SECOND AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT dated as of May 25, 2006 among, SIMMONS BEDDING COMPANY, as Company, THL-SC BEDDING COMPANY AND CERTAIN SUBSIDIARIES OF COMPANY, as Guarantors, THE FINANCIAL INSTITUTIONS LISTED HEREIN, as...

SECOND AMENDED AND RESTATED

CREDIT AND GUARANTY AGREEMENT

dated as of May 25, 2006

among,

XXXXXXX BEDDING COMPANY,

as Company,

THL-SC BEDDING COMPANY AND CERTAIN SUBSIDIARIES OF COMPANY,

as Guarantors,

THE FINANCIAL INSTITUTIONS LISTED HEREIN,

as Lenders,

XXXXXXX SACHS CREDIT PARTNERS L.P.,

as Sole Bookrunner, Lead Arranger and as Syndication Agent,

DEUTSCHE BANK AG, NEW YORK BRANCH,

as Administrative Agent and Collateral Agent

GENERAL ELECTRIC CAPITAL CORPORATION,

as Co-Documentation Agent

and

CIT LENDING SERVICES CORPORATION,

as Co-Documentation Agent

________________________________________________________

TERM LOAN AND REVOLVING CREDIT FACILITIES

________________________________________________________

TABLE OF CONTENTS

		Page
SECTION 1. DEFINITIONS; INTERPRETATION		2
1.1	Defined Terms	2
1.2	Accounting Terms	36
1.3	Interpretation, etc.	37
SECTION 2. CREDIT EXTENSIONS		37
2.1	Tranche D Term Loans	37
2.2	Revolving Loans and Swing Line Loans	38
2.3	Letters of Credit	40
2.4	Pro Rata Shares	45
2.5	Use of Proceeds	45
2.6	Notes; Register; Lenders’ Books and Records	46
2.7	Interest Payments	47
2.8	Conversion; Continuation	48
2.9	Post-Maturity Interest	49
2.10	Fees	49
2.11	Scheduled Payments	50
2.12	Voluntary Prepayments/Commitment Reductions	51
2.13	Mandatory Prepayments/Commitment Reductions	54
2.14	Application of Prepayments and Reductions of Commitments	55
2.15	Collateral Proceeds; Guaranty Payments	56
2.16	General Provisions Regarding Payments	57
2.17	Ratable Sharing	57
2.18	Making or Maintaining Eurodollar Rate Loans	58
2.19	Increased Costs; Capital Adequacy	60
2.20	Taxes; Withholding, Etc.	61
2.21	Capital Adequacy Adjustment	64
2.22	Obligation to Mitigate	64
2.23	Defaulting Lenders	65
2.24	Removal or Replacement of a Lender	66
2.25	Incremental Facilities	67
SECTION 3. CONDITIONS PRECEDENT		69
3.1	Effective Date	69
3.2	Conditions to Each Credit Extension	70
SECTION 4. REPRESENTATIONS AND WARRANTIES		71
4.1	Organization and Powers	71
4.2	Qualification and Good Standing	71
4.3	Subsidiaries	72
4.4	Authorization of Borrowing; No Conflict	72
4.5	Governmental Consents	72
4.6	Binding Obligation	73
4.7	Valid Issuance of the Senior Subordinated Notes	73
4.8	Financial Condition	73
4.9	No Material Adverse Change	73
4.10	Litigation; Adverse Facts	73
4.11	Payment of Taxes	74
4.12	Title to Properties; Real Property	74
4.13	Collateral	74
4.14	Environmental	75
4.15	No Defaults	76
4.16	Governmental Regulation	76
4.17	Margin Stock	76
4.18	Employee Matters	76
4.19	Employee Benefit Plans	76
4.20	[Reserved]	77
4.21	Solvency	77
4.22	Certain Related Agreements	77
4.23	[Reserved]	77
4.24	Disclosure	77
4.25	Intellectual Property	77
4.26	Patriot Act	78
SECTION 5. AFFIRMATIVE COVENANTS		78
5.1	Financial Statements and Other Reports	78
5.2	Legal Existence, etc.	82
5.3	Payment of Taxes and Claims	82
5.4	Maintenance of Properties	82
5.5	Insurance	82
5.6	Inspection Rights; Lender Meeting	83
5.7	Compliance with Laws, Etc.	83
5.8	Environmental Matters	83
5.9	Subsidiaries	85
5.10	[Reserved]	86
5.11	[Reserved]	86
5.12	Matters Relating to Additional Real Property Collateral	86
5.13	Further Assurances	88
SECTION 6. NEGATIVE COVENANTS		88
6.1	Indebtedness	88
6.2	Liens	91
6.3	Investments	92
6.4	[Reserved]	95
6.5	Restricted Junior Payments	95
6.6	Financial Covenants	97
6.7	Fundamental Changes; Asset Sales	99
6.8	Consolidated Capital Expenditures	101
6.9	Sales and Lease-Backs	101
6.10	Transactions with Shareholders and Affiliates	101
6.11	Amendments or Waivers of Certain Documents	102
6.12	Conduct of Company Business	103
6.13	Special Covenants of Holdings	103
6.14	Fiscal Year	103
6.15	Securities of Company and Subsidiaries; Restrictions on Subsidiaries	103
6.16	Designated Senior Debt	103
SECTION 7. GUARANTY		104
7.1	Guaranty of the Obligations	104
7.2	Limitation on Amount Guarantied	104
7.3	Payment by Guarantors	105
7.4	Liability of Guarantors Absolute	105
7.5	Waivers by Guarantors	107
7.6	Guarantors’ Rights of Subrogation, Contribution, Etc.	108
7.7	Subordination of Other Obligations	108
7.8	Continuing Guaranty	109
7.9	Authority of Guarantors or Company	109
7.10	Financial Condition of Company and Guarantors	109
7.11	Bankruptcy, Etc.	109
7.12	Discharge of Guaranty Upon Sale of Guarantor	110
SECTION 8. EVENTS OF DEFAULT		110
8.1	Events of Default	110
8.2	Certain Option of Lenders	113
8.3	Company’s Right to Cure Financial Performance Covenants	114
SECTION 9. AGENTS		114
9.1	Appointment of Agents	114
9.2	Powers and Duties	115
9.3	General Immunity	115
9.4	Agent Entitled to Act as Lender	116
9.5	Lenders’ Representations and Warranties	116
9.6	Right to Indemnity	117
9.7	Successor Administrative Agent and Swing Line Lender	117
9.8	Collateral Documents and Guaranties	118
SECTION 10. MISCELLANEOUS		120
10.1	Notices	120
10.2	Expenses	120
10.3	Indemnity	121
10.4	Set-Off	122
10.5	Amendments and Waivers	122
10.6	Successors and Assigns; Participations	124
10.7	Independence of Covenants	127
10.8	Survival of Representations, Warranties and Agreements	127
10.9	No Waiver; Remedies Cumulative	127
10.10	Marshalling; Payments Set Aside	127
10.11	Severability	128
10.12	Obligations Several; Independent Nature of Lenders’ Rights	128
10.13	Headings	128
10.14	APPLICABLE LAW	128
10.15	CONSENT TO JURISDICTION AND SERVICE OF PROCESS	128
10.16	WAIVER OF JURY TRIAL	129
10.17	Confidentiality	129
10.18	Counterparts; Effectiveness	130
10.19	Maximum Amount	130
10.20	Reaffirmation and Grant of Security Interest	131
10.21	Amendment and Restatement	132
10.22	Patriot Act	132

SCHEDULES:

1.1(b)

Term Loan Amounts, Revolving Loan Commitments and Pro Rata Shares

2.1(a)

Continuing Lenders

4.1

Subsidiaries of Holdings

4.12

Real Property Assets

6.1

Certain Existing Indebtedness

6.2

Certain Existing Liens

6.3

Certain Existing Investments

EXHIBITS:

A-1

Funding Notice

A-2

Conversion/Continuation Notice

A-3

Request for Issuance

B-1

Tranche D Term Loan Note

B-2

New Term Loan Note

B-3

Revolving Note

B-4

Swing Line Note

Compliance Certificate

Opinion of Weil, Gotshal & Xxxxxx LLP

Assignment Agreement

Certificate Re Non-Bank Status

Solvency Certificate

Effective Date Certificate

Counterpart Agreement

Pledge and Security Agreement

Mortgage

Certain Adjustments to EBITDA

Joinder Agreement

SECOND AMENDED AND RESTATED

CREDIT AND GUARANTY AGREEMENT

This SECOND AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT dated as of May 25, 2006, is entered into by and among XXXXXXX BEDDING COMPANY (formerly known as Xxxxxxx Company), a Delaware corporation (“Company”), THL-SC BEDDING COMPANY, a Delaware corporation (“Holdings”), CERTAIN SUBSIDIARIES OF COMPANY PARTY HERETO, as Guarantors, XXXXXXX SACHS CREDIT PARTNERS L.P. (“GSCP”), as sole bookrunner, lead arranger and syndication agent, THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HERETO (together with each such institution’s successors and permitted assigns, each a “Lender”), DEUTSCHE BANK AG, NEW YORK BRANCH (“DBNY”), as administrative agent for Lenders (together with its permitted successors in such capacity, “Administrative Agent”) and as collateral agent for Lenders (together with its permitted successors in such capacity, “Collateral Agent”), GENERAL ELECTRIC CAPITAL CORPORATION (“GE Capital”) as Co-Documentation Agent, and CIT LENDING SERVICES CORPORATION (“CIT”) as Co-Documentation Agent.

R E C I T A L S

WHEREAS, capitalized terms used herein having the meanings assigned to those terms in Section 1.1;

WHEREAS, reference is made to that certain Amended and Restated Credit and Guaranty Agreement dated as of August 27, 2004 by and among Company, Holdings, certain subsidiaries of Company party thereto, GSCP, as sole bookrunner, joint lead arranger and as co-syndication agent, the financial institutions listed on the signature pages thereto (together with each such institutions successors and assigns, the “Existing Lenders”), UBSS, as joint lead arranger and co-syndication agent (“UBSS”), DBNY, as administrative agent and collateral agent, GE Capital as co-documentation agent and CIT, as co-documentation agent (as it may amended, restated, supplemented or otherwise modified from time to time, the “Existing Credit Agreement”) which amended and restated that certain Credit Agreement dated as of December 19, 2003 by and among THL Bedding Company, a Delaware corporation (“THL Company”), Holdings, GSCP, as sole bookrunner, joint lead arranger and as co-syndication agent, the financial institutions listed on the signature pages thereto, UBSS, as joint lead arranger and co-syndication agent, DBNY, as administrative agent and collateral agent, GE Capital as co-documentation agent and CIT, as co-documentation agent (as it may amended, restated, supplemented or otherwise modified from time to time, the “Original Credit Agreement”);

WHEREAS, Company 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 Tranche C Term Loans made under the Existing Credit Agreement (the “Existing Tranche C Term Loans”) with the Tranche D Term Loans made hereunder; (ii) to provide for additional Tranche D Term Loans to refinance the Senior Unsecured Term Loans and (iii) 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, Company has agreed to secure all of the Obligations by reaffirming its grant to Collateral Agent, on behalf of the Secured Parties, of a First Priority Lien on certain of its real and substantially all of its personal property, including a pledge of all of the capital stock of each of its Domestic Subsidiaries and 65% of the capital stock of each of the Foreign Subsidiaries which is directly owned by Company;

WHEREAS, Holdings and certain Subsidiaries of Company have agreed to guarantee the Obligations and to secure their guaranties by reaffirming their grant to Collateral Agent, on behalf of the Secured Parties, of a First Priority Lien on certain of their real and substantially all of their respective personal property, including (i) a pledge of all of the capital stock of Company and (ii) a pledge of all of the capital stock of each Domestic Subsidiary which is a Subsidiary Guarantor and 65% of the capital stock of each Foreign Subsidiary which is directly owned by a Subsidiary Guarantor;

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.

NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, Holdings, Company, each of its Subsidiaries party hereto, Lenders and Agents agree to amend and restate the Existing Credit Agreement as follows:

SECTION 1. DEFINITIONS; INTERPRETATION

1.1 Defined Terms

. The following terms used herein, including (except to the extent specifically stated otherwise) the preamble, recitals, exhibits and schedules hereto, shall have the following meanings:

“Acquisition” means the acquisition of 84% of the outstanding capital stock of Xxxxxxx Holdco by THL Company on December 19, 2003.

“Adjusted Eurodollar Rate” means, for any Interest Rate Determination Date with respect to an Interest Period for a Eurodollar Rate Loan, the rate per annum obtained by dividing (i) the offered rate (rounded upward to the nearest 1/16 of one percent) appearing on the Dow Xxxxx/Telerate Monitor on Telerate Access Service Page 3750 (British Bankers Association Settlement Rate) (or if such page or service is not available, any page reasonably determined by Administrative Agent to be the successor thereto) at or about 10:00 a.m. (New York time) on such Interest Rate Determination Date for U.S. dollar deposits of amounts in same day funds comparable to the principal amount of the Eurodollar Rate Loan for which the Adjusted Eurodollar Rate is then being determined with maturities comparable to such Interest Period, by (ii) the difference of (1) a percentage equal to 100%, minus (2) the stated maximum rate of all reserve requirements (including any marginal, emergency, supplemental, special or other reserves) applicable on such Interest Rate Determination Date to any member bank of the Federal Reserve System in respect of “Eurocurrency liabilities” as defined in Regulation D (or any successor category of liabilities under Regulation D). If for any reason the portion of the Adjusted Eurodollar Rate determined by reference to the mechanics of clause (i) of this definition is unavailable, as determined by Administrative Agent, such portion of Adjusted Eurodollar Rate for the applicable Interest Period shall mean the offered quotation (rounded upward to the nearest 1/16 of one percent) to first class banks in the London interbank market by DBNY for U.S. dollar deposits of amounts in same day funds comparable to the principal amount of the Eurodollar Rate Loan of DBNY for which the Adjusted Eurodollar Rate is then being determined with maturities comparable to such Interest Period as of approximately 10:00 a.m. (New York time) on such Interest Rate Determination Date.

“Additional Mortgaged Policy” has the meaning assigned to that term in Section 5.12.

“Additional Mortgaged Property” has the meaning assigned to that term in Section 5.12.

“Adjusted Maximum Amount” has the meaning assigned to that term in Section 7.2(b).

“Administrative Agent” has the meaning assigned to that term in the preamble hereto.

“Adverse Proceeding” means any action, suit, proceeding (whether administrative, judicial or otherwise), governmental investigation or arbitration (whether or not purportedly on behalf of Company or any of its Subsidiaries) at law or in equity, or before or by any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign (including any Environmental Claims), whether pending or, to the knowledge of Company or its Material Subsidiaries, threatened in writing against or affecting Company or any of its Subsidiaries or any property of Company or any of its Subsidiaries.

“Affected Lender” has the meaning assigned to that term in Section 2.18(b).

“Affected Loans” has the meaning assigned to that term in Section 2.18(b).

“Affiliate,” as applied to any Person, means any other Person directly or indirectly controlling, controlled by, or under common control with, that Person. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,”“controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities or by contract or otherwise. Notwithstanding the foregoing, neither any Agent or any Lender shall be deemed to be an Affiliate of any Credit Parties or any Affiliate thereof.

“Agent” means each of the Syndication Agent, Lead Arranger, Administrative Agent, Collateral Agent and Co-Documentation Agents.

“Aggregate Payments” has the meaning assigned to that term in Section 7.2(b).

“Agreement” means this Second Amended and Restated Credit and Guaranty Agreement, as it may be amended, restated, supplemented or otherwise modified from time to time.

“Applicable Commitment Fee Percentage” means (i) 0.50% per annum and (ii) 0.375% per annum if and for so long as the Leverage Ratio in effect from time to time is less than 4.50:1.00; provided, (A) no change in the Applicable Commitment Fee Percentage shall be effective until three Business Days after the date on which Administrative Agent receives the financial statements and a Compliance Certificate pursuant to Section 5.1(d) calculating the Leverage Ratio, and (B) the Applicable Commitment Fee Percentage shall be 0.50% per annum, in each case for so long (but only for so long) as Company has not submitted to Administrative Agent the information described in clause (A) when required under Section 5.1(d).

“Applicable Margin” means (i) for Tranche D Term Loans which are Base Rate Loans, 1.25% per annum and for Tranche D Term Loans which are Eurodollar Rate Loans, 2.25% per annum or (B) for Tranche D Term Loans which are Base Rate Loans, 1.00% per annum and for Tranche D Term Loans which are Eurodollar Rate Loans, 2.00% per annum upon the earlier of (and for so long as) (x) the Leverage Ratio in effect is less than 4.50:1.00 or (y) the Loans are rated at least B1 or better by Xxxxx’x, (ii) for Swing Line Loans, 1.00% per annum, and (iii) for Revolving Loans, the applicable percentage per annum determined by reference to the Leverage Ratio in effect from time to time as set forth below:

Leverage Ratio	Applicable Margin for Revolving Loans which are Eurodollar Loans	Applicable Margin for Revolving Loans which are Base Rate Loans
³5.00:1.00	2.50%	1.50%
<5.00:1.00 and ³4.50:1.00	2.25%	1.25%
<4.50:1.00 and ³4.00:1.00	2.00%	1.00%
<4.00:1.00 and ³3.50:1.00	1.75%	0.75%
<3.50:1.00	1.50%	0.50%

; provided, (A) no change in the Applicable Margin shall be effective until three Business Days after the date on which Administrative Agent receives the financial statements and a Compliance Certificate pursuant to Section 5.1(d) calculating the Leverage Ratio which as of the Effective Date shall be the Leverage Ratio as of March 31, 2006 set forth in the Compliance Certificate delivered pursuant to Section 5.1(d) of the Existing Credit Agreement, and (B) the Applicable Margin for Revolving Loans shall be the applicable percentage per annum amount set forth opposite the greatest Leverage Ratio above, in each case for so long (but only for so long) as Company has not submitted to Administrative Agent the information described in clause (A) when required under Section 5.1(d). The Applicable Margin with respect to any Series of New Term Loans shall be set forth in the Joinder Agreement for such Series.

“Asset Sale” means a sale, lease or sub-lease (as lessor or sublessor), transfer, conveyance or disposition to any Person of all or any part of Company’s or any of its Subsidiaries’ businesses, properties or assets, including, without limitation, a sale, transfer or other disposition of any Security of Company or any of its Subsidiaries.

“Assignment Agreement” means an Assignment and Assumption Agreement in the form of Exhibit E.

“Authorized Officers” means, as applied to any Person, (i) its chairman of the board (if an officer) or president or any vice president, and (ii) its chief financial officer, treasurer or any assistant treasurer.

“Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy”, as now and hereafter in effect, or any successor statute.

“Base Rate” means, at any time, the higher of (i) the Prime Rate, and (ii) the rate equal to the sum of (a) 0.50%, plus (b) the Federal Funds Effective Rate.

“Base Rate Loan” means a Loan bearing interest at a rate determined by reference to the Base Rate.

“Beneficiary” means Administrative Agent, each of the other Agents, each of the Lenders, and each Lender Counterparty.

“Business Day” means any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of the State of New York or is a day on which banking institutions located in such state are authorized or required by law or other governmental action to close, and with respect to all notices, determinations, fundings and payments in connection with the Adjusted Eurodollar Rate or any Eurodollar Rate Loans, that is also a day for trading by and between banks in Dollar deposits in the London interbank market.

“Capital Lease” means, 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 accounted for as a capital lease on the balance sheet of that Person.

“Captive Insurance Subsidiary” has the meaning assigned to that term in Section 6.3(i).

“Cash” means money, currency or a credit balance in any demand or deposit account.

“Cash Equivalents” means, as at any date of determination, (i) marketable securities (a) issued or directly and unconditionally guaranteed as to interest and principal by the United States Government or (b) issued by any agency or instrumentality of the United States the obligations of which are backed by the full faith and credit of the United States, in each case maturing within one year after such date; (ii) marketable general obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof, in each case maturing within one year after such date and having, at the time of the acquisition thereof, a rating of “A” or better from either Standard & Poor’s Ratings Group (“S&P”) or Xxxxx’x; (iii) commercial paper maturing no more than one year from the date of creation thereof and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from Xxxxx’x; (iv) certificates of deposit, time deposits, eurodollar time deposits or bankers’ acceptances maturing within one year after such date and issued or accepted by any Lender or by any commercial bank organized under the laws of the United States of America or any state thereof or the District of Columbia that has capital and surplus in excess of $500,000,000; (v) repurchase obligations for underlying securities of the types described in clauses (i), (ii) and (iv) above entered into with any financial institution meeting the qualifications specified in clause (iv) above; and (vi) shares of any money market mutual fund that invests substantially all of its assets in the types of investments referred to in clauses (i) through (iv) above or in Dollars.

“Certificate re Non-Bank Status” means a certificate in the form of Exhibit F.

“CFO Certification” means, with respect to the financial statements for which such certification is required, the certification of the chief financial officer of Company that such financial statements fairly present, in all material respects, the financial condition of Company and its Subsidiaries as at the dates indicated and the results of their operations and their cash flows for the periods indicated, subject to (in the case of unaudited financial statements) changes resulting from audit and normal year-end adjustments and, in the case of monthly financial statements, the absence of footnotes.

“Change of Control” means the earlier to occur of (a) the Equity Investors shall cease to have the power, directly or indirectly, to vote or direct the voting of equity Securities having a majority of the ordinary voting power for the election of directors of Holdings; provided, that the occurrence of the foregoing event shall not be deemed a Change of Control if,

(i)

any time prior to the consummation of an initial public offering of either Parent or Holdings, and for any reason whatsoever, (A) the Equity Investors otherwise have the right to designate (and does so designate) a majority of the board of directors of Holdings or (B) the Equity Investors own of record and beneficially, directly or indirectly, an amount of common stock of Holdings equal to an amount of more than fifty percent (50%) of the amount of common stock of Holdings owned, directly or indirectly, by the Equity Investors of record and beneficially as of the Closing Date and such ownership by the Equity Investors represents the largest single block of voting securities of Holdings held by any Person or related group for purposes of Section 13(d) of the Securities and Exchange Act of 1934, as amended, or

(ii)

at any time after the consummation of an initial public offering of either Parent or Holdings, and for any reason whatsoever, (A) no “person” or “group” (as such terms are used in sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended, but excluding any employee benefit plan of such Person and its Subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan), excluding the Equity Investors, shall become the “beneficial owner” (as defined in Rules 13(d)-3 and 13(d)-5 under such Act), directly or indirectly, of more than the greater of (x) thirty-five percent (35%) of the then outstanding voting stock of Holdings or (y) the percentage of the then outstanding voting stock of Holdings owned beneficially, directly or indirectly, by the Equity Investors, (B) during any period of twelve (12) consecutive months, the board of directors of Holdings shall consist of a majority of the Continuing Directors or (C) the Equity Investors have the power, directly or indirectly, to vote or direct the voting of at least thirty percent (30%) of the voting of securities having a majority of the ordinary voting power for the election of directors of Holdings; or

(b) any “Change of Control” (or any comparable term) in any document pertaining to the Subordinated Indebtedness with an aggregate outstanding principal amount in excess of $20,000,000; or

(c) Holdings shall cease to own 100% of the equity Securities of Company.

“CIT” has the meaning assigned to that term in the preamble hereto.

“Class” means (i) with respect to Lenders, each following class of Lenders: (a) Lenders having Tranche D Term Loan Exposure, (b) Lenders having Revolving Credit Exposure (including Swing Line Lender), and (c) Lenders having New Term Loan Exposure of each Series, and (ii) with respect to Loans, each of the following class of Loans: (a) Tranche D Term Loans, (b) Revolving Loans (including Swing Line Loans) and (c) each Series of New Term Loans.

“Closing Date” means December 19, 2003, the date the loans made under the Original Credit Agreement were made.

“Co-Documentation Agents” means each of, GE Capital and CIT in its capacity as a co-documentation agent.

“Collateral” means all of the properties and assets (including capital stock) in which Liens are purported to be granted by the Collateral Documents.

“Collateral Agent” has the meaning assigned to that term in the preamble hereto.

“Collateral Documents” means the Pledge and Security Agreement, the Mortgages and any other documents, instruments or agreements delivered by any Credit Party pursuant to this Agreement or any of the other Credit Documents in order to grant or perfect Liens on any assets of such Credit Party as security for the Obligations.

“Collateral Questionnaire” means a certificate of an Authorized Officer in a form reasonably satisfactory to Collateral Agent that provides information with respect to the personal or mixed property of each Credit Party.

“Commercial Letter of Credit” means any letter of credit or similar instrument issued for the purpose of providing the primary payment mechanism in connection with the purchase of any materials, goods or services by Company or any of its Subsidiaries in the ordinary course of business of Company or such Subsidiary.

“Commitments” means, collectively, the Swing Line Loan Commitments, the Revolving Loan Commitments, the New Revolving Loan Commitments and the New Term Loan Commitments.

“Company” has the meaning assigned to that term in the preamble hereto.

“Compliance Certificate” means a certificate executed by an Authorized Officer in the form of Exhibit C.

“Consolidated Adjusted EBITDA” means, for any period, without duplication, the sum of the amounts for such period of (i) Consolidated Net Income, plus to the extent the following amounts were deducted in calculating Consolidated Net Income: (ii) Consolidated Interest Expense, plus (iii) provisions for taxes based on income, including but not limited to (without duplication) taxes imposed in lieu of income-based taxes, such as those taxes based upon gross receipts, net worth, equity, capital or property values (except normal real and personal property taxes) and the like, to the extent that such alternative tax provisions do not exceed $2,000,000 in the aggregate for any Fiscal Year, plus (iv) total depreciation expense, plus (v) total amortization expense, plus (vi) Management Fees, plus (vii) ESOP expenses, plus (viii) the aggregate amount of the fees, costs and cash expenses paid by Company in connection with the consummation of the Acquisition (including, without limitation, bonus and option payments) for such period, plus (ix) other non-cash items reducing Consolidated Net Income (including, without limitation, non-cash purchase accounting adjustments and debt extinguishment costs but excluding accruals of expenses and the establishment of reserves in the ordinary course of business), plus (x) the Cure Amount, if any, received by Company in respect of such period, plus (xi) any extraordinary, unusual or non-recurring gains or losses or charges or credits, including, but not limited to, any expenses relating to the Acquisition, the Mergers and the Related Agreements, plus (xii) any reasonable expenses or charges related to any issuance of Securities, Investments permitted under Section 6.3, Permitted Acquisitions, recapitalizations, Asset Sales permitted by Section 6.7 or Indebtedness permitted to be incurred under Section 6.1, less other non-cash items increasing Consolidated Net Income (other than accruals of revenue or reversals of reserves in the ordinary course of business), all of the foregoing as determined on a consolidated basis for Company and its Subsidiaries in conformity with GAAP; provided, that for the periods set forth on Exhibit L, Consolidated Adjusted EBITDA shall be the amount set forth opposite such period on Exhibit L.

“Consolidated Capital Expenditures” means, for any period, the sum of (i) the aggregate of all expenditures (whether paid in cash or other consideration or accrued as a liability and including that portion of Capital Leases which is capitalized on the consolidated balance sheet of Company and its Subsidiaries) by Company and its Subsidiaries during that period that, in conformity with GAAP, are included in “additions to property, plant or equipment” or comparable items reflected in the consolidated statement of cash flows of Company and its Subsidiaries; provided, however, that Consolidated Capital Expenditures shall not include (i) any expenditures by Company or any of its Subsidiaries during that period in connection with a Permitted Acquisition or, (ii) capital expenditures arising from deployment of any Proposed Reinvestment Proceeds or the Net Cash Proceeds of any issuance of Securities not otherwise required to repay the Loans pursuant to Section 2.13(b) or (iii) any expenditures made with respect to the original acquisition of any property that has been transferred pursuant to a Permitted Sale/Lease-Back Transaction permitted by Section 6.9.

“Consolidated Cash Interest Expense” means, for any period, Consolidated Interest Expense for such period; provided, however, any (i) interest expense not payable in Cash (including amortization of discount and amortization of debt issuance costs), but excluding, however, any amounts referred to in Section 2.10 payable on or before the Effective Date and (ii) any costs associated with xxxx-to-market changes in Interest Rate Agreements and any other charges or payments related to any Interest Rate Agreements, in each case, shall be excluded from the calculation of Consolidated Cash Interest Expense.

“Consolidated Current Assets” means, as at any date of determination, the total assets of Company and its Subsidiaries on a consolidated basis that may properly be classified as current assets in conformity with GAAP, excluding (i) Cash and Cash Equivalents, (ii) assets (other than inventory) that are held for sale and (iii) assets pertaining to the Retail Business (including inventory pertaining to the Retail Business) that are held for sale.

“Consolidated Current Liabilities” means, as at any date of determination, the total liabilities of Company and its Subsidiaries on a consolidated basis that may properly be classified as current liabilities in conformity with GAAP, excluding any current liabilities with respect to long-term Indebtedness, excluding liabilities associated with the Retail Business that are held for sale.

“Consolidated Excess Cash Flow” means, for any period, an amount (if positive) equal to the difference of (a) the sum, without duplication, of the amounts for such period of (i) Consolidated Adjusted EBITDA, plus (ii) the Consolidated Working Capital Adjustment (excluding any non-cash adjustments to Consolidated Working Capital Adjustment), minus (b) the sum, without duplication, of the amounts for such period of (i) voluntary prepayments (but excluding voluntary prepayments of Term Loans pursuant to Section 2.12(a) and repurchases of Term Loans made pursuant to Section 2.12), mandatory prepayments pursuant to Section 2.13(d) and scheduled repayments of Consolidated Total Debt (excluding repayments of Revolving Loans or Swing Line Loans except to the extent the Revolving Loan Commitments are permanently reduced in connection with such repayments), plus (ii) Consolidated Capital Expenditures (net of any proceeds of any related financings with respect to such expenditures), plus (iii) Consolidated Cash Interest Expense (without giving effect to the proviso set forth in the definition thereof), plus (iv) the provision for current taxes based on income of Company and its Subsidiaries and payable in cash with respect to such period, plus (v) Management Fees actually paid in cash during such period, plus (vi) the cash portion of any purchase price payments made during such period by Company or any of its Subsidiaries in connection with any Permitted Acquisition or Investments (net of the proceeds of any related debt or equity financings with respect to such Investments), plus (vii) the cash portion of any purchase price payments made during such period by Company or any of its Subsidiaries in connection with the acquisition of any Intellectual Property (net of any proceeds of any related financings with respect to such expenditures), plus (viii) the cash portion of any Restricted Junior Payments made by Company during such period pursuant to Section 6.5 (net of any proceeds of any related financings with respect to such Restricted Junior Payments), plus (ix) cash expenses and charges added to Consolidated Net Income for purposes of determining Consolidated Adjusted EBITDA pursuant to clauses (xi) and (xii) thereof plus, (x) the Cure Amount, if any.

“Consolidated Interest Expense” means, for any period, total interest expense (including that portion attributable to Capital Leases in accordance with GAAP and capitalized interest) of Company and its Subsidiaries on a consolidated basis with respect to all outstanding Indebtedness of Company and its Subsidiaries, including all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing, but excluding net costs under Interest Rate Agreements. For purposes of greater clarity, it is understood that “Consolidated Interest Expense” excludes interest income.

“Consolidated Net Income” means, for any period, the net income (or loss) of Company and its Subsidiaries on a consolidated basis for such period determined in conformity with GAAP; provided, there shall be excluded the sum of (i) the income (or loss) of any Person (other than a Subsidiary of Company) in which any other Person (other than Company or any of its Subsidiaries) has a joint interest, except to the extent of the amount of dividends or other distributions actually paid to Company or any of its Subsidiaries by such Person during such period; plus (ii) the income (or loss) of any Person accrued prior to the date it becomes a Subsidiary of Company or is merged into or consolidated with Company or any of its Subsidiaries or that Person’s assets are acquired by Company or any of its Subsidiaries; plus (iii) the income of any Subsidiary of Company to the extent that the declaration or payment of dividends or similar distributions by that Subsidiary of that income is not at the time permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary; plus (iv) any after-tax gains or losses attributable to Asset Sales or returned surplus assets of any Pension Plan; plus (v) (to the extent not included in clauses (i) through (iv) above) any net non-cash extraordinary gains or net non-cash extraordinary losses; plus (vi) for purposes of Section 6.5 only, any goodwill impairment charges; plus (vii) for purposes of Section 6.6 only, any gains, losses or charges associated with Interest Rate Agreements.

“Consolidated Total Debt” means, as at any date of determination, the aggregate stated balance sheet amount of all Indebtedness of the type specified in clauses (a) or (b) of the definition thereof of Company and its Subsidiaries, determined on a consolidated basis in accordance with GAAP.

“Consolidated Working Capital” means, as at any date of determination, the excess of Consolidated Current Assets less Consolidated Current Liabilities.

“Consolidated Working Capital Adjustment” means, for any period on a consolidated basis, the amount (which may be a negative number) by which Consolidated Working Capital as of the beginning of such period exceeds (or is less than) Consolidated Working Capital as of the end of such period, excluding any pro forma effects of changes in the classification of assets held for sale.

“Contingent Obligation” means, as to any Person, without duplication, any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part). The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith.

“Continuing Directors” shall mean the directors of Holdings on the Effective Date, and each other director, if, in each case, such other directors’ nomination for election to the board of directors of Holdings is recommended by a majority of the then Continuing Directors or such other director receives the vote of the Equity Investors in his or her election by the stockholders of Holdings.

“Continuing Lenders” means those lenders under the Existing Credit Agreement identified as Continuing Lenders in Schedule 2.1(a).

“Contractual Obligation” means, as applied to any Person, any provision of any equity Security issued by that Person or of any material indenture, mortgage, deed of trust, contract, undertaking, agreement or other instrument to which that Person is a party or by which it or any of its properties is bound or to which it or any of its properties is subject.

“Contributing Guarantors” has the meaning assigned to that term in Section 7.2(b).

“Conversion/Continuation Notice” means a notice in the form of Exhibit A-2.

“Co-Op Subsidiary” means a Subsidiary formed by The Xxxxxxx Manufacturing Co., LLC, Xxxxxxx Caribbean Bedding, Inc. (or another Subsidiary of Company) and a third Person formed to operate as a “T corporation” under the Internal Revenue Code.

“Counterpart Agreement” means a counterpart agreement in the form of Exhibit I.

“Credit Document” means any of this Agreement, the Notes, any documents or certificates executed by Company in favor of Issuing Bank relating to the Letters of Credit, the Collateral Documents and all other documents, instruments or agreements executed and delivered by a Credit Party for the benefit of Agents, Issuing Bank or any Lender in connection herewith (in each case, as such other documents, instruments or agreements may be amended, restated, supplemented or otherwise modified from time to time).

“Credit Extension” means the making of a Loan or the issuing of a Letter of Credit.

“Credit Extension Date” means the date of a Credit Extension.

“Credit Party” means Holdings, Company and the Subsidiary Guarantors.

“Cure Amount” has the meaning assigned to that term in Section 8.3.

“Cure Right” has the meaning assigned to that term in Section 8.3.

“Currency Agreement” means any foreign exchange contract, currency swap agreement, futures contract, option contract, synthetic cap or other similar agreement or arrangement to which Company or any of its Subsidiaries is a party and which is designed to hedge against fluctuations in currency values and not for speculative purposes.

“DBNY” has the meaning assigned to that term in the preamble hereto.

“Default” means a condition or event that, after notice or lapse of time or both, would constitute an Event of Default.

“Default Excess” means, with respect to any Defaulting Lender, the excess, if any, of such Defaulting Lender’s Pro Rata Share of the aggregate outstanding principal amount of Revolving Loans of all Lenders (calculated as if all Defaulting Lenders (other than such Defaulting Lender) had funded all of their respective Defaulted Revolving Loans) over the aggregate outstanding principal amount of all Revolving Loans of such Defaulting Lender.

“Defaulting Lender” has the meaning assigned to that term in Section 2.23.

“Default Period” means, with respect to any Defaulting Lender, the period commencing on the date of the applicable Funding Default and ending on the earliest of the following dates: (i) the date on which all Commitments are cancelled or terminated and/or the Obligations are declared or become immediately due and payable, (ii) the date on which (a) the Default Excess with respect to such Defaulting Lender shall have been reduced to zero (whether by the funding by such Defaulting Lender of any Defaulted Revolving Loans of such Defaulting Lender or by the non-pro rata application of any voluntary or mandatory prepayments of the Revolving Loans in accordance with the terms of Section 2.12 or Section 2.13 or by a combination thereof) and (b) such Defaulting Lender shall have delivered to Company and Administrative Agent a written reaffirmation of its intention to honor its obligations hereunder with respect to its Commitment, and (iii) the date on which Company, Administrative Agent and Requisite Lenders waive all Funding Defaults of such Defaulting Lender in writing.

“Defaulted Revolving Loan” has the meaning assigned to that term in Section 2.23.

“Dollars” and the sign “$” mean the lawful money of the United States of America.

“Domestic Subsidiary” means any Subsidiary of Company organized under the laws of any jurisdiction within the United States of America (but excluding any Foreign Subsidiary).

“Effective Date” means the date upon which the conditions set forth in Section 3.1 are satisfied.

“Effective Date Certificate” means a certificate in the form of Exhibit H.

“Eligible Assets” has the meaning assigned to that term in Section 2.13(a).

“Eligible Assignee” means (i) a commercial bank, savings and loan association or savings bank or any other entity which is an “accredited investor” (as defined in Regulation D under the Securities Act) which extends credit or buys loans as one of its businesses including insurance companies, mutual funds and lease financing companies and any investment fund that invests in commercial loans; and (ii) any Lender, any Affiliate of any Lender and, with respect to any Lender that is an investment fund that invests in commercial loans, any other investment fund that invests in commercial loans and that is managed or advised (other than any fund that is managed or advised by Highland Capital Management, L.P. or any of its Affiliates or Subsidiaries) by the same investment advisor as such Lender or by an Affiliate of such investment advisor; provided, Eligible Assignee shall not include (a) any Affiliate of Company or Holdings or (b) Highland Capital Management, L.P. or any of its Affiliates or Subsidiaries.

“Employee Benefit Plan” means any “employee benefit plan” as defined in Section 3(3) of ERISA which is (currently or hereafter) or within the prior 6 years was maintained or contributed to by Company, any of its Subsidiaries or any of their respective ERISA Affiliates.

“Environmental Claim” means any investigation, notice, notice of violation, claim, action, suit, proceeding, demand, abatement order or other order or directive (conditional or otherwise), by any governmental authority or any other Person, arising (i) pursuant to or in connection with any actual or alleged violation of any Environmental Law; (ii) in connection with any Hazardous Material or any actual or alleged Hazardous Materials Activity; or (iii) in connection with any actual or alleged damage, injury, threat or harm to health, safety, natural resources or the environment.

“Environmental Laws” means any and all federal or state (or any subdivision of either of them), statutes, ordinances, orders, rules, regulations, guidance documents, judgments, Governmental Authorizations, or any other requirements of governmental authorities relating to (i) environmental matters, including those relating to any Hazardous Materials Activity; (ii) the generation, use, storage, transportation or disposal of Hazardous Materials; or (iii) occupational safety and health, industrial hygiene, land use or the protection of human, plant or animal health or welfare, in any manner applicable to Company or any of its Subsidiaries or any Facility.

“Equity Investors” means Sponsor and the Management Investors.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and any successor thereto.

“ERISA Affiliate” means, as applied to any Person, (i) any corporation which is a member of a controlled group of corporations within the meaning of Section 414(b) of the Internal Revenue Code of which that Person is a member; (ii) any trade or business (whether or not incorporated) which is a member of a group of trades or businesses under common control within the meaning of Section 414(c) of the Internal Revenue Code of which that Person is a member; and (iii) any member of an affiliated service group within the meaning of Section 414(m) or (o) of the Internal Revenue Code of which that Person, any corporation described in clause (i) above or any trade or business described in clause (ii) above is a member. Any former ERISA Affiliate of Company or any of its Subsidiaries shall continue to be considered an ERISA Affiliate of Company or such Subsidiary within the meaning of this definition with respect to the period such entity was an ERISA Affiliate of Company or such Subsidiary and with respect to liabilities arising after such period for which Company or such Subsidiary could be liable under the Internal Revenue Code or ERISA.

“ERISA Event” means (i) a “reportable event” within the meaning of Section 4043 of ERISA and the regulations issued thereunder with respect to any Pension Plan (excluding those for which the provision for 30-day notice to the PBGC has been waived by regulation); (ii) the failure to meet the minimum funding standard of Section 412 of the Internal Revenue Code with respect to any Pension Plan (whether or not waived in accordance with Section 412(d) of the Internal Revenue Code) or the failure to make by its due date a required installment under Section 412(m) of the Internal Revenue Code with respect to any Pension Plan or the failure to make any required contribution to a Multiemployer Plan; (iii) the filing by the administrator of any Pension Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such plan in a distress termination described in Section 4041(c) of ERISA; (iv) the withdrawal by Company, any of its Subsidiaries or any of their respective ERISA Affiliates from any Pension Plan with two or more contributing sponsors or the termination of any such Pension Plan resulting in liability pursuant to Section 4063 or 4064 of ERISA; (v) the institution by the PBGC of proceedings to terminate any Pension Plan, or the occurrence of any event or condition which might constitute grounds under ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan; (vi) the imposition of liability on Company, any of its Subsidiaries or any of their respective ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of Section 4212(c) of ERISA; (vii) the withdrawal of Company, any of its Subsidiaries or any of their respective ERISA Affiliates in a complete or partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer Plan that could reasonably be expected to result in material liability therefor, or the receipt by Company, any of its Subsidiaries or any of their respective ERISA Affiliates of notice from any Multiemployer Plan that it is in reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to terminate or has terminated under Section 4041A or 4042 of ERISA; (viii) the occurrence of an act or omission which could give rise to the imposition on Company, any of its Subsidiaries or any of their respective ERISA Affiliates of material fines, penalties, taxes or related charges under Chapter 43 of the Internal Revenue Code or under Section 406, 409, Section 502(c), (i) or (l), or Section 4071 of ERISA in respect of any Employee Benefit Plan; (ix) the assertion of a material claim (other than routine claims for benefits) against any Employee Benefit Plan other than a Multiemployer Plan or the assets thereof, or against Company, any of its Subsidiaries or any of their respective ERISA Affiliates in connection with any Employee Benefit Plan; (x) receipt from the Internal Revenue Service of notice of the failure of any Pension Plan (or any other Employee Benefit Plan intended to be qualified under Section 401(a) of the Internal Revenue Code) to qualify under Section 401(a) of the Internal Revenue Code, or the failure of any trust forming part of any Pension Plan to qualify for exemption from taxation under Section 501(a) of the Internal Revenue Code; or (xi) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue Code or pursuant to ERISA with respect to any Pension Plan.

“ESOP” means the Xxxxxxx Company Employee Stock Ownership Plan, as amended and restated effective January 17, 1989 whereby the Xxxxxxx Company Employee Stock Ownership Trust is the record and beneficial owner of the shares of Holdings equity Securities pursuant to the terms thereof.

“Eurodollar Rate Loan” means a Loan bearing interest at a rate determined by reference to the Adjusted Eurodollar Rate.

“Event of Default” means each of the events set forth in Section 8.1.

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and any successor statute.

“Existing Credit Agreement” has the meaning assigned to that term in the recitals hereto.

“Existing Lenders” has the meaning assigned to that term in the recitals hereto.

“Existing Notes” means the 10¼% of Series B Senior Subordinated Notes due 2009 of Company.

“Existing Tranche C Term Loans” has the meaning assigned to that term in the recitals hereto.

“Facilities” means any real property (including all buildings, fixtures or other improvements located thereon) now, hereafter or (except with respect to Section 5 and Section 6) heretofore owned, leased, operated or used by Company or any of its Subsidiaries or any of their respective predecessors or Affiliates.

“Fair Share” has the meaning assigned to that term in Section 7.2(b).

“Fair Share Shortfall” has the meaning assigned to that term in Section 7.2(b).

“Federal Funds Effective Rate” means, for any period, a fluctuating interest rate equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by Administrative Agent from three Federal funds brokers of recognized standing selected by Administrative Agent.

“Fenway” means Fenway Partners Capital Fund II, L.P., a Delaware limited partnership, FPIP, LLC, a Delaware limited liability company and FPIP Trust, LLC, a Delaware limited liability company.

“Financial Performance Covenants” means the covenants of Company set forth in Section 6.6.

“Financial Plan” has the meaning assigned to that term in Section 5.1(k).

“First Priority” means, with respect to any Lien purported to be created in any Collateral pursuant to any Collateral Document, that (i) such Lien has priority over any other Lien on such Collateral (other than Permitted Encumbrances and Liens permitted pursuant to Section 6.2) and (ii) such Lien is the only Lien (other than Permitted Encumbrances and Liens permitted pursuant to Section 6.2) to which such Collateral is subject.

“Fiscal Quarter” means a fiscal quarter of any Fiscal Year.

“Fiscal Year” means the fiscal year of Company and its Subsidiaries ending on the last Saturday of each calendar year or, at the option of Company, December 31 of each calendar year.

“Flood Hazard Property” means any Real Estate Asset subject to a Mortgage in favor of Collateral Agent, for the benefit of the Lenders, and located in an area designated by the Federal Emergency Management Agency as having special flood or mud slide hazards.

“Floor Plan Sales” means sales by Company or any of is Subsidiaries of (i) inventory (other than inventory classified as floor sample inventory) to any Person for a discount not to exceed 2.5% and (ii) with respect to inventory classified as floor sample inventory, for a discount not to exceed 5.0%; provided that the discounts set forth in clauses (i) and (ii) above may be increased by an additional 0.05% (up to a maximum amount of 10.0%) for every 0.50% increase to the Base Rate above 7.50% per annum.

“Foreign Subsidiary” means any Subsidiary of Company organized under the laws of any jurisdiction outside the United States of America (and including any Subsidiary of a Foreign Subsidiary that is organized under the laws of any jurisdiction within the United States of America).

“Fraudulent Transfer Laws” has the meaning assigned to that term in Section 7.2(a).

“Funding and Payment Office” means (i) the office of Administrative Agent located at the address set forth on the Administrative Agent’s signature page hereto, or (ii) such other office of Administrative Agent as may from time to time hereafter be designated as such in a written notice delivered by Administrative Agent to Company and each Lender.

“Funding Default” shall have the meaning assigned to that term in Section 2.23.

“Funding Guarantor” has the meaning assigned to that term in Section 7.2(b).

“Funding Notice” means a notice substantially in the form of Exhibit A-1.

“GAAP” means United States of America generally accepted accounting principles in effect as of the date of determination thereof.

“GE Capital” has the meaning assigned to that term in the preamble hereto.

“Governmental Act” means any act or omission, whether rightful or wrongful, of any present or future de jure or de facto government or governmental authority.

“Governmental Authorization” means any permit, license, authorization, plan, directive, consent order or consent decree of or from any federal, state or local governmental authority, agency or court.

“GSCP” has the meaning assigned to that term in the preamble hereto.

“Guaranteed Obligations” has the meaning assigned to that term in Section 7.1.

“Guarantor” means Holdings and each Subsidiary Guarantor.

“Guaranty” means the Guaranty of each Guarantor set forth in Section 7.

“Hazardous Materials” means any chemical, material or substance, exposure to which is prohibited, limited or regulated by any governmental authority or which may or could pose a hazard to the health and safety of the owners, occupants or any persons in the vicinity of any Facility, or to the indoor or outdoor environment as defined as such by, or regulated as such under, any Environmental Law including Hazardous Substances, Oils, Pollutants or Contaminants as defined in the National Oil and Hazardous Substances Pollution Contingency Plan, 40 C.F.R. § 300.5.

“Hazardous Materials Activity” means any past, current, proposed or threatened activity, event or occurrence involving any Hazardous Materials, including the use, manufacture, possession, storage, holding, presence, existence, location, Release, threatened Release, discharge, placement, generation, transportation, processing, construction, treatment, abatement, removal, remediation, disposal, disposition or handling of any Hazardous Materials, and any corrective action or response action with respect to any of the foregoing.

“Hedge Agreement” means an Interest Rate Agreement or a Currency Agreement designed to hedge against fluctuations in interest rates or currency values, respectively and not for speculative purposes.

“Historical Financial Statements” means (i) the audited financial statements of Pre-Merger Xxxxxxx and its Subsidiaries for the Fiscal Year ended December 28, 2002, consisting of a consolidated balance sheet and the related consolidated statements of operations, changes in stockholders’ deficit and cash flows for such Fiscal Year filed under form 8-K-A on September 16, 2003; and (ii) unaudited financial statements of Pre-Merger Xxxxxxx and its Subsidiaries for the third Fiscal Quarter of 2003, consisting of a consolidated balance sheet and the related consolidated statements of operations, changes in stockholders’ deficit and cash flows for the period ending on such date, all in reasonable detail and certified by the chief financial officer of Company that they fairly present, in all material respects, the financial condition of Company and its Subsidiaries as at the dates indicated and the results of their operations and their cash flows for the periods indicated, subject to changes resulting from audit and normal year-end adjustments and the absence of footnotes, in the case of such unaudited financial statements.

“Holdco Notes” has the meaning assigned to that term in Section 6.1(p).

“Holdings” has the meaning assigned to that term in the preamble hereto; provided that from and after the Holdings Merger Effective Date, all references in this Agreement and the other Credit Documents to “Holdings” shall instead automatically be deemed to refer to and mean Parent, as the surviving corporation of the Holdings Merger.

“Holdings Merger” means the merger of Holdings with and into Parent, with Parent as the surviving corporation.

“Holdings Merger Effective Date” means the date upon which the Holdings Merger becomes effective in accordance with the related merger agreement and Delaware corporate law.

“Increased Amount Date” has the meaning assigned to that term in Section 2.25(a).

“Indebtedness”, as applied to any Person, means, without duplication (a) all indebtedness for borrowed money, (b) that portion of obligations with respect to Capital Leases that is properly classified as a liability on a balance sheet in conformity with GAAP, (c) notes payable and drafts accepted representing extensions of credit whether or not representing obligations for borrowed money, (d) any obligation owed for all or any part of the deferred purchase price of property or services (excluding any such obligations incurred under ERISA or any deferred compensation plan), which purchase price is (i) due more than six months from the date of incurrence of the obligation in respect thereof (other than trade payables which are due more than six months from the date of incurrence in the ordinary course of business) or (ii) evidenced by a note or similar written debt instrument, (e) all indebtedness secured by any Lien on any property or asset owned by that Person regardless of whether the indebtedness secured thereby shall have been assumed by that Person or is nonrecourse to the credit of that Person, (f) the face amount of any letter of credit issued for the account of that Person or as to which that Person is otherwise liable for reimbursement of drawings; (g) all obligations of such Person in respect of any exchange traded or over the counter derivative transaction, including, without limitation, any Interest Rate Agreement and Currency Agreement, whether entered into for hedging or speculative purposes; and (h) Contingent Obligations of such Person in respect of any of the foregoing; provided, in no event shall obligations under any Interest Rate Agreement and any Currency Agreement be deemed “Indebtedness” for any purpose under Section 6.6. The amount of Indebtedness of any Person for purposes of clause (e) shall be deemed to be the lesser of (X) the aggregate unpaid principal amount of such Indebtedness and (Y) the fair market value of the property encumbered thereby as determined by such Person in good faith.

“Indemnified Liabilities” means, collectively, any and all liabilities, obligations, losses, damages (including natural resource damages), penalties, actions, judgments, suits, claims (including Environmental Claims), costs (including the costs of any investigation, study, sampling, testing, abatement, cleanup, removal, remediation or other response action necessary to remove, remediate, clean up or xxxxx any Hazardous Materials Activity), expenses and disbursements of any kind or nature whatsoever (including the reasonable fees and disbursements of counsel for Indemnitees in connection with any investigative, administrative or judicial proceeding commenced or threatened by any Person, whether or not any such Indemnitee shall be designated as a party or a potential party thereto, and any fees or expenses incurred by Indemnitees in enforcing this indemnity), whether direct or indirect and whether based on any federal, state or foreign laws, statutes, rules or regulations (including securities and commercial laws, statutes, rules or regulations and Environmental Laws), on common law or equitable cause or on contract or otherwise, that may be imposed on, incurred by, or asserted against any such Indemnitee, in any manner relating to or arising out of (i) this Agreement or the other Credit Documents or the transactions contemplated hereby or thereby (including Lenders’ agreement to make Credit Extensions or the use or intended use of the proceeds thereof or the use or intended use of any thereof, or any enforcement of any of the Credit Documents (including any sale of, collection from, or other realization upon any of the Collateral or the enforcement of the Guaranty)); (ii) the statements contained in the commitment letter delivered by any Lender to Company with respect thereto; or (iii) any Environmental Claim or any Hazardous Materials Activity relating to or arising from, directly or indirectly, any past or present activity, operation, land ownership, or practice of Company or any of its Subsidiaries.

“Indemnitee” has the meaning assigned to that term in Section 10.3.

“Installment” has the meaning assigned to that term in Section 2.11.

“Installment Date” has the meaning assigned to that term in Section 2.11.

“Intellectual Property” means all patents, trademarks, servicemarks, tradenames, copyrights, mask works, trade secrets, technology, know-how and processes and rights of publicity used in or necessary for the conduct of the business of Company and its Subsidiaries as currently conducted that are material to the condition (financial or otherwise), business or operations of Company and its Subsidiaries, individually or in the aggregate.

“Interest Payment Date” means with respect to (i) any Base Rate Loan, each March 30, June 30, September 30 and December 30 of each year, commencing on the first such date to occur after the Effective Date; and (ii) any Eurodollar Rate Loan, the last day of each Interest Period applicable to such Loan; provided, in the case of each Interest Period of longer than three months “Interest Payment Date” shall also include each date that is three months, or an integral multiple thereof, after the commencement of such Interest Period.

“Interest Period” means, in connection with a Eurodollar Rate Loan, an interest period of one-, two-, three-, six-, nine- or twelve-months, as selected by Company in the applicable Notice, (i) initially, commencing on the Credit Extension Date or the date of any conversion or continuation thereof, as the case may be (permitted pursuant to Section 2.8); and (ii) thereafter, commencing on the day on which the immediately preceding Interest Period expires; provided, (a) if an 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 unless no further Business Day occurs in such month, in which case such Interest Period shall expire on the immediately preceding Business Day; (b) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of a calendar month; (c) no Interest Period with respect to any portion of any Class of Term Loans shall extend beyond the such Class’s Tranche D Term Loan Maturity Date or New Term Loan Maturity Date, respectively; and (d) no Interest Period with respect to any portion of the Revolving Loans shall extend beyond the Revolving Loan Commitment Termination Date.

“Interest Rate Agreement” means any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement or other similar agreement or arrangement to which Company or any of its Subsidiaries is a party and which is designed to hedge against fluctuations in interest rates and not for speculative purposes.

“Interest Rate Determination Date” means, with respect to any Interest Period, the second Business Day prior to the first day of such Interest Period.

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended to the date hereof and from time to time hereafter, and any successor statute.

“Investment” means (a) any direct or indirect purchase or other acquisition by Company or any of its Subsidiaries of, or of a beneficial interest in, any of the Securities of any other Person (including any Subsidiary of Company); (b) any direct or indirect loan, advance (other than advances to employees for moving, entertainment and travel expenses, drawing accounts and similar expenditures in the ordinary course of business) or capital contribution by Company or any of its Subsidiaries to any other Person, including all indebtedness and accounts receivable from that other Person that are not current assets or did not arise from sales to that other Person in the ordinary course of business; (c) Interest Rate Agreements or Currency Agreements not constituting Hedge Agreements; or (d) the purchase or other acquisition (in one transaction or a series of transactions) of all or substantially all of the property and assets or business of another Person or assets constituting a business unit, line of business or division of any other Person. The amount of any Investment shall be the original cost of such Investment plus the cost of all additions thereto, without any adjustments for increases or decreases in value, or write-ups, write-downs or write-offs with respect to such Investment.

“Issuing Bank” means, with respect to any Letter of Credit, the Lender or any of its Subsidiaries or Affiliates, which issues such Letter of Credit.

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

“Lead Arranger” means GSCP, in its capacity as lead arranger.

“Joint Venture” means a joint venture, partnership or other similar arrangement, whether in corporate, partnership or other legal form; provided, in no event shall any Subsidiary of any Person be considered to be a Joint Venture.

“Lender” has the meaning assigned to that term in the preamble hereto; provided, the term “Lenders” shall include Swing Line Lender unless the context otherwise requires.

“Lender Counterparty” means each Lender, Lead Arranger or any of their respective Affiliates counterparty to a Hedge Agreement.

“Letter of Credit” or “Letters of Credit” means Commercial Letters of Credit and Standby Letters of Credit issued or to be issued by Issuing Bank for the account of Company pursuant to Section 2.3.

“Letter of Credit Sublimit” means the lesser of (i) $40,000,000 and (ii) the aggregate amount of the Revolving Loan Commitments then in effect.

“Letter of Credit Usage” means, as at any date of determination, the sum of (i) the maximum aggregate amount which is, or at any time thereafter may become, available for drawing under all Letters of Credit then outstanding, plus (ii) the aggregate amount of all drawings under Letters of Credit honored by Issuing Bank and not theretofore reimbursed by or on behalf of Company.

“Leverage Ratio” means the ratio, as of any date of determination, of (i) Consolidated Total Debt as of such date minus, Cash and Cash Equivalents of Company and its Subsidiaries as of such date not in excess of $30,000,000 to (ii) Consolidated Adjusted EBITDA for the most recent four-Fiscal Quarter period ended on or prior to such date.

“Lien” means any lien, mortgage, pledge, assignment, security interest, charge or encumbrance of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof, and any agreement to give any security interest) and any option, trust or other preferential arrangement having the practical effect of any of the foregoing.

“Loan” means a Tranche D Term Loan, a Revolving Loan, a Swing Line Loan or a New Term Loan.

“Management Agreement” means that certain Management Agreement dated as of the Closing Date by and among Company and THL Managers V, LLC, a Delaware limited liability company, as the same may be amended, restated, supplemented or otherwise modified from time to time in a manner not prohibited by this Agreement.

“Management Fees” means the fees payable pursuant to the Management Agreement.

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

“Margin Stock” has the meaning assigned to that term in Regulation U of the Board of Governors of the Federal Reserve System as in effect from time to time.

“Material Adverse Effect” means (i) a material adverse effect upon the business, operations, properties, assets or condition (financial or otherwise) of Company and its Subsidiaries, taken as a whole, or (ii) the impairment (other than as a result of circumstances covered by clause (i) above) of the ability of Company or any of its Subsidiaries to perform, or Administrative Agent or Lenders to enforce, the Obligations in any material respect.

“Material Subsidiary” means each Subsidiary of Company now existing or hereafter acquired or formed by Company or its Subsidiaries which, on a consolidated basis for such Subsidiary and its Subsidiaries, (i) for the most recent Fiscal Year accounted for more than 5% of the consolidated revenues of Company and its Subsidiaries or (ii) as at the end of such Fiscal Year, was the owner of more than 5% of the consolidated assets of Company and its Subsidiaries.

“Maximum Amount” has the meaning assigned to that term in Section 10.19.

“Maximum Consolidated Capital Expenditures Amount” has the meaning assigned to that term in Section 6.8.

“MD&A” means, with respect to financial statements to which it pertains, management’s discussion and analysis of Company’s and its Subsidiaries’ financial performance for the period covered by such financial statements as compared to projected financial performance for such period.

“Mergers” means the mergers which occurred on December 19, 2003 of (i) THL Company with and into Xxxxxxx Holdco, with Xxxxxxx Holdco being the surviving corporation and (ii) Pre-Merger Xxxxxxx with and into Xxxxxxx Holdco, with Xxxxxxx Holdco being the surviving corporation and changing its name to “Xxxxxxx Company”.

“Monthly Reports” has the meaning assigned to that term in Section 5.1(a).

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

“Mortgage” means (i) a security instrument (whether designated as a deed of trust or a mortgage or by any similar title) executed and delivered by any Credit Party, substantially in the form of Exhibit K annexed hereto or in such other form as may be approved by Collateral Agent in its sole discretion, in each case with such changes thereto as may be recommended by Collateral Agent’s local counsel based on local laws or customary local mortgage or deed of trust practices, or (ii) at Collateral Agent’s option, in the case of an Additional Mortgaged Property (as defined in Section 5.12), an amendment to an existing Mortgage, in form satisfactory to Administrative Agent, adding such Additional Mortgaged Property to the Real Property Assets encumbered by such existing Mortgage, in either case as such security instrument or amendment may be amended, restated, supplemented or otherwise modified from time to time. “Mortgages” means all such instruments, collectively.

“Mortgage Policy” means an Additional Mortgage Policy (as defined in Section 5.12).

“Multiemployer Plan” means any Employee Benefit Plan which is a “multiemployer plan” as defined in Section 3(37) of ERISA.

“National Flood Insurance Program” means the National Flood Insurance Program under the National Flood Insurance Act of 1968 and the Flood Disaster Protection Act of 1973.

“Net Asset Sale Proceeds” means, with respect to any Asset Sale, an amount equal to the difference of (i) Cash payments (including any Cash received by way of deferred payment pursuant to, or by monetization of, a note receivable or otherwise, but only as and when so received) received from such Asset Sale, minus (ii) any bona fide direct costs incurred in connection with such Asset Sale, including (a) income taxes reasonably estimated to be actually payable within two years of the date of such Asset Sale as a result of any gain recognized in connection with such Asset Sale, (b) payment of the outstanding principal amount of, premium or penalty, if any, and interest on any Indebtedness (other than the Loans) that is secured by a Lien on the stock or assets in question and that is repaid as a result of such Asset Sale, (c) the out-of-pocket expenses incurred by such Person in connection with such Asset Sale and (d) any reserve for adjustment in respect of (x) the sale price of such asset or assets established in accordance with GAAP and (y) any liabilities associated with such asset or assets and retained by such Person after such sale or other disposition thereof, including, without limitation, pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction.

“Net Insurance/Condemnation Proceeds” means the difference of (i) any Cash payments or proceeds received by Company or any of its Subsidiaries (a) under any business interruption or casualty insurance policy in respect of a covered loss thereunder or (b) as a result of the taking of any assets of Company or any of its Subsidiaries by any Person pursuant to the power of eminent domain, condemnation or otherwise, or pursuant to a sale of any such assets to a purchaser with such power under threat of such a taking, minus, in each case, (ii)(a) any actual and reasonable documented costs incurred by Company or any of its Subsidiaries in connection with the adjustment or settlement of any claims of Company or such Subsidiary in respect thereof, (b) income taxes reasonably estimated to be actually payable within two years of the date of such event giving rise to such Net Insurance/Condemnation Proceeds as a result of any gain recognized in connection with such event, (c) payment of the outstanding principal amount of, premium or penalty, if any, and interest on any Indebtedness (other than the Loans) that is secured by a Lien on the assets in question and that is repaid as a result of such casualty or condemnation, (d) the out-of-pocket expenses incurred by such Person in connection with such casualty or condemnation and (e) any reserve for adjustment in respect of (x) the sale price of such asset or assets established in accordance with GAAP and (y) any liabilities associated with such asset or assets and retained by such Person after such sale or other disposition thereof, including, without limitation, liabilities related to environmental matters or against any indemnification obligations associated with such transaction, provided, however, that the receipt by Company and its Subsidiaries from the Closing Date through the date of determination of up to an aggregate of $10,000,000 in Net Insurance/Condemnation Proceeds in respect of business interruption insurance described in clause (a) above shall not be “Net Insurance/Condemnation Proceeds” for purposes of Section 2.13(a).

“New Revolving Loan” has the meaning assigned to that term in Section 2.25(b).

“New Revolving Loan Commitments” has the meaning assigned to that term in Section 2.25(a).

“New Revolving Loan Lender” has the meaning assigned to that term in Section 2.25(a).

“New Term Loan Commitments” has the meaning assigned to that term in Section 2.25(a).

“New Term Loan Exposure” means, with respect to any Lender as of any date of determination, the outstanding principal amount of the New Term Loans of such Lender.

“New Term Loan Lender” has the meaning assigned to that term in Section 2.25(a).

“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 Loan Note” means a promissory note substantially in the form of Exhibit B-2, as it may be amended, restated, supplemented or otherwise modified.

“New Term Loans” has the meaning assigned to that term in Section 2.25(c).

“Non-Guarantor Subsidiary” means (i) each of the Subsidiaries identified as a Non-Guarantor Subsidiary on Schedule 4.1 annexed hereto and (ii) each Person that becomes a Subsidiary of Company after the date hereof and in accordance with Section 5.9, and is not required to become a Subsidiary Guarantor; provided, however, that any such Domestic Subsidiary shall cease to be a Non-Guarantor Subsidiary if (x) it is or at any time becomes a Material Subsidiary or (y) it otherwise ceases to be a Non-Guarantor Subsidiary pursuant to Section 5.9. Notwithstanding the foregoing, each of Co-Op Subsidiary and any Captive Insurance Subsidiary shall always be a Non-Guarantor Subsidiary.

“Nonpublic Information” means information that has not been disseminated in a manner making it available to investors generally, within the meaning of Regulation FD under the Securities Act.

“Note” means a Tranche D Term Loan Note, a New Term Loan Note, a Revolving Note or a Swing Line Note.

“Notice” means a Funding Notice, a Request for Issuance or a Conversion/Continuation Notice.

“Obligations” means, with respect to any Credit Party, obligations of such Credit Party, whether now existing or hereafter made, incurred or created, whether absolute or contingent, liquidated or unliquidated, whether due or not due, and however arising under or in connection with this Agreement and any other Credit Documents, including those arising under successive borrowing transactions hereunder which shall either continue the Obligations of such Credit Party from time to time or renew them after they have been satisfied and including interest which, but for the filing of a petition in bankruptcy with respect to such Credit Party, would have accrued on any Obligation, whether or not a claim is allowed against such Credit Party for such interest in the related bankruptcy proceeding.

“Offer” has the meaning assigned to that term in Section 2.12.

“Offer Loans” has the meaning assigned to that term in Section 2.12.

“Operating Lease” means, as applied to any Person, any lease (including leases that may be terminated by the lessee at any time but excluding any such lease under which that Person is the lessor) of any property (whether real, personal or mixed) that is not a Capital Lease.

“Parent” means Xxxxxxx Company (formerly known as THL Bedding Holding Company), a Delaware corporation.

“Parent IPO” means an initial public offering of the Securities of Parent.

“Parent Notes” means those certain 10% Senior Discount Notes due 2014 issued by Parent pursuant to that certain Indenture dated as of December 15, 2004 by and between Parent and Xxxxx Fargo Bank, National Association, as Trustee, as such notes and Indenture may be amended, restated, supplemented or otherwise modified from time to time.

“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.

“Pension Plan” means any Employee Benefit Plan, other than a Multiemployer Plan, which is subject to Title IV of ERISA.

“Permitted Acquisition” means an acquisition of Securities or assets made pursuant to Section 6.3(e).

“Permitted Cure Security” means Securities of Holdings (or of Parent, the proceeds of which have been contributed to Holdings) having no mandatory redemption, repurchase, repayment or similar requirements prior to the date which occurs six (6) months after the Tranche D Term Loan Maturity Date and upon which all dividends or distributions, at the election of Holdings (or Parent, as the case may be), may be payable in additional shares of such Security.

“Permitted Encumbrances” means the following types of Liens (excluding any such Lien imposed by ERISA):

(a) Liens for taxes, assessments or governmental charges or claims the payment of which is not, at the time, required by Section 5.3;

(b) statutory Liens of landlords, statutory Liens of banks and rights of set-off, statutory Liens of carriers, warehousemen, mechanics, repairmen, workmen and materialmen, and other Liens imposed by law, in each case incurred in the ordinary course of business which are not, at the time, required to be paid by Section 5.3;

(c) Liens incurred or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance, old age pensions and other types of social security, or to secure the performance of tenders, statutory obligations, surety, stay, customs and appeal bonds, bids, leases, government contracts, insurance premiums, deductibles or co-insured amounts, trade contracts, performance and return-of-money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money);

(d) any attachment or judgment Lien not constituting an Event of Default under Section 8.1(h);

(e) leases, subleases, licenses or sublicenses granted to third parties and not interfering in any material respect with the ordinary conduct of the business of Company or any of its Subsidiaries;

(f) easements, rights-of-way, restrictions, encroachments, protrusions, and other minor defects or irregularities in title, in each case which do not and will not interfere in any material respect with the ordinary conduct of the business of Company or any of its Subsidiaries;

(g) any (i) interest or title of a lessor, sublessor, licensor or sublicensor, (ii) restriction, Lien or encumbrance that the interest or title of such lessor or sublessor, licensor, sublicensor may be subject to, or (iii) subordination of the interest of the lessee, sublessee, licensee or sublicensee under such lease or license to any restriction, Lien or encumbrance referred to in the preceding clause (ii);

(h) Liens arising from filing UCC financing statements relating to operating leases and in connection with consignment arrangements;

(i) 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;

(j) any zoning or similar law or right reserved to or vested in any governmental office or agency to control or regulate the use of any real property;

(k) Liens securing obligations (other than obligations representing Indebtedness for borrowed money) under operating, reciprocal easement or similar agreements entered into in the ordinary course of business of Company and its Subsidiaries; and

(l) licenses of patents, trademarks and other intellectual property rights granted by Company or any of its Subsidiaries in the ordinary course of business and not interfering in any material respect with the ordinary conduct of the business of Company or such Subsidiary.

“Permitted Liens” means each of the Liens permitted pursuant to Section 6.2.

“Permitted Refinancing Indebtedness” means any Indebtedness of Holdings or any Subsidiary of Holdings issued in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund (collectively, to “Refinance”) any Indebtedness of such Person; provided that (a) the principal amount (or accreted value, if applicable) thereof does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness so modified, refinanced, refunded, renewed, replaced, defeased or extended except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such modification, refinancing, refunding, renewal, replacement, defeasance or extension and by an amount equal to any existing commitments unutilized thereunder or as otherwise permitted pursuant to Section 6.1, (b) such modification, refinancing, refunding, renewal or extension providing for a final maturity date of such Indebtedness equal to or later than the final maturity date of, and has a weighted average life equal to or greater than the weighted average life of, the Indebtedness being modified, refinanced, refunded, renewed or extended, (c) if the Indebtedness being modified, refinanced, refunded, renewed, replaced, defeased or extended is subordinated in right of payment to the Obligations, such modification, refinancing, refunding, renewal, replacement or extension is subordinated in right of payment to the Obligations on terms not materially less favorable to the Lenders as those contained in the documentation governing the Indebtedness being modified, refinanced, refunded, renewed, replaced, defeased or extended, taken as a whole, (d) the terms, conditions (including, if applicable, as to collateral) and interest rates of any such modified, refinanced, refunded, renewed, defeased, replaced or extended Indebtedness are not materially less favorable to the Credit Parties or the Lenders than the terms and conditions of the Indebtedness being modified, refinanced, refunded, renewed, defeased, replaced or extended, taken as a whole, (e) such modification, refinancing, refunding, renewal, replacement or extension is incurred only by the Person who is the obligor on the Indebtedness being modified, refinanced, refunded, renewed, defeased, replaced or extended; provided, that such Indebtedness may include any new or additional obligors so long as (i) such new or additional obligors are Credit Parties or simultaneously with the incurrence of such Permitted Refinancing Indebtedness become Credit Parties pursuant to Section 5.9, and (ii) with respect to Indebtedness being refinanced with Permitted Refinancing Indebtedness that is Subordinated Indebtedness, the obligations of such new or additional obligors shall be subordinated in right of payment to the Obligations on terms not materially less favorable to the Lenders as those contained in the Senior Subordinated Note Indenture, taken as a whole, and (f) at the time thereof and after giving effect thereto, no Default or Event of Default shall have occurred and be continuing.

“Permitted Sale/Lease-Back Transaction” has the meaning assigned to that term in Section 6.9.

“Permitted Subordinated Indebtedness” means any unsecured Indebtedness of Company that (a) is expressly subordinated to the prior payment in full in cash of the Obligations on terms and conditions not materially less favorable to the Lenders than the terms and conditions of the Senior Subordinated Notes or any Permitted Refinancing Indebtedness pertaining thereto, taken as a whole, (b) will not mature prior to the date that is six (6) months after the Tranche D Term Loan Maturity Date, (c) has no scheduled amortization or payments of principal prior to the date that is six (6) months after the Tranche D Term Loan Maturity Date, and (d) has covenant, default and remedy provisions not materially more restrictive, or mandatory prepayment, repurchase, defeasance or redemption provisions no more onerous or expansive in scope, than those contained in the Senior Subordinated Notes Indenture or any Permitted Refinancing Indebtedness pertaining thereto, taken as a whole; provided any such Indebtedness shall constitute Permitted Subordinated Indebtedness only if (i) both before and after giving effect to the issuance or incurrence thereof, no Default or Event of Default shall have occurred and be continuing, and (ii) the chief financial officer of Company shall have delivered an officer’s certificate demonstrating compliance with the covenants set forth in Section 6.6 on a Pro Forma Basis as of the most recently ended Fiscal Quarter in form and substance reasonably satisfactory to the Administrative Agent, it being understood that any capitalized or paid-in-kind interest or accreted principal on such Indebtedness shall not constitute an issuance or incurrence of Indebtedness for purposes of this proviso.

“Person” means and includes natural persons, corporations, limited partnerships, general partnerships, limited liability companies, limited liability partnerships, joint stock companies, Joint Ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts or other organizations, whether or not legal entities, and governments (whether federal, state or local, domestic or foreign, and including political subdivisions thereof) and agencies or other administrative or regulatory bodies thereof.

“Personal Property Collateral Documents” means such documents, certificates and opinions required in order to create in favor of Collateral Agent, for the benefit of Secured Parties, a valid, perfected First Priority security interest in the personal property Collateral, which include:

(i) evidence reasonably satisfactory to Collateral Agent of the compliance by each Credit Party of its obligations under the Pledge and Security Agreement and the other Collateral Documents (including, without limitation, their obligations to execute and deliver UCC financing statements, originals of securities, instruments, chattel paper and intercompany notes evidencing Indebtedness permitted to be incurred pursuant to Section 6.1);

(ii) a completed Collateral Questionnaire executed by an Authorized Officer of the relevant Person, together with all attachments contemplated thereby, including (A) the results of a recent search of all effective UCC financing statements (or equivalent filings) made with respect to any personal or mixed property of the relevant Person in the jurisdictions specified in the Collateral Questionnaire, together with copies of all such filings disclosed by such search, and (B) UCC termination statements (or similar documents) duly executed by all applicable Persons for filing in all applicable jurisdictions as may be necessary to terminate any effective UCC financing statements (or equivalent filings) disclosed in such search (other than any such financing statements in respect of Permitted Liens); and

(iii) customary opinions of counsel (which counsel shall be reasonably satisfactory to Collateral Agent) with respect to the creation and perfection of the security interests in favor of Collateral Agent in such Collateral and such other matters governed by the laws of each jurisdiction in which the relevant Person is located as Collateral Agent may reasonably request, in each case in form and substance reasonably satisfactory to Collateral Agent.

“PF Asset Sale” means any Asset Sale pertaining to (x) an entire line of business of Company or its Subsidiaries or (y) all of the equity Securities or all or substantially all of the assets of any Subsidiary of Company.

“Platform” as defined in Section 5.1(o).

“Pledge and Security Agreement” means the Pledge and Security Agreement entered into by and among Company, Guarantors and Collateral Agent dated as of the Closing Date, substantially in the form of Exhibit J annexed hereto, as such Pledge and Security Agreement may hereafter be amended, restated, supplemented or otherwise modified from time to time.

“Pledged Collateral” means the “Pledged Collateral” as defined in the Pledge and Security Agreement.

“Pre-Merger Xxxxxxx” means Xxxxxxx Company, a Delaware corporation, which existed prior to the Mergers.

“Prime Rate” means the rate that the Administrative Agent announces from time to time as its prime lending rate, as in effect from time to time. The Prime Rate is a reference rate and does not necessarily represent the lowest or best rate actually charged to any customer. The Administrative Agent or any other Lender may make commercial loans or other loans at rates of interest at, above or below the Prime Rate.

“Pro Forma Basis” shall mean for purposes of this Agreement (but not for determining the Applicable Commitment Fee Percentage or the Applicable Margin) as to any Person, for any Permitted Acquisition, PF Asset Sale or incurrence of Indebtedness which occurs subsequent to the commencement of a period for which the financial effect of such events is being calculated (each, a “Referent Event”), and giving effect to the Referent Event for which such calculation is being made, such calculation as will give pro forma effect to such events as if same had occurred at the beginning of such period of calculation; and

(a) for purposes of the foregoing calculation, each Referent Event shall be assumed to have occurred on the first day of the four consecutive Fiscal Quarter period last ended on or before the occurrence of the Referent Event for which such pro forma effect is being determined (the “Reference Period”); and

(b) (x) all Indebtedness (including Indebtedness incurred or assumed in connection with the Referent Event, whether incurred under this Agreement or otherwise, but including, with respect to revolving Indebtedness the average amount of such Indebtedness outstanding during the Reference Period) incurred or permanently repaid in connection with the Referent Event shall be deemed to have been incurred or repaid at the beginning of such Reference Period and (y) interest expense of such Person attributable to interest on any Indebtedness, for which pro forma effect is being given as provided in preceding clause (x), bearing floating interest rates shall be computed on a pro forma basis as if the rates which would have been in effect during the period for which pro forma effect is being given had been actually in effect during such periods.

Calculations made pursuant to the definition of Pro Forma Basis shall be determined in good faith by an Authorized Officer of Company and may include adjustments, in the reasonable determination of Company as set forth in an officer’s certificate, to (i) reflect operating expense reductions reasonably expected to result from any acquisition, merger or PF Asset Sale to the extent (x) determined on a basis consistent with Article 11 of Regulation S-X promulgated under the Securities Act or (y) reasonably acceptable to the Administrative Agent and the Syndication Agent and (ii) eliminate the effect of any extraordinary accounting event with respect to any acquired person or assets on Consolidated Net Income.

“Pro Rata Share” means (i) with respect to all payments, computations and other matters relating to the Tranche D Term Loan of any Lender, the percentage obtained by dividing (a) the Tranche D Term Loan Exposure of such Lender by (b) the aggregate Tranche D Term Loan Exposure of all Lenders, (ii) with respect to all payments, computations and other matters relating to the Revolving Loan Commitment or Revolving Loans of any Lender or any Letters of Credit issued or participations therein purchased by any Lender or any participations in any Swing Line Loans purchased by any Lender, the percentage obtained by dividing (a) the Revolving Credit Exposure of that Lender by (b) the aggregate Revolving Credit Exposure of all Lenders, (iii) with respect to all payments, computations, and other matters relating to New Term Loan Commitments or New Term Loans of a particular Series, the percentage obtained by dividing (a) the New Term Loan Exposure of that Lender with respect to that Series by (b) the aggregate New Term Loan Exposure of all Lenders with respect to that Series, and (iv) for all other purposes with respect to each Lender, the percentage obtained by dividing (a) the sum of the Tranche D Term Loan Exposure of that Lender, plus, the Revolving Credit Exposure of that Lender, plus, the New Term Loan Exposure of that Lender by (b) the sum of the aggregate Tranche D Term Loan Exposure of all Lenders, plus the aggregate Revolving Credit Exposure of all Lenders, plus the aggregate New Term Loan Exposure of all Lenders in any such case as the applicable percentage may be adjusted by assignments permitted pursuant to Section 10.6. The initial Pro Rata Share of each Lender for purposes of each of clauses (i) and (ii) of the preceding sentence is set forth opposite the name of that Lender in Schedule 1.1(b) annexed hereto.

“Projections” has the meaning assigned to that term in Section 4.24.

“Proposed Reinvestment Proceeds” has the meaning assigned to that term in Section 2.13(a).

“RCRA” means the Resource Conservation and Recovery Act and any state equivalents, as any of the same may be amended from time to time, and any successors thereto.

“Real Property Asset” means, at any time of determination, any interest then owned in fee simple by any Credit Party in any real property.

“Refinanced Term Loan” has the meaning assigned to that term in Section 10.5(f).

“Refunded Swing Line Loan” has the meaning assigned to that term in Section 2.2(e).

“Refunding Notice” has the meaning assigned to that term in Section 2.2(e).

“Register” has the meaning assigned to that term in Section 2.6.

“Regulation D” means Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time.

“Reimbursement Date” has the meaning assigned to that term in Section 2.3(d).

“Related Agreements” means, collectively, the Stock Purchase Agreement, the Stockholders Agreement, the Management Agreement, the Senior Subordinated Note Documents, the Tender Offer Documents, the Senior Unsecured Term Loan Agreement, the indenture governing the Parent Notes, and all documents relating to any of the foregoing.

“Release” means any release, spill, emission, leaking, pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching or migration of any Hazardous Material into the indoor or outdoor environment (including the abandonment or disposal of any barrels, containers or other closed receptacles containing any Hazardous Material), including the movement of any Hazardous Material through the air, soil, surface water or groundwater.

“Replacement Term Loans” has the meaning assigned to that term in Section 10.5(f).

“Request for Issuance” means a notice in the form of Exhibit A-3.

“Requisite Class Lenders” means, at any time of determination (i) for the Class of Lenders having Tranche D Term Loan Exposure, Lenders having or holding more than 50% of the sum of the aggregate Tranche D Term Loan Exposure of all Lenders, (ii) for the Class of Lenders having Revolving Credit Exposure, Lenders having or holding more than 50% of the sum of the aggregate Revolving Credit Exposure of all Lenders, and (iii) for each class of Lender having New Term Loan Exposure, Lenders having or holding more than 50% of the aggregate New Term Loan Exposure of that class.

“Requisite Lenders” means Lenders having or holding more than 50% of the sum of (i) the aggregate Tranche D Term Loan Exposure of all Lenders, plus (ii) the aggregate Revolving Credit Exposure of all Lenders, plus (iii) the aggregate New Term Loan Exposure of all Lenders.

“Responsible Officer” means, as to any Person, any of the chairman of the board, the president, the chief executive officer, the chief financial officer, any senior or executive vice president, the general counsel, the treasurer or assistant treasurer, secretary or assistant secretary, the principal financial officer or principal accounting officer, of such Person.

“Restricted Junior Payment” means (i) any dividend or other distribution, direct or indirect, on account of any equity Securities of Holdings or its Subsidiaries now or hereafter outstanding, except a dividend or other distribution payable solely in shares of equity Securities, (ii) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any equity Securities of Holdings or its Subsidiaries now or hereafter outstanding, (iii) any payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire equity Securities of Holdings or its Subsidiaries now or hereafter outstanding, and (iv) any payment or prepayment of principal of, premium, if any, or interest on, or redemption, purchase, repurchase, retirement, defeasance (including in-substance or legal defeasance), sinking fund or similar payment with respect to, any Subordinated Indebtedness.

“Retail Business” means, the assets owned by, or the equity Securities of collectively, SC Holdings, Inc., a Delaware corporation and Gallery Corp., a Delaware corporation and each of their respective Subsidiaries.

“Revolving Credit Exposure” means, with respect to any Lender as of any date of determination (i) prior to the termination of the Revolving Loan Commitments, such Lender’s Revolving Loan Commitment; and (ii) after the termination of the Revolving Loan Commitments, the sum of (a) the aggregate outstanding principal amount of the Revolving Loans of such Lender, plus (b) in the case of Issuing Bank, the aggregate Letter of Credit Usage in respect of all Letters of Credit (net of any participations purchased by Lenders in such Letters of Credit or any unreimbursed drawing thereunder), plus (c) the aggregate amount of all participations purchased by such Lender in any outstanding Letters of Credit or any unreimbursed drawing under any Letter of Credit, plus (d) in the case of Swing Line Lender, the aggregate outstanding principal amount of all Swing Line Loans (net of any participation therein purchased by other Lenders), plus (e) the aggregate amount of all participations purchased by such Lender in any outstanding Swing Line Loans.

“Revolving Loan” means a Loan made by a Lender to Company pursuant to its Revolving Loan Commitment.

“Revolving Loan Commitment” means the commitment of a Lender to make Revolving Loans to Company pursuant to Section 2.2(a)(i) and/or Section 2.25 and “Revolving Loan Commitments” means such commitments of all Lenders in the aggregate. The amount of each Lender’s Revolving Loan Commitment is initially as set forth opposite the name of that Lender in Schedule 1.1(b) annexed hereto, and may be adjusted or reduced pursuant to the terms and conditions hereof. As of the Effective Date, the aggregate amount of the Revolving Loan Commitments shall be $75,000,000.

“Revolving Loan Commitment Period” means the period from the Effective Date to but excluding the Revolving Loan Commitment Termination Date.

“Revolving Loan Commitment Termination Date” means the earliest to occur of (i) the sixth anniversary of the Closing Date, (ii) the date the Revolving Loan Commitments are permanently reduced to zero pursuant to Section 2.12(b), Section 2.13 or Section 2.14, and (iii) the date of the termination of the Revolving Loan Commitments pursuant to Section 8.1.

“Revolving Loan Lender” means a Lender having a Revolving Loan Commitment.

“Revolving Note” means a promissory note in the form of Exhibit B-3, as it may be amended, restated, supplemented or otherwise modified from time to time.

“Secured Parties” has the meaning assigned to that term in the Pledge and Security Agreement.

“Secured Obligations” has the meaning assigned to that term in the Pledge and Security Agreement.

“Securities” means, with respect to any Person, any stock, shares, partnership or other similar interests, voting trust certificates, certificates of interest or participation in any profit-sharing agreement or arrangement, options, warrants, bonds, debentures, notes, or other evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known as “securities” or any certificates of interest, shares or participations in temporary or interim certificates for the purchase or acquisition of, or any right to subscribe to, purchase or acquire, any of the foregoing of such Person.

“Securities Act” means the Securities Act of 1933, as amended from time to time, and any successor statute.

“Sellers” means collectively, Xxxxxxx Holdings, LLC, a Delaware limited liability company, Fenway, the Management Investors and the ESOP.

“Senior Unsecured Term Loan Agreement” means the Senior Unsecured Term Loan and Guaranty Agreement dated as of the Closing Date among Company, Holdings, GSCP, as sole bookrunner, joint lead arranger and co-syndication agent, UBSS as joint lead arranger and co-syndication agent, DBNY, as administrative agent and the other agents and lenders party thereto as it may be amended, modified, renewed, refunded, replaced or refinanced or otherwise restructured in whole or in part from time to time whether by the same or any other agent, lender or group of lenders.

“Senior Unsecured Term Loans” means the Senior Unsecured Term Loan and Guaranty Agreement of Company due 2012 in an aggregate principal amount of $140,000,000 made on the Closing Date under the Senior Unsecured Term Loan Agreement.

“Senior Subordinated Note Documents” means the Senior Subordinated Note Indenture, the Senior Subordinated Notes and each other document executed in connection with the Senior Subordinated Notes, as each such document may be amended, restated, supplemented or otherwise modified from time to time to the extent permitted under Section 6.11.

“Senior Subordinated Note Indenture” means the indenture dated December 19, 2003 pursuant to which the Senior Subordinated Notes are issued, as such indenture may thereafter be amended, restated, supplemented or otherwise modified from time to time to the extent permitted under Section 6.11 or replaced pursuant to a refinancing permitted under Section 6.1.

“Senior Subordinated Notes” means the Senior Subordinated Notes of Company in the aggregate principal amount not to exceed $200,000,000 and issued pursuant to the Senior Subordinated Note Indenture, with such changes thereto when executed as are permitted under Section 6.11, which principal amount may be increased by amounts permitted to be incurred pursuant to Section 6.1 and as such notes may thereafter be amended, restated, supplemented or otherwise modified from time to time to the extent permitted under Section 6.11 or refinanced to the extent permitted under Section 6.1.

“Series” has the meaning assigned to that term in Section 2.25.

“Xxxxxxx Holdco” means Xxxxxxx Holdings, Inc., a Delaware corporation, before giving effect to the Mergers.

“Solvency Certificate” means a certificate in the form of Exhibit G.

“Solvent” means, with respect to any Person, that as of the date of determination both (i) (a) the then fair saleable value of the property of such Person is (1) greater than the total amount of liabilities (including contingent liabilities) of such Person and (2) not less than the amount that will be required to pay the probable liabilities on such Person’s then existing debts as they become absolute and matured considering all financing alternatives and potential asset sales reasonably available to such Person; (b) such Person’s capital is not unreasonably small in relation to its business or any contemplated or undertaken transaction; and (c) such Person does not intend to incur, or believe (nor should it reasonably believe) that it will incur, debts beyond its ability to pay such debts as they become due; 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.

“Sponsor” means Xxxxxx X. Xxx Partners, L.P. and its Affiliates.

“Standby Letter of Credit” means any standby letter of credit or similar instrument issued for the purpose of supporting (i) workers’ compensation liabilities of Company or any of its Subsidiaries, (ii) the obligations of third party insurers of Company or any of its Subsidiaries arising by virtue of the laws of any jurisdiction requiring third party insurers, (iii) performance, payment, deposit or surety obligations of Company or any of its Subsidiaries, in any case if required by law or governmental rule or regulation or in accordance with custom and practice in the industry, and (iv) such other obligations of Company and its Subsidiaries as may be reasonably acceptable to Administrative Agent.

“Stock Purchase Agreement” means that certain Stock Purchase Agreement dated as of November 17, 2003, by and among Xxxxxxx Holdco, THL Company, and the Sellers.

“Subordinated Indebtedness” means (i) the Indebtedness of Company under the Senior Subordinated Note Documents; and (ii) any other Permitted Subordinated Indebtedness and, in each case, any Permitted Refinancing Indebtedness with respect thereto.

“Subsidiary” means, with respect to any Person, any corporation, partnership, limited liability company, association, joint venture or other business entity of which more than 50% of the total voting power of shares of stock or other ownership interests entitled (without regard to the occurrence of any contingency) to vote in the election of the Person or Persons (whether directors, managers, trustees or other Persons performing similar functions) having the power to direct or cause the direction of the management and policies thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof.

“Subsidiary Guarantor” means any Domestic Subsidiary of Company that is a party hereto as of the Effective Date and is not identified as a Non-Guarantor Subsidiary on Schedule 4.1 or becomes a party to the Guaranty at any time after the Effective Date pursuant to Section 5.9.

“Supplemental Collateral Agent” has the meaning assigned to that term in Section 9.8(c).

“Swing Line Lender” means Deutsche Bank A.G., Cayman Islands branch, in its capacity as Swing Line Lender hereunder, together with its permitted successors and assigns in such capacity.

“Swing Line Loan” means a Loan made by Swing Line Lender to Company pursuant to Section 2.2(a)(ii).

“Swing Line Loan Commitment” means the commitment of Swing Line Lender to make Swing Line Loans to Company pursuant to Section 2.2(a)(ii).

“Swing Line Note” means a promissory note substantially in the form of Exhibit B-4, as it may be amended, restated, supplemented or otherwise modified from time to time.

“Swing Line Sublimit” means the lesser of (i) $10,000,000, and (ii) the aggregate amount of Revolving Loan Commitments then in effect.

“Syndication Agent” means GSCP in its capacity as syndication agent.

“Tax” means any present or future tax, levy, impost, duty, charge, fee, deduction or withholding of any nature and whatever called, by a governmental authority, on whomsoever and wherever imposed, levied, collected, withheld or assessed; provided, “Tax on the overall net income” of a Person shall be construed as a reference to a tax imposed by the jurisdiction in which that Person is organized or in which that Person’s principal office (and/or, in the case of a Lender, its lending office) is located or in which that Person (and/or, in the case of a Lender, its lending office) is deemed to be doing business, on all or part of the net income, profits or gains (whether worldwide, or only insofar as such income, profits or gains are considered to arise in or to relate to a particular jurisdiction, or otherwise, including, franchise taxes or taxes substantially similar to franchise taxes) of that Person (and/or, in the case of a Lender, its lending office).

“Tender Offer” means the offer by Company to purchase at least 50% of the outstanding Existing Notes pursuant to the Tender Offer Documents.

“Tender Offer Documents” means the Offer to Purchase and Consent Solicitation Statement and the Consent of Company dated November 18, 2003.

“Term Loan” means a Tranche D Term Loan or a New Term Loan.

“Termination Date” means the date upon which all of the Commitments of the Lenders hereunder have terminated, any Loan or any other non-contingent Obligation which is accrued has been paid or satisfied in full in Cash and no Letters of Credit are then outstanding.

“THL Company” has the meaning assigned to that term in the recitals hereto, a predecessor to the Company.

“Title Company” means, collectively, First American Title Insurance Company and/or one or more other title insurance companies reasonably satisfactory to the Agents.

“Total Leverage Ratio” means the ratio, as of any date of determination of (i) Consolidated Total Debt as of such date plus (A) any outstanding Indebtedness incurred by Holdings pursuant to Section 6.1(p) minus (B) Cash and Cash Equivalents of Company and its Subsidiaries as of such date not in excess of $30,000,000 to (ii) Consolidated Adjusted EBITDA for the most recent four-Fiscal Quarter period ended on or prior to such date.

“Total Utilization of Revolving Loan Commitments” means, as at any date of determination, the sum of (i) the aggregate principal amount of all outstanding Revolving Loans (other than Revolving Loans made for the purpose of repaying any Refunded Swing Line Loans or reimbursing Issuing Bank for any amount drawn under any Letter of Credit but not yet so applied), plus (ii) the aggregate principal amount of all outstanding Swing Line Loans, plus (iii) the Letter of Credit Usage.

“Tranche D Term Loan” means a Loan made on the Effective Date by a Lender to Company pursuant to Section 2.1.

“Tranche D Term Loan Amount” means the amount of the Tranche D Term Loan to be lent by a Lender to Company. The Tranche D Term Loan Amount of each Lender is initially as set forth opposite the name of that Lender in Schedule 1.1(b) annexed hereto, and may be adjusted or reduced pursuant to the terms and conditions hereof. As of the Effective Date, the aggregate amount of the Tranche D Term Loan Amounts shall be $492 million.

“Tranche D Term Loan Exposure” means, with respect to any Lender, as of any date of determination, the outstanding principal amount of the Tranche D Term Loans of such Lender; provided, at any time prior to the making of the Tranche D Term Loans, the Tranche D Term Loan Exposure of any Lender shall be equal to such Lender’s Tranche D Term Loan Amount.

“Tranche D Term Loan Maturity Date” means the earlier of (i) December 19, 2011, and (ii) the date that all Tranche D Term Loans shall become due and payable in full hereunder, whether by acceleration or otherwise.

“Tranche D Term Loan Note” means a promissory note substantially in the form of Exhibit B-1, as it may be amended, restated, supplemented or otherwise modified from time to time.

“Transaction Costs” means the fees, costs and expenses payable by Company on or before the Closing Date in connection with the transactions contemplated by the Credit Documents and the Related Agreements.

“Trustee” means State Street Bank & Trust Company as trustee of the ESOP.

“Type” means (i) with respect to either Term Loans or Revolving Loans, a Base Rate Loan or a Eurodollar Rate Loan, and (ii) with respect to Swing Line Loans, a Base Rate Loan.

“UBSS” has the meaning assigned to that term in the preamble hereto.

“UCC” means the Uniform Commercial Code (or any similar or equivalent legislation) as in effect in any applicable jurisdiction.

“Unfunded Benefit Liabilities” has the meaning assigned to that term in Section 4.19.

“US Lender” has the meaning assigned to that term in Section 2.20(d).

1.2 Accounting Terms

Except as otherwise expressly provided herein, all accounting terms not otherwise defined herein shall have the meanings assigned to them in conformity with GAAP. Financial statements and other information required to be delivered by Company to Administrative Agent pursuant to Section 5.1(a), 5.1(b) and 5.1(c) shall be prepared in accordance with GAAP as in effect at the time of such preparation (and delivered together with the reconciliation statements provided for in Section 5.1(e), if applicable); provided, that all calculations in connection with financial definitions and financial covenants set forth in Section 6.6 shall utilize accounting principles and policies in conformity with those used to prepare the Historical Financial Statements; provided, further, if Company notifies the Administrative Agent that Company wishes to amend any covenant in Section 2.13 or Section 6 or any related definition to eliminate the effect of any change in GAAP occurring after the date of this Agreement on the operation of such covenant (or if Administrative Agent notifies Company that the Requisite Lenders wish to amend Section 2.13, Section 6 or any related definition for such purpose), then (i) Company and Administrative Agent shall negotiate in good faith to agree upon an appropriate amendment to such covenant and (ii) Company’s compliance with such covenant shall be determined on the basis of GAAP in effect immediately before the relevant change in GAAP became effective until such covenant is amended in a manner satisfactory to Company and Requisite Lenders.

1.3 Interpretation, etc.

Any of the terms defined herein may, unless the context otherwise requires, be used in the singular or the plural, depending on the reference. References herein to any Section, Exhibit or Schedule shall be to a Section, an Exhibit and a Schedule, respectively, hereof unless otherwise specifically provided. The use herein of the word “include” or “including”, when following any general statement, term or matter, shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not nonlimiting language (such as “without limitation” or “but not limited to” or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that fall within the broadest possible scope of such general statement, term or matter. Furthermore, when the performance of any covenant, duty or other non-monetary obligation is stated to be required on a day which is not a Business Day, the date of such performance shall extend to the immediately succeeding Business Day. Except as otherwise set forth in this Agreement, whenever any payment to be made hereunder shall be stated to be due on a day that is not a Business Day, such payment shall be made on the next succeeding Business Day and such extension of time shall be included in the computation of the payment of interest hereunder or of the commitment fees hereunder, as the case may be. For purposes of this Agreement and the other Credit Documents, Letters of Credit which have been cash collateralized or otherwise backstopped shall not be deemed to be outstanding Letters of Credit.

SECTION 2. CREDIT EXTENSIONS

2.1 Tranche D Term Loans

(a) Subject to and upon the terms and conditions herein set forth, each of the Continuing Lenders agrees that the Existing Tranche C Term Loans made by such Continuing Lender under the Existing Credit Agreement shall remain outstanding on and after the Effective Date as “Tranche D Term Loans” made pursuant to this Agreement in the same pro rata amount of such Continuing Lenders pro rata share of the Existing Tranche C Term Loans and such Existing Tranche C Term Loans shall on and after the Effective Date have all of the rights and benefits of Tranche D Term Loans as set forth in this Agreement and the other Credit Documents.

(b) Subject to the terms and conditions hereof, each Lender (other than a Continuing Lender) severally agrees to lend to Company on the Effective Date, a Tranche D Term Loan in an amount equal to such Lender’s Tranche D Term Loan Amount to be used for the purposes identified in Section 2.5.

(c) Any amount borrowed under this Section 2.1, and subsequently repaid or prepaid, may not be reborrowed.

2.2 Revolving Loans and Swing Line Loans

(a) During the Revolving Loan Commitment Period, subject to the terms and conditions hereof, (i) each Lender severally agrees to make Revolving Loans to Company in the aggregate amount up to but not exceeding such Lender’s Revolving Loan Commitment, and (ii) Swing Line Lender hereby agrees to make Swing Line Loans to Company in an aggregate amount up to but not exceeding the Swing Line Sublimit, in each case to be used for the purposes identified in Section 2.5. Amounts borrowed pursuant to this Section 2.2 may be repaid and reborrowed during the Revolving Loan Commitment Period. Each Lender’s Revolving Loan Commitment, and Swing Line Lender’s Swing Line Loan Commitment, shall expire on the Revolving Loan Commitment Termination Date and all Revolving Loans and all Swing Line Loans and all other amounts owed hereunder with respect to the Revolving Loans, the Swing Line Loans, the Revolving Loan Commitments and the Swing Line Loan Commitment shall be paid in full no later than such date.

(b) Except pursuant to Section 2.2(e) or Section 2.3(d), (i) Revolving Loans that are Base Rate Loans shall be made in an aggregate minimum amount of $500,000 and integral multiples of $100,000 in excess of that amount, (ii) Eurodollar Rate Revolving Loans shall be made in an aggregate minimum amount of $2,000,000 and integral multiples of $500,000 in excess of that amount, and (iii) Swing Line Loans shall be made in an aggregate minimum amount of $250,000 and integral multiples of $100,000 in excess of that amount. Anything contained herein to the contrary notwithstanding, in no event shall the Total Utilization of Revolving Loan Commitments at any time exceed the Revolving Loan Commitments then in effect.

(c) Whenever Company desires that Lenders make Loans, Company shall deliver to Administrative Agent a fully executed and delivered Funding Notice no later than 12:00 noon (New York City time) (i) at least three (3) Business Days in advance of the proposed Credit Extension Date in the case of a Eurodollar Rate Loan; and (ii) at least one (1) Business Day in advance of the proposed Credit Extension Date in the case of a Base Rate Loan; provided, whenever Company desires that Swing Line Lender make a Swing Line Loan, it shall deliver to Administrative Agent a Funding Notice no later than 12:00 noon (New York City time) on the proposed Credit Extension Date. Except as otherwise provided herein, a Funding Notice for a Eurodollar Rate Loan (or telephonic notice in lieu thereof) shall be irrevocable on and after the related Interest Rate Determination Date, and Company shall be bound to make a borrowing in accordance therewith. Promptly after receipt by Administrative Agent of a Funding Notice (or telephonic notice in lieu thereof), Administrative Agent shall notify each Lender or Swing Line Lender, as the case may be, of the proposed borrowing.

(d) Each Lender shall make the amount of its Loan available to Administrative Agent not later than 12:00 noon (New York City time) on the applicable Credit Extension Date, and Swing Line Lender shall make the amount of its Swing Line Loan available to Administrative Agent not later than 2:30 p.m. (New York City time) on the applicable Credit Extension Date, in each case by wire transfer of same day funds in Dollars, at the Funding and Payment Office (or, in the case of Swing Line Loans, at such other place as Administrative Agent, Company and Swing Line Lender may approve). Except as provided herein, upon satisfaction or waiver of the conditions precedent specified herein, Administrative Agent shall make the proceeds of such Loans available to Company on the applicable Credit Extension Date by causing an amount of same day funds in Dollars equal to the proceeds of all such Loans received by Administrative Agent from Lenders or Swing Line Lender, as the case may be, to be credited to the account of Company at the Funding and Payment Office (or, in the case of Swing Line Loans, at such other place as Administrative Agent, Company and Swing Line Lender may approve).

(e) With respect to any Swing Line Loan that has not been voluntarily prepaid by Company, Swing Line Lender may, at any time in its sole and absolute discretion, deliver to Administrative Agent (with a copy to Company), no later than 10:00 a.m. (New York City time) on the first Business Day in advance of the proposed Credit Extension Date, a notice (the “Refunding Notice”) (which shall be deemed to be a Funding Notice given by Company) requesting Lenders having Revolving Credit Exposure to make Revolving Loans that are Base Rate Loans on such Credit Extension Date in an amount equal to the amount of such Swing Line Loans (each, a “Refunded Swing Line Loan”) outstanding on the date of such Refunding Notice. Promptly after receipt by Administrative Agent of a Refunding Notice, Administrative Agent shall notify each such Lender thereof. Anything contained herein to the contrary notwithstanding, the proceeds of such Revolving Loans made by Lenders shall be immediately delivered by Administrative Agent solely to Swing Line Lender and applied to repay a corresponding amount of the applicable Refunded Swing Line Loans. Company hereby authorizes Administrative Agent and Swing Line Lender to charge Company’s accounts, if any (up to the amount available in each such account) in order to immediately pay Swing Line Lender the amount of the Refunded Swing Line Loans to the extent the proceeds of such Revolving Loans made by Lenders are not sufficient to repay in full the Refunded Swing Line Loans. If any portion of any such amount paid to Swing Line Lender should be recovered by or on behalf of Company from Swing Line Lender in bankruptcy, by assignment for the benefit of creditors or otherwise, the loss of the amount so recovered shall be ratably shared among all Lenders having Revolving Credit Exposure in the manner contemplated by Section 10.4.

(f) If for any reason (i) Revolving Loans are not made upon the request of Swing Line Lender as provided in Section 2.2(e) in an amount sufficient to repay any amounts owed to Swing Line Lender in respect of any outstanding Swing Line Loans; or (ii) the Revolving Loan Commitments are terminated at a time when any Swing Line Loans are outstanding, then, in either case, each Lender having Revolving Credit Exposure shall be deemed to, and hereby agrees to, have purchased a participation in such outstanding Swing Line Loans in an amount equal to its Pro Rata Share (calculated, in the case of this clause (ii), immediately prior to such termination of the Revolving Loan Commitments) of the unpaid amount of such Swing Line Loans together with accrued interest thereon. Upon one Business Day’s notice from Swing Line Lender, each such Lender shall deliver to Swing Line Lender an amount equal to its respective participation in same day funds at the Funding and Payment Office. In order to further evidence such participation (and without prejudice to the effectiveness of the participation provisions set forth above), each such Lender agrees to enter into a separate participation agreement at the request of Swing Line Lender in form and substance reasonably satisfactory to Swing Line Lender. In the event any such Lender fails to make available to Swing Line Lender the amount of such Lender’s participation as provided herein, Swing Line Lender shall be entitled to recover such amount on demand from such Lender together with interest thereon at the rate customarily used by Swing Line Lender for the correction of errors among banks for three (3) Business Days and thereafter at the Base Rate. In the event Swing Line Lender receives a payment of any amount in which other Lenders have purchased participations as provided herein, Swing Line Lender shall promptly distribute to each such other Lender its Pro Rata Share of such payment. In addition, in the case of each Lender that is deemed to have purchased a participation in such outstanding Swing Line Loan as specified in this Section 2.2(f), the Swing Line Lender (i) shall keep a register, meeting the requirements of Temporary Treasury Regulation Section 5f.103-1(c), of each such Lender, specifying such Lender’s entitlement to payments of principal and interest with respect to such participation, and (ii) shall collect, prior to the time such Lender receives payments, from each such Lender the appropriate forms, certificates and statements described in Section 2.20 (and updated as required by Section 2.20) as if such Lender were a Lender under Section 2.20.

(g) Anything contained herein to the contrary notwithstanding, each such Lender’s obligation to make Revolving Loans for the purpose of repaying any Refunded Swing Line Loans, and each such Lender’s obligation to purchase a participation in any unpaid Swing Line Loans, shall be absolute and unconditional and shall not be affected by any circumstance, including (i) any set-off, counterclaim, recoupment, defense or other right which such Lender may have against Swing Line Lender, any Credit Party or any other Person for any reason whatsoever; (ii) the occurrence or continuation of an Event of Default or a Default; (iii) any adverse change in the business, operations, properties, assets, condition (financial or otherwise) or prospects of Company or any of its Subsidiaries; (iv) any breach hereof or any other Credit Document by any party thereto; or (v) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing; provided, such obligations of each such Lender are subject to the condition that (1) Swing Line Lender believed in good faith that all conditions under Section 3 to the making of the applicable Refunded Swing Line Loans or other unpaid Swing Line Loans, as the case may be, were satisfied at the time such Refunded Swing Line Loans or unpaid Swing Line Loans were made, or (2) the satisfaction of any such condition not satisfied had been waived in accordance with Section 10.5 prior to or at the time such Refunded Swing Line Loans or other unpaid Swing Line Loans were made.

2.3 Letters of Credit

(a) During the Revolving Loan Commitment Period, subject to the terms and conditions hereof, Company may request from time to time (but in no event later than the date that is thirty (30) days prior to the Revolving Loan Commitment Termination Date) that one or more Lenders issue Letters of Credit for the account of Company for the purposes specified in the definitions of Commercial Letters of Credit and Standby Letters of Credit; provided that all such Letters of Credit shall provide for sight drawings. Subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties of Company herein set forth, any one or more Lenders may, but (except as provided herein) shall not be obligated to, issue such Letters of Credit in accordance with the provisions hereof; provided, Company shall not request that any Lender issue, and no Lender shall issue: (i) any Letter of Credit if, after giving effect to such issuance, the Total Utilization of Revolving Loan Commitments would exceed the Revolving Loan Commitments then in effect; (ii) any Letter of Credit if, after giving effect to such issuance, the Letter of Credit Usage would exceed the Letter of Credit Sublimit then in effect; (iii) any Standby Letter of Credit having an expiration date later than the earlier of (1) the 10th Business Day prior to the Revolving Loan Commitment Termination Date and (2) the date which is one year after the date of issuance of such Standby Letter of Credit. Notwithstanding the foregoing, Issuing Bank may agree that the expiration date of a Standby Letter of Credit will be automatically extended for one or more successive periods not to exceed one year each unless the Issuing Bank elects not to extend the expiration date for any such additional period and further provided that no expiration date for a Standby Letter of Credit will be extended beyond the 10th Business Day prior to the Revolving Loan Commitment Termination Date; (iv) any Commercial Letter of Credit having an expiration date (a) later than the earlier of (1) the 30th day prior to the Revolving Loan Commitment Termination Date and (2) the date which is 180 days after the date of issuance of such Commercial Letter of Credit (or such other date as shall be agreed to by the Issuing Bank) or (b) that is otherwise unacceptable to the Issuing Bank in its reasonable discretion; or (v) any Letter of Credit denominated in a currency other than Dollars.

(b) Whenever Company desires the issuance of a Letter of Credit, it shall deliver to Administrative Agent a Request for Issuance no later than 12:00 noon (New York City time) at least three (3) Business Days (in the case of Standby Letters of Credit) or five (5) Business Days (in the case of Commercial Letters of Credit), or in each case such shorter period as may be agreed to by Issuing Bank in any particular instance, in advance of the proposed date of issuance. Issuing Bank, in its reasonable discretion, may require changes in the text of the proposed Letter of Credit or any such documents. Upon receipt by Administrative Agent of a Request for Issuance pursuant to this Section, in the event Administrative Agent elects to issue such Letter of Credit, Administrative Agent shall promptly so notify Company, and Administrative Agent shall be Issuing Bank with respect thereto. In the event that Administrative Agent, in its sole discretion, elects not to issue such Letter of Credit, Administrative Agent shall promptly so notify Company, whereupon Company may request any other Lender to issue such Letter of Credit by delivering to such Lender a copy of the applicable Request for Issuance. Any Lender so requested to issue such Letter of Credit shall promptly notify Company and Administrative Agent whether or not, in its sole discretion, it has elected to issue such Letter of Credit, and any such Lender which so elects to issue such Letter of Credit shall be the Issuing Bank with respect thereto. In the event that all other Lenders shall have declined to issue such Letter of Credit, notwithstanding the prior election of Administrative Agent not to issue such Letter of Credit, Administrative Agent shall be obligated to issue such Letter of Credit and shall be Issuing Bank with respect thereto, notwithstanding the fact that the Letter of Credit Usage with respect to such Letter of Credit and with respect to all other Letters of Credit issued by Administrative Agent, when aggregated with Administrative Agent’s outstanding Revolving Loans and Swing Line Loans, may exceed Administrative Agent’s Revolving Loan Commitment then in effect. Upon satisfaction or waiver of the conditions set forth in Section 3.2, Issuing Bank shall issue the requested Letter of Credit. Upon the issuance or amendment of any Standby Letter of Credit, Issuing Bank shall notify the Administrative Agent and the Company, in writing of such issuance or amendment and such notice shall be accompanied by a copy of such issuance or amendment. Promptly after the receipt of such notice, the Administrative Agent shall notify each Lender, in writing, of such issuance or amendment and in the event any Lender shall so request, the Administrative Agent shall provide such Lender with copies of such issuance or amendment. With regard to Commercial Letters of Credit, each Issuing Bank shall on the first Business Day of each week furnish the Administrative Agent, by facsimile, with a report detailing the daily aggregate outstanding Commercial Letters of Credit for such Issuing Bank during the previous week.

(c) In determining whether to honor any drawing under any Letter of Credit by the beneficiary thereof, Issuing Bank shall be responsible only to examine the documents delivered under such Letter of Credit with reasonable care so as to ascertain whether they appear on their face to be in accordance with the terms and conditions of such Letter of Credit. As between Company and Issuing Bank, Company assumes all risks of the acts and omissions of, or misuse of the Letters of Credit issued by Issuing Bank by, the respective beneficiaries of such Letters of Credit. In furtherance and not in limitation of the foregoing, Issuing Bank shall not be responsible for: (i) the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any party in connection with the application for and issuance of any such Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any such Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason; (iii) failure of the beneficiary of any such Letter of Credit to comply fully with any conditions required in order to draw upon such Letter of Credit, except to the extent that such failure is the result of the gross negligence or willful misconduct of the Issuing Bank, as determined by a final and non-appealable judgment of a court of competent jurisdiction; (iv) errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher; (v) errors in interpretation of technical terms; (vi) any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any such Letter of Credit or of the proceeds thereof; (vii) the misapplication by the beneficiary of any such Letter of Credit of the proceeds of any drawing under such Letter of Credit; or (viii) any consequences arising from causes beyond the control of Issuing Bank, including any Governmental Acts, and none of the above shall affect or impair, or prevent the vesting of, any of Issuing Bank’s rights or powers hereunder. Without limiting the foregoing and in furtherance thereof, any action taken or omitted by Issuing Bank under or in connection with the Letters of Credit or any documents and certificates delivered thereunder, if taken or omitted in good faith (and without gross negligence or willful misconduct, as determined by a final and non-appealable judgment of a court of competent jurisdiction and in accordance with the standard of care specified in the UCC with respect to Letters of Credit), shall not put Issuing Bank under any resulting liability to Company. Notwithstanding anything to the contrary contained in this Section 2.3(c), Company shall retain any and all rights it may have against Issuing Bank for any liability arising solely out of the gross negligence or willful misconduct of Issuing Bank, as determined by a final and non-appealable judgment of a court of competent jurisdiction or failure of such Issuing Bank to use the standard of care specified in the UCC with respect to Letters of Credit.

(d) In the event Issuing Bank has determined to honor a drawing under a Letter of Credit, it shall immediately notify Company and Administrative Agent, and Company shall reimburse Issuing Bank on or before the Business Day immediately following the date on which such drawing is honored (the “Reimbursement Date”) in an amount in Dollars and in same day funds equal to the amount of such honored drawing; provided, anything contained herein to the contrary notwithstanding, (i) unless Company shall have notified Administrative Agent and Issuing Bank prior to 11:00 a.m. (New York City time) on the date such drawing is honored (or prior to 11:00 a.m. (New York City time) on the immediately following Business Day if such drawing is made after 11:00 a.m. on the previous Business Day) that Company intends to reimburse Issuing Bank for the amount of such honored drawing with funds other than the proceeds of Revolving Loans, Company shall be deemed to have given a timely Funding Notice to Administrative Agent requesting Lenders having a Revolving Loan Commitment to make Revolving Loans that are Base Rate Loans on the Reimbursement Date in an amount in Dollars equal to the amount of such honored drawing, and (ii) subject to satisfaction or waiver of the conditions specified in Section 3.2 (and Administrative Agent shall promptly notify each such Lender of such deemed request), Lenders having a Revolving Loan Commitment shall, on the Reimbursement Date, make Revolving Loans that are Base Rate Loans in the amount of such honored drawing, the proceeds of which shall be applied directly by Administrative Agent to reimburse Issuing Bank for the amount of such honored drawing; and provided further, if for any reason proceeds of Revolving Loans are not received by Issuing Bank on the Reimbursement Date in an amount equal to the amount of such honored drawing, Company shall reimburse Issuing Bank, on demand, in an amount in same day funds equal to the excess of the amount of such honored drawing over the aggregate amount of such Revolving Loans, if any, which are so received. Nothing in this Section 2.3(d) shall be deemed to relieve any Lender having a Revolving Loan Commitment from its obligation to make Revolving Loans on the terms and conditions set forth herein, and Company shall retain any and all rights it may have against any such Lender resulting from the failure of such Lender to make such Revolving Loans under this Section 2.3(d).

(e) Immediately upon the issuance of each Letter of Credit, each Lender having a Revolving Loan Commitment shall be deemed to have irrevocably purchased, and hereby agrees to irrevocably purchase, from Issuing Bank a participation in such Letter of Credit and any drawings honored thereunder in an amount equal to such Lender’s Pro Rata Share (with respect to the Revolving Loan Commitments) of the maximum amount which is or at any time may become available to be drawn thereunder. In the event that Company shall fail for any reason to reimburse Issuing Bank as provided in Section 2.3(d), Issuing Bank shall promptly notify each such Lender of the unreimbursed amount of such honored drawing and of such Lender’s respective participation therein based on such Lender’s Pro Rata Share of the Revolving Loan Commitments. Each such Lender shall make available to Issuing Bank an amount equal to its respective participation, in Dollars and in same day funds, at the office of Issuing Bank specified in such notice, not later than 12:00 noon (New York City time) on the first Business Day (under the laws of the jurisdiction in which such office of Issuing Bank is located) after the date notified by Issuing Bank. In the event that any Lender having a Revolving Loan Commitment fails to make available to Issuing Bank on such business day the amount of such Lender’s participation in such Letter of Credit as provided in this Section 2.3(e), Issuing Bank shall be entitled to recover such amount on demand from such Lender together with interest thereon at the rate customarily used by Issuing Bank for the correction of errors among banks for three (3) Business Days and thereafter at the Base Rate. Nothing in this Section 2.3(e) shall be deemed to prejudice the right of any Lender to recover from Issuing Bank any amounts made available by such Lender to Issuing Bank pursuant to this Section in the event that it is determined by the final judgment of a court of competent jurisdiction that the payment with respect to a Letter of Credit in respect of which payment was made by such Lender constituted gross negligence or willful misconduct on the part of Issuing Bank or resulted from Issuing Bank’s failure to use the standard of care specified in the UCC with respect to Letters of Credit. In the event Issuing Bank shall have been reimbursed by other Lenders pursuant to this Section 2.3(e) for all or any portion of any drawing honored by Issuing Bank under a Letter of Credit, such Issuing Bank shall distribute to each Lender which has paid all amounts payable by it under this Section 2.3(e) with respect to such honored drawing such Lender’s Pro Rata Share of all payments subsequently received by Issuing Bank from Company in reimbursement of such honored drawing promptly when such payments are received. Any such distribution shall be made to a Lender at its primary address set forth below its name on the appropriate signature page hereof or at such other address as such Lender may request. In addition, in the case of each Lender that is deemed to have irrevocably purchased from Issuing Bank a participation in such Letter of Credit as specified in this Section 2.3(e), the Issuing Bank shall keep a register specifying such Lender’s entitlement to payments with respect to such participation in accordance with its normal business practice which is intended to meet the requirements of Temporary Treasury Regulation Section 5f.103-1(c).

(f) The obligation of Company to reimburse Issuing Bank for drawings honored under the Letters of Credit issued by it and to repay any Revolving Loans made by Lenders pursuant to Section 2.3(d) and the obligations of Lenders having Revolving Credit Exposure under Section 2.3(e) shall be unconditional and irrevocable and shall be paid strictly in accordance with the terms hereof under all circumstances including any of the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit; (ii) the existence of any claim, set-off, defense or other right which Company or any Lender may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons for whom any such transferee may be acting), Issuing Bank, Lender or any other Person or, in the case of a Lender, against Company, whether in connection herewith, the transactions contemplated herein or any unrelated transaction (including any underlying transaction between Company or one of its Subsidiaries and the beneficiary for which any Letter of Credit was procured); (iii) any draft or 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) payment by Issuing Bank under any Letter of Credit against presentation of a draft or other document which does not substantially comply with the terms of such Letter of Credit, except where such payment constitutes gross negligence or willful misconduct on the part of the Issuing Bank, as determined by a final and non-appealable judgment of a court of competent jurisdiction or results from Issuing Bank’s failure to use the standard of care specified in the UCC with respect to Letters of Credit; (v) any adverse change in the business, operations, properties, assets, condition (financial or otherwise) or prospects of Company or any of its Subsidiaries; (vi) any breach of this Agreement or any other Credit Document by any party thereto; (vii) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing; or (viii) the fact that an Event of Default or a Default shall have occurred and be continuing; provided, in each case, that payment by Issuing Bank under the applicable Letter of Credit shall not have constituted gross negligence or willful misconduct of Issuing Bank, as determined by a final and non-appealable judgment of a court of competent jurisdiction or failure of such Issuing Bank to use the standard of care specified in the UCC with respect to Letters of Credit under the circumstances in question.

(g) In addition to amounts payable as provided herein, Company hereby agrees to protect, indemnify, pay and save harmless Issuing Bank from and against any and all claims, demands, liabilities, damages, losses, costs, charges and expenses (including reasonable fees, expenses and disbursements of outside counsel but excluding, any and all claims, demands, liabilities, damages, losses, costs, charges and expenses relating to Taxes (and any liabilities relating thereto), the indemnity for which shall be governed solely and exclusively by Section 2.20) which Issuing Bank may incur or be subject to as a consequence, direct or indirect, of (i) the issuance of any Letter of Credit by Issuing Bank, other than as a result of (1) the gross negligence or willful misconduct of Issuing Bank, as determined by a final and non-appealable judgment of a court of competent jurisdiction or failure of such Issuing Bank to use the standard of care specified in the UCC with respect to Letters of Credit, or (2) subject to the following clause (ii), the wrongful dishonor by Issuing Bank of a proper demand for payment made under any Letter of Credit issued by it, or (ii) the failure of Issuing Bank to honor a drawing under any such Letter of Credit as a result of any Governmental Act.

2.4 Pro Rata Shares

All Loans made and all participations purchased pursuant to Section 2.1, 2.2 and Section 2.3 shall be made or purchased, as the case may be, by Lenders simultaneously and proportionately to their respective applicable Pro Rata Shares, it being understood that no Lender shall be responsible for any default by any other Lender in such other Lender’s obligation to make a Loan requested hereunder or purchase a participation required hereby nor shall the Revolving Loan Commitment or Term Loan amount of any Lender be increased or decreased as a result of a default by any other Lender in such other Lender’s obligation to make a Loan requested hereunder or purchase a participation required hereby. Unless Administrative Agent shall have been notified by any Lender prior to the applicable Credit Extension Date that such Lender does not intend to make available to Administrative Agent the amount of such Lender’s Loan requested on such Credit Extension Date, Administrative Agent may assume that such Lender has made such amount available to Administrative Agent on such Credit Extension Date and Administrative Agent may, in its sole discretion, but shall not be obligated to, make available to Company a corresponding amount on such Credit Extension Date. If such corresponding amount is not in fact made available to Administrative Agent by such Lender, Administrative Agent shall be entitled to recover such corresponding amount on demand from such Lender together with interest thereon, for each day from such Credit Extension Date until the date such amount is paid to Administrative Agent, at the customary rate set by Administrative Agent for the correction of errors among banks for three (3) Business Days and thereafter at the Base Rate. If such Lender does not pay such corresponding amount forthwith upon Administrative Agent’s demand therefor, Administrative Agent shall promptly notify Company and Company shall immediately pay such corresponding amount to Administrative Agent together with interest thereon, for each day from such Credit Extension Date until the date such amount is paid to Administrative Agent, at the rate payable hereunder for Base Rate Loans. Nothing in this Section 2.4 shall be deemed to relieve any Lender from its obligation to fulfill its Revolving Loan Commitments or its commitments to make Term Loans hereunder or to prejudice any rights that Company may have against any Lender as a result of any default by such Lender hereunder.

2.5 Use of Proceeds

The proceeds of (a) the Tranche D Term Loans made on the Effective Date shall be applied by Company to repay in full the (i) Existing Tranche C Term Loans that are not converting to Tranche D Term Loans on the Effective Date and (ii) Senior Unsecured Term Loans, (b) the Existing Tranche C Term Loans that are converting to Tranche D Term Loans as of the Effective Date shall remain outstanding on and after the Effective Date as “Tranche D Term Loans” made pursuant to this Agreement in accordance with the provisions of Section 2.1(a) and (c) the Revolving Loans, Swing Line Loans and Letters of Credit made on and after the Effective Date shall continue to be applied by Company for working capital and general corporate purposes of Parent and its Subsidiaries and other purposes permitted hereunder. The proceeds from any New Term Loans shall be applied by Company for working capital, general corporate purposes and other purposes permitted hereunder. No portion of the proceeds of any Credit Extension shall be used in any manner that causes or might cause such Credit Extension or the application of such proceeds to violate Regulation T, Regulation U or Regulation X of the Board of Governors of the Federal Reserve System or any other regulation thereof or to violate the Exchange Act.

2.6 Notes; Register; Lenders’ Books and Records

If so requested by any Lender by written notice to Company (with a copy to Administrative Agent) at least two Business Days prior to the Effective Date, or at any time thereafter, Company shall execute and deliver to such Lender (and/or, if applicable and if so specified in such notice, to any Person who is a permitted assignee of such Lender pursuant to Section 10.6) on the Effective Date (or, if such notice is delivered after the Effective Date, promptly after Company’s receipt of such notice) a Note or Notes to evidence such Lender’s Tranche D Term Loan, New Term Loan, Revolving Loan or Swing Line Loan, as the case may be. Each Continuing Lender who has a Note evidencing its Existing Tranche C Term Loan shall promptly deliver to Company such Note in exchange for its Tranche D Term Loan Note. Any Note delivered to a Lender to evidence such Lender’s Revolving Loan or Swing Line Loan, as the case may be, under the Existing Credit Agreement shall continue to be a Note hereunder and shall evidence such Lender’s Revolving Loan or Swing Line Loan under this Agreement. Administrative Agent shall maintain, at its address referred to in Section 10.1, a register for the recordation of the names and addresses of Lenders and Issuing Banks and the Revolving Loan Commitments and Loans of each Lender and Letters of Credit, and drawings honored under the Letters of Credit, issued by each Issuing Bank from time to time (the “Register”). The Register shall be available for inspection by Company or any Lender at any reasonable time and from time to time upon reasonable prior notice. Administrative Agent shall record in the Register the Revolving Loan Commitments and the Loans of each Lender and Letters of Credit, and drawings honored under the Letters of Credit, issued by each Issuing Bank, and each repayment or prepayment in respect of the principal amount of the Loans (and related interest payments with respect to the Loans) and any reimbursement amounts paid to each Issuing Bank pursuant to Section 2.3 (and related interest payments), and any such recordation shall be conclusive and binding on Company and each Lender, absent demonstrable error; provided, failure to make any such recordation, or any error in such recordation, shall not affect any Lender’s Revolving Loan Commitment or Company’s Obligations in respect of any Loan. Company hereby designates the Administrative Agent to serve as Company’s agent solely for purposes of maintaining the Register as provided in this Section 2.6, and Company hereby agrees that, to the extent the Administrative Agent serves in such capacity, the Administrative Agent and its officers, directors, employees, agents and affiliates shall constitute Indemnitees for all purposes. Each Lender shall record on its internal records, including its Notes, the amount of the Loans and Letters of Credit made or issued, as the case may be, by it and each repayment and prepayment and interest payment in respect thereof. Any such recordation shall be conclusive and binding on Company, absent demonstrable error; provided, failure to make any such recordation, or any error in such recordation, shall not affect any Lender’s Commitments or Company’s Obligations in respect of any applicable Loans and Letters of Credit; and provided, further, in the event of any inconsistency between the Register and any Lender’s records, the recordations in the Register shall govern. Company, Administrative Agent and Lenders shall deem and treat the Persons listed as Lenders in the Register as the holders and owners of the corresponding Revolving Loan Commitments and Loans listed therein for all purposes hereof.

2.7 Interest Payments

(a) Except as otherwise set forth herein, each Class of Loan shall bear interest on the unpaid principal amount thereof from the date made through maturity (whether by acceleration or otherwise) at the sum of (x) the applicable interest rate for the Type of Loan of such Class plus (y) the Applicable Margin for such Type of Loan of such Class. The Type of any Loan (except a Swing Line Loan), and the Interest Period with respect to any Eurodollar Rate Loan, shall be selected by Company and notified to Administrative Agent and Lenders pursuant to the applicable Funding Notice or Conversion/Continuation Notice, as the case may be. If on any day a Loan is outstanding with respect to which notice has not been delivered to Administrative Agent in accordance with the terms hereof specifying the applicable basis for determining the rate of interest, then for that day such Loan shall be a Base Rate Loan. Notwithstanding anything contained herein to the contrary, in connection with Eurodollar Rate Loans (i) there shall be no more than 16 Interest Periods outstanding at any time; and (ii) in the event Company fails to specify an Interest Period for any Eurodollar Rate Loan in the applicable Funding Notice or Conversion/Continuation Notice, Company shall be deemed to have selected an Interest Period of one month. As soon as practicable after 10:00 a.m. (New York City time) on each Interest Rate Determination Date, Administrative Agent shall determine (which determination shall, absent demonstrable error, be final, conclusive and binding upon all parties) the interest rate that shall apply to the Eurodollar Rate Loans for which an interest rate is then being determined for the applicable Interest Period and shall promptly give notice thereof (in writing or by telephone confirmed in writing) to Company and each Lender. The interest rates for the Tranche D Term Loans on the Effective Date shall be determined in the same manner and with the same Interest Periods as the Existing Tranche C Term Loans. The interest rates for the Tranche D Term Loans on the Effective Date shall be determined in the same manner and with the same Interest Periods as the Existing Tranche C Term Loans. Each Tranche D Term Loan Lender shall be allocated its pro rata share of Tranche D Term Loans set at the corresponding interest rates and Interest Periods as the Existing Tranche C Term Loans. Upon expiration of the applicable Interest Period for the Tranche D Term Loans on the Effective Date, each Eurodollar Rate Loan shall either be converted to a Base Rate Loan or continued as a Eurodollar Rate Loan at Company’s option pursuant to Section 2.8 hereof.

(b) Company agrees to pay to Issuing Bank, with respect to drawings honored under any Letter of Credit honored by it, interest on the amount paid by Issuing Bank in respect of each such honored drawing from the date such drawing is honored to but excluding the date such amount is reimbursed by or on behalf of Company at a rate equal to (i) for the period from the date such drawing is honored to but excluding one day after the applicable Reimbursement Date, (1) the Base Rate, plus (2) the Applicable Margin for Revolving Loans that are Base Rate Loans, and (ii) thereafter, a rate which is 2% per annum in excess of the rate of interest otherwise payable hereunder with respect to Revolving Loans that are Base Rate Loans.

(c) Interest payable hereunder shall be computed (i) in the case of Base Rate Loans, on the basis of a 365/6-day year, as the case may be, and (ii) in the case of Eurodollar Rate Loans, on the basis of a 360-day year, in each case for the actual number of days elapsed in the period during which it accrues. In computing interest on any Loan, the date of the making of such Loan or the first day of an Interest Period applicable to such Loan or, with respect to a Base Rate Loan being converted from a Eurodollar Rate Loan, the date of conversion of such Eurodollar Rate Loan to such Base Rate Loan, as the case may be, shall be included, and the date of payment of such Loan or the expiration date of an Interest Period applicable to such Loan or, with respect to a Base Rate Loan being converted to a Eurodollar Rate Loan, the date of conversion of such Base Rate Loan to such Eurodollar Rate Loan, as the case may be, shall be excluded; provided, if a Loan is repaid on the same day on which it is made, one day’s interest shall be paid on that Loan.

(d) Except as otherwise set forth herein, interest on each Loan shall be payable in arrears on and to (i) each Interest Payment Date applicable to that Loan; (ii) any prepayment of that Loan, to the extent accrued on the amount being prepaid; and (iii) at maturity, including final maturity; provided, in the event any Swing Line Loan or any Revolving Loan that is a Base Rate Loan is prepaid pursuant to Section 2.12(a), interest accrued on such Swing Line Loan or Revolving Loan through the date of such prepayment shall be payable on the next succeeding Interest Payment Date applicable to Base Rate Loan, or, if earlier, at final maturity.

(e) Interest payable pursuant to Section 2.7(b) shall be payable on demand or, if no demand is made, on the date on which the related drawing honored under a Letter of Credit is reimbursed in full. Promptly upon receipt by Issuing Bank of any payment of interest pursuant to Section 2.7(b), (i) Issuing Bank shall distribute to each Lender having Revolving Credit Exposure, out of the interest received by Issuing Bank in respect of the period from the date such drawing is honored to but excluding the date on which Issuing Bank is reimbursed for the amount of such drawing (including any such reimbursement out of the proceeds of any Revolving Loans), the amount that such Lender would have been entitled to receive in respect of the letter of credit fee that would have been payable in respect of such Letter of Credit for such period if no drawing had been honored under such Letter of Credit, and (ii) in the event Issuing Bank shall have been reimbursed by Lenders for all or any portion of such honored drawing, Issuing Bank shall distribute to each Lender having Revolving Credit Exposure which has paid all amounts payable by it under Section 2.3(e) with respect to such honored drawing such other Lender’s Pro Rata Share of any interest received by Issuing Bank in respect of that portion of such honored drawing so reimbursed by Lenders for the period from the date on which Issuing Bank was so reimbursed by Lenders to but excluding the date on which such portion of such honored drawing is reimbursed by Company. Any such distribution shall be made to a Lender at its primary address set forth below its name on the appropriate signature page hereof or at such other address as such Lender may request.

2.8 Conversion; Continuation

Company shall have the option (a) to convert at any time all or any part of any Class of Loans from one Type of Loan to another Type of Loan, provided, that partial conversions of Base Rate Loans shall be in the aggregate principal amount of $1,000,000 and integral multiples of $100,000 in excess of that amount and the aggregate principal amount of the resulting Eurodollar Rate Loans outstanding in respect of any one (1) Interest Period shall be at least $2,000,000 and integral multiples of $1,000,000 in excess of that amount; or (b) upon the expiration of any Interest Period applicable to a Eurodollar Rate Loan, to continue all or any portion of such Loan as a Eurodollar Rate Loan; provided, (1) a Eurodollar Rate Loan may only be converted into a Base Rate Loan on the expiration date of an Interest Period applicable thereto and (2) the aggregate principal amount of the resulting Eurodollar Rate Loans outstanding in respect of any one Interest Period shall be at least $2,000,000 and integral multiples of $1,000,000 in excess of that amount. Company shall deliver a Conversion/Continuation Notice to Administrative Agent no later than 10:00 a.m. (New York City time) at least one (1) Business Day in advance of the proposed conversion date (in the case of a conversion to a Base Rate Loan) and at least three (3) Business Days in advance of the proposed conversion/continuation date (in the case of a conversion to, or a continuation of, a Eurodollar Rate Loan). Except as otherwise provided herein, a Conversion/Continuation Notice for conversion to, or continuation of, a Eurodollar Rate Loan (or telephonic notice in lieu thereof) shall be irrevocable on and after the related Interest Rate Determination Date, and Company shall be bound to effect a conversion or continuation in accordance therewith. After the occurrence of and during the continuation of an Event of Default, unless the Requisite Lenders otherwise consent, (i) Company may not elect to have a Loan be made or maintained as, or converted to, a Eurodollar Rate Loan after the expiration of any Interest Period then in effect for that Loan; and (ii) any Funding Notice or Conversion/Continuation Notice given by Company with respect to a requested borrowing or conversion/continuation that has not yet occurred shall be deemed to be rescinded by Company.

2.9 Post-Maturity Interest

Any principal payments on the Loans not paid when due and, to the extent permitted by applicable law, any interest payments on the Loans or any fees or other amounts owed hereunder not paid when due, in each case whether at stated maturity, by notice of prepayment, by acceleration or otherwise, shall thereafter bear interest (including post-petition interest in any proceeding under the Bankruptcy Code or other applicable bankruptcy laws) payable on demand at a rate which is 2% per annum in excess of the interest rate otherwise payable hereunder with respect to the applicable Loans (or, in the case of any such fees and other amounts, at a rate which is 2% per annum in excess of the interest rate otherwise payable hereunder for Base Rate Loans that are Revolving Loans); provided, in the case of Eurodollar Rate Loans, upon the expiration of the Interest Period in effect at the time any such increase in interest rate is effective such Eurodollar Rate Loans shall thereupon become Base Rate Loans and shall thereafter bear interest payable upon demand at a rate which is 2% per annum in excess of the interest rate otherwise payable hereunder for Base Rate Loans of the Class in question. Payment or acceptance of the increased rates of interest provided for in this Section 2.9 is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of Administrative Agent or any Lender.

2.10 Fees

(a) Company agrees to pay to Administrative Agent, for distribution to each Lender having Revolving Credit Exposure in proportion to that Lender’s Pro Rata Share (determined with respect to the Revolving Loan Commitments), commitment fees for the Revolving Loan Commitment Period equal to the product of (i) the average of the daily difference between (1) the Revolving Loan Commitments, minus (2) the sum of (A) the aggregate principal amount of outstanding Revolving Loans (but not any outstanding Swing Line Loans) plus (B) the Letter of Credit Usage, multiplied by the (ii) Applicable Commitment Fee Percentage. All such commitment fees shall be calculated on the basis of a 360-day year and the actual number of days elapsed and shall be payable quarterly in arrears on March 30, June 30, September 30 and December 30 of each year, commencing on the first such date to occur after the Effective Date, and on the Revolving Loan Commitment Termination Date.

(b) Company agrees to pay (i) a fronting fee, payable directly to Issuing Bank for its own account, equal to 0.25% per annum of the aggregate daily amount available to be drawn under all Letters of Credit issued by it, and (ii) a letter of credit fee, payable to Administrative Agent for the account of Lenders having Revolving Credit Exposure, equal to the product of (1) the Applicable Margin for Revolving Loans that are Eurodollar Rate Loans, multiplied by (2) the daily amount available to be drawn under all such Letters of Credit, each such fee to be payable in arrears on and to (but not including) the last Business Day of each of January, April, July and October of each year and computed on the basis of a 360-day year for the actual number of days elapsed. Without duplication of the foregoing fees, Company agrees to pay documentary and processing charges payable directly to Issuing Bank for its own account in accordance with Issuing Bank’s standard schedule for such charges in effect at the time of such issuance, amendment, transfer or payment, as the case may be. For purposes of calculating any fees payable under this Section, the daily amount available to be drawn under any Letter of Credit shall be determined as of the close of business on any date of determination. Promptly upon receipt by Administrative Agent of any amount described in clause (ii) above, Administrative Agent shall distribute to each Lender having Revolving Credit Exposure its Pro Rata Share (determined with respect to the Revolving Loan Commitments) of such amount.

(c) Company agrees to pay to the Agents such other fees in the amounts and at the times separately agreed upon between Company and the Agents.

2.11 Scheduled Payments

Company shall make principal payments on the Tranche D Term Loans in installments (each an “Installment”) on the dates (each an “Installment Date”) and in the amounts set forth below:

DATE	AMOUNT
June 30, 2006	$1,230,000.00
September 30, 2006	$1,230,000.00
December 31, 2006	$1,230,000.00
March 31, 2007	$1,230,000.00
June 30, 2007	$1,230,000.00
September 30, 2007	$1,230,000.00
December 31, 2007	$1,230,000.00
March 31, 2008	$1,230,000.00
June 30, 2008	$1,230,000.00
September 30, 2008	$1,230,000.00
December 31, 2008	$1,230,000.00
March 31, 2009	$1,230,000.00
June 30, 2009	$1,230,000.00
September 30, 2009	$1,230,000.00
December 31, 2009	$1,230,000.00
March 31, 2010	$1,230,000.00
June 30, 2010	$1,230,000.00
September 30, 2010	$1,230,000.00
December 31, 2010	$1,230,000.00
March 31, 2011	$117,157,500.00
June 30, 2011	$117,157,500.00
September 30, 2011	$117,157,500.00
December 19, 2011	$117,157,500.00

; 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 original Installment amount of the Tranche D Term Loans to be repaid on such Installment Date and (z) the original aggregate principal amount of the Tranche D Term Loans.

Notwithstanding the foregoing, (i) such scheduled installments shall be reduced in connection with any voluntary or mandatory prepayments of the Term Loans in accordance with Sections 2.12, 2.13 and 2.14; (ii) Tranche D Term Loans and all other amounts owed hereunder with respect thereto shall be paid in full no later than the Tranche D Term Loan Maturity Date, and the final installment payable by Company in respect thereof on such date shall be in an amount sufficient to repay all amounts owing by Company hereunder with respect to the Tranche D Term Loans; and (iii) New Term Loans and all other amounts owed hereunder with respect thereto shall be paid in full no later than the New Term Loan Maturity Date, and the final installment payable by Company in respect thereof on such date shall be in an amount sufficient to repay all amounts owing by Company hereunder with respect to the New Term Loans.

2.12 Voluntary Prepayments/Commitment Reductions

(a) Company may, upon written or telephonic notice to Administrative Agent on or prior to 12:00 noon (New York City time) on the date of prepayment, which notice, if telephonic, shall be promptly confirmed in writing, at any time and from time to time prepay any Swing Line Loan on any Business Day in whole or in part in an aggregate minimum amount of $250,000 and integral multiples of $100,000 in excess of that amount. Company may, upon not less than one (1) Business Day’s prior written or telephonic notice, in the case of Base Rate Loans, and three (3) Business Days’ prior written or telephonic notice, in the case of Eurodollar Rate Loans, in each case given to Administrative Agent by 12:00 noon (New York City time) on the date required and, if given by telephone, promptly confirmed in writing to Administrative Agent (which original written or telephonic notice Administrative Agent will promptly transmit by telefacsimile or telephone to each Lender), at any time and from time to time prepay any Term Loans or Revolving Loans on any Business Day in whole or in part in an aggregate minimum amount of $500,000 and integral multiples of $100,000 in excess of that amount in the case of Term Loans and $100,000 and integral multiples of $500,000 in excess of that amount in the case of Revolving Loans; provided, however, that a Eurodollar Rate Loan may only be prepaid on the expiration of the Interest Period applicable thereto unless Company pays Lenders any amount required pursuant to Section 2.18(c) on the date of such prepayment. Notice of prepayment having been given as aforesaid, the principal amount of the Loans specified in such notice shall become due and payable on the prepayment date specified therein; provided that Company may rescind or postpone any such notice of prepayment if such prepayment would have resulted from a refinancing of all of the Loans and such refinancing shall not be consummated or otherwise shall be delayed.

(b) Company may, upon not less than three (3) Business Days’ prior written or telephonic notice confirmed in writing to Administrative Agent (which original written or telephonic notice Administrative Agent will promptly transmit by telefacsimile or telephone to each Lender), at any time and from time to time terminate in whole or permanently reduce in part, without premium or penalty, the Revolving Loan Commitments in an amount up to the amount by which the Revolving Loan Commitments exceed the Total Utilization of Revolving Loan Commitments at the time of such proposed termination or reduction; provided, any such partial reduction of the Revolving Loan Commitments shall be in an aggregate minimum amount of $2,000,000 and integral multiples of $1,000,000 in excess of that amount. Company’s notice to Administrative Agent shall designate the date (which shall be a Business Day) of such termination or reduction and the amount of any partial reduction, and such termination or reduction of the Revolving Loan Commitments shall be effective on the date specified in Company’s notice and shall reduce the Revolving Loan Commitment of each Lender having Revolving Credit Exposure proportionately to its Pro Rata Share (determined with respect to Revolving Loan Commitments); provided that Company may rescind or postpone any such notice of termination of the Revolving Loan Commitments if such termination would have resulted from a refinancing of all of the Loans and such refinancing shall not be consummated or otherwise shall be delayed.

(c) Notwithstanding anything to the contrary contained in this Section 2.12 or any other provision of this Agreement, so long as (i) there is no Default, (ii) there is no Event of Default and (iii) no Default or Event of Default would result therefrom, Company may repurchase outstanding Term Loans on the following bases:

(i) Company may repurchase on a non-pro rata basis all or any portion of the Term Loans of one or more Lenders pursuant to an Assignment Agreement, between Company and such Lender or Lenders in an aggregate principal amount not to exceed 30% of the initial aggregate principal amount of Term Loans with respect to all such repurchases pursuant to this clause (i); provided that, with respect to such repurchases, Company shall simultaneously provide a copy of such Assignment Agreement and any other agreements between Company and such Lender with respect to such repurchase to Administrative Agent and GSCP;

(ii) In addition, Company may make one or more offers (each, an “Offer”) to repurchase all or any portion of the Term Loans (such Term Loans, the “Offer Loans”) of Lenders, provided, (A) Company delivers a notice of such Offer to Administrative Agent (to be distributed to the Lenders) no later than 12:00 noon (New York City time) at least five (5) Business Days in advance of a proposed consummation date of such Offer indicating (1) the last date on which such Offer may be accepted, (2) the maximum dollar amount of the Offer, (3) the repurchase price per dollar of principal amount of such Offer Loans at which Company is willing to repurchase the Offer Loans and (4) the instructions, consistent with this Section 2.12(c) with respect to the Offer (which shall be reasonably acceptable to Company, Administrative Agent and GSCP), that a Lender must follow in order to have its Offer Loans repurchased; (B) the maximum dollar amount of the Offer shall be no less than an aggregate $1,000,000; (C) Company shall hold the Offer open for a minimum period of two (2) Business Days; (D) a Lender who elects to participate in the Offer may choose to tender all or part of such Lender’s Offer Loans; and (E) the Offer shall be made to Lenders holding the Offer Loans on a pro rata basis in accordance with their Pro Rata Shares; provided, further that, if any Lender elects not to participate in the Offer, either in whole or in part, the amount of such Lender’s Offer Loans not being tendered shall be excluded in calculating the pro rata amount applicable to the balance of such Offer Loans;

(iii) With respect to all repurchases made by Company pursuant to this Section 2.12(c), (A) Company shall pay all accrued and unpaid interest, if any, on the repurchased Term Loans to the date of repurchase of such Term Loans (B) Company shall have provided to all Lenders all information that, together with any previously provided information, would satisfy the requirements of Rule 10b-5 of the Exchange Act with respect to an offer by Company to repurchase securities registered under the Securities Act (whether or not such securities are outstanding) as if such offer was being made as of the date of such repurchase of Term Loans from a Lender and (C) such repurchases shall not be deemed to be voluntary prepayments pursuant to this Section 2.12, Section 2.13 or 2.16 hereunder except that the amount of the Loans so repurchased shall be applied on a pro rata basis to reduce the scheduled remaining Installments of principal on such Term Loan;

(iv) Following repurchase by Company pursuant to this Section 2.12(c), the Term Loans so repurchased shall be deemed cancelled for all purposes and no longer outstanding (and may not be resold by Company), for all purposes of this Agreement and all other Credit Documents, including, but not limited to (A) the making of, or the application of, any payments to the Lenders under this Agreement or any other Credit Document, (B) the making of any request, demand, authorization, direction, notice, consent or waiver under this Agreement or any other Credit Document or (C) the determination of Requisite Lenders, or for any similar or related purpose, under this Agreement or any other Credit Document. Any payment made by Company in connection with a repurchase permitted by this Section 2.12(c) shall not be subject to the provisions of either Section 2.16 or Section 2.17. Failure by Company to make any payment to a Lender required by an agreement permitted by this Section 2.12(c) shall not constitute an Event of Default under Section 8.1(a); and

(v) Notwithstanding any of the provisions set forth in this Agreement to the contrary, Company, the Lenders and Agents hereby agree that nothing in this Agreement shall be understood to mean or suggest that the Term Loans constitute “securities” for purposes of either the Securities Act or the Exchange Act.

2.13 Mandatory Prepayments/Commitment Reductions

(a) No later than the first Business Day following the date of receipt by Holdings, Company or any of its Subsidiaries of any Net Asset Sale Proceeds from Asset Sales made in accordance with Sections 6.7(o), 6.7(p), and Section 6.9, or of any Net Insurance/Condemnation Proceeds, Company shall prepay the Loans and/or the Revolving Loan Commitments shall be permanently reduced in an aggregate amount equal to such Net Asset Sale Proceeds or Net Insurance/Condemnation Proceeds, as the case may be; provided, so long as Event of Default shall have occurred and be continuing, Company may deliver to Administrative Agent a certificate of an Authorized Officer of Company setting forth (1) that portion of such Net Asset Sale Proceeds or Net Insurance/Condemnation Proceeds (such portion being the “Proposed Reinvestment Proceeds”) that Company or such Subsidiary intends to reinvest within 365 days of the date of receipt, in non-current assets useful in the business of Company and its Subsidiaries, which may include, in the case of any Proposed Reinvestment Proceeds which related to Net Insurance/Condemnation Proceeds, the repair, restoration or replacement of the applicable assets of Company or its Subsidiaries (such assets being “Eligible Assets”) and (2) the proposed use of such Proposed Reinvestment Proceeds and such other information with respect to such reinvestment as Administrative Agent may reasonably request. In the event Collateral Agent shall receive any Net Insurance/Condemnation Proceeds in its capacity as loss payee pursuant to Section 5.5, Company hereby authorizes Collateral Agent to apply an amount equal to all such amounts in accordance with this Section 2.13(a); provided, if Company shall elect to exercise its option to reinvest any such proceeds pursuant to the first sentence of this Section 2.13(a), Company shall give notice to Administrative Agent of such election and Administrative Agent shall pay over to Company such proceeds and Company shall reinvest such proceeds in accordance with the terms of such sentence.

(b) On the date of receipt by Parent, Holdings or Company of the Cash proceeds from the issuance of any equity Securities in a public offering or in a private placement underwritten, placed or initially purchased by an investment bank (it being understood that Sponsor is not an investment bank) of Parent, Holdings, Company or any of its Subsidiaries, Company shall prepay the Loans and/or the Revolving Loan Commitments shall be permanently reduced in an aggregate amount equal to 50% of such proceeds, net of investment banking fees, underwriting discounts and commissions and other reasonable costs and expenses associated therewith, including reasonable legal fees and expenses; provided, during any period in which the Leverage Ratio as of the last day of the immediately preceding Fiscal Quarter (determined for any such period by reference to the most recent Compliance Certificate delivered pursuant to Section 5.1(d) calculating the Leverage Ratio) (i) shall be 4.00:1.00 or less, Company shall be required to make the prepayment and/or reduction required hereby in an amount equal to 25% of such net proceeds, and (ii) shall be 2.50:1.00 or less, Company shall not be required to make any prepayment and/or reduction hereby; and provided further that no such prepayment or commitment reduction shall be required with respect to an amount equal to such proceeds that are received (w) in a private offering or placement to the extent that such proceeds do not exceed $25,000,000 in the aggregate and are utilized to finance Permitted Acquisitions, (x) pursuant to any employee stock or stock option plan, (y) in connection with sales or issuances of equity Securities to (A) the Equity Investors, their Affiliates, related funds and limited partners and (B) other Persons making additional equity investments together with the Equity Investors after the Closing Date, and (z) in connection with any Permitted Cure Securities. Notwithstanding the foregoing, in the event that Parent receives net proceeds from the Parent IPO of at least $125,000,000, then Company shall not be required to prepay the Loans hereunder to the extent such net proceeds are used to repay the Senior Subordinated Notes and/or the Holdco Notes and/or, from and after the Holdings Merger Effective Date, the Parent Notes.

(c) On the first Business Day following the date of receipt by Holdings, Company or its Subsidiaries of the Cash proceeds from the issuance of any debt Securities (other than the proceeds of Indebtedness permitted under Section 6.1 (unless indicated otherwise in Section 6.1)) of Holdings, Company or its Subsidiaries, Company shall prepay the Loans and/or the Revolving Loan Commitments shall be permanently reduced in an aggregate amount equal to equal to 100% of such proceeds, net, in the case of any such issuance, of investment banking fees, underwriting discounts and commissions and other reasonable costs and expenses associated therewith, including reasonable legal fees and expenses.

(d) In the event that there shall be Consolidated Excess Cash Flow for any Fiscal Year (commencing with Fiscal Year ended 2006), Company shall, no later than one hundred-five (105) days after the end of such Fiscal Year, prepay the Loans and/or the Revolving Loan Commitments shall be permanently reduced in an aggregate amount equal to 50% of such Consolidated Excess Cash Flow, minus a dollar-for-dollar reduction in an amount equal to the amount of prepayments and repurchases of Tranche D Term Loan made during such Fiscal Year or, without duplication, the Fiscal Year in which such payment of Consolidated Excess Cash Flow occurs, pursuant to Section 2.12(a) and/or 2.12(c); provided, during any period in which the Leverage Ratio as of the last day of the last Fiscal Quarter of such Fiscal Year (determined for any such period by reference to the most recent Compliance Certificate delivered pursuant to Section 5.1(d) calculating the Leverage Ratio) (i) shall be 4.00:1.00 or less, Company shall be required to make the prepayment and/or reduction required hereby in an amount equal to 25% of such Consolidated Excess Cash Flow, and (ii) shall be 2.50:1.00 or less, Company shall not be required to make any prepayment and/or reduction hereby.

(e) Company shall from time to time prepay first, the Swing Line Loans, and second, the Revolving Loans to the extent necessary so that the Total Utilization of Revolving Loan Commitments shall not at any time exceed the Revolving Loan Commitments then in effect.

(f) Concurrently with any prepayment of the Loans and/or reduction of the Commitments pursuant to Sections 2.13(a) through 2.13(e), Company shall deliver to Administrative Agent a certificate by its Authorized Officer demonstrating the calculation of the amount of the applicable net proceeds or Consolidated Excess Cash Flow, as the case may be, that gave rise to such prepayment and/or reduction.

2.14 Application of Prepayments and Reductions of Commitments

(a) Any voluntary prepayments made pursuant to Section 2.12 (other than clause (c) thereof) shall be applied as specified by Company in the applicable notice of prepayment; provided, in the event Company fails to specify the Loans to which any such prepayment shall be applied, such prepayment shall be applied first, to repay outstanding Swing Line Loans to the full extent thereof, second to repay outstanding Revolving Loans to the full extent thereof, third to prepay scheduled Installments of the Term Loans for the immediately succeeding twelve-month period, and fourth, to prepay the Term Loans on a pro rata basis (in accordance with the respective outstanding principal amounts thereof) and shall be further applied on a pro rata basis (in accordance with the respective outstanding principal amounts thereof) to each scheduled installment of principal of the Term Loans, that is unpaid at the time of such prepayment.

(b) Any amount (the “Applied Amount”) required to be paid pursuant to Section 2.13 shall be applied first, to prepay scheduled Installments of the Term Loans for the immediately succeeding twelve-month period, second, to prepay the Term Loans on a pro rata basis (in accordance with the respective outstanding principal amounts thereof) and shall be further applied on a pro rata basis (in accordance with the respective outstanding principal amounts thereof) to each scheduled installment of principal of the Term Loans, that is unpaid at the time of such prepayment, third, to the extent of any remaining portion of the Applied Amount, to prepay the Swing Line Loans to the full extent thereof and to permanently reduce the Revolving Loan Commitments by the amount of such prepayment, fourth, to the extent of any remaining portion of the Applied Amount, to prepay the Revolving Loans to the full extent thereof and to further permanently reduce the Revolving Loan Commitments by the amount of such prepayment, fifth, to the extent of any remaining portion of the Applied Amount, to further permanently reduce the Revolving Loan Commitments to the full extent thereof, and sixth, to cash-collateralize any Letters of Credit that are outstanding.

(c) Considering each Class of Loans being prepaid separately, any prepayment thereof shall be applied first to Base Rate Loans to the full extent thereof before application to Eurodollar Rate Loans, in each case in a manner which minimizes the amount of any payments required to be made by Company pursuant to Section 2.18(c); provided, so long as no Event of Default shall have occurred and then be continuing, Company may elect that the remainder of such prepayments (after application to all Base Rate Loans) be deposited in a cash collateral account and applied thereafter to prepay any Eurodollar Rate Loans at the earliest expiration of the Interest Periods applicable thereto. Company hereby grants to Administrative Agent, for the benefit of such Lenders, a security interest in all amounts in which Company has any right, title or interest which are from time to time on deposit in such cash collateral account and expressly waives all rights (which rights Company hereby acknowledges and agrees are vested exclusively in the Administrative Agent) to exercise dominion or control over any such amounts.

2.15 Collateral Proceeds; Guaranty Payments

(a) Except as otherwise provided herein, all proceeds received by Collateral Agent in respect of any sale of, collection from, or other realization upon all or any part of the Collateral after the occurrence and during the continuance of an Event of Default, may, in the discretion of Collateral Agent, be held by Collateral Agent as Collateral for, and/or (then or at any time thereafter) applied in full or in part by Collateral Agent against, the “Secured Obligations” or “Obligations” (each as defined in the applicable Collateral Documents) in the following order of priority: first, to the payment of all costs and expenses of such sale, collection or other realization, including reasonable compensation to Collateral Agent and its agents and counsel, and all other expenses, liabilities and advances made or incurred by Collateral Agent in connection therewith, and all amounts for which Collateral Agent is entitled to indemnification under such Collateral Documents and hereunder and all advances made by Collateral Agent thereunder for the account of the applicable Credit Party, and to the payment of all costs and expenses paid or incurred by Collateral Agent in connection with the exercise of any right or remedy under such Collateral Document or hereunder, all in accordance with the terms hereof; second, to the extent of any excess such proceeds, to the payment of all other such Secured Obligations for the ratable benefit of the holders thereof; and third, to the extent of any excess such proceeds, to the payment to or upon the order of such Credit Party or to whosoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct.

(b) All payments received by Administrative Agent under the Guaranty shall be applied promptly from time to time by Administrative Agent in the following order of priority: first, to the payment of the costs and expenses of any collection or other realization under the Guaranty, including reasonable compensation to Collateral Agent and its agents and counsel, and all expenses, liabilities and advances made or incurred by Collateral Agent in connection therewith, all in accordance with the terms of the Guaranty and this Agreement; second, to the extent of any excess such payments, to the payment of all other Obligations for the ratable benefit of the holders thereof; and third, to the extent of any excess such payments, to the payment to the applicable Guarantor or to whosoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct.

2.16 General Provisions Regarding Payments

All payments by Company of principal, interest, fees and other Obligations shall be made in Dollars in same day funds, without defense, set-off or counterclaim, free of any restriction or condition, and delivered to Administrative Agent not later than 12:00 noon (New York City time) on the date due at the Funding and Payment Office for the account of Lenders; funds received by Administrative Agent after that time on such due date shall be deemed to have been paid by Company on the next succeeding Business Day. All payments in respect of the principal amount of any Loan (other than voluntary prepayments of Revolving Loans and Swing Line Loans) shall include payment of accrued interest on the principal amount being repaid or prepaid, and all such payments (and, in any event, any payments in respect of any Loan on a date when interest is due and payable with respect to such Loan) shall be applied to the payment of interest before application to principal. Administrative Agent shall promptly distribute to each Lender, at its primary address set forth on its signature page hereto or at such other address as such Lender may request, its applicable Pro Rata Share of all payments and prepayments of principal and interest due hereunder, together with all other amounts due thereto, including, without limitation, all fees payable thereto, received by Administrative Agent. Notwithstanding the foregoing provisions hereof, if any Conversion/Continuation Notice is withdrawn as to any Affected Lender or if any Affected Lender makes Base Rate Loans in lieu of its applicable Pro Rata Share of any Eurodollar Rate Loans, Administrative Agent shall give effect thereto in apportioning payments received thereafter. Notwithstanding anything to the contrary herein, payments of amounts deposited in the collateral account pursuant to Section 2.14(c) shall be deemed to have been paid by Company on the later of (a) the date such amounts are so deposited, and (b) if Company elects to apply such amounts in accordance with Section 2.14(c), the applicable date or dates such amounts are applied to prepay Eurodollar Rate Loans.

2.17 Ratable Sharing

Lenders hereby agree among themselves that if any of them shall, whether by voluntary payment (other than a voluntary prepayment of Loans made and applied in accordance with the terms hereof), by realization upon security, through the exercise of any right of set-off or banker’s lien, by counterclaim or cross action or by the enforcement of any right under the Credit Documents or otherwise, or as adequate protection of a deposit treated as cash collateral under the Bankruptcy Code, receive payment or reduction of a proportion of the aggregate amount of principal, interest, amounts payable in respect of Letters of Credit, fees and other amounts then due and owing to such Lender hereunder or under the other Credit Documents (collectively, the “Aggregate Amounts Due” to such Lender) which is greater than the proportion received by any other Lender in respect of the Aggregate Amounts Due to such other Lender, then the Lender receiving such proportionately greater payment shall (i) notify Administrative Agent and each other Lender of the receipt of such payment and (ii) apply a portion of such payment to purchase participations (which it shall be deemed to have purchased from each seller of a participation simultaneously upon the receipt by such seller of its portion of such payment) in the Aggregate Amounts Due to the other Lenders so that all such recoveries of Aggregate Amounts Due shall be shared by all Lenders in proportion to the Aggregate Amounts Due to them; provided, if all or part of such proportionately greater payment received by such purchasing Lender is thereafter recovered from such Lender upon the bankruptcy or reorganization of Company or otherwise, those purchases shall be rescinded and the purchase prices paid for such participations shall be returned to such purchasing Lender ratably to the extent of such recovery, but without interest. Company expressly consents to the foregoing arrangement and agrees that any holder of a participation so purchased may exercise any and all rights of banker’s lien, set-off or counterclaim with respect to any and all monies owing by Company to that holder with respect thereto as fully as if that holder were owed the amount of the participation held by that holder directly by Company.

2.18 Making or Maintaining Eurodollar Rate Loans

(a) In the event that Administrative Agent shall have reasonably determined (which determination shall be final and conclusive and binding upon all parties hereto), on any Interest Rate Determination Date with respect to any Eurodollar Rate Loans, that by reason of circumstances affecting the London interbank market adequate and fair means do not exist for ascertaining the interest rate applicable to such Loans on the basis provided for in the definition of Adjusted Eurodollar Rate, Administrative Agent shall on such date give notice (by telefacsimile or by telephone confirmed in writing) to Company and each Lender of such determination, whereupon (i) no Loans may be made as, or converted to, Eurodollar Rate Loans until such time as Administrative Agent notifies Company and Lenders that the circumstances giving rise to such notice no longer exist, which notice shall be given as soon as reasonably practicable and (ii) any Funding Notice or Conversion/Continuation Notice given by Company with respect to the Loans in respect of which such determination was made shall be deemed to be rescinded by Company without the necessity of paying any amount under Section 2.18(c), and any Funding Notice previously delivered by Company which requested Eurodollar Rate Loans may be revoked by Company or, failing that, shall be deemed to be converted into a request(s) for borrowing of Base Rate Loans.

(b) In the event that on any date any Lender shall have reasonably determined (which determination shall be final and conclusive and binding upon all parties hereto but shall be made only after consultation with Company and Administrative Agent) that the making, maintaining or continuation of its Eurodollar Rate Loans (i) has become unlawful as a result of compliance by such Lender in good faith with any law, treaty, governmental rule, regulation, guideline or order (or would conflict with any such treaty, governmental rule, regulation, guideline or order not having the force of law even though the failure to comply therewith would not be unlawful), or (ii) has become impracticable, or would cause such Lender material hardship, as a result of contingencies occurring after the date hereof which materially and adversely affect the London interbank market or the position of such Lender in that market, then, and in any such event, such Lender shall be an “Affected Lender” and it shall on that day give notice (by telefacsimile or by telephone confirmed in writing) to Company and Administrative Agent of such determination (which notice Administrative Agent shall promptly transmit to each other Lender). Thereafter (1) the obligation of the Affected Lender to make Loans as, or to convert Loans to, Eurodollar Rate Loans shall be suspended until such notice shall be withdrawn by the Affected Lender, (2) to the extent such determination by the Affected Lender relates to a Eurodollar Rate Loan then being requested by Company pursuant to a Funding Notice or a Conversion/Continuation Notice, the Affected Lender shall make such Loan as (or convert such Loan to, as the case may be) a Base Rate Loan, (3) the Affected Lender’s obligation to maintain its outstanding Eurodollar Rate Loans (the “Affected Loans”) shall be terminated at the earlier to occur of the expiration of the Interest Period then in effect with respect to the Affected Loans or when required by law, and (4) the Affected Loans shall automatically convert into Base Rate Loans on the date of such termination. Notwithstanding the foregoing, to the extent a determination by an Affected Lender as described above relates to a Eurodollar Rate Loan then being requested by Company pursuant to a Funding Notice or a Conversion/Continuation Notice, Company shall have the option, subject to the provisions of Section 2.18(c), to rescind such Funding Notice or Conversion/Continuation Notice as to all Lenders by giving notice (by telefacsimile or by telephone confirmed in writing) to Administrative Agent of such rescission on the date on which the Affected Lender gives notice of its determination as described above (which notice of rescission Administrative Agent shall promptly transmit to each other Lender). Except as provided in the immediately preceding sentence, nothing in this Section 2.18(b) shall affect the obligation of any Lender other than an Affected Lender to make or maintain Loans as, or to convert Loans to, Eurodollar Rate Loans in accordance with the terms hereof.

(c) Company shall compensate each Lender, upon written request by such Lender (which request shall set forth the basis for requesting such amounts), for all reasonable losses, expenses and liabilities (including any interest paid by such Lender to lenders of funds borrowed by it to make or carry its Eurodollar Rate Loans and any loss, expense or liability sustained by such Lender in connection with the liquidation or re-employment of such funds but excluding (a) any loss solely attributable to the failure to receive the Applicable Margin on a Eurodollar Rate Loan for any period after (y) the date specified for such Eurodollar Rate Loan in the case of clause (i) below and (z) the date such Eurodollar Rate Loans are prepaid or converted in the case of clause (ii) below) which such Lender may sustain: (i) if for any reason (other than a default by such Lender) a borrowing of any Eurodollar Rate Loan does not occur on a date specified therefor in a Funding Notice or a telephonic request for borrowing, or a conversion to or continuation of any Eurodollar Rate Loan does not occur on a date specified therefor in a Conversion/Continuation Notice or a telephonic request for conversion or continuation; (ii) if any prepayment or other principal payment or any conversion of any of its Eurodollar Rate Loans occurs on a date prior to the last day of an Interest Period applicable to that Loan; or (iii) if any prepayment of any of its Eurodollar Rate Loans is not made on any date specified in a notice of prepayment given by Company and (b) any loss, expense or liability with respect to Taxes (and any liabilities relating thereto), the indemnity for which shall be governed solely and exclusively by Section 2.20.

(d) Any Lender may make, carry or transfer Eurodollar Rate Loans at, to, or for the account of any of its branch offices or the office of an Affiliate of such Lender. In addition, in the case of each Lender that makes, carries or transfers any Eurodollar Rate Loan at, to, or for the account of an office of an Affiliate of such Lender pursuant to this Section 2.18(d), such Lender: (i) shall keep a register, meeting the requirements of Temporary Treasury Regulation Section 5f.103-1(c), relating to each such Affiliate of such Lender, specifying such Affiliate’s entitlement to payments of principal and interest with respect to such Loan, and (ii) shall collect, prior to the time such Affiliate receives payments, from each such Lender the appropriate forms, certificates and statements described in Section 2.20 (and updated as required by Section 2.20) as if such Affiliate were a Lender under Section 2.20.

(e) Calculation of all amounts payable to a Lender under this Section 2.18 and under Section 2.19 shall be made as though such Lender had actually funded each of its relevant Eurodollar Rate Loans through the purchase of a Eurodollar deposit bearing interest at the rate obtained pursuant to clause (i) of the definition of Adjusted Eurodollar Rate in an amount equal to the amount of such Eurodollar Rate Loan and having a maturity comparable to the relevant Interest Period and through the transfer of such Eurodollar deposit from an offshore office of such Lender to a domestic office of such Lender in the United States of America; provided, each Lender may fund each of its Eurodollar Rate Loans in any manner it sees fit and the foregoing assumptions shall be utilized only for the purposes of calculating amounts payable under this Section 2.18 and under Section 2.19.

2.19 Increased Costs; Capital Adequacy

Subject to the provisions of Section 2.20 (which shall be controlling with respect to the Tax matters), in the event that any Lender (which term shall include Issuing Bank for purposes of this Section 2.19) shall reasonably determine (which determination shall, absent demonstrable error, be final and conclusive and binding upon all parties hereto) that any law, treaty or governmental rule, regulation or order, or any change therein or in the interpretation, administration or application thereof (including the introduction of any new law, treaty or governmental rule, regulation or order), or any determination of a court or governmental authority, in each case that becomes effective after the date hereof, or compliance by such Lender with any guideline, request or directive issued or made after the date hereof by any central bank or other governmental or quasi-governmental authority (whether or not having the force of law): (a) imposes, modifies or holds applicable any reserve (including any marginal, emergency, supplemental, special or other reserve), special deposit, compulsory loan, FDIC insurance or similar requirement against assets held by, or deposits or other liabilities in or for the account of, or advances or loans by, or other credit (including letters of credit) extended by, or any other acquisition of funds by, any office of such Lender (other than any such reserve or other requirements with respect to Eurodollar Rate Loans that are reflected in the definition of Adjusted Eurodollar Rate); or (b) imposes any other condition (other than with respect to a Tax matter) on or affecting such Lender (or its applicable lending office) or its obligations hereunder or the London interbank market; and the result of any of the foregoing is to increase the cost to such Lender of agreeing to make, making or maintaining Loans hereunder or to reduce any amount received or receivable by such Lender (or its applicable lending office) with respect thereto; then, in any such case, Company shall promptly pay to such Lender, upon receipt of the statement referred to in the next sentence, such additional amount or 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 may be necessary to compensate such Lender for any such increased cost or reduction in amounts received or receivable hereunder. Such Lender shall deliver to Company (with a copy to Administrative Agent) a written statement, setting forth in reasonable detail the basis for calculating the additional amounts owed to such Lender under this Section 2.19, which statement shall be conclusive and binding upon all parties hereto absent demonstrable error.

2.20 Taxes; Withholding, Etc.

(a) All sums payable by any Credit Party hereunder and the other Credit Documents shall (except to the extent required by law) be paid free and clear of, and without any deduction or withholding on account of, any Tax (other than a Tax on the overall net income of any Lender or any Agent), imposed, levied, collected, withheld or assessed by or within the United States of America or any political subdivision in or of the United States of America or any other jurisdiction from or to which a payment is made by or on behalf of any Credit Party or by any federation or organization of which the United States of America or any such jurisdiction is a member at the time of payment.

(b) If any Credit Party or any other Person is required by law to make any deduction or withholding on account of any such Tax from any sum paid or payable by any Credit Party to Administrative Agent or any Lender under any of the Credit Documents: (i) Company shall notify Administrative Agent of any such requirement or any change in any such requirement as soon as Company becomes aware of it; (ii) Company shall pay any such Tax before the date on which penalties attach thereto, such payment to be made (if the liability to pay is imposed on any Credit Party) for its own account or (if that liability is imposed on Administrative Agent or such Lender, as the case may be) on behalf of and in the name of Administrative Agent or such Lender; (iii) the sum payable by such Credit Party in respect of which the relevant deduction, withholding or payment is required shall be increased to the extent necessary to ensure that, after the making of that deduction, withholding or payment, Administrative Agent or such Lender, as the case may be, receives on the due date a net sum equal to what it would have received had no such deduction, withholding or payment been required or made; and (iv) within thirty (30) days after paying any sum from which it is required by law to make any deduction or withholding, and within 30 days after the due date of payment of any Tax which it is required by clause (ii) above to pay, Company shall deliver to Administrative Agent evidence reasonably satisfactory to the other affected parties of such deduction, withholding or payment and of the remittance thereof to the relevant taxing or other authority; provided, no such additional amount shall be required to be paid to any Lender or any Agent under clause (iii) above with respect to any deductions or withholding applicable as of the date hereof (in the case of each Lender and each Agent listed on the signature pages hereof) or the effective date of the Assignment Agreement pursuant to which such Lender became a Lender or the date on which a successor Lender becomes a Lender, or the date a successor Agent becomes an Agent (in the case of each other Lender or Agent) in respect of payments to such Lender or such Agent.

(c) Each Lender and each Agent that is not a United States Person (as such term is defined in Section 7701(a)(30) of the Internal Revenue Code) for U.S. federal income tax purposes (a “Non-US Lender”) shall, unless previously delivered pursuant to Section 2.20(c) of the Existing Credit Agreement or Original Credit Agreement, deliver to Administrative Agent for transmission to Company, on or prior to the Effective Date (in the case of each Lender and each Agent listed on the signature pages hereof on the Effective Date) or on or prior to the date of the Assignment Agreement pursuant to which it becomes a Lender or on or prior to the date a successor Lender becomes a Lender or on or prior to the date a successor Agent becomes an Agent (in the case of each other Lender and each Agent): (i) two original copies of Internal Revenue Service Form W-8BEN or W-8ECI (or any successor forms), properly completed and duly executed by such Non-U.S. Lender, and such other documentation required under the Internal Revenue Code to establish that such Non-U.S. Lender is not subject to deduction or withholding of United States federal income tax with respect to any payments to such Non-U.S. Lender of principal, interest, fees or other amounts payable under any of the Credit Documents, or (ii) if such Non-U.S. Lender is not a “bank” or other Person described in Section 881(c)(3) of the Internal Revenue Code and cannot deliver either Internal Revenue Service Form W-8BEN or W-8ECI pursuant to clause (i) above, a Certificate re Non-Bank Status together with two original copies of Internal Revenue Service Form W-8BEN (or any successor form), properly completed and duly executed by such Non-U.S. Lender, and such other documentation required under the Internal Revenue Code to establish that such Non-U.S. Lender is not subject to deduction or withholding of United States federal income tax with respect to any payments to such Non-U.S. Lender of interest payable under any of the Credit Documents. Each Non-U.S. Lender required to deliver any forms, certificates or other evidence with respect to United States federal income tax withholding matters pursuant to this Section 2.20(c) hereby agrees, from time to time after the initial delivery by such Non-U.S. Lender of such forms, certificates or other evidence to promptly deliver to Administrative Agent for transmission to Company two new original copies of Internal Revenue Service Form W-8BEN or W-8ECI, or a Certificate re Non-Bank Status and two original copies of Internal Revenue Service Form W-8BEN (or successor forms or certificates as shall be adopted from time to time by the relevant United States taxing authority), as the case may be, properly completed and duly executed by such Non-U.S. Lender, and such other documentation required under the Internal Revenue Code to confirm or establish that such Non-U.S. Lender is not subject to deduction or withholding of United States federal income tax with respect to payments to such Non-U.S. Lender under the Credit Documents, (i) on or before the date that any such previously provided forms, certificates or evidence expires or becomes inaccurate, (ii) whenever a lapse in time or change in circumstances renders such previously provided forms, certificates or other evidence obsolete or inaccurate and (iii) from time to time thereafter if reasonably requested by Company or Administrative Agent, or to notify Administrative Agent and Company of its inability to deliver any such forms, certificates or other evidence. Company and each other Credit Party shall not be required to pay any additional amount to any Non-US Lender under Section 2.20(b)(iii) if such Non-U.S. Lender shall have (x) failed to deliver the forms, certificates or other evidence referred to in this Section 2.20(c), or (y) notified Administrative Agent and Company of its inability to deliver any such forms, certificates or other evidence, as the case may be; provided, if such Non-U.S. Lender shall have satisfied the requirements of the first sentence of this Section 2.20(c) on the Effective Date or on the date of the Assignment Agreement or the date of succession pursuant to which it became a Lender or an Agent, as applicable, nothing in this last sentence of Section 2.20(c) shall relieve Company and each other Credit Party of its obligation to pay any additional amounts pursuant to this Section 2.20 in the event that, as a result of any change in any applicable law, treaty or governmental rule, regulation or order, or any change in the interpretation, administration or application thereof, such Non-U.S. Lender is no longer properly entitled to deliver forms, certificates or other evidence at a subsequent date establishing the fact that such Non-U.S. Lender is not subject to withholding as described herein.

(d) Each Lender and each Agent that is not a Non-US Lender (a “US Lender”) shall, unless previously delivered pursuant to Section 2.20(d) of the Existing Credit Agreement or Original Credit Agreement, deliver to Administrative Agent and Company two original copies of Internal Revenue Service Form W-9 properly completed and duly executed by such US Lender on or prior to the Effective Date (or on or prior to the date it becomes a party to this Agreement), certifying that such US Lender is entitled to an exemption from United States backup withholding tax, or any successor form. Each US Lender required to deliver any forms, certificates or other evidence with respect to United States backup withholding tax matters pursuant to this Section 2.20(d) hereby agrees, from time to time after the initial delivery by such US Lender of such forms, certificates or other evidence, that such US Lender shall promptly deliver to Administrative Agent for transmission to Company two new original copies of Internal Revenue Service Form W-9, properly completed and duly executed by such US Lender, together with any other certificate or statement of exemption required in order to confirm or establish that such US Lender is exempt from United States backup withholding tax with respect to payments to such US Lender under any of the Credit Documents (i) on or before the date that any such previously provided forms, certificates or other evidence expires or becomes obsolete, (ii) whenever a lapse in time or change in circumstances render such previously provided forms, certificates or other evidence obsolete or inaccurate, and (iii) from time to time thereafter if reasonably requested by Company or Administrative Agent, or shall notify Administrative Agent and Company of its inability to deliver any such forms, certificates or other evidence. Company and each other Credit Party shall not be required to pay any additional amount to any US Lender under Section 2.20(b)(iii) to the extent deduction or withholding is a result of such US Lender’s failure to provide an Internal Revenue Service Form W-9 establishing that such US Lender is exempt from United States backup withholding tax; provided, if such US Lender shall have satisfied the requirements of this Section 2.20(d) on the Effective Date or on the date of the Assignment Agreement or on the date of the succession pursuant to which it became a Lender or an Agent, as applicable, nothing in this last sentence of Section 2.20(d) shall relieve Company and each other Credit Party of its obligation to pay any additional amounts otherwise payable pursuant to Section 2.20(b)(iii) in the event that, as a result of any change in any applicable law, treaty or governmental rule, regulation or order, or any change in the interpretation, administration or application thereof, such US Lender is no longer properly entitled to deliver forms, certificates or other evidence at a subsequent date establishing the fact that such US Lender is not subject to United States backup withholding tax as described herein. If such US Lender fails to deliver such forms, then Company may withhold from any payment to such US Lender an amount equal to the applicable backup withholding tax imposed by the Internal Revenue Code.

(e) If any Lender or any Agent determines that it has received a refund in respect of any Taxes as to which additional amounts have been paid to it by Company pursuant to Section 2.20(b)(iii), it shall promptly remit such refund (including any interest included in such refund) to Company, net of all out-of-pocket expenses of such Lender or such Agent, as the case may be; provided however, that Company, upon request of such Lender or such Agent, as the case may be, agrees to promptly return such refund to such party in the event such party is required to repay such refund to the relevant taxing authority. Such Lender or such Agent, as the case may be, shall, at Company’s request, provide Company with a copy of any notice of assessment or other evidence of the requirement to repay such refund received from the relevant taxing authority (provided that such Lender or such Agent, as the case may be, may delete any information therein that such Lender or such Agent, as the case may be, deems confidential).

(f) For purposes of this Section 2.20, the term “Lender” shall include Issuing Bank.

2.21 Capital Adequacy Adjustment

If any Lender (which term shall include Issuing Bank for purposes of this Section 2.21) shall have determined that the adoption, effectiveness, phase-in or applicability after the date hereof of any law, rule or regulation (or any provision thereof) regarding capital adequacy, or any change therein or in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Lender (or its applicable lending office) with any guideline, request or directive regarding capital adequacy (whether or not having the force of law) of any such governmental authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on the capital of such Lender or any corporation controlling such Lender as a consequence of, or with reference to, such Lender’s Loans or Commitments or Letters of Credit or participations therein or other obligations hereunder with respect to the Loans or the Letters of Credit to a level below that which such Lender or such controlling corporation could have achieved but for such adoption, effectiveness, phase-in, applicability, change or compliance (taking into consideration the policies of such Lender or such controlling corporation with regard to capital adequacy), then from time to time, within five (5) Business Days after receipt by Company from such Lender of the statement referred to in the next sentence, Company shall pay to such Lender such additional amount or amounts as will compensate such Lender or such controlling corporation on an after-tax basis for such reduction. Such Lender shall deliver to Company (with a copy to Administrative Agent) a written statement, setting forth in reasonable detail the basis of the calculation of such additional amounts, which statement shall be conclusive and binding upon all parties hereto absent demonstrable error.

2.22 Obligation to Mitigate

Each Lender (which term shall include Issuing Bank for purposes of this Section 2.22) agrees that, as promptly as practicable after the officer of such Lender responsible for administering its Loans or Letters of Credit, as the case may be, becomes aware of the occurrence of an event or the existence of a condition that would cause such Lender to become an Affected Lender or that would entitle such Lender to receive payments under Section 2.19, 2.20 or 2.21, it will, to the extent not inconsistent with the internal policies of such Lender and any applicable legal or regulatory restrictions, use reasonable efforts (i) to make, issue, fund or maintain its Credit Extensions, including any Affected Loans, through another office of such Lender, or (ii) take such other measures as such Lender may deem reasonable, if as a result thereof the circumstances which would cause such Lender to be an Affected Lender would cease to exist or the additional amounts which would otherwise be required to be paid to such Lender pursuant to Section 2.19, 2.20 or 2.21 would be materially reduced and if, as determined by such Lender in its sole discretion, the making, issuing, funding or maintaining of such Commitments, Loans or Letters of Credit through such other office or in accordance with such other measures, as the case may be, would not otherwise materially adversely affect such Commitments, Loans or Letters of Credit or the interests of such Lender; provided, such Lender will not be obligated to utilize such other office pursuant to this Section 2.22 unless Company agrees to pay all incremental expenses incurred by such Lender as a result of utilizing such other office as described in clause (i) above. A certificate as to the amount of any such expenses payable by Company pursuant to this Section 2.22 (setting forth in reasonable detail the basis for requesting such amount) submitted by such Lender to Company (with a copy to Administrative Agent) shall be conclusive absent demonstrable error. With respect to any Lender’s claim for compensation under Sections 2.19, 2.20 or 2.21, Company shall not be required to compensate such Lender for any amount incurred more than ninety (90) days prior to the date that such Lender becomes aware of the event that gives rise to such claim.

2.23 Defaulting Lenders

Anything contained herein to the contrary notwithstanding, in the event that any Lender (a “Defaulting Lender”) defaults (a “Funding Default”) in its obligation to fund any Revolving Loan (a “Defaulted Revolving Loan”) as a result of the appointment of a receiver or conservator with respect to such Lender at the direction or request of any regulatory agency or authority, then (a) during any Default Period with respect to such Defaulting Lender, such Defaulting Lender shall be deemed not to be a “Lender” for purposes of voting on any matters (including the granting of any consents or waivers) with respect to any of the Credit Documents; (b) to the extent permitted by applicable law, until such time as the Default Excess with respect to such Defaulting Lender shall have been reduced to zero, (i) any voluntary prepayment of the Revolving Loans shall, if Company so directs at the time of making such voluntary prepayment, be applied to the Revolving Loans of other Lenders as if such Defaulting Lender had no Revolving Loans outstanding and the Revolving Credit Exposure of such Defaulting Lender were zero, and (ii) any mandatory prepayment of the Revolving Loans shall, if Company so directs at the time of making such mandatory prepayment, be applied to the Revolving Loans of other Lenders (but not to the Revolving Loans of such Defaulting Lender) as if such Defaulting Lender had funded all Defaulted Revolving Loans of such Defaulting Lender, it being understood and agreed that Company shall be entitled to retain any portion of any mandatory prepayment of the Revolving Loans that is not paid to such Defaulting Lender solely as a result of the operation of the provisions of this clause (b); (c) such Defaulting Lender’s Revolving Loan Commitment and outstanding Revolving Loans and such Defaulting Lender’s applicable Pro Rata Share of the Letter of Credit Usage shall be excluded for purposes of calculating the commitment fee payable to Lenders pursuant to Section 2.10 in respect of any day during any Default Period with respect to such Defaulting Lender, and such Defaulting Lender shall not be entitled to receive any commitment fee pursuant to Section 2.10 with respect to such Defaulting Lender’s Commitment in respect of any Default Period with respect to such Defaulting Lender; and (d) the Total Utilization of Revolving Loan Commitments as at any date of determination shall be calculated as if such Defaulting Lender had funded all Defaulted Revolving Loans of such Defaulting Lender. No Revolving Loan Commitment of any Lender shall be increased or otherwise affected, and, except as otherwise expressly provided in this Section 2.23, performance by Company of its obligations hereunder and the other Credit Documents shall not be excused or otherwise modified as a result of any Funding Default or the operation of this Section 2.23. The rights and remedies against a Defaulting Lender under this Section 2.23 are in addition to other rights and remedies which Company may have against such Defaulting Lender with respect to any Funding Default and which Administrative Agent or any Lender may have against such Defaulting Lender with respect to any Funding Default.

2.24 Removal or Replacement of a Lender

Anything contained herein to the contrary notwithstanding, in the event that: (a) any Lender (an “Increased-Cost Lender”) shall give notice to Company that such Lender is an Affected Lender or that such Lender is entitled to receive payments under Section 2.19, Section 2.20 or Section 2.21, the circumstances which have caused such Lender to be an Affected Lender or which entitle such Lender to receive such payments shall remain in effect, and such Lender shall fail to withdraw such notice within five (5) Business Days after Company’s request for such withdrawal; or (b) any Lender shall become a Defaulting Lender, the Default Period for such Defaulting Lender shall remain in effect, and such Defaulting Lender shall fail to cure the default as a result of which it has become a Defaulting Lender within five (5) Business Days after Company’s request that it cure such default; or (c) in connection with any proposed amendment, modification, termination, waiver or consent with respect to any of the provisions hereof as contemplated by Section 10.5(b) or Section 10.5(c), the consent of Requisite Lenders shall have been obtained but the consent of one or more of such other Lenders (each a “Non-Consenting Lender”) whose consent is required shall not have been obtained; then, with respect to each such Increased-Cost Lender, Defaulting Lender or Non-Consenting Lender (the “Terminated Lender”), Company may, by giving written notice to Administrative Agent and any Terminated Lender of its election to do so: (i) (1) elect to terminate the Commitment, if any, of such Terminated Lender upon receipt by such Terminated Lender of such notice, and (2) prepay on the date of such termination any outstanding Loans made by such Terminated Lender, together with accrued and unpaid interest thereon and any other amounts payable to such Terminated Lender hereunder pursuant to Section 2.18(c), 2.19, 2.20 or 2.21 or otherwise; or (ii) elect to cause such Terminated Lender (and such Terminated Lender hereby irrevocably agrees) to assign its outstanding Loans and its Commitment, if any, in full to one or more Eligible Assignees (each a “Replacement Lender”) in accordance with the provisions of Section 10.6 (and no processing or recordation fee shall be payable under Section 10.6); provided, (1) on the date of such assignment, Company shall pay any amounts payable to such Terminated Lender pursuant to Section 2.18(c), 2.19, 2.20 or 2.21 or otherwise as if it were a prepayment and (2) in the event such Terminated Lender is a Non-Consenting Lender, each Replacement Lender shall consent, at the time of such assignment, to each matter in respect of which such Terminated Lender was a Non-Consenting Lender; provided, (A) Company may not make either of such elections with respect to any Terminated Lender

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SECOND AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT dated as of May 25, 2006 among, SIMMONS BEDDING COMPANY, as Company, THL-SC BEDDING COMPANY AND CERTAIN SUBSIDIARIES OF COMPANY, as Guarantors, THE FINANCIAL INSTITUTIONS LISTED HEREIN, as...