION 3.           Letters of Credit

 

3.1.          Letters of Credit.

 

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

 

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

 

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

 

50

 

3.2.          Letter of Credit Requests.

 

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

 

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

 

3.3.          Letter of Credit Participations.

 

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

 

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

 

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

 

51

 

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

 

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

 

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

 

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

 

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

 

52

 

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

 

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

 

(v)           the occurrence of
any Default;

 

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

 

3.4.          Agreement to Repay Letter of Credit
Drawings.

 

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

 

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

 

53

 

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

 

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

 

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

 

54

 

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

 

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

 

SECTION 4.           Fees; Commitments

 

4.1.          Fees.

 

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

 

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

 

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

 

55

 

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

 

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

 

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

 

4.3.          Mandatory Termination of
Commitments.

 

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

 

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

 

SECTION 5.           Payments

 

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

 

56

 

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

 

5.2.          Mandatory Prepayments.

 

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

 

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

 

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

 

57

 

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

 

5.3.          Payments Generally.

 

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

 

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

 

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

 

58

 

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

 

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

 

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

 

5.4.          Net Payments.

 

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

 

59

 

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

 

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

 

60

 

Non-Excluded Taxes imposed
or asserted on or attributable to amounts payable under this Section) payable
by the Administrative Agent or such Lender, as the case may be, and any
reasonable expenses arising therefrom or with respect thereto, whether or not
such Non-Excluded Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. A certificate as to the amount of such payment
or liability delivered to the Borrower by a Lender (with a copy to the
Administrative Agent), or by the Administrative Agent on its own behalf or on
behalf of a Lender, shall be conclusive absent manifest error.

 

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

 

(i)            deliver to the
Borrower and the Administrative Agent two copies of either (x) in the case
of Non-U.S. Lender claiming exemption from U.S. Federal withholding tax under Section 871(h) or
881(c) of the Code with respect to payments of “portfolio interest”,
Internal Revenue Service Form W-8BEN (together with a certificate
representing that such Non-U.S. Lender is not a bank for purposes of Section 881(c) of
the Code, is not a 10-percent shareholder (within the meaning of Section 871(h)(3)(B) of
the Code) of the Borrower, is not a controlled foreign corporation related to
the Borrower (within the meaning of Section 864(d)(4) of the Code)
and that no payments in connection with the Credit Documents are effectively
connected with such Non-U.S. Lender’s conduct of a U.S. trade or business (a “Certificate”)),
(y) Internal Revenue Service Form W-8BEN or Form W-8ECI, in each
case properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or reduced rate of, U.S. Federal withholding tax on
payments by the Borrower under this Agreement or (z) in the case of a
Non-U.S. Lender that not the beneficial owner (for example, where the Non-U.S.
Lender is a partnership or participating Lender granting a typical
participation), Internal Revenue Service Form W-8IMY, accompanied by a Form W-8ECI,
W-8BEN, a Certificate, Form W-9 and/or other certification documents from
each beneficial owner, as applicable; provided that, if the Non-U.S.
Lender is a partnership (and not a participating Lender) and one or more
beneficial owners of such Non-U.S. Lender are claiming the portfolio interest
exemption, such Non-U.S. Lender may provide a Certificate on behalf of such
beneficial owner(s);

 

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

 

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

 

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

 

61

 

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

 

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

 

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

 

5.5.          Computations of Interest and Fees.

 

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

 

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

 

62

 

5.6.          Limit on Rate of Interest.

 

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

 

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

 

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

 

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

 

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

 

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

 

SECTION 6.           Conditions Precedent to Initial
Borrowing

 

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

 

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

 

63

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

64

 

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

 

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

 

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

 

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

 

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

 

6.15.        Pledged Stock; Stock Powers; Pledged
Notes. The collateral agent for the Initial Secured Notes shall have
received (i) the certificates representing the certificated equity
interests pledged pursuant to the Pledge Agreement, together with an undated
stock power for each such certificate executed in blank by a duly authorized
officer of the pledgor thereof, and (ii) each promissory note (if any)
pledged to the Collateral Agent pursuant to the Security Agreement or the
Pledge Agreement endorsed (without recourse) in blank (or accompanied by an
executed transfer form in blank) by the pledgor thereof.

 

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

 

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

 

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

 

SECTION 7.           Conditions Precedent to All Credit
Events

 

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

 

65

 

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

 

7.2.          Notice of Borrowing; Letter of
Credit Request.

 

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

 

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

 

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

 

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

 

SECTION 8.           Representations, Warranties and
Agreements

 

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

 

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

 

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

 

66

 

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

 

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

 

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

 

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

 

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

 

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

 

8.8.          True and Complete Disclosure.

 

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

 

67

 

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

 

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

 

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

 

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

 

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

 

68

 

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

 

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

 

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

 

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

 

8.15.        Environmental Laws.

 

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

 

69

 

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

 

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

 

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

 

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

 

SECTION 9.           Affirmative Covenants

 

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

 

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

 

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

 

70

 

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

 

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

 

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

 

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

 

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

 

71

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

72

 

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

 

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

 

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

 

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

 

9.3.          Maintenance of Insurance.

 

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

 

73

 

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

 

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

 

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

 

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

 

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

 

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

 

74

 

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

 

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

 

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

 

75

 

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

 

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

 

9.12.          Pledges of Additional Stock and
Evidence of Indebtedness.

 

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

 

(b)             [Reserved].

 

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

 

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

 

76

 

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

 

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

 

9.15.          Further Assurances.

 

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

 

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

 

77

 

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

 

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

 

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

 

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

 

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

 

78

 

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

 

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

 

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

 

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

 

79

 

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

 

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

 

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

 

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

 

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

 

80

 

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

 

SECTION 10.           Negative
Covenants

 

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

 

10.1.          Limitation on Indebtedness.

 

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

 

(a)             Indebtedness arising under
the Credit Documents;

 

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

 

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

 

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

 

81

 

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

 

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

 

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

 

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

 

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

 

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

 

82

 

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

 

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

 

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

 

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

 

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

 

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

 

10.2.          Limitation on Liens.

 

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

 

(a)             Liens arising under the
Credit Documents;

 

(b)             Permitted Liens;

 

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

 

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

 

83

 

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

 

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

 

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

 

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

 

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

 

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

 

10.3.          Limitation on Fundamental Changes.

 

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

 

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

 

84

 

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

 

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

 

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

 

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

 

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

 

85

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

87

 

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

 

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

 

(b)             Permitted Investments;

 

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

 

(d)             Investments
existing on the date hereof and listed on Schedule 10.5 and any extensions,
renewals or reinvestments with respect to any return therefrom (including
through a repayment, return of capital, interest or dividends) (but without any
increase in the amount thereof and in the case of any reinvestment, only if
such reinvestment is made within 60 days after the date of receipt of any such
returned amount);

 

(e)             Hedge Agreements
permitted by Section 10.1(A)(h);

 

(f)              Investments
received in connection with the bankruptcy or reorganization of suppliers or
customers and in settlement of delinquent obligations of, and other disputes with,
customers arising in the ordinary course of business;

 

(g)             Investments to the
extent that payment for such investments is made solely with capital stock of
Parent;

 

(h)             Investments
constituting non-cash proceeds of sales, transfers and other dispositions of
assets to the extent permitted by Section 10.4;

 

(i)              Investments (i) in
the Borrower or any Subsidiary Guarantor, (ii) Investments by any
Restricted Subsidiary that is not a Subsidiary Guarantor in any other
Subsidiary that is not a Subsidiary Guarantor and (iii) Investments by the
Borrower or any Subsidiary Guarantor in any Restricted Subsidiary that is not a
Subsidiary Guarantor in an aggregate principal amount not to exceed $1,000,000
at any time outstanding;

 

(j)              Permitted
Acquisitions, provided that (i) no Event of Default shall have
occurred and is continuing after giving effect to such Permitted Acquisition, (ii) on
a Pro Forma Basis (x) the Fixed Charge Coverage Ratio for the most
recently ended Test Period for which Section 9.1 Financials have been
delivered would be at least 1.1 to 1.0, (y) average daily Availability for
the period of sixty (60) consecutive days immediately preceding

 

88

 

such
Investment has been and for the period of six consecutive months immediately
following such Investment is projected by the Borrower to be not less than the
greater of (1) 20% of the Total Commitment on the date of such Permitted
Acquisition and (2) $20,000,000 and (z) the fair market value of any
assets acquired in any transaction that are not owned directly by the Borrower
or a Subsidiary Guarantor (including a Person who becomes a Subsidiary
Guarantor as a result of such Permitted Acquisition) shall be deemed to be an
Investment not permitted by this clause (j);

 

(k)             other Investments,
provided that, at the time each such Investment is made or otherwise
acquired and after giving effect thereto(i) no Default shall have occurred
and be continuing or would result therefrom, (ii) on a Pro Forma Basis, (x) the
Fixed Charge Coverage Ratio for the most recently ended Test Period is at least
1.25 to 1.00, and (y) average daily Availability for the period of sixty
(60) consecutive days immediately preceding such Investment has been and for
the period of six consecutive months immediately following such Investment is
projected by the Borrower to be not less than the greater of (1) 25% of
the Total Commitment on the date of such Investment and (2) $25,000,000;

 

(l)              other
Investments in an amount not to exceed $5,000,000; and

 

(m)            Investments
constituting Restricted Payments permitted by Section 10.6 and Guarantee
Obligations permitted by Section 10.1(d)(ii) .

 

10.6.          Limitation on Restricted Payments.
None of Holdings, the Borrower or any Restricted Subsidiary will make any
Restricted Payment, provided that, (a) so long as no Default or
Event of Default exists or would exist after giving effect thereto, Holdings or
the Borrower may redeem in whole or in part any of its capital stock for
another class of capital stock or rights to acquire its capital stock or with
proceeds from substantially concurrent equity contributions or issuances of new
shares of its capital stock (or pay dividends with such proceeds), provided
that such other class of capital stock contains terms and provisions at least
as advantageous to the Lenders in all respects material to their interests as
those contained in the capital stock redeemed thereby, (b) the Borrower
and Holdings may declare and pay dividends and/or make distributions on its
capital stock, as applicable the proceeds of which will be used by Parent or
Holdings solely to pay (i) taxes of Parent, Holdings, the Borrower and the
Subsidiaries as part of a consolidated tax filing group for U.S. federal, state
or local tax purposes in an amount not to exceed the income tax liabilities
that would have been payable by the Borrower and its Restricted Subsidiaries on
a stand-alone basis, reduced by any such income taxes paid or to be paid
directly by Borrower or its Restricted Subsidiaries, and (ii) franchise
taxes, administrative and similar expenses related to Parent’s and Holdings’
existence and ownership of the Borrower, as applicable, provided that
the amount of such dividends pursuant to this subclause (ii) does not
exceed in any fiscal year the amount of such taxes and expenses payable for
such fiscal year (it being understood that such expenses shall in no event
exceed $1,000,000 in the aggregate per fiscal year), (c) Holdings, the
Borrower and the Restricted Subsidiaries may make other Restricted Payments; provided
that (A) both immediately before and immediately after giving effect to
such Restricted Payment, no Event of Default shall have occurred and be
continuing, (B) at the time any Restricted Payment is made on a Pro Forma
Basis, (x) the Fixed Charge Coverage Ratio for the most recently ended
Test Period for which Section 9.1 Financials have been delivered

 

89

 

shall not be less than 1.25
to 1.00 and (y) average daily Availability for the period of sixty (60)
consecutive days immediately preceding such Restricted Payment has been and for
the period of six consecutive months immediately following such Restricted
Payment is projected to be not less than the greater of (1) 25% of the
Total Commitment and (2) $25,000,000 and (C) any amount received by
Holdings shall be promptly used by Holdings to make a Restricted Payment and (d) Holdings,
the Borrower and its Restricted Subsidiaries may make Restricted Payments to
repurchase or settle shares of capital stock of Parent (or options, warrants or
stock appreciation rights with respect to such capital stock or any other
equity-based award) in an aggregate amount not to exceed (x) $15,000,000
prior to the Final Date or (y) $5,000,000 in any twelve month period.

 

10.7.          Limitations on Debt Payments and
Certain Amendments.

 

(a)             The Borrower will not, and will not
permit any of its Restricted Subsidiaries to, make directly or indirectly, any
payment or other distribution (whether in cash, securities or other property)
of or in respect of principal of or interest on any Indebtedness for borrowed
money, or any payment or other distribution (whether in cash, securities or
other property), including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement, acquisition, cancellation or termination
of any Indebtedness for borrowed money, except:

 

(A)            payments of Indebtedness
created under the Credit Documents;

 

(B)             payments of
regularly scheduled interest and principal payments as and when due in respect
of any Indebtedness, other than payments in respect of any Indebtedness that is
subordinated to the Obligations prohibited by the subordination provisions
thereof;

 

(C)             refinancings,
replacements and renewals of Indebtedness to the extent made with (or in
exchange for) Permitted Refinancing Indebtedness (or, in the case of
Indebtedness outstanding pursuant to clause (f), (g) or (j) of Section 10.1(A),
with the proceeds of refinancing Indebtedness incurred pursuant to such
clauses);

 

(D)            payments of secured
Indebtedness that becomes due as a result of the voluntary sale or transfer of
the property or assets securing such Indebtedness on a first lien basis;

 

(E)             payments with
respect to Indebtedness owed to the Borrower or any Subsidiary Guarantor;

 

(F)             payments by
Restricted Subsidiaries that are not Subsidiary Guarantors with respect to
Indebtedness of such Restricted Subsidiaries;

 

(G)             payments with
respect to the Initial Secured Notes and any Permitted Additional Secured Notes
made solely from the proceeds of Notes Priority Collateral to the extent
required by the Secured Notes Documents;

 

(H)            other payments with
respect to Indebtedness; provided that (A) both immediately before
and immediately after giving effect to such payment, no Event of 

 

90

 

Default
shall have occurred and be continuing and (B) at the time any payment is
made on a Pro Forma Basis, (x) the Fixed Charge Coverage Ratio for the
most recently ended Test Period for which Section 9.1 Financials have been
delivered shall not be less than 1.25 to 1.00 and (y) average daily
Availability for the period of sixty (60) consecutive days immediately
preceding such payment has been and for the period of six consecutive months
immediately following such payment is projected by the Borrower to be not less
than the greater of (1) 25% of the Total Commitment and (2) $25,000,000;
and

 

(I)              payments with
respect to Indebtedness made from the proceeds of a substantially concurrent
contribution to the equity of the Borrower (other than proceeds from an Equity
Cure).

 

(b)             Holdings and the Borrower will not,
and will not permit any Restricted Subsidiary, to amend, modify or waive any of
its rights under any agreement governing or relating to the Subordinated Notes,
the Initial PIK Convertible Notes, any Permitted Additional PIK Convertible
Notes, the Forward Purchase Contract or any other Indebtedness which is
subordinated to the Obligations to the extent any such amendment, modification
or waiver would be materially adverse to the Lenders. The Borrower will not
amend the terms of the Initial Secured Notes, any Permitted Additional Secured
Notes or any Permitted Junior Lien or Unsecured Notes in a manner that would
accelerate the date on which the Borrower is required to make any payment of
principal or interest or any other amount thereon.

 

10.8.          Limitations on Sale Leasebacks.
Holdings and the Borrower will not, and will not permit any of the Restricted
Subsidiaries to, enter into or effect any Sale Leasebacks, other than Permitted
Sale Leasebacks.

 

10.9.          Fixed Charge Coverage Ratio.
During any Minimum Availability Period, the Borrower will not permit the Fixed
Charge Coverage Ratio for the most recently ended Test Period prior to the
commencement of such Minimum Availability Period or for any Test Period ending
during such Minimum Availability Period to be less than 1.1 to 1.0.

 

For
purposes of determining compliance with this Section 10.9 only, any cash
common equity contribution (an “Equity Cure”) to the Borrower by
Holdings after the date on which financial statements are required to be
delivered for a Test Period in accordance with Section 9.1 and on or prior
to the day that is 10 days after such date, shall at the request of the
Borrower, be included in the calculation of Consolidated EBITDA solely for the
purposes of determining compliance with this Section 10.9 for such Test
Period and applicable subsequent Test Periods, provided that (a) in
each four fiscal quarter period, there shall be at least two fiscal quarters in
respect of which no Equity Cure is made and (b) the amount of any such
Equity Cure shall be no greater than the amount required to cause the Borrower
to be in compliance with this Section 10.9.

 

SECTION 11.          Events of Default

 

Upon
the occurrence of any of the following specified events (each an “Event of
Default”):

 

91

 

11.1.          Payments. The Borrower shall (a) default
in the payment when due of any principal of the Loans or (b) default, and
such default shall continue for five or more days, in the payment when due of
any interest on the Loans or any Fees or any Unpaid Drawings or of any other
amounts owing hereunder or under any other Credit Document; or

 

11.2.          Representations, etc. Any
representation, warranty or statement made or deemed made by any Credit Party
herein or in any Credit Document or any certificate delivered or required to be
delivered pursuant hereto or thereto shall prove to be untrue in any material
respect on the date as of which made or deemed made; or

 

11.3.          Covenants. Any Credit Party
shall (a) (x) default in the due performance or observance by it of
any term, covenant or agreement contained in Section 9.1(f)(i) or Section 10
or (y) default in the due performance or observance by it of any term,
covenant or agreement contained in Section 9.1(e), Section 9.16 and Section 9.17
of this Agreement or Section 4.5(b) of the Security Agreement and
such default shall continue unremedied for a period of at least 5 Business Days
after receipt of written notice by the Borrower from the Administrative Agent,
the Security Agents or the Required Lenders or (b) default in the due
performance or observance by it of any term, covenant or agreement (other than
those referred to in Section 11.1 or 11.2 or clause (a) of this Section 11.3)
contained in this Agreement or any Credit Document and such default shall
continue unremedied for a period of at least 30 days after receipt of written
notice by the Borrower from the Administrative Agent or the Required Lenders;
or

 

11.4.          Default Under Other Agreements.
(a) Any of Holdings, the Borrower or any of the Restricted Subsidiaries
shall (i) default in any payment with respect to any Indebtedness (other
than the Obligations) in excess of $20,000,000 in the aggregate, for Holdings,
the Borrower and such Subsidiaries, beyond the period of grace, if any, provided
in the instrument or agreement under which such Indebtedness was created or (ii) default
in the observance or performance of any agreement or condition relating to any
such Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition
exist, the effect of which default or other event or condition is to cause, or
to permit the holder or holders of such Indebtedness (or a trustee or agent on
behalf of such holder or holders) to cause, any such Indebtedness to become due
(or to cause Holdings, the Borrower or any of its Restricted Subsidiaries to
purchase any such Indebtedness) prior to its stated maturity; or (b) without
limiting the provisions of clause (a) above, any such Indebtedness shall
be declared to be due and payable, or required to be prepaid other than by a
regularly scheduled required prepayment or as a mandatory prepayment, prior to
the stated maturity thereof or (c) the Forward Purchase Contract is
terminated prior to the settlement date or one or more conditions precedent to
the purchase of the Initial PIK Convertible Notes by Sealy Holding LLC pursuant
to the Forward Purchase Contract has not been satisfied or becomes impossible
to satisfy and such condition or conditions has not been waived by Sealy
Holding LLC; or

 

11.5.          Bankruptcy, etc. Holdings, the
Borrower or any Specified Subsidiary shall commence a voluntary case,
proceeding or action concerning itself under (a) Title 11 of the United
States Code entitled “Bankruptcy”, or (b) in the case of any Foreign
Subsidiary that is a Specified Subsidiary, any domestic or foreign law relating
to bankruptcy, insolvency reorganization or relief of debtors legislation of
its jurisdiction of incorporation, in each case as now or hereafter in effect,
or any successor thereto (collectively, the “Bankruptcy Code”); or an
involuntary

 

92

 

case, proceeding or action
is commenced against any of Holdings, the Borrower or any Specified Subsidiary
and the petition is not controverted within 10 days after commencement of the
case, proceeding or action; or an involuntary case, proceeding or action is
commenced against any of Holdings, the Borrower or any Specified Subsidiary and
the petition is not dismissed within 60 days after commencement of the case,
proceeding or action; or a custodian (as defined in the Bankruptcy Code) receiver,
receiver manager, trustee or similar person is appointed for, or takes charge
of, all or substantially all of the property of any of Holdings, the Borrower
or any Specified Subsidiary; or any of Holdings, the Borrower or any Specified
Subsidiary commences any other proceeding or action under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction whether now or hereafter in
effect relating to any of Holdings, the Borrower or any Specified Subsidiary;
or there is commenced against any of Holdings, the Borrower, or any Specified
Subsidiary any such proceeding or action that remains undismissed for a period
of 60 days; or any of Holdings, the Borrower or any Specified Subsidiary is
adjudicated insolvent or bankrupt; or any order of relief or other order
approving any such case or proceeding or action is entered; or any of Holdings,
the Borrower or any Specified Subsidiary suffers any appointment of any
custodian receiver, receiver manager, trustee or the like for it or any
substantial part of its property to continue undischarged or unstayed for a
period of 60 days; or any of Holdings, the Borrower or any Specified Subsidiary
makes a general assignment for the benefit of creditors; or any corporate
action is taken by any of Holdings, the Borrower or any Specified Subsidiary
for the purpose of effecting any of the foregoing; or

 

11.6.          ERISA. (a) Any Plan shall
fail to satisfy the minimum funding standard required for any plan year or part
thereof or a waiver of such standard or extension of any amortization period is
sought or granted under Section 412 of the Code; any Plan is or shall have
been terminated or is the subject of termination proceedings under ERISA (including
the giving of written notice thereof); an event shall have occurred or a
condition shall exist in either case entitling the PBGC to terminate any Plan
or to appoint a trustee to administer any Plan (including the giving of written
notice thereof); any Plan shall have an accumulated funding deficiency (whether
or not waived); any of Holdings, the Borrower or any Subsidiary or any ERISA
Affiliate has incurred or is likely to incur a liability to or on account of a
Plan under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201
or 4204 of ERISA or Section 4971 or 4975 of the Code (including the giving
of written notice thereof); (b) there could result from any event or
events set forth in clause (a) of this Section 11.6 the imposition of
a lien, the granting of a security interest, or a liability, or the reasonable
likelihood of incurring a lien, security interest or liability; and (c) such
lien, security interest or liability will or would be reasonably likely to have
a Material Adverse Effect; or

 

11.7.          Guarantee. The Guarantees or
any material provision thereof shall cease to be in full force or effect or any
Guarantor thereunder or any Credit Party shall deny or disaffirm in writing any
Guarantor’s obligations under the Guarantee; or

 

11.8.          Pledge Agreement. The Pledge
Agreements or any material provision thereof shall cease to be in full force or
effect (other than pursuant to the terms hereof or thereof or as a result of
acts or omissions of the Administrative Agent or any Lender) or any pledgor
thereunder or any Credit Party shall deny or disaffirm in writing any pledgor’s
obligations under the Pledge Agreement; or

 

93

 

11.9.          Security Agreement. The
Security Agreements or any material provision thereof shall cease to be in full
force or effect (other than pursuant to the terms hereof or thereof or as a
result of acts or omissions of the Administrative Agent or any Lender) or any
grantor thereunder or any Credit Party shall deny or disaffirm in writing any
grantor’s obligations under the Security Agreement; or

 

11.10.        Mortgages. Any Mortgage or any
material provision of any Mortgage relating to any material portion of the
Collateral shall cease to be in full force or effect (other than pursuant to the
terms hereof or thereof or as a result of acts or omissions of the
Administrative Agent or any Lender) or any mortgagor thereunder or any Credit
Party shall deny or disaffirm in writing any mortgagor’s obligations under any
Mortgage; or

 

11.11.        Subordination. The Obligations of
the Borrower, or the obligations of Holdings or any Subsidiaries pursuant to
the Guarantee, shall cease to constitute senior indebtedness under the
subordination provisions of any document or instrument evidencing the
Subordinated Notes or any other permitted subordinated Indebtedness or such
subordination provisions shall be invalidated or otherwise cease to be legal,
valid and binding obligations of the parties thereto, enforceable in accordance
with their terms; or

 

11.12.        Judgments. One or more judgments
or decrees shall be entered against the Borrower or any of the Restricted
Subsidiaries involving a liability of $20,000,000 or more in the aggregate for
all such judgments and decrees for the Borrower and the Restricted Subsidiaries
(to the extent not paid or fully covered by insurance provided by a carrier not
disputing coverage) and any such judgments or decrees shall not have been
satisfied, vacated, discharged or stayed or bonded pending appeal within 60
days from the entry thereof; or

 

11.13.        Change of Control. A Change of
Control shall occur;

 

then, and in any such event,
and at any time thereafter, if any Event of Default shall then be continuing,
the Administrative Agent shall, upon the written request of the Required Lenders,
by written notice to the Borrower, take any or all of the following actions,
without prejudice to the rights of the Administrative Agent or any Lender to
enforce its claims against the Borrower, except as otherwise specifically
provided for in this Agreement (provided that, if an Event of Default
specified in Section 11.5 shall occur with respect to the Borrower, the
result that would occur upon the giving of written notice by the Administrative
Agent as specified in clauses (i), (ii) and (iv) below shall occur
automatically without the giving of any such notice): (i) declare the
Total Commitment terminated, whereupon the Commitments and Swingline
Commitment, if any, of each Lender or the Swingline Lender, as the case may be,
shall forthwith terminate immediately and any Fees theretofore accrued shall
forthwith become due and payable without any other notice of any kind; (ii) declare
the principal of and any accrued interest and fees in respect of all Loans and
all Obligations owing hereunder and thereunder to be, whereupon the same shall
become, forthwith due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower; (iii) terminate
any Letter of Credit that may be terminated in accordance with its terms; (iv) exercise
rights and remedies under the Credit Documents, at law or in equity; and/or (v) direct
the Borrower to pay (and the Borrower agrees that upon receipt of such notice,
or upon the occurrence of an Event of Default specified in Section 11.5
with respect to the Borrower, it will pay) to the Administrative Agent, at its
Administrative

 

94

 

Agent’s Office, such
additional amounts of cash, to be held as security for the Borrower’s
reimbursement obligations for Drawings that may subsequently occur thereunder,
equal to the aggregate Stated Amount of all Letters of Credit issued and then
outstanding.

 

SECTION 12.           The Agents

 

12.1.          Appointment. Each Lender hereby
irrevocably designates and appoints the Administrative Agent, Collateral Agent
and Co-Collateral Agent as the agents of such Lender under this Agreement and
the other Credit Documents, and each such Lender irrevocably authorizes the
Administrative Agent and the Security Agents, in their respective capacities,
to take such action on its behalf under the provisions of this Agreement and
the other Credit Documents and to exercise such powers and perform such duties
as are expressly delegated to such Agents by the terms of this Agreement and
the other Credit Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
this Agreement, no Agent shall have any duties or responsibilities, except
those expressly set forth herein, or any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other
Credit Document or otherwise exist against any Agent. Neither the Joint Lead
Arrangers nor the Syndication Agent, in their respective capacities as such,
shall have any obligations, duties or responsibilities under this Agreement but
shall be entitled to all benefits of this Section 12.

 

12.2.          Delegation of Duties. The
Administrative Agent and each Security Agent may execute any of their
respective duties under this Agreement and the other Credit Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent and
the Security Agents shall not be responsible for the negligence or misconduct
of any of their respective agents or attorneys-in-fact selected by it with
reasonable care.

 

12.3.          Exculpatory Provisions. Neither
the Administrative Agent nor any Security Agent, nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or Affiliates shall
be (a) liable for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with this Agreement or any other Credit
Document (except for its or such Person’s own gross negligence or willful
misconduct) or (b) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by the Borrower or any
Guarantor or any officer thereof contained in this Agreement or any other
Credit Document or in any certificate, report, statement or other document
referred to or provided for in, or received by the Administrative Agent or any
Security Agent under or in connection with, this Agreement or any other Credit
Document or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Credit Document or for any
failure of the Borrower or any Guarantor to perform its obligations hereunder
or thereunder. Neither the Administrative Agent nor any Security Agent shall be
under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Credit Document, or to inspect the properties,
books or records of the Borrower.

 

12.4.          Reliance by Administrative Agent
and Security Agents. The Administrative Agent and each Security Agent shall
be entitled to rely, and shall be fully protected in relying,

 

95

 

upon any writing,
resolution, notice, consent, certificate, affidavit, letter, telecopy, telex or
teletype message, statement, order or other document or conversation believed
by it to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons and upon advice and statements of legal counsel
(including counsel to the Borrower), independent accountants and other experts
selected by the Administrative Agent or such Security Agent, as the case may
be. The Administrative Agent and each Security Agent may deem and treat the
Lender specified in the Register with respect to any amount owing hereunder as
the owner thereof for all purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been filed with the Administrative
Agent. Neither the Administrative Agent nor any Security Agent shall be deemed
to have knowledge of any Secured Cash Management Agreement or Secured Hedge
Agreement unless and until it has received written notice thereof from the
applicable Hedge Bank or Cash Management Bank.

 

12.5.          Notice of Default. Neither the
Administrative Agent nor any Security Agent shall be deemed to have knowledge
or notice of the occurrence of any Default hereunder unless the Administrative
Agent or such Security Agent, as the case may be, has received notice from a
Lender or the Borrower referring to this Agreement, describing such Default and
stating that such notice is a “notice of default”. In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall
give notice thereof to the Lenders.

 

12.6.          Non-Reliance on Administrative
Agent, Security Agents and Other Lenders. Each Lender expressly
acknowledges that neither the Administrative Agent nor any Security Agent, nor
any of their respective officers, directors, employees, agents,
attorneys-in-fact or Affiliates has made any representations or warranties to
it and that no act by the Administrative Agent or any Security Agent
hereinafter taken, including any review of the affairs of the Borrower or any
Guarantor, shall be deemed to constitute any representation or warranty by the
Administrative Agent or any Security Agent to any Lender. Each Lender
represents to the Administrative Agent and each Security Agent that it has,
independently and without reliance upon the Administrative Agent, any Security
Agent or any other Lender, and based on such documents and information as it
has deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of the Credit Parties and made its own decision to make its
Loans hereunder and enter into this Agreement. Each Lender also represents that
it will, independently and without reliance upon the Administrative Agent, any
Security Agent or any other Lender, and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action under this
Agreement and the other Credit Documents, and to make such investigation as it
deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Credit Parties.
Except for notices, reports and other documents expressly required to be
furnished to the Lenders by the Administrative Agent hereunder, the
Administrative Agent and the Security Agents shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, assets, operations, properties, financial condition,
prospects or creditworthiness of the Credit Parties that may come into the
possession of the Administrative Agent or any Security Agent or any of their
respective officers, directors, employees, agents, attorneys-in-fact or
Affiliates.

 

96

 

12.7.          Indemnification. The Lenders
agree to indemnify the Administrative Agent and the Security Agents, each in
its capacity as such (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to their
Applicable Percentage in effect on the date on which indemnification is sought
(or, if indemnification is sought after the date upon which the Commitments
shall have terminated and the Total Credit Exposure shall have been paid in
full, ratably in accordance with their respective portions of the Total Credit
Exposure in effect immediately prior to such date), from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever that may at any
time (including at any time following the payment of the Loans) be imposed on,
incurred by or asserted against the Administrative Agent or any Security Agent
in any way relating to or arising out of, the Commitments, this Agreement, any
of the other Credit Documents or any documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby or any action
taken or omitted by the Administrative Agent or any Security Agent under or in
connection with any of the foregoing, provided that no Lender shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Administrative Agent’s or such Security Agent’s, as the case
may be, gross negligence or willful misconduct. The agreements in this Section 12.7
shall survive the payment of the Loans and all other amounts payable hereunder.

 

12.8.          Administrative Agent and Security
Agents in Their Individual Capacities. The Administrative Agent, the
Security Agents and their respective Affiliates may make loans to, accept
deposits from and generally engage in any kind of business with Parent and its
Subsidiaries as though the Administrative Agent and the Security Agents were
not the Administrative Agents and the Security Agents hereunder and under the
other Credit Documents. With respect to the Loans made by it, the
Administrative Agent and each Security Agent shall have the same rights and
powers under this Agreement and the other Credit Documents as any Lender and
may exercise the same as though it were not the Administrative Agent or a
Security Agent, and the terms “Lender” and “Lenders” shall include the
Administrative Agent and the Security Agents in their respective individual
capacities.

 

12.9.          Successor Agent. The
Administrative or any Security Agent may resign as Administrative Agent or
Security Agent, as the case may be, upon 20 days’ prior written notice to the
Lenders and the Borrower. If the Administrative Agent or any Security Agent
shall resign as Administrative Agent or Security Agent, as the case may be,
under this Agreement and the other Credit Documents, then the Required Lenders
shall appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall be approved by the Borrower (which approval shall not be
unreasonably withheld) unless an Event of Default has occurred and is
continuing under Section 11.1 or Section 11.5, whereupon such
successor agent shall succeed to the rights, powers and duties of the
Administrative Agent or a Security Agent, as the case may be, and the term “Administrative
Agent,” “Collateral Agent” or “Co-Collateral Agent,” as the case may be, shall
mean such successor agent effective upon such appointment and approval, and the
former Administrative Agent’s or Security Agents’ rights, powers and duties as
Administrative Agent, Collateral Agent or Co-Collateral Agent, as the case may
be, shall be terminated, without any other or further act or deed on the part
of such former Administrative Agent or Security Agent or any of the parties to
this Agreement or any holders of the Loans. After any retiring Administrative
Agent’s or Security Agent’s resignation as Administrative Agent or Security

 

97

 

Agent, as the case may be,
the provisions of this Section 12 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Administrative Agent or
a Security Agent under this Agreement and the other Credit Documents.

 

12.10.        Withholding Tax. To the extent
required by any applicable law, the Administrative Agent may withhold from any
interest payment to any Lender an amount equivalent to any applicable
withholding tax. If the Internal Revenue Service or any authority of the United
States or other jurisdiction asserts a claim that the Administrative Agent did
not properly withhold tax from amounts paid to or for the account of any Lender
(because the appropriate form was not delivered, was not properly executed, or
because such Lender failed to notify the Administrative Agent of a change in
circumstances which rendered the exemption from, or reduction of, withholding
tax ineffective, or for any other reason other than the gross negligence or
willful misconduct of the Administrative Agent), such Lender shall indemnify
the Administrative Agent fully for all amounts paid, directly or indirectly, by
the Administrative Agent as tax or otherwise, including penalties and interest,
together with all expenses incurred, including legal expenses, allocated staff
costs and any out of pocket expenses.

 

12.11.        Reports. Each Lender hereby
agrees that (a) it has requested a copy of each Report prepared by or on
behalf of the Administrative Agent or the Security Agents; (b) the
Administrative Agent and the Security Agents (i) make no representation or
warranty, express or implied, as to the completeness or accuracy of any Report
or any of the information contained therein or any inaccuracy or omission
contained in or relating to a Report and (ii) shall not be liable for any
information contained in any Report; (c) the Reports are not comprehensive
audits or examinations, and that any Person performing any field examination
will inspect only specific information regarding the Credit Parties and will
rely significantly upon the Credit Parties’ books and records, as well as on
representations of the Credit Parties’ personnel and that the Administrative
Agent and the Security Agents undertake no obligation to update, correct or
supplement the Reports; (d) it will keep all Reports confidential and
strictly for its internal use, not share the Report with any other Person
except as otherwise permitted pursuant to this Agreement; and (e) without
limiting the generality of any other indemnification provision contained in
this Agreement, it will pay and protect, and indemnify, defend, and hold the
Administrative Agent, the Security Agents and any such other Person preparing a
Report harmless from and against, the claims, actions, proceedings, damages,
costs, expenses, and other amounts (including reasonable attorney fees)
incurred by as the direct or indirect result of any third parties who might
obtain all or part of any Report through the indemnifying Lender.

 

12.12.        Security Agents. All
determinations of the Security Agents under the Credit Documents shall be made
jointly by the Security Agents, provided that, in the event that the Security
Agents cannot agree on any matter to be determined by the Security Agents, the
determination shall be made by the individual Security Agent asserting the more
conservative credit judgment or declining to permit the requested action for
which consent is being sought by the Borrower, as applicable. This provision
shall be binding upon any successor Security Agent pursuant to Section 12.9.

 

98

 

SECTION 13.           [Reserved]

 

SECTION 14.           Miscellaneous

 

14.1.          Amendments and Waivers.

 

(a)             Neither this Agreement nor any
other Credit Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this Section 14.1.
The Required Lenders may, or, with the written consent of the Required Lenders,
the Administrative Agent may, from time to time, (a) enter into with the
relevant Credit Party or Credit Parties written amendments, supplements or
modifications hereto and to the other Credit Documents for the purpose of
adding any provisions to this Agreement or the other Credit Documents or
changing in any manner the rights of the Lenders or of the Credit Parties
hereunder or thereunder or (b) waive, on such terms and conditions as the
Required Lenders or the Administrative Agent, as the case may be, may specify
in such instrument, any of the requirements of this Agreement or the other
Credit Documents or any Default and its consequences; provided, however,
that no such waiver and no such amendment, supplement or modification shall
directly (i) forgive any portion of any Loan or waive any required
prepayment or cash collateralization pursuant to Section 5.2(a) or
extend the final scheduled maturity date of any Loan or reduce the stated rate,
or forgive any portion, or extend the date for the payment, of any interest or
Fee payable hereunder (other than as a result of waiving the applicability of Section 2.8(c)),
or extend the final expiration date of any Lender’s Commitment or extend the
final expiration date of any Letter of Credit beyond the L/C Maturity Date (provided
that the Administrative Agent may make Protective Advances as set forth in Section 2.1),
or increase the aggregate amount of the Commitments of any Lender, or amend or
modify any provisions of Section 14.8(a), in each case without the written
consent of each Lender directly and adversely affected thereby, or (ii) amend,
modify or waive any provision of this Section 14.1 or reduce the
percentages specified in the definitions of the terms “Required Lenders”, “Required
Supermajority Lenders” or “Applicable Percentage” or consent to the assignment
or transfer by the Borrower of its rights and obligations under any Credit
Document to which it is a party (except as permitted pursuant to Section 10.3),
in each case without the written consent of each Lender directly and adversely
affected thereby, or (iii) amend, modify or waive any provision of Section 12
as it relates to the Administrative Agent without the written consent of the
then-current Administrative Agent or as it relates to the Security Agents
without the written consent of both of the then-current Security Agents, or (iv) amend,
modify or waive any provision of Section 2.3 relating to Letters of
Credit, Section 2.14 or Section 3 without the written consent of the
Letter of Credit Issuer, or (v) amend, modify or waive any provisions
hereof relating to Swingline Loans (including the applicable provisions of Section 2.14)
without the written consent of the Swingline Lender, or (vi) increase the
advance rates set forth in the definition of Borrowing Base or add new
categories of eligible assets, without the written consent of both of the
Security Agents and the Required Supermajority Lenders, or (vii) release
all or substantially all of the Guarantors under the Guarantee (except as
expressly permitted by the Guarantee) or, except as permitted in Section 14.1(b),
release all or substantially all of the Collateral under the Pledge Agreement,
the Security Agreement and the Mortgages, in each case without the prior
written consent of each Lender, or (viii) amend Section 2.9 so as to
permit Interest Period intervals greater than six months without regard to the
consent of each Lender, without the written consent of each Lender directly and
adversely affected thereby, or (ix) amend, modify or waive the application
of

 

99

 

proceeds provisions of Section 2.5(b),
Section 5.2(a) or Section 5.3(c), without the written consent of
each Lender directly and adversely affected thereby, or (x) decrease the
amount or allocation of any optional or mandatory prepayment to be received by
any Lender holding any Loans without the written consent of such Lender, or
(xi) waive any condition set forth in Section 6 without the written
consent of each Initial Lender. Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the affected Lenders
and shall be binding upon the Borrower, such Lenders, the Administrative Agent,
the Collateral Agent and all future holders of the affected Loans. In the case
of any waiver, the Borrower, the Lenders, the Collateral Agent and the
Administrative Agent shall be restored to their former positions and rights
hereunder and under the other Credit Documents, and any Default waived shall be
deemed to be cured and not continuing, it being understood that no such waiver
shall extend to any subsequent or other Default or impair any right consequent
thereon.

 

(b)             Any Liens granted to the
Administrative Agent by the Credit Parties on any Collateral for the benefit of
the Secured Parties shall automatically be released (i) upon the Final
Date, (ii) constituting property being sold or disposed of (or property of
a Subsidiary Guarantor whose capital stock is being sold in a transaction that
will result in such Subsidiary Guarantor being released from the Guarantee in
accordance with the terms thereof) to the extent such sale or disposition is in
compliance with the terms of this Agreement and (iii) as required by the
Intercreditor Agreement. Additionally, the Administrative Agent is hereby
authorized in its sole discretion to release any Liens as required to effect
any sale or other disposition of such Collateral in connection with any
exercise of remedies of the Administrative Agent and the Lenders pursuant to Section 11.
Except as provided in the preceding sentence, the Administrative Agent will not
release any Liens on Collateral without the prior written authorization of the
Lenders as Section 14.1(a); provided that the Administrative Agent
may in its discretion, release its Liens on Collateral valued in the aggregate
not in excess of $2,000,000 during any calendar year without the prior written
authorization of any Lenders. Any such release shall not in any manner
discharge, affect, or impair the Obligations or any Liens (other than those
expressly being released) upon (or obligations of the Credit Parties in respect
of) all interests retained by the Credit Parties, including the proceeds of any
sale, all of which shall continue to constitute part of the Collateral. In
connection with any release of Liens under the Security Documents, the
Administrative Agent shall be protected in relying on a certificate of an
Authorized  Officer to the effect that
such release is permitted by this Section 14.1(b).

 

14.2.          Notices. All notices, requests
and demands to or upon the respective parties hereto to be effective shall be
in writing (including by facsimile transmission), and, unless otherwise
expressly provided herein, shall be deemed to have been duly given or made when
delivered, or three days after being deposited in the mail, postage prepaid,
or, in the case of tele-copy notice, when received, addressed as follows in the
case of the Borrower and the Administrative Agent, and in the case of the other
parties hereto to such other address as may be hereafter notified by the
respective parties hereto:

 

	
  The
  Borrower:

  	
  Sealy Mattress Company

  
	
   

  	
  One Office Parkway

  
	
   

  	
  Trinity, NC 27370

  
	
   

  	
  Attention: Kenneth L.
  Walker

  
	
   

  	
  Fax: 336-861-3786

  

 

100

 

	
   

  	
  with a copy to

  
	
   

  	
   

  
	
   

  	
  Kohlberg Kravis
  Roberts & Co., L.P.

  
	
   

  	
  9 West 57th Street

  
	
   

  	
  Suite 4200

  
	
   

  	
  New York, NY 10019

  
	
   

  	
  Attention: Brian Carroll

  
	
   

  	
  Fax: 212-750-0003

  
	
   

  	
   

  
	
  The Administrative Agent
  or  Collateral Agent:

  	
  JPMorgan Chase Bank, N.A.

  
	
   

  	
  1111 Fannin St., Floor 10

  
	
   

  	
  Houston, TX 77002

  
	
   

  	
  Attention: Siraz Maknojia

  
	
   

  	
  Fax: (713) 750-2782

  
	
   

  	
   

  
	
   

  	
  with a copy to

  
	
   

  	
   

  
	
   

  	
  JPMorgan Chase Bank, N.A.,

  
	
   

  	
  270 Park Avenue, Floor 4

  
	
   

  	
  New York, New York 10017

  
	
   

  	
  Attention: Tony Yung

  
	
   

  	
  Fax: (212) 270-6637

  
	
   

  	
   

  
	
  The
  Co-Collateral Agent

  	
  General Electric Capital
  Corporation

  
	
   

  	
  299 Park Avenue

  
	
   

  	
  New York, New York 10171

  
	
   

  	
  Attention: Sealy Account
  Manager

  
	
   

  	
  Fax: (646) 428-7094

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  General Electric Capital
  Corporation

  
	
   

  	
  299 Park Avenue

  
	
   

  	
  New York, New York 10171

  
	
   

  	
  Attention: Counsel GE
  Global Sponsor Finance

  
	
   

  	
  Fax: 646-428-7295

  
	
   

  	
   

  
	
   

  	
  and

  
	
   

  	
   

  
	
   

  	
  Winston & Strawn
  LLP

  
	
   

  	
  200 Park Avenue

  
	
   

  	
  New York, New York 10166

  
	
   

  	
  Attention: William D.
  Brewer

  
	
   

  	
  Fax: 212-294-4700

  

 

101

 

provided that any
notice, request or demand to or upon the Administrative Agent, the Security
Agents or the Lenders pursuant to Sections 2.3, 2.6, 2.9, 4.2 and 5.1 shall not
be effective until received.

 

14.3.          No Waiver; Cumulative Remedies.
No failure to exercise and no delay in exercising, on the part of the
Administrative Agent, Collateral Agent or any Lender, any right, remedy, power
or privilege hereunder or under the other Credit Documents shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law.

 

14.4.          Survival of Representations and
Warranties. All representations and warranties made hereunder, in the other
Credit Documents and in any document, certificate or statement delivered
pursuant hereto or in connection herewith shall survive the execution and
delivery of this Agreement and the making of the Loans hereunder.

 

14.5.          Payment of Expenses and Taxes.
The Borrower agrees (a) to pay or reimburse the Agents for all their
reasonable out-of-pocket costs and expenses incurred in connection with the
development, preparation and execution of, and any amendment, supplement or
modification to, this Agreement and the other Credit Documents and any other
documents prepared in connection herewith or therewith, and the consummation
and administration of this Agreement and the transactions contemplated hereby
and thereby, including the reasonable fees, disbursements and other charges of
counsel to the Agents, (b) to pay or reimburse each Lender, each Security
Agent and the Administrative Agent for all its reasonable and documented costs
and expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the other Credit Documents and any such other
documents, including the reasonable fees, disbursements and other charges of
counsel to each Lender, of counsel to the Security Agents and of counsel to the
Administrative Agent, (c) to pay, indemnify and hold harmless each Lender,
each Security Agent and the Administrative Agent from any and all recording and
filing fees and any and all liabilities with respect to, or resulting from any
delay in paying, stamp, excise and other similar taxes, if any, that may be
payable or determined to be payable in connection with the execution, delivery
or enforcement of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under, or otherwise in respect of, this Agreement, the other Credit
Documents and any such other documents, and (d) to pay, indemnify, and
hold harmless each Lender, each Security Agent, the Administrative Agent, their
respective Affiliates and their respective directors, officers, employees,
trustees, agents, attorneys-in-fact from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever,
including reasonable and documented fees, disbursements and other charges of
counsel, with respect to the execution, delivery, enforcement, performance and
administration of this Agreement, the other Credit Documents and any such other
documents, including any of the foregoing relating to the violation of,
noncompliance with or liability under, any Environmental Law or any actual or
alleged presence of Hazardous Materials applicable to the operations of the
Borrower, any of its Subsidiaries or any of the Real Estate (all the foregoing
in this clause (d), collectively, the “indemnified liabilities”), provided
that the Borrower shall have no obligation hereunder to the Administrative
Agent, any Security

 

102

 

Agent or any Lender nor any
of their respective directors, officers, employees and agents with respect to
indemnified liabilities arising from (i) the gross negligence or willful
misconduct of the party to be indemnified, (ii) a material breach of any
Credit Document by the party to be indemnified or (iii) disputes solely
among Lenders (in their capacities as such) and not involving any conduct of
any Credit Party. The agreements in this Section 14.5 shall survive
repayment of the Loans and all other amounts payable hereunder. Expenses being
reimbursed by the Borrower under this Section include, without limiting
the generality of the foregoing, but in each case subject to the limitations of
the foregoing, reasonable out-of-pocket costs and expenses incurred in
connection with:

 

(i)              subject to Section 9.16,
appraisals and insurance reviews;

 

(ii)             subject to Section 9.17,
field examinations and the preparation of Reports based on the reasonable fees
charged by a third party retained by the Security Agents or the internally
allocated reasonable fees for each Person employed by the Security Agents with
respect to each field examination;

 

(iii)            taxes, fees and
other charges for (A) lien and title searches and title insurance and (B) recording
the Security Documents, filing financing statements and continuations, and
other actions to perfect, protect, and continue the Administrative Agent’s
Liens;

 

(iv)            sums paid or
incurred to take any action required of any Credit Party under the Credit
Documents that such Credit Party fails to pay or take; and

 

(v)             forwarding loan
proceeds, collecting checks and other items of payment, and establishing and
maintaining the accounts and lock boxes, and reasonable costs and expenses of
preserving and protecting the Collateral.

 

All of the foregoing costs
and expenses may be charged to the Borrower as Revolving Credit Loans or to
another deposit account to the extent permitted by Section 5.3(d).

 

14.6.          Successors and
Assigns; Participations and Assignments.

 

(a)             The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby (including any Affiliate of
the Letter of Credit Issuer that issues any Letter of Credit), except that (i) the
Borrower may not assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender (and any attempted
assignment or transfer by the Borrower without such consent shall be null and
void) and (ii) no Lender may assign or otherwise transfer its rights or
obligations hereunder except in accordance with this Section. Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby (including any Affiliate of the Letter of Credit Issuer that
issues any Letter of Credit), Participants (to the extent provided in paragraph
(c) of this Section) and, to the extent expressly contemplated hereby, the
Related Parties of each of the Administrative Agent, the Letter of Credit
Issuer and the Lenders) any legal or equitable right, remedy or claim under or
by reason of this Agreement.

 

103

 

(b)             (i) Subject to the conditions
set forth in paragraph (b)(ii) below, any Lender may assign to one or more
assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitments and the Loans at the time owing
to it) with the prior written consent (such consent not be unreasonably
withheld; it being understood that, without limitation, the Borrower shall have
the right to withhold its consent to any assignment if, in order for such
assignment to comply with applicable law, the Borrower would be required to
obtain the consent of, or make any filing or registration with, any
Governmental Authority) of:

 

(A)            the Borrower, provided
that no consent of the Borrower shall be required for an assignment to a
Lender, an Affiliate of a Lender (unless increased costs would result therefrom
except if an Event of Default under Section 11.1 or Section 11.5 has
occurred and is continuing), an Approved Fund or, if an Event of Default under
Section 11.1 or Section 11.5 has occurred and is continuing,
any other assignee;

 

(B)             the Administrative
Agent, the Swingline Lender and the Letter of Credit Issuer; and

 

(C)             provided; however,
that, notwithstanding the foregoing or any other provision of this Agreement,
in no event shall Parent, Holdings, Borrower or any of their Subsidiaries be
permitted to be a Lender or a Participant hereunder.

 

(ii)             Assignments shall
be subject to the following additional conditions:

 

(A)            except in the case
of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund or
an assignment of the entire remaining amount of the assigning Lender’s
Commitment or Loans, the amount of the Commitment or Loans of the assigning
Lender subject to each such assignment (determined as of the date the
Assignment and Acceptance with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 and integral multiples
of $1,000,000 in excess thereof, or if less, all of such Lender’s remaining
Loans and Commitments unless each of the Borrower and the Administrative Agent
otherwise consents, provided that no such consent of the Borrower shall
be required if an Event of Default under Section 11.1 or Section 11.5
has occurred and is continuing; provided further that
contemporaneous assignments to a single assignee made by Affiliate Lenders
shall be aggregated for purposes of meeting the minimum assignment amount
requirements stated above;

 

(B)             each partial
assignment shall be made as an assignment of a proportionate part of all the
assigning Lender’s rights and obligations under this Agreement;

 

(C)             the parties to
each assignment shall execute and deliver to the Administrative Agent an
Assignment and Acceptance, together with a processing and recordation fee of
$3,500, provided that only one such fee shall be payable in the event of
simultaneous assignments to or from two or more Approved Funds; and

 

(D)            the assignee, if it
shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire in a form approved by the Administrative Agent
(the “Administrative Questionnaire”);

 

104

 

For
the purpose of this Section 14.6(b), the term “Approved Fund” has the
following meaning:

 

“Approved
Fund” means any Person (other than a natural person) that is engaged in
making, purchasing, holding or investing in bank loans and similar extensions of
credit in the ordinary course of its business and that is administered, advised
or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an
entity or an Affiliate of an entity that administers, advises or manages a
Lender.

 

(iii)          Subject to acceptance and recording
thereof pursuant to paragraph (b)(v) of this Section, from and after the
effective date specified in each Assignment and Acceptance, the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such Assignment and Acceptance, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Acceptance, be released from
its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 2.10, 2.11, 3.5, 5.4 and 14.5) . Any
assignment or transfer by a Lender of rights or obligations under this
Agreement that does not comply with this Section 14.6 shall be treated for
purposes of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with paragraph (c) of this Section.

 

(iv)          The Administrative Agent, acting
solely for this purpose as an agent of the Borrower, shall maintain at the
Administrative Agent’s Office a copy of each Assignment and Acceptance delivered
to it and a register for the recordation of the names and addresses of the
Lenders, and the Commitments of, and principal amount (and stated interest) of
the Loans and any payment made by the Letter of Credit Issuer under any Letter
of Credit owing to, each Lender pursuant to the terms hereof from time to time
(the “Register”). The entries in the Register shall be conclusive absent
manifest error, and the Borrower, the Administrative Agent, the Letter of
Credit Issuer and the Lenders shall treat each Person whose name is recorded in
the Register pursuant to the terms hereof as a Lender hereunder for all
purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Borrower, the Letter of Credit
Issuer and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.

 

(v)           Upon its receipt of a duly completed
Assignment and Acceptance executed by an assigning Lender and an assignee, the
assignee’s completed Administrative Questionnaire (unless the assignee shall
already be a Lender hereunder), the processing and recordation fee referred to
in paragraph (b) of this Section and any written consent to such
assignment required by paragraph (b) of this Section, the Administrative
Agent shall accept such Assignment and Acceptance and record the information
contained therein in the Register. No assignment shall be effective for
purposes of this Agreement unless it has been recorded in the Register as
provided in this paragraph.

 

(c)             (i) Any Lender may, without
the consent of the Borrower, the Administrative Agent, the Letter of Credit
Issuer or the Swingline Lender, sell participations to one or more banks or
other entities (each, a “Participant”) in all or a portion of such Lender’s
rights and 

 

105

 

obligations under this
Agreement (including all or a portion of its Commitments and the Loans owing to
it), provided that (A) such Lender’s obligations under this
Agreement shall remain unchanged, (B) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (C) the Borrower, the Administrative Agent, the Letter of Credit
Issuer and the other Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender’s rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to enforce
this Agreement and to approve any amendment, modification or waiver of any
provision of this Agreement or any other Credit Document, provided that
such agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 14.1(a) that affects such
Participant. Subject to paragraph (c)(ii) of this Section, the Borrower
agrees that each Participant shall be entitled to the benefits of Sections
2.10, 2.11, 3.5 and 5.4 (subject to the requirements of such Sections) to the
same extent as if it were a Lender and had acquired its interest by assignment
pursuant to paragraph (b) of this Section. To the extent permitted by law,
each Participant also shall be entitled to the benefits of Section 14.8(b) as
though it were a Lender, provided such Participant agrees to be subject
to Section 14.8(a) as though it were a Lender.

 

(ii)           A Participant shall not be entitled
to receive any greater payment under Section 2.10 or 5.4 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower’s prior written consent (not to be
unreasonably withheld or delayed; it being understood that, without limitation,
the Borrower shall have the right to withhold its consent to any participation
if the Participant would be entitled, on the date of the sale of the
participation, to receive any greater payment under Section 2.10 or 5.4
than the applicable Lender would have been entitled to receive with respect to
the participation sold to such Participant).

 

(iii)          Each Lender that sells a participation
shall, acting solely for this purpose as an agent of the Borrower, maintain a
register on which it enters the name and address of each Participant and the
principal amounts (and stated interest) of each Participant’s interest in the
Loans or other obligations under this Agreement (the “Participant Register”).
The entries in the Participant Register shall be conclusive absent manifest
error, and such Lender shall treat each person whose name is recorded in the
Participant Register as the owner of such participation for all purposes of this
Agreement notwithstanding any notice to the contrary. Any such Participant
Register shall be available for inspection by the Administrative Agent at any
reasonable time and from time to time upon reasonable prior notice.

 

(d)           Any Lender may, without the consent
of the Borrower or the Administrative Agent, at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to
any such pledge or assignment of a security interest, provided that no
such pledge or assignment of a security interest shall release a Lender from
any of its obligations hereunder or substitute any such pledgee or assignee for
such Lender as a party hereto. In order to facilitate such pledge or
assignment, the Borrower hereby agrees that, upon request of any Lender at any
time and from time to time after the Borrower has made its initial Borrowing
hereunder, the Borrower shall provide to such

 

106

 

Lender, at the Borrower’s
own expense, a promissory note, in form reasonably satisfactory to each Initial
Lender, as the case may be, evidencing the Revolving Credit Loans and Swingline
Loans, respectively, owing to such Lender.

 

(e)           Subject to compliance with Section 14.16,
the Borrower authorizes each Lender to disclose to any Participant, secured
creditor of such Lender or assignee (each, a “Transferee”) and any
prospective Transferee any and all Confidential Information (including any and
all financial information) in such Lender’s possession concerning the Borrower
and its Affiliates that has been delivered to such Lender by or on behalf of
the Borrower and its Affiliates pursuant to this Agreement or which has been
delivered to such Lender by or on behalf of the Borrower and its Affiliates in
connection with such Lender’s credit evaluation of the Borrower and its
Affiliates prior to becoming a party to this Agreement.

 

14.7.        Replacements of Lenders under Certain
Circumstances. The Borrower shall be permitted to replace any Lender that (a) requests
reimbursement for amounts owing pursuant to Section 2.10, 2.12, 3.5 or
5.4, (b) is affected in the manner described in Section 2.10(a)(iii) and
as a result thereof any of the actions described in such Section is
required to be taken, (c) becomes a Defaulting Lender, with a replacement
bank or other financial institution or (d) in connection with any proposed
amendment, waiver or consent requiring the consent of “each Lender” or “each
Lender affected thereby” pursuant to Section 14.1(a), does not consent
when the consent of the Required Lenders has been obtained, but the consent of
other remaining Lenders has not been obtained, provided that (i) such
replacement does not conflict with any Requirement of Law, (ii) no Event
of Default shall have occurred and be continuing at the time of such
replacement, (iii) the Borrower shall repay (or the replacement bank or institution
shall purchase, at par) all Loans and other amounts (other than any disputed
amounts) pursuant to Section 2.8, 2.10, 2.11, 2.13, 3.3, 3.5, 4.1, 5.4 or
14.5, as the case may be, owing to such replaced Lender prior to the date of
replacement, (iv) the replacement bank or institution, if not already a
Lender, and the terms and conditions of such replacement, shall be reasonably
satisfactory to the Administrative Agent, (v) the replaced Lender shall be
obligated to make such replacement in accordance with the provisions of Section 14.6
(provided that the Borrower shall be obligated to pay the registration
and processing fee referred to therein) and (vi) any such replacement
shall not be deemed to be a waiver of any rights that the Borrower, the Administrative
Agent, the Collateral Agent or any other Lender shall have against the replaced
Lender.

 

14.8.        Adjustments; Set-off.

 

(a)           Except as otherwise provided herein,
if any Lender (a “benefited Lender”) shall at any time receive any
payment of all or part of its Loans, or interest thereon, or receive any
collateral in respect thereof (whether voluntarily or involuntarily, by
set-off, pursuant to events or proceedings of the nature referred to in Section 11.5,
or otherwise), in a greater proportion than any such payment to or collateral
received by any other Lender, if any, in respect of such other Lender’s Loans,
or interest thereon, such benefited Lender shall purchase for cash from the
other Lenders a participating interest in such portion of each such other
Lender’s Loan, or shall provide such other Lenders with the benefits of any
such collateral, or the proceeds thereof, as shall be necessary to cause such
benefited Lender to share the excess payment or benefits of such collateral or
proceeds ratably with each of the Lenders; provided, however,
that if all or any portion of such excess payment or benefits is thereafter
recovered from such 

 

107

 

benefited Lender, such
purchase shall be rescinded, and the purchase price and benefits returned, to
the extent of such recovery, but without interest.

 

(b)           After the occurrence and during the
continuance of an Event of Default, in addition to any rights and remedies of
the Lenders provided by law, each Lender shall have the right, without prior
notice to the Borrower, any such notice being expressly waived by the Borrower
to the extent permitted by applicable law, upon any amount becoming due and
payable by the Borrower hereunder (whether at the stated maturity, by acceleration
or otherwise) to set-off and appropriate and apply against such amount any and
all deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of the Borrower. Each Lender agrees
promptly to notify the Borrower and the Administrative Agent after any such
set-off and application made by such Lender, provided that the failure
to give such notice shall not affect the validity of such set-off and
application.

 

14.9.        Counterparts. This Agreement may
be executed by one or more of the parties to this Agreement on any number of
separate counterparts (including by facsimile or other electronic
transmission), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the copies of this Agreement
signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.

 

14.10.      Severability. Any provision of any
Credit Document that is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.

 

14.11.      Integration. This Agreement and the
other Credit Documents represent the agreement of the Borrower, the
Administrative Agent, the Collateral Agent and the Lenders with respect to the
subject matter hereof, and there are no promises, undertakings, representations
or warranties by the Administrative Agent, the Collateral Agent or any Lender
relative to subject matter hereof not expressly set forth or referred to herein
or in the other Credit Documents.

 

14.12.      GOVERNING LAW. THIS AGREEMENT AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

14.13.      Submission to Jurisdiction; Waivers.
Each Credit Party hereby irrevocably and unconditionally:

 

(a)           submits for itself
and its property in any legal action or proceeding relating to this Agreement
and the other Credit Documents to which it is a party, or for recognition and
enforcement of any judgment in respect thereof, to the non-exclusive general
jurisdiction of the courts of the City of New York, County of New York, State
of New

 

108

 

York,
the courts of the United States of America for the Southern District of New
York and appellate courts from any thereof;

 

(b)           consents that any
such action or proceeding may be brought in such courts and waives any
objection that it may now or hereafter have to the venue of any such action or
proceeding in any such court or that such action or proceeding was brought in
an inconvenient court and agrees not to plead or claim the same;

 

(c)           agrees that service
of process in any such action or proceeding may be effected by mailing a copy
thereof by registered or certified mail (or any substantially similar form of
mail), postage prepaid, to the Borrower at its address set forth in Section 14.2
or at such other address of which the Administrative Agent shall have been
notified pursuant thereto;

 

(d)           agrees that nothing
herein shall affect the right to effect service of process in any other manner
permitted by law or shall limit the right to sue in any other jurisdiction; and

 

(e)           waives, to the
maximum extent not prohibited by law, any right it may have to claim or recover
in any legal action or proceeding any special, exemplary, punitive or
consequential damages.

 

14.14.      Acknowledgments.
The Borrower hereby acknowledges that:

 

(a)           it has been advised
by counsel in the negotiation, execution and delivery of this Agreement and the
other Credit Documents;

 

(b)           neither the
Administrative Agent, any Security Agent nor any Lender has any fiduciary
relationship with or duty to the Borrower arising out of or in connection with
this Agreement or any of the other Credit Documents, and the relationship
between the Administrative Agent, the Security Agents and the Lenders, on one
hand, and the Borrower, on the other hand, in connection herewith or therewith
is solely that of debtor and creditor; and

 

(c)           no joint venture is
created hereby or by the other Credit Documents or otherwise exists by virtue
of the transactions contemplated hereby among the Lenders or among the Borrower
and the Lenders.

 

14.15.      WAIVERS
OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT, THE
COLLATERAL AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE
TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR
ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

14.16.      Confidentiality. The Administrative
Agent, each Security Agent and each Lender shall hold all non-public
information furnished by or on behalf of the Borrower in connection with such
Lender’s evaluation of whether to become a Lender hereunder or obtained by such
Lender, such Security Agent or the Administrative Agent pursuant to the requirements
of

 

109

 

this Agreement (“Confidential
Information”), confidential in accordance with its customary procedure for
handling confidential information of this nature and (in the case of a Lender
that is a bank) in accordance with safe and sound banking practices and in any
event may make disclosure as required or requested by any governmental agency
or representative thereof or pursuant to legal process or to such Lender’s,
Security Agent’s or the Administrative Agent’s attorneys, or to any direct or
indirect contractual counterparty in swap agreements or such contractual
counterparty’s professional advisor (so long as such contractual counterparty
or professional advisor to such contractual party agrees to be bound by the
provisions of this Section 14.16.) or independent auditors or Affiliates, provided
that unless specifically prohibited by applicable law or court order, each
Lender, each Security Agent and the Administrative Agent shall notify the Borrower
of any request by any governmental agency or representative thereof (other than
any such request in connection with an examination of the financial condition
of such Lender by such governmental agency) for disclosure of any such
non-public information prior to disclosure of such information, and provided further
that in no event shall any Lender, Security Agent or the Administrative Agent
be obligated or required to return any materials furnished by the Borrower or
any Subsidiary of the Borrower. Each Lender, each Security Agent and the
Administrative Agent agrees that it will not provide to prospective Transferees
or to prospective direct or indirect contractual counterparties in swap
agreements to be entered into in connection with Loans made hereunder any of
the Confidential Information unless such Person is advises of and agrees to be
bound by the provisions of this Section 14.16.

 

14.17.        USA PATRIOT Act. Each Lender
hereby notifies the Borrower that pursuant to the requirements of the USA
Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001))
(the “Patriot Act”), it is required to obtain, verify and record
information that identifies the Borrower, which information includes the name
and address of the Borrower and other information that will allow such Lender
to identify the Borrower in accordance with the Patriot Act.

 

[Signature
Pages Follow]

 

110

 

IN WITNESS WHEREOF, each of the parties hereto has
caused a counterpart of this Agreement to be duly executed and delivered as of
the date first above written.

 

	
   

  	
  SEALY
  MATTRESS COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Kenneth L. Walker

  
	
   

  	
   

  	
  Name:

  	
  Kenneth
  L. Walker

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  	
   

  	
  General
  Counsel & Secretary

  

 

	
   

  	
  SEALY
  MATTRESS CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Kenneth L. Walker

  
	
   

  	
   

  	
  Name:

  	
  Kenneth
  L. Walker

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  	
   

  	
  General
  Counsel & Secretary

  

 

	
   

  	
  SEALY
  CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Kenneth L. Walker

  
	
   

  	
   

  	
  Name:

  	
  Kenneth
  L. Walker

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  	
   

  	
  General
  Counsel & Secretary

  

 

 

	
   

  	
  JPMORGAN
  CHASE BANK, N.A.,

  
	
   

  	
  as
  Administrative Agent, Collateral Agent, Letter of Credit Issuer and as a
  Lender

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Tony Yung

  
	
   

  	
   

  	
  Name:

  	
  Tony
  Yung

  
	
   

  	
   

  	
  Title:
  

  	
  Vice
  President

  

 

 

	
   

  	
  GENERAL
  ELECTRIC CAPITAL CORPORATION

  
	
   

  	
  as
  Co-Collateral Agent and a Lender

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Philip F. Carfora

  
	
   

  	
   

  	
  Name:

  	
  Philip
  F. Carfora

  
	
   

  	
   

  	
  Title:
  

  	
  Duly
  Authorized Signatory

  

 

 

	
   

  	
  CITICORP
  NORTH AMERICA, INC. 

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Thomas M. Halsch

  
	
   

  	
   

  	
  Name:

  	
  Thomas
  M. Halsch

  
	
   

  	
   

  	
  Title:
  

  	
  Vice
  President

  

 

 

	
   

  	
  MIZUHO
  CORPORATE BANK, LTD. 

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  William Getz

  
	
   

  	
   

  	
  Name:

  	
  William
  Getz

  
	
   

  	
   

  	
  Title:
  

  	
  Deputy
  General Manager

  

 

Schedule 1.1(a)

to Credit Agreement

 

MORTGAGED PROPERTIES

 

OWNED

 

	
   

  	
   

  	
  Company

  	
   

  	
  State

  	
   

  	
  Address

  
	
  1.

  	
   

  	
  Sealy Mattress Company

  	
   

  	
  AZ

  	
   

  	
  4802 W. Van Buren St.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Phoenix, AZ 85043

  
	
  2.

  	
   

  	
  Sealy Mattress Manufacturing

  	
   

  	
  CA

  	
   

  	
  1130 7th Street

  
	
   

  	
   

  	
  Company, Inc.

  	
   

  	
   

  	
   

  	
  Richmond, CA 94801

  
	
  3.

  	
   

  	
  The Ohio Mattress Company

  	
   

  	
  CO

  	
   

  	
  6275 Lake Shore Court

  
	
   

  	
   

  	
  Licensing and Components Group

  	
   

  	
   

  	
   

  	
  Colorado Springs, CO 80915

  
	
  4.

  	
   

  	
  Sealy Mattress Manufacturing

  	
   

  	
  CC

  	
   

  	
  12555 E. 39th Avenue

  
	
   

  	
   

  	
  Company, Inc.

  	
   

  	
   

  	
   

  	
  Denver, CO 80239

  
	
  5.

  	
   

  	
  Sealy Mattress Company of

  	
   

  	
  CT

  	
   

  	
  25 & 31 Hillside
  Avenue

  
	
   

  	
   

  	
  Albany, Inc.

  	
   

  	
   

  	
   

  	
  Watertown, CT 06779

  
	
  6.

  	
   

  	
  Sealy Mattress Company

  	
   

  	
  GA

  	
   

  	
  1705 Rockdale Ind. Blvd.
  NW

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Conyers, GA 30012

  
	
  7.

  	
   

  	
  The Ohio Mattress Company

  	
   

  	
  IN

  	
   

  	
  1132-1133 North Cullen
  Street

  
	
   

  	
   

  	
  Licensing and Components Group

  	
   

  	
   

  	
   

  	
  Rensselaer, IN 47978

  
	
  8.

  	
   

  	
  Sealy of Minnesota, Inc.

  	
   

  	
  MN

  	
   

  	
  825 Transfer Road

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  St. Paul, MN 55114

  
	
  9.

  	
   

  	
  Sealy Mattress Manufacturing

  	
   

  	
  NC

  	
   

  	
  700 S. State St.

  
	
   

  	
   

  	
  Company, Inc.

  	
   

  	
   

  	
   

  	
  at 7th Avenue

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Lexington, NC 27293

  
	
  10.

  	
   

  	
  Sealy, Inc.

  	
   

  	
  NC

  	
   

  	
  239 Sealy Drive

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  One Office Parkway

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Trinity, NC 27370

  
	
  11.

  	
   

  	
  Sealy Mattress Company, f/k/a

  	
   

  	
  OH

  	
   

  	
  1070 Lake Road

  
	
   

  	
   

  	
  Ohio Mattress Company

  	
   

  	
   

  	
   

  	
  Medina, OH 44258

  
	
  12.

  	
   

  	
  Sealy Mattress Manufacturing

  	
   

  	
  OR

  	
   

  	
  13635 N. Lombard St.

  
	
   

  	
   

  	
  Company, Inc.

  	
   

  	
   

  	
   

  	
  Portland, OR 97203

  
	
  13.

  	
   

  	
  The Ohio Mattress Company

  	
   

  	
  PA

  	
   

  	
  Magic Industrial Park

  
	
   

  	
   

  	
  Licensing and Components Group

  	
   

  	
   

  	
   

  	
  Delano, PA 18220

  
	
  14.

  	
   

  	
  Sealy Mattress Manufacturing

  	
   

  	
  PA

  	
   

  	
  R.D. #1 Rte. 322

  
	
   

  	
   

  	
  Company, Inc.

  	
   

  	
   

  	
   

  	
  Clarion, PA 16214

  
	
  15.

  	
   

  	
  Sealy Mattress Company of

  	
   

  	
  Puerto Rico

  	
   

  	
  El Comandante Industrial
  Center

  
	
   

  	
   

  	
  Puerto Rico

  	
   

  	
   

  	
   

  	
  #1 San Marcos

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Carolina, Puerto Rico
  00982

  
	
  16.

  	
   

  	
  Sealy Texas Management, Inc.

  	
   

  	
  TX

  	
   

  	
  6550 Wuliger Way

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  North Richland Hills, TX
  76180

  
	
  17.

  	
   

  	
  Sealy Texas Management, Inc.

  	
   

  	
  TX

  	
   

  	
  Highway Loop 290

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Brenham, TX 77833

  

 

 

LEASED

 

	
   

  	
   

  	
  Company

  	
   

  	
  State

  	
   

  	
  Address

  
	
  18.

  	
   

  	
  Sealy Mattress Company of

  	
   

  	
  KS

  	
   

  	
  3100 Fairfax Traffic Way

  
	
   

  	
   

  	
  Kansas City, Inc.

  	
   

  	
   

  	
   

  	
  Kansas City, KS 66115

  
	
  19.

  	
   

  	
  The Ohio Mattress Company

  	
   

  	
  CO

  	
   

  	
  1779 South Academy Blvd

  
	
   

  	
   

  	
  Licensing and Components Group

  	
   

  	
   

  	
   

  	
  Colorado Springs 80915

  

 

2

 

Schedule
1.1(b)

to Credit
Agreement

 

COMMITMENTS
OF LENDERS

 

	
  Lender

  	
   

  	
  Commitment

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  General Electric Capital Corporation

  	
   

  	
  $

  	
  40,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  JPMorgan Chase Bank, N.A.

  	
   

  	
  $

  	
  25,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Citicorp North America, Inc.

  	
   

  	
  $

  	
  25,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Mizuho Corporate Bank, Ltd.

  	
   

  	
  $

  	
  10,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  100,000,000

  	
   

  

 

 

Schedule
1.1(c)

to
Credit Agreement

 

IMMATERIAL SUBSIDIARIES

 

A. Brandwein & Co.

Advanced Sleep Products

American Mattress Centers, Inc.

Sealy Components-Pads, Inc.

Sealy Mattress Company of
Memphis

Sealy Mattress Company of
Michigan, Inc.

Sealy Mattress Company of
S.W. Virginia

Sealy-Korea, Inc.

 

 

Schedule 1.1(d)

to Credit Agreement

 

EXISTING LETTERS OF CREDIT

 

	
  Issuer

  	
   

  	
  LC Number

  	
   

  	
  Beneficiary

  	
   

  	
  Date

  	
   

  	
  Increase

  	
   

  	
  Decrease

  	
   

  	
  Adjusted

  Balance

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  JPMorgan

  	
   

  	
  SB0868491

  P-010195

  	
   

  	
  Hartford Fire Insurance Company

  	
   

  	
  05/18/1998

  	
   

  	
  $

  	
   700,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  06/01/2001

  	
   

  	
   

  	
   

  	
  $

  	
   300,000

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  01/13/2003

  	
   

  	
   

  	
   

  	
  $

  	
   200,000

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  10/17/2006

  	
   

  	
   

  	
   

  	
  $

  	
   100,000

  	
   

  	
  $

  	
   100,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  JPMorgan

  	
   

  	
  S868856

  P-010194

  	
   

  	
  Commissioner of NJ Environmental Protection

  	
   

  	
  08/25/1999

  	
   

  	
  $

  	
  3,869,683

  	
   

  	
   

  	
   

  	
  $

  	
   3,869,683

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  JPMorgan

  	
   

  	
  P-227810

  	
   

  	
  C N A ClaimPlus (05/31/03)

  	
   

  	
  07/01/2002

  	
   

  	
  $

  	
  1,398,933

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (formerly Transcontinental Casualty Company)

  	
   

  	
  09/01/2002

  	
   

  	
  $

  	
  1,398,933

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  12/02/2002

  	
   

  	
  $

  	
  1,398,933

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  03/01/2003

  	
   

  	
  $

  	
  1,398,933

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  06/04/2003

  	
   

  	
  $

  	
  1,250,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  09/01/2003

  	
   

  	
  $

  	
  1,250,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  12/01/2003

  	
   

  	
  $

  	
  1,250,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  03/01/2004

  	
   

  	
  $

  	
  1,250,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  05/03/2004

  	
   

  	
   

  	
   

  	
  $

  	
   (755,732

  	
  )

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  06/13/2007

  	
   

  	
   

  	
   

  	
  $

  	
   (1,780,000

  	
  )

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  07/10/2008

  	
   

  	
   

  	
   

  	
  $

  	
   (7,294,000

  	
  )

  	
  $

  	
   766,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  JPMorgan

  	
   

  	
  P245505

  	
   

  	
  RLI Insurance Company

  	
   

  	
  02/12/2004

  	
   

  	
  $

  	
   49,500

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  04/13/2009

  	
   

  	
  $

  	
   33,000

  	
   

  	
   

  	
   

  	
  $

  	
   82,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  JPMorgan

  	
   

  	
  P-249728

  SB 248642

  	
   

  	
  US Fidelity and Guaranty Co (Discove Re Mgrs, LTD)

  	
   

  	
  07/19/2004

  	
   

  	
  $

  	
  5,000,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  07/26/2005

  	
   

  	
  $

  	
  5,000,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  08/05/2005

  	
   

  	
  $

  	
   700,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  06/15/2006

  	
   

  	
  $

  	
  1,300,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  05/30/2007

  	
   

  	
   

  	
   

  	
  $

  	
   (500,000

  	
  )

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  05/28/2008

  	
   

  	
   

  	
   

  	
  $

  	
   (500,000

  	
  )

  	
  $

  	
   11,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  JPMorgan

  	
   

  	
  TPTS-236337

  	
   

  	
  Ohio Bureau of Workers’ Compensation

  	
   

  	
  02/14/2006

  	
   

  	
  $

  	
   462,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  01/18/2008

  	
   

  	
   

  	
   

  	
  $

  	
   (384,000

  	
  )

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  01/01/2009

  	
   

  	
  $

  	
   105,000

  	
   

  	
   

  	
   

  	
  $

  	
   183,000

  	
   

  

 

Schedule
8.12

to Credit
Agreement

 

SUBSIDIARIES

 

	
  Name of
  Subsidiary

  	
   

  	
  State/Jurisdiction of

  Incorporation/Formation

  	
   

  	
  Ownership Interest

  of Borrower

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The Ohio Mattress Company
  Licensing and Components Group

  	
   

  	
  Delaware

  	
   

  	
  100% directly

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress
  Manufacturing Company, Inc.

  	
   

  	
  Delaware

  	
   

  	
  100% indirectly through The Ohio Mattress Company Licensing and
  Components Group

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Technology LLC

  	
   

  	
  North Carolina

  	
   

  	
  100% indirectly through The Ohio Mattress Company Licensing and
  Components Group

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Kurlon Ltd. (inactive)

  	
   

  	
  India

  	
   

  	
  51.7% indirectly through The Ohio Mattress Company Licensing and
  Components Group

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy (Switzerland) GmbH

  	
   

  	
  Switzerland

  	
   

  	
  100% indirectly through The Ohio Mattress Company Licensing and
  Components Group

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy-Korea, Inc. (inactive)

  	
   

  	
  Delaware

  	
   

  	
  100% indirectly through The Ohio Mattress Company Licensing and
  Components Group

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  North American Bedding
  Company

  	
   

  	
  Ohio

  	
   

  	
  100% directly

  	
   

  

 

 

	
  Name of
  Subsidiary

  	
   

  	
  State/Jurisdiction of

  Incorporation/Formation

  	
   

  	
  Ownership Interest

  of Borrower

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Company of
  Puerto Rico

  	
   

  	
  Ohio

  	
   

  	
  100% directly

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy, Inc.

  	
   

  	
  Ohio

  	
   

  	
  100% directly

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mattress Holdings
  International LLC

  	
   

  	
  Delaware

  	
   

  	
  100% indirectly through Sealy, Inc.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  American Mattress
  Centers, Inc. (inactive)

  	
   

  	
  North Carolina

  	
   

  	
  100% indirectly through Sealy, Inc.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Real
  Estate, Inc.

  	
   

  	
  North Carolina

  	
   

  	
  100% directly

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Company of
  Kansas City, Inc.

  	
   

  	
  Missouri

  	
   

  	
  100% directly

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy of Minnesota, Inc.

  	
   

  	
  Minnesota

  	
   

  	
  100% directly

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Texas
  Management, Inc.

  	
   

  	
  Texas

  	
   

  	
  100% directly

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Company of
  Michigan, Inc. (inactive)

  	
   

  	
  Michigan

  	
   

  	
  100% directly

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Company of
  Illinois

  	
   

  	
  Illinois

  	
   

  	
  100% directly

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A. Brandwein &
  Co. (inactive)

  	
   

  	
  Illinois

  	
   

  	
  100% indirectly through Sealy Mattress Company of Illinois

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy of Maryland and
  Virginia, Inc.

  	
   

  	
  Maryland

  	
   

  	
  100% directly

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Company of
  Albany, Inc.

  	
   

  	
  New York

  	
   

  	
  100% directly

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ohio-Sealy Mattress
  Manufacturing Co., Inc.

  	
   

  	
  Massachusetts

  	
   

  	
  100% directly

  	
   

  

 

2

 

	
  Name of
  Subsidiary

  	
   

  	
  State/Jurisdiction of

  Incorporation/Formation

  	
   

  	
  Ownership Interest

  of Borrower

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ohio-Sealy Mattress
  Manufacturing Co.

  	
   

  	
  Georgia

  	
   

  	
  100% directly

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Western Mattress Company

  	
   

  	
  California

  	
   

  	
  100% directly

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy
  Components-Pads, Inc. (inactive)

  	
   

  	
  Delaware

  	
   

  	
  100% directly

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Company of
  S.W. Virginia (inactive)

  	
   

  	
  Virginia

  	
   

  	
  100% directly

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Advanced Sleep Products (inactive)

  	
   

  	
  California

  	
   

  	
  100% directly

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Company of
  Memphis (inactive)

  	
   

  	
  Tennessee

  	
   

  	
  100% directly

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Argentina Srl

  	
   

  	
  Argentina

  	
   

  	
  100% indirectly through The Ohio Mattress Company Licensing and
  Components Group

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Uruguay Srl

  	
   

  	
  Argentina

  	
   

  	
  100% indirectly through The Ohio Mattress Company Licensing and
  Components Group

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Cayman Islands (Inactive)

  	
   

  	
  Cayman Islands

  	
   

  	
  100% indirectly through The Ohio Mattress Company Licensing and
  Components Group

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mattress Holdings
  International B.V.

  	
   

  	
  Netherlands

  	
   

  	
  100% indirectly through The Ohio Mattress Company Licensing and
  Components Group

  	
   

  

 

3

 

	
  Name of
  Subsidiary

  	
   

  	
  State/Jurisdiction of

  Incorporation/Formation

  	
   

  	
  Ownership Interest

  of Borrower

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Canada, Ltd.

  	
   

  	
  Alberta

  	
   

  	
  100% indirectly through The Ohio Mattress Company Licensing and
  Components Group

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Gestion Centurion Inc.

  	
   

  	
  Quebec

  	
   

  	
  100% indirectly through The Ohio Mattress Company Licensing and
  Components Group

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mattress Holding S.A.S. 

  	
   

  	
  France

  	
   

  	
  100% indirectly through The Ohio Mattress Company Licensing and Components
  Group

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sapsa Bedding S.A.S.

  	
   

  	
  France

  	
   

  	
  100% indirectly through The Ohio Mattress Company Licensing and
  Components Group

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sapsa Bedding Srl

  	
   

  	
  Italy

  	
   

  	
  100% indirectly through The Ohio Mattress Company Licensing and
  Components Group

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sapsa Bedding Sprl

  	
   

  	
  Belgium

  	
   

  	
  100% indirectly through The Ohio Mattress Company Licensing and Components
  Group

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sapsa Latex SL

  	
   

  	
  Spain

  	
   

  	
  100% indirectly through The Ohio Mattress Company Licensing and
  Components Group

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sapsa Bedding SL

  	
   

  	
  Spain

  	
   

  	
  100% indirectly through The Ohio Mattress Company Licensing and
  Components Group

  	
   

  

 

4

 

	
  Name of
  Subsidiary

  	
   

  	
  State/Jurisdiction of

  Incorporation/Formation

  	
   

  	
  Ownership Interest

  of Borrower

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Company
  Mexico S de R.L. de C.V.

  	
   

  	
  Mexico

  	
   

  	
  100% indirectly through The Ohio Mattress Company Licensing and
  Components Group

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Colchones de Mexico
  S.A. de C.V.

  	
   

  	
  Mexico

  	
   

  	
  100% indirectly through The Ohio Mattress Company Licensing and
  Components Group

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Servicios de Mexico
  S.A. de C.V.

  	
   

  	
  Mexico

  	
   

  	
  100% indirectly through The Ohio Mattress Company Licensing and
  Components Group

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy (Switzerland) GmbH
  Finance Branch

  	
   

  	
  Guernsey, Channel Islands

  	
   

  	
  100% indirectly through The Ohio Mattress Company Licensing and
  Components Group

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy do Brasil Limitada

  	
   

  	
  Brazil

  	
   

  	
  100% indirectly through The Ohio Mattress Company Licensing and
  Components Group

  	
   

  

 

5

 

Schedule
10.1

to Credit
Agreement

 

EFFECTIVE
DATE INDEBTEDNESS

 

	
  Facility

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Revolver Loan(1)

  	
   

  	
  $

  	
   58,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Senior Secured Term Loan A(2)

  	
   

  	
  $

  	
   270,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Senior Secured Term Loan E(3)

  	
   

  	
  $

  	
   107,108,753

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Senior Subordinated Debt(4)

  	
   

  	
  $

  	
   273,945,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Capital Leases:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Mountain Top-Latex facility

  	
   

  	
  $

  	
   13,471,725

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Orlando facility

  	
   

  	
  $

  	
   17,573,032

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Albany facility

  	
   

  	
  $

  	
   10,842,355

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Italy:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Debtor: Sapsa Bedding Srl; Lender: Banca Pop. Milano

  	
   

  	
  $

  	
   3,669,050

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Debtor: Sapsa Bedding Srl; Lender: Monte Paschi

  	
   

  	
  $

  	
   3,355,931

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Debtor: Sapsa Bedding Srl; Lender: Banca Regionale Europea

  	
   

  	
  $

  	
   582,522

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Debtor: Sapsa Bedding Srl; Lender: Cred. Bergamasco

  	
   

  	
  $

  	
   85,082

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Debtor: Sapsa Bedding Srl; Lender: MPS Merchant

  	
   

  	
  $

  	
   3,578,495

  	
   

  

 

(1) To be paid on the
Effective Date

 

(2) To be paid on the
Effective Date

 

(3) To be paid on the
Effective Date

 

(4) To be paid on the
Effective Date

 

 

	
  Facility

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Debtor: Sapsa Bedding Srl; Lender: MPS Merchant

  	
   

  	
  $

  	
  2,857,128

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Debtor: Sapsa Bedding Srl; Lender: MPS Merchant

  	
   

  	
  $

  	
  3,058,827

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Debtor: Sapsa Bedding Srl; Lender: CA.RI Tortona

  	
   

  	
  $

  	
  354,930

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Debtor: Sapsa Bedding Srl; Lender: Banca Toscana

  	
   

  	
  $

  	
  42,309

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  France:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Debtor: Sapsa Bedding S.A.S.; Lender: Palatine

  	
   

  	
  $

  	
  1,807,711

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Debtor: Sapsa Bedding S.A.S.; Lender: BNP

  	
   

  	
  $

  	
  298,799

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Debtor: Sapsa Bedding S.A.S.; Lender: HSBC

  	
   

  	
  $

  	
  1,080,980

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Spain:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Debtor: Sapsa Latex, SL; Lenders: Sabadel and La Caixa

  	
   

  	
  $

  	
  11,786

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Argentina:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Debtor: Sealy Argentina Srl; Lender: Galicia

  	
   

  	
  $

  	
  369,159

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Debtor: Sealy Argentina Srl; Lender: Frances

  	
   

  	
  $

  	
  386,510

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Brazil:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Debtor: Sealy do Brasil Limitada; Lender: ABN Amro Bank (revolver
  line)

  	
   

  	
  $

  	
  558,790

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Mexico:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Company Mexico S de R.L. de C.V. Capital Lease

  	
   

  	
  $

  	
  10,470

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Puerto Rico:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Company of Puerto Rico Capital Lease

  	
   

  	
  $

  	
  24,573

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  U.S. insurance financing

  	
   

  	
  $

  	
  1,022,624

  	
   

  

 

7

Schedule 10.2

to Credit Agreement

 

EFFECTIVE DATE LIENS

 

Liens
securing obligations under the Existing Credit Agreement, which liens shall be
discharged on the Effective Date.

 

	
  Debtor

  	
   

  	
  Jurisdiction

  	
   

  	
  Type
  of

  filing found

  	
   

  	
  Secured

  Party

  	
   

  	
  Collateral

  	
   

  	
  Original

  File Date

  	
   

  	
  Original

  File Number

  	
   

  	
  Amdt.

  File Date

  	
   

  	
  Amdt. File Number

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  E Plus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  08/09/2005

  	
   

  	
  OH00092069842

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  E Plus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  09/05/2005

  	
   

  	
  OH00092069953

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  E Plus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  11/26/2005

  	
   

  	
  OH00095639915

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  E Plus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  01/06/2006

  	
   

  	
  20060060766

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  E Plus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  05/17/2006

  	
   

  	
  OH00102227487

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  E Plus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  05/17/2006

  	
   

  	
  OH00102227609

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  E Plus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  05/17/2006

  	
   

  	
  OH00102229512

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  E Plus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  05/17/2006

  	
   

  	
  OH00102229512

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  E Plus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  08/17/2006

  	
   

  	
  OH00105602719

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  E Plus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  09/12/2006

  	
   

  	
  OH00106404275

  	
   

  	
   

  	
   

  	
   

  

 

 

	
  Debtor

  	
   

  	
  Jurisdiction

  	
   

  	
  Type
  of

  filing found

  	
   

  	
  Secured

  Party

  	
   

  	
  Collateral

  	
   

  	
  Original

  File Date

  	
   

  	
  Original

  File Number

  	
   

  	
  Amdt.

  File Date

  	
   

  	
  Amdt. File Number

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  E Plus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  09/12/2006

  	
   

  	
  OH00106404386

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  E Plus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  09/12/2006

  	
   

  	
  OH00106723766

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  E Plus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  12/04/2006

  	
   

  	
  OH00109491372

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  E Plus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  12/04/2006

  	
   

  	
  OH00109502963

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  E Plus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  12/04/2006

  	
   

  	
  OH00109503086

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  E Plus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  12/04/2006

  	
   

  	
  OH00109504765

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  E Plus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  12/04/2006

  	
   

  	
  OH00109504876

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  E Plus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  12/04/2006

  	
   

  	
  OH00109505000

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  E Plus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  12/04/2006

  	
   

  	
  OH00109505111

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  E Plus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  12/04/2006

  	
   

  	
  OH00109506901

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Company

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  Wells Fargo Financial Leasing, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  01/03/2007

  	
   

  	
  OH00110501863

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  Wells Fargo Financial Leasing, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  01/03/2007

  	
   

  	
  OH00110502097

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  Wells Fargo Financial Leasing, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  01/03/2007

  	
   

  	
  OH00110510973

  	
   

  	
   

  	
   

  	
   

  

 

2

 

	
  Debtor

  	
   

  	
  Jurisdiction

  	
   

  	
  Type
  of

  filing found

  	
   

  	
  Secured

  Party

  	
   

  	
  Collateral

  	
   

  	
  Original

  File Date

  	
   

  	
  Original

  File Number

  	
   

  	
  Amdt.

  File Date

  	
   

  	
  Amdt. File Number

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  Wells Fargo Financial Leasing, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  01/03/2007

  	
   

  	
  OH00110514688

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  Wells Fargo Financial Leasing, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  01/03/2007

  	
   

  	
  OH00110514799

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  Wells Fargo Financial Leasing, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  01/03/2007

  	
   

  	
  OH00110515145

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  E Plus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  01/18/2007

  	
   

  	
  OH00111026563

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Company

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  General Electric Capital Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  02/24/2009

  	
   

  	
  OH00132944473

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Company of Albany, Inc.

  	
   

  	
  New York SOS

  	
   

  	
  UCC-1

  	
   

  	
  OCE Financial Services, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  04/17/2008

  	
   

  	
  200804175421515

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  De Lage Landen Financial Services, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  10/18/2005

  	
   

  	
  53316784

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  12/19/2005

  	
   

  	
  53927135

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  08/08/2006

  	
   

  	
  62735124

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  02/05/2007

  	
   

  	
  20070457787

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  OFC Capital Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  02/05/2007

  	
   

  	
  20070457787

  	
   

  	
  12/06/2007

  	
   

  	
  20074605571

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  02/05/2007

  	
   

  	
  20070457795

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  OFC Capital Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  02/05/2007

  	
   

  	
  20070457795

  	
   

  	
  12/06/2007

  	
   

  	
  20074610423

  

 

3

 

	
  Debtor

  	
   

  	
  Jurisdiction

  	
   

  	
  Type
  of

  filing found

  	
   

  	
  Secured

  Party

  	
   

  	
  Collateral

  	
   

  	
  Original

  File Date

  	
   

  	
  Original

  File Number

  	
   

  	
  Amdt.

  File Date

  	
   

  	
  Amdt. File Number

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  02/05/2007

  	
   

  	
  20070459502

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  OFC Capital Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  02/05/2007

  	
   

  	
  20070459502

  	
   

  	
  12/06/2007

  	
   

  	
  20074611645

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  02/05/2007

  	
   

  	
  20070459510

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  OFC Capital Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  02/05/2007

  	
   

  	
  20070459510

  	
   

  	
  12/06/2007

  	
   

  	
  200704612890

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  02/05/2007

  	
   

  	
  20070459528

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  OFC Capital Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  02/05/2007

  	
   

  	
  20070459528

  	
   

  	
  12/06/2007

  	
   

  	
  20074613187

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  02/05/2007

  	
   

  	
  20070459536

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  OFC Capital Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  02/05/2007

  	
   

  	
  20070459536

  	
   

  	
  12/06/2007

  	
   

  	
  20074613583

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  02/05/2007

  	
   

  	
  20070459544

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  OFC Capital Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  02/05/2007

  	
   

  	
  20070459544

  	
   

  	
  12/06/2007

  	
   

  	
  20074613781

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  02/05/2007

  	
   

  	
  20070459569

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  OFC Capital Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  02/05/2007

  	
   

  	
  20070459569

  	
   

  	
  12/06/2007

  	
   

  	
  20074614136

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  02/05/2007

  	
   

  	
  20070459577

  	
   

  	
   

  	
   

  	
   

  

 

4

 

	
  Debtor

  	
   

  	
  Jurisdiction

  	
   

  	
  Type
  of

  filing found

  	
   

  	
  Secured

  Party

  	
   

  	
  Collateral

  	
   

  	
  Original

  File Date

  	
   

  	
  Original

  File Number

  	
   

  	
  Amdt.

  File Date

  	
   

  	
  Amdt. File Number

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  05/29/2007

  	
   

  	
  20072001740

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  OFC Capital Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  05/29/2007

  	
   

  	
  20072001740

  	
   

  	
  12/06/2007

  	
   

  	
  20074606470

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  05/29/2007

  	
   

  	
  20072001757

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  OFC Capital Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  05/29/2007

  	
   

  	
  20072001757

  	
   

  	
  12/06/2007

  	
   

  	
  20074608914

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  05/29/2007

  	
   

  	
  20072001773

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  OFC Capital Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  05/29/2007

  	
   

  	
  20072001773

  	
   

  	
  12/06/2007

  	
   

  	
  20074610837

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  05/29/2007

  	
   

  	
  20072001781

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  OFC Capital Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  05/29/2007

  	
   

  	
  20072001781

  	
   

  	
  12/06/2007

  	
   

  	
  20074611215

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  06/22/2007

  	
   

  	
  20072377975

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  OFC Capital Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  06/22/2007

  	
   

  	
  20072377975

  	
   

  	
  12/06/2007

  	
   

  	
  20074614458

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  06/22/2007

  	
   

  	
  20072377983

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  OFC Capital Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  06/22/2007

  	
   

  	
  20072377983

  	
   

  	
  12/06/2007

  	
   

  	
  20074614672

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  06/22/2007

  	
   

  	
  20072378544

  	
   

  	
   

  	
   

  	
   

  

 

5

 

	
  Debtor

  	
   

  	
  Jurisdiction

  	
   

  	
  Type
  of

  filing found

  	
   

  	
  Secured

  Party

  	
   

  	
  Collateral

  	
   

  	
  Original

  File Date

  	
   

  	
  Original

  File Number

  	
   

  	
  Amdt.

  File Date

  	
   

  	
  Amdt. File Number

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  OFC Capital Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  06/22/2007

  	
   

  	
  20072378544

  	
   

  	
  12/06/2007

  	
   

  	
  20074614953

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  06/22/2007

  	
   

  	
  20072378551

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  06/22/2007

  	
   

  	
  20072378569

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  OFC Capital Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  06/22/2007

  	
   

  	
  20072378569

  	
   

  	
  12/06/2007

  	
   

  	
  20074615133

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  06/22/2007

  	
   

  	
  20072378577

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  OFC Capital Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  06/22/2007

  	
   

  	
  20072378577

  	
   

  	
  12/06/2007

  	
   

  	
  20074615323

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  06/22/2007

  	
   

  	
  20072378585

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  OFC Capital Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  06/22/2007

  	
   

  	
  20072378585

  	
   

  	
  12/06/2007

  	
   

  	
  20074615398

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  06/22/2007

  	
   

  	
  20072378601

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  OFC Capital Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  06/22/2007

  	
   

  	
  20072378601

  	
   

  	
  12/06/2007

  	
   

  	
  20074615505

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  12/03/2007

  	
   

  	
  20074554902

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  MB Financial Bank, N.A.

  	
   

  	
  Leased Equipment

  	
   

  	
  12/03/2007

  	
   

  	
  20074554902

  	
   

  	
  03/31/2008

  	
   

  	
  20081118296

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  12/03/2007

  	
   

  	
  20074554936

  	
   

  	
   

  	
   

  	
   

  

 

6

 

	
  Debtor

  	
   

  	
  Jurisdiction

  	
   

  	
  Type
  of

  filing found

  	
   

  	
  Secured

  Party

  	
   

  	
  Collateral

  	
   

  	
  Original

  File Date

  	
   

  	
  Original

  File Number

  	
   

  	
  Amdt.

  File Date

  	
   

  	
  Amdt. File Number

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  MB Financial Bank, N.A.

  	
   

  	
  Leased Equipment

  	
   

  	
  12/03/2007

  	
   

  	
  20074554936

  	
   

  	
  03/31/2008

  	
   

  	
  20081118320

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  12/03/2007

  	
   

  	
  20074555164

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  12/03/2007

  	
   

  	
  20074555172

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  01/03/2008

  	
   

  	
  20080021723

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  MB Financial Bank, N.A.

  	
   

  	
  Leased Equipment

  	
   

  	
  01/03/2008

  	
   

  	
  20080021723

  	
   

  	
  03/31/2008

  	
   

  	
  20081117603

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  04/01/2008

  	
   

  	
  20081135423

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  05/30/2008

  	
   

  	
  20081849841

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  10/08/2008

  	
   

  	
  20083414784

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Amendment

   

  Amended Debtor’s name to Sealy Corporation 

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  10/08/2008

  	
   

  	
  20083414784

  	
   

  	
  11/12/2008

  	
   

  	
  20083778444

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  10/08/2008

  	
   

  	
  20083414792

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  SG Equipment Finance USA Corp.

  	
   

  	
  Leased Equipment

  	
   

  	
  10/08/2008

  	
   

  	
  20083414792

  	
   

  	
  10/23/2008

  	
   

  	
  20083579875

  

 

7

 

	
  Debtor

  	
   

  	
  Jurisdiction

  	
   

  	
  Type
  of

  filing found

  	
   

  	
  Secured

  Party

  	
   

  	
  Collateral

  	
   

  	
  Original

  File Date

  	
   

  	
  Original

  File Number

  	
   

  	
  Amdt.

  File Date

  	
   

  	
  Amdt. File Number

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Corporation

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  EPlus Group, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  03/12/2009

  	
   

  	
  20090798303

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Manufacturing Company, Inc.

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  Toyota Motor Credit Corporation

  	
   

  	
  Specific Equipment

  	
   

  	
  08/26/2004

  	
   

  	
  42446815

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Manufacturing Company.

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  De Lage Landen Financial Services, Inc.

  	
   

  	
  Specific Equipment

  	
   

  	
  02/24/2005

  	
   

  	
  50607904

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Manufacturing Company, Inc.

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  NMHG Financial Services, Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  11/03/2006

  	
   

  	
  63853702

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Manufacturing Company, Inc.

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  Toyota Motor Credit Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  02/20/2007

  	
   

  	
  20070654151

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Manufacturing Company, Inc.

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  Thompson Tractor Co., Inc.

  	
   

  	
  Specific Equipment

  	
   

  	
  05/17/2007

  	
   

  	
  20071857076

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Manufacturing Company, Inc.

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  Toyota Motor Credit Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  12/10/2007

  	
   

  	
  20074655790

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Manufacturing Company, Inc.

  	
   

  	
  Delaware SOS

  	
   

  	
  UCC-1

  	
   

  	
  Toyota Motor Credit Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  12/11/2007

  	
   

  	
  20074667902

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Mattress Manufacturing Company, Inc.

  	
   

  	
  North Carolina,
  Randolph County Superior Court

  	
   

  	
  Judgment

  	
   

  	
  Marie McGuinness Sartin

  	
   

  	
  Amount $760.13

  	
   

  	
  11/28/2001

  	
   

  	
  01M566

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy of Maryland and Virginia, Inc.

  	
   

  	
  Maryland SOS

  	
   

  	
  UCC-1

  	
   

  	
  NMGH Financial Services Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  07/15/2002

  	
   

  	
  181124960

  	
   

  	
   

  	
   

  	
   

  

 

8

 

	
  Debtor

  	
   

  	
  Jurisdiction

  	
   

  	
  Type
  of

  filing found

  	
   

  	
  Secured

  Party

  	
   

  	
  Collateral

  	
   

  	
  Original

  File Date

  	
   

  	
  Original

  File Number

  	
   

  	
  Amdt.

  File Date

  	
   

  	
  Amdt. File Number

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy of Maryland and Virginia, Inc.

  	
   

  	
  Maryland SOS

  	
   

  	
  UCC-3 Continuation

  	
   

  	
  NMGH Financial Services Inc.

  	
   

  	
  Leased Equipment

  	
   

  	
  07/15/2002

  	
   

  	
  181124960

  	
   

  	
  05/16/2007

  	
   

  	
  181124960

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy, Inc.

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  C.J. Hodder Lumber Company, Inc.

  	
   

  	
  Consigned Inventory

  	
   

  	
  11/15/2001

  	
   

  	
  OH00041373199

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy, Inc.

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-3 Continuation

  	
   

  	
  C.J. Hodder Lumber Company, Inc.

  	
   

  	
  Consigned Inventory

  	
   

  	
  11/15/2001

  	
   

  	
  OH00041373199

  	
   

  	
  05/19/2006

  	
   

  	
  20061420310

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy, Inc.

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1 In Lieu

  	
   

  	
  C.J. Hodder Lumber Company, Inc.

  	
   

  	
  Consigned Inventory 

  

  In Lieu fo NY, Fl, TX and AZ UCCs into OH.

  	
   

  	
  12/20/2001

  	
   

  	
  OH00043030337

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy, Inc.

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-3
  Continuation

  	
   

  	
  C.J. Hodder
  Lumber Company, Inc.

  	
   

  	
  Consigned
  Inventory 

  

  In Lieu fo NY, Fl, TX and AZ UCCs into OH.

  	
   

  	
  12/20/2001

  	
   

  	
  OH00043030337

  	
   

  	
  06/22/2006

  	
   

  	
  20061740464

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy, Inc.

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1 In Lieu

  	
   

  	
  C.J. Hodder Lumber Company, Inc.

  	
   

  	
  Consigned Inventory

  

  In Lieu fo NY, Fl, TX and CA and MDUCCs into OH.

  	
   

  	
  12/20/2001

  	
   

  	
  OH00043030448

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy, Inc.

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-3 Continuation

  	
   

  	
  C.J. Hodder Lumber Company, Inc.

  	
   

  	
  Consigned Inventory 

  In Lieu fo NY, Fl, TX and CA and MDUCCs into OH.

  	
   

  	
  12/20/2001

  	
   

  	
  OH00043030448

  	
   

  	
  06/22/2006

  	
   

  	
  20061740366

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy, Inc.

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  C.J. Hodder Lumber Company, Inc.

  	
   

  	
  Consigned Inventory

  	
   

  	
  01/07/2002

  	
   

  	
  OH00043568841

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy, Inc.

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-3 Continuation

  	
   

  	
  C.J. Hodder Lumber Company, Inc.

  	
   

  	
  Consigned Inventory

  	
   

  	
  01/07/2002

  	
   

  	
  OH00043568841

  	
   

  	
  07/10/2006

  	
   

  	
  20061920414

  

 

9

 

	
  Debtor

  	
   

  	
  Jurisdiction

  	
   

  	
  Type
  of

  filing found

  	
   

  	
  Secured

  Party

  	
   

  	
  Collateral

  	
   

  	
  Original

  File Date

  	
   

  	
  Original

  File Number

  	
   

  	
  Amdt.

  File Date

  	
   

  	
  Amdt. File Number

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy, Inc.

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  C.J. Hodder Lumber Company, Inc.

  	
   

  	
  Consigned Inventory

  	
   

  	
  01/25/2002

  	
   

  	
  OH00044472122

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy, Inc.

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC Correction

   

  Clerk entered wrogn Filing Type

  	
   

  	
  C.J. Hodder Lumber Company, Inc.

  	
   

  	
  Consigned Inventory

  	
   

  	
  01/25/2002

  	
   

  	
  OH00044472122

  	
   

  	
  01/31/2002

  	
   

  	
  20020320062

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy, Inc.

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-3 Continuation

  	
   

  	
  C.J. Hodder Lumber Company, Inc.

  	
   

  	
  Consigned Inventory

  	
   

  	
  01/25/2002

  	
   

  	
  OH00044472122

  	
   

  	
  07/27/2006

  	
   

  	
  20062090638

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IOS Capital

  	
   

  	
  Leased Equipment

  	
   

  	
  07/06/2005

  	
   

  	
  OH00091170755

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IOS Capital

  	
   

  	
  Leased Equipment

  	
   

  	
  09/06/2005

  	
   

  	
  OH00092994702

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IOS Capital

  	
   

  	
  Leased Equipment

  	
   

  	
  09/29/2005

  	
   

  	
  OH00093806170

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IOS Capital

  	
   

  	
  Leased Equipment

  	
   

  	
  11/04/2005

  	
   

  	
  OH00095191490

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IOS Capital

  	
   

  	
  Leased Equipment

  	
   

  	
  11/10/2005

  	
   

  	
  OH00095477244

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IOS Capital

  	
   

  	
  Leased Equipment

  	
   

  	
  11/10/2005

  	
   

  	
  OH00095477466

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IOS Capital

  	
   

  	
  Leased Equipment

  	
   

  	
  12/20/2005

  	
   

  	
  OH00096872021

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IOS Capital

  	
   

  	
  Leased Equipment

  	
   

  	
  01/27/2006

  	
   

  	
  OH00098156106

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IOS Capital

  	
   

  	
  Leased Equipment

  	
   

  	
  01/27/2006

  	
   

  	
  OH00098161490

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IOS Capital

  	
   

  	
  Leased Equipment

  	
   

  	
  03/15/2006

  	
   

  	
  OH00099777436

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IOS Capital

  	
   

  	
  Leased Equipment

  	
   

  	
  05/01/2006

  	
   

  	
  OH00101503886

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IOS Capital

  	
   

  	
  Leased Equipment

  	
   

  	
  05/01/2006

  	
   

  	
  OH00101505133

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IOS Capital

  	
   

  	
  Leased Equipment

  	
   

  	
  07/19/2006

  	
   

  	
  OH00104489736

  	
   

  	
   

  	
   

  	
   

  

 

10

 

	
  Debtor

  	
   

  	
  Jurisdiction

  	
   

  	
  Type
  of

  filing found

  	
   

  	
  Secured

  Party

  	
   

  	
  Collateral

  	
   

  	
  Original

  File Date

  	
   

  	
  Original

  File Number

  	
   

  	
  Amdt.

  File Date

  	
   

  	
  Amdt. File Number

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IOS Capital

  	
   

  	
  Leased Equipment

  	
   

  	
  11/15/2006

  	
   

  	
  OH00108848873

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IOS Capital

  	
   

  	
  Leased Equipment

  	
   

  	
  12/05/2006

  	
   

  	
  OH00109505777

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IOS Capital

  	
   

  	
  Leased Equipment

  	
   

  	
  01/06/2007

  	
   

  	
  OH00110651153

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IOS Capital

  	
   

  	
  Leased Equipment

  	
   

  	
  01/23/2007

  	
   

  	
  OH00111169545

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IOS Capital

  	
   

  	
  Leased Equipment

  	
   

  	
  03/26/2007

  	
   

  	
  OH00113202216

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IOS Capital

  	
   

  	
  Leased Equipment

  	
   

  	
  03/29/2007

  	
   

  	
  OH00113361505

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IOS Capital

  	
   

  	
  Leased Equipment

  	
   

  	
  06/13/2007

  	
   

  	
  OH00116162637

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IOS Capital

  	
   

  	
  Leased Equipment

  	
   

  	
  06/19/2007

  	
   

  	
  OH00116336666

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IKON Financial Svcs

  	
   

  	
  Leased Equipment

  	
   

  	
  07/19/2007

  	
   

  	
  OH00117392695

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IKON Financial Svcs

  	
   

  	
  Leased Equipment

  	
   

  	
  08/11/2007

  	
   

  	
  OH00118133850

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IKON Financial Svcs

  	
   

  	
  Leased Equipment

  	
   

  	
  09/01/2007

  	
   

  	
  OH00118723790

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IKON Financial Svcs

  	
   

  	
  Leased Equipment

  	
   

  	
  09/01/2007

  	
   

  	
  OH00118726948

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IKON Financial Svcs

  	
   

  	
  Leased Equipment

  	
   

  	
  09/26/2007

  	
   

  	
  OH00119475299

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IKON Financial Svcs

  	
   

  	
  Leased Equipment

  	
   

  	
  09/29/2007

  	
   

  	
  OH00119625480

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IKON Financial Svcs

  	
   

  	
  Leased Equipment

  	
   

  	
  10/04/2007

  	
   

  	
  OH00119805593

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy Inc

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  IKON Financial Svcs

  	
   

  	
  Leased Equipment

  	
   

  	
  11/02/2007

  	
   

  	
  OH00120759931

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy, Inc.

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  Toyota Motor Credit Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  01/22/2008

  	
   

  	
  OH00123071714

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy, Inc.

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  Toyota Motor Credit Corporation

  	
   

  	
  Leased Equipment

  	
   

  	
  12/15/2008

  	
   

  	
  OH000131596615

  	
   

  	
   

  	
   

  	
   

  

 

11

 

	
  Debtor

  	
   

  	
  Jurisdiction

  	
   

  	
  Type
  of

  filing found

  	
   

  	
  Secured

  Party

  	
   

  	
  Collateral

  	
   

  	
  Original

  File Date

  	
   

  	
  Original

  File Number

  	
   

  	
  Amdt.

  File Date

  	
   

  	
  Amdt. File Number

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy, Inc.

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  CCFA Financial, LLC

  	
   

  	
  Leased Agreement

  	
   

  	
  01/07/2009

  	
   

  	
  OH00132079791

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy, Inc.

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-3 Assignment

  	
   

  	
  Wachovia Bank

  	
   

  	
  Leased Agreement

  	
   

  	
  01/07/2009

  	
   

  	
  OH00132079791

  	
   

  	
  02/18/2009

  	
   

  	
  20090500172

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sealy, Inc.

  	
   

  	
  Ohio SOS

  	
   

  	
  UCC-1

  	
   

  	
  ePlus Technology, Inc.

  	
   

  	
  Computer equipment

  	
   

  	
  02/27/2009

  	
   

  	
  OH00133024818

  	
   

  	
   

  	
   

  	
   

  

 

Liens in respect of Mountain Top-Latex facility
Capital Lease listed on Schedule 10.1

Liens in respect of Orlando facility Capital Lease
listed on Schedule 10.1 

Liens in respect of Albany facility Capital Lease
listed on Schedule 10.1

Liens on certain assets of Sapsa Bedding Srl in
respect of secured indebtedness listed on Schedule 10.1 

Liens on certain assets of Sealy Argentina Srl in
respect of secured indebtedness listed on Schedule 10.1 

Liens on certain assets of Sealy do Brasil Limitada in
respect of secured indebtedness listed on Schedule 10.1 

Liens in respect of Sealy Mattress Company Mexico S de
R.L. de C.V. Capital Lease listed on Schedule 10.1 

Liens in respect of Sealy Mattress Company of Puerto
Rico Capital Lease listed on Schedule 10.1

 

12

 

Schedule 10.3(c)

to Credit Agreement

 

EFFECTIVE DATE PARENT ASSETS

 

Trademark License Agreement
by and between Pirelli & C. S.p.A. and Sealy Corporation dated January 2004,
as amended

 

 

Schedule
10.5

to Credit
Agreement

 

EFFECTIVE
DATE INVESTMENTS

 

	
  Investor

  	
   

  	
  Amount of Investment

  	
   

  	
  Type of Investment

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The Ohio Mattress Company
  Licensing and Components Group

  	
   

  	
  50% JV interest in Sealy
  Korea Company

  	
   

  	
  equity

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The Ohio Mattress Company
  Licensing and Components Group

  	
   

  	
  50% JV interest in Sealy
  Asia (Singapore) Pte, Ltd.

  	
   

  	
  equity

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The Ohio Mattress Company
  Licensing and Components Group

  	
   

  	
  50% JV interest in Sealy
  Asia (Malaysia) Sdn Bhd

  	
   

  	
  equity

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The Ohio Mattress Company
  Licensing and Components Group

  	
   

  	
  50% JV interest in Sealy
  Asia (Hong Kong) Ltd

  	
   

  	
  equity

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The Ohio Mattress Company
  Licensing and Components Group

  	
   

  	
  50% JV interest in Sealy
  Taiwan Branch

  	
   

  	
  equity

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The Ohio Mattress Company
  Licensing and Components Group

  	
   

  	
  50% JV interest in Sealy
  New Zealand Limited

  	
   

  	
  equity

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The Ohio Mattress Company
  Licensing and Components Group

  	
   

  	
  50% JV interest in Sealy
  China (Holdings) Ltd. Hong Kong

  	
   

  	
  equity

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The Ohio Mattress Company
  Licensing and Components Group

  	
   

  	
  50% JV interest in Sealy
  China WOFE

  	
   

  	
  equity

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00171-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00171-of-00352.parquet"}]]