Exhibit 10.1

EXECUTION VERSION

PURCHASE AGREEMENT

December 12, 2012

MERRILL LYNCH, PIERCE, FENNER & SMITH

                         INCORPORATED

        As Representative of the Initial Purchasers

One Bryant Park

New York, New York 10036

Ladies and Gentlemen:

Introductory. Tempur-Pedic International Inc., a Delaware corporation (the
“Company”), proposes to issue and sell to Merrill Lynch, Pierce, Fenner & Smith
Incorporated (“Merrill Lynch”) and the other several Initial Purchasers named in
Schedule A (the “Initial Purchasers”), acting severally and not jointly, the
respective amounts set forth in such Schedule A of $375,000,000 aggregate
principal amount of the Company’s 6.875% Senior Notes due 2020 (the “Notes”).
Merrill Lynch has agreed to act as the representative of the several Initial
Purchasers (the “Representative”) in connection with the offering and sale of
the Notes.

The Securities (as defined below) will be issued pursuant to an indenture, to be
dated as of December 19, 2012 (the “Indenture”), among the Company, the
Guarantors (as defined below) and The Bank of New York Mellon Trust Company,
N.A., as trustee (the “Trustee”). Notes will be issued only in book-entry form
in the name of Cede & Co., as nominee of The Depository Trust Company (the
“Depositary”) pursuant to a letter of representations, to be dated on or before
the Closing Date (as defined in Section 2 hereof) (the “DTC Agreement”), among
the Company and the Depositary.

The payment of principal of, premium, if any, and interest on the Notes will be
fully and unconditionally guaranteed on a senior unsecured basis, jointly and
severally by (i) the entities listed on the signature pages hereof as “Initial
Guarantors” on the Closing Date (as defined below), (ii) the entities listed on
Schedule B hereto which become borrowers or guarantors under the New Credit
Agreement (as defined below) (the “Specified Guarantors”) on or prior to the
Escrow Release Date (as defined below) and (iii) any Subsidiary (as defined
below) of the Company formed or acquired after the Closing Date that executes an
additional guarantee in accordance with the terms of the Indenture
(collectively, (i), (ii) and (iii) and their respective successors and assigns,
being referred to herein as the “Guarantors”), pursuant to their guarantees (the
“Guarantees”). The Notes and the Guarantees attached thereto are herein
collectively referred to as the “Securities”; and the Exchange Notes and the
Guarantees attached thereto are herein collectively referred to as the “Exchange
Securities.”

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

The holders of the Notes will be entitled to the benefits of a registration
rights agreement, to be dated on or prior to the Closing Date (the “Registration
Rights Agreement”), among the Company, the Guarantors (including the Guarantors
that subsequently become a party thereto by executing the RRA Joinder (as
defined below)), and the Initial Purchasers, pursuant to which the Company and
the Guarantors will be required to file with the Commission (as defined below),
under the circumstances set forth therein, (i) a registration statement under
the Securities Act (as defined below) relating to another series of debt
securities of the Company with terms substantially identical to the Notes (the
“Exchange Notes”) to be offered in exchange for the Notes (the “Exchange Offer”)
and/or (ii) a shelf registration statement pursuant to Rule 415 of the
Securities Act relating to the resale by certain holders of the Notes, and in
each case, to use its reasonable best efforts to cause such registration
statement(s) to be declared effective. All references herein to the Exchange
Notes and the Exchange Offer are only applicable if the Company and the
Guarantors are in fact required to consummate the Exchange Offer pursuant to the
terms of the Registration Rights Agreement.

In connection with the offering of the Securities, the Company entered into an
amendment (the “Bank Amendment”) to the Amended and Restated Credit Agreement,
dated as of June 18, 2011 (as amended, supplemented or otherwise modified from
time to time, the “Existing Credit Agreement”), among certain Subsidiaries and
affiliates of the Company, the financial institutions party thereto from time to
time, Bank of America, N.A., as domestic administrative agent and domestic
collateral agent and Nordea Bank Danmark A/S, as foreign administrative agent
and foreign collateral agent, to permit the Company and the Guarantors to issue
the Securities. On or prior to the Closing Date, the Company expects to enter
into a credit agreement (the “New Credit Agreement”) with a group of lenders and
Bank of America, N.A. as administrative agent, to provide for new senior secured
credit facilities, consisting of a $350 million revolving credit facility, a
$550 million term A loan and a $870 million term B loan, primarily in order to
(A) finance the acquisition (the “Sealy Acquisition”) of Sealy Corporation
(“Sealy”) pursuant to the Agreement and Plan of Merger dated as of September 26,
2012 (as in effect on the date hereof, and as may be amended hereafter, the
“Acquisition Agreement”) among the Company, Silver Lightning Merger Company and
Sealy, (B) repay, defease or redeem substantially all existing indebtedness of
the Company and Sealy and (C) pay fees and expenses related to each of (A) and
(B).

On the Closing Date, the Company shall enter into an escrow agreement (the
“Escrow Agreement”) with the Trustee, who shall also act as escrow agent (the
“Escrow Agent”). Pursuant to the Escrow Agreement, the Company will deposit, or
cause to be deposited, into an escrow account (the “Escrow Account”) cash and/or
U.S. government obligations (collectively with the Escrow Account and any other
securities from time to time held therein, the “Escrowed Property”) equal to the
proceeds of the offering of the Securities and an additional amount of cash
and/or U.S. government obligations sufficient to redeem all the Notes, for cash
at a redemption price of 100% of the principal amount of the Notes, plus accrued
and unpaid interest from the Closing Date to, but excluding, October 1, 2013.
The Escrowed Property will be held by the Escrow Agent in accordance with the
terms and provisions set forth in the Escrow Agreement, and released in
accordance with the conditions set forth therein (the “Escrow Release
Conditions”) on the date such conditions are satisfied in accordance with the
Escrow Agreement (the “Escrow Release Date”), as described in the Preliminary
Offering Memorandum and the Final Offering Memorandum (each as defined below).
Following the Escrow Release Date, the Escrowed Property

 

2

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

will be used to pay a portion of the consideration due for the Sealy
Acquisition, and related fees and expenses, under the Acquisition Agreement. If
the Escrow Release Conditions are not satisfied on or before September 26, 2013
(the “Outside Date”), the Company will be required to redeem the Securities at
the Escrow Redemption Price (as defined in the Indenture) pursuant to the terms
of the Indenture and the Escrow Agreement and in accordance therewith.

The Specified Guarantors will, among other things, on or prior to the Escrow
Release Date, execute a joinder agreement to this Agreement (the “Joinder
Agreement”) in the form attached as Annex I hereto. In addition, on or prior to
the Escrow Release Date, the Specified Guarantors will execute (i) a joinder
agreement to the Registration Rights Agreement in the form attached to the
Registration Rights Agreement (the “RRA Joinder”) and (ii) a supplemental
indenture to the Indenture (the “Supplemental Indenture”) in the form attached
to the Indenture pursuant to which each such Specified Guarantor will become a
Guarantor under the Indenture.

The (i) issuance and sale of the Notes, (ii) issuance of the Guarantees,
(iii) execution of the Escrow Agreement, the Registration Rights Agreement, the
Joinder Agreement, the RRA Joinder, the Indenture and the Supplemental
Indenture, (iv) entry by the Company and the Guarantors into the Bank Amendment,
(v) entry by the Company and the Guarantors into the New Credit Agreement,
(vi) release of the Escrowed Property to the Company in accordance with the
Escrow Release Conditions on the Escrow Release Date, if applicable,
(vii) initial extensions of credit under the New Credit Agreement on the Closing
Date or the Escrow Release Date, as applicable, (viii) Sealy Acquisition,
(ix) repayment, defeasance or redemption of substantially all existing
indebtedness of the Company and Sealy and entry into the supplemental indenture
to the 8% Senior Secured Third Lien Convertible Notes due 2016 (the “Convertible
Notes”) indenture and (x) payment of all related fees and expenses are referred
to herein collectively as the “Transactions.”

This Agreement, the Registration Rights Agreement, the Joinder Agreement, the
RRA Joinder, the DTC Agreement, the Securities, the Exchange Securities, the
Bank Amendment, the New Credit Agreement, the Escrow Agreement, the Acquisition
Agreement, the Indenture and the Supplemental Indenture are referred to herein
collectively as the “Transaction Documents.”

For purposes of this Agreement, “Subsidiary” means, in respect of any person,
any corporation, company (including any limited liability company), association,
partnership, joint venture or other business entity of which a majority of the
total voting power of all classes of capital stock or other interests (including
partnership interests) of that person then outstanding and normally entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by (i) that person, (ii) that person and one or more
Subsidiaries of that person, or (iii) one or more Subsidiaries of that person.

As used in this Agreement, all references to the Company and its Subsidiaries,
the Company and its affiliates (as such term is defined in Rule 501 under the
Securities Act) (each, an “Affiliate”), the Company and the Guarantors, and the
Guarantors, give effect to the consummation of the Sealy Acquisition.

 

3

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

The Company understands that the Initial Purchasers propose to make an offering
of the Securities on the terms and in the manner set forth herein and in the
Pricing Disclosure Package (as defined below) and agrees that the Initial
Purchasers may resell, subject to the conditions set forth herein, all or a
portion of the Securities to purchasers (the “Subsequent Purchasers”) on the
terms set forth in the Pricing Disclosure Package (the first time when sales of
the Securities are made is referred to as the “Time of Sale”). The Securities
are to be offered and sold to or through the Initial Purchasers without being
registered with the Securities and Exchange Commission (the “Commission”) under
the Securities Act of 1933 (as amended, the “Securities Act,” which term, as
used herein, includes the rules and regulations of the Commission promulgated
thereunder), in reliance upon exemptions therefrom. Pursuant to the terms of the
Securities and the Indenture, investors who acquire Securities shall be deemed
to have agreed that Securities may only be resold or otherwise transferred,
after the date hereof, if such Securities are registered for sale under the
Securities Act or if an exemption from the registration requirements of the
Securities Act is available (including the exemptions afforded by Rule 144A
under the Securities Act (“Rule 144A”) or Regulation S under the Securities Act
(“Regulation S”)).

The Company has prepared and delivered to each Initial Purchaser copies of a
Preliminary Offering Memorandum, dated December 7, 2012 (the “Preliminary
Offering Memorandum”), and has prepared and delivered to each Initial Purchaser
copies of a Pricing Supplement, dated December 12, 2012 (the “Pricing
Supplement”), describing the terms of the Securities, each for use by such
Initial Purchaser in connection with its solicitation of offers to purchase the
Securities. The Preliminary Offering Memorandum and the Pricing Supplement are
herein referred to as the “Pricing Disclosure Package.” Promptly after this
Agreement is executed and delivered, the Company will prepare and deliver to
each Initial Purchaser a final offering memorandum dated the date hereof (the
“Final Offering Memorandum”).

All references herein to the terms “Pricing Disclosure Package” and “Final
Offering Memorandum” shall be deemed to mean and include all information filed
under the Securities Exchange Act of 1934 (as amended, the “Exchange Act,” which
term, as used herein, includes the rules and regulations of the Commission
promulgated thereunder) prior to the Time of Sale and specifically incorporated
by reference in the Pricing Disclosure Package (including the Preliminary
Offering Memorandum) or the Final Offering Memorandum (as the case may be), and
all references herein to the terms “amend,” “amendment” or “supplement” with
respect to the Final Offering Memorandum shall be deemed to mean and include all
information filed under the Exchange Act after the Time of Sale and incorporated
by reference in the Final Offering Memorandum.

The representations, warranties, authorizations, acknowledgements, covenants and
agreements of the Specified Guarantors set forth in this Agreement shall, with
respect to the Specified Guarantors, become effective immediately upon the
execution and delivery by each of them of the Joinder Agreement at which time
such representations, warranties, authorizations, acknowledgments, covenants and
agreements shall become effective as to the Specified Guarantors as if made on
the date hereof.

The Company hereby confirms its agreements with the Initial Purchasers as
follows:

 

4

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

SECTION 1. Representations and Warranties. Each of the Company and the
Guarantors (in the case of the Specified Guarantors, upon execution and delivery
of the Joinder Agreement), jointly and severally, hereby represents, warrants
and covenants to each Initial Purchaser that, as of the date hereof and as of
the Closing Date (references in this Section 1 to the “Offering Memorandum” are
to (x) the Pricing Disclosure Package in the case of representations and
warranties made as of the date hereof and (y) the Final Offering Memorandum in
the case of representations and warranties made as of the Closing Date):

(a) No Registration Required. Subject to compliance by the Initial Purchasers
with the representations and warranties set forth in Section 2 hereof and with
the procedures set forth in Section 7 hereof, it is not necessary in connection
with the offer, sale and delivery of the Securities to the Initial Purchasers
and to each Subsequent Purchaser in the manner contemplated by this Agreement
and the Offering Memorandum to register the Securities under the Securities Act
or, until such time as the Exchange Securities are issued pursuant to an
effective registration statement, to qualify the Indenture under the Trust
Indenture Act of 1939, as amended (the “Trust Indenture Act,” which term, as
used herein, includes the rules and regulations of the Commission promulgated
thereunder).

(b) No Integration of Offerings or General Solicitation. None of the Company,
its Affiliates, or any person acting on its or any of their behalf (other than
the Initial Purchasers, as to whom the Company makes no representation or
warranty) has, directly or indirectly, solicited any offer to buy or offered to
sell, or will, directly or indirectly, solicit any offer to buy or offer to
sell, in the United States or to any United States citizen or resident, any
security which is or would be integrated with the sale of the Securities in a
manner that would require the Securities to be registered under the Securities
Act. None of the Company, its Affiliates, or any person acting on its or any of
their behalf (other than the Initial Purchasers, as to whom the Company makes no
representation or warranty) has engaged or will engage, in connection with the
offering of the Securities, in any form of general solicitation or general
advertising within the meaning of Rule 502 under the Securities Act. With
respect to those Securities sold in reliance upon Regulation S, (i) none of the
Company, its Affiliates or any person acting on its or their behalf (other than
the Initial Purchasers, as to whom the Company makes no representation or
warranty) has engaged or will engage in any directed selling efforts within the
meaning of Regulation S and (ii) each of the Company and its Affiliates and any
person acting on its or their behalf (other than the Initial Purchasers, as to
whom the Company makes no representation or warranty) has complied and will
comply with the offering restrictions set forth in Regulation S.

(c) Eligibility for Resale under Rule 144A. When issued on the Closing Date, the
Securities will be eligible for resale pursuant to Rule 144A and will not be, at
the Closing Date, of the same class as securities listed on a national
securities exchange registered under Section 6 of the Exchange Act or quoted in
a U.S. automated interdealer quotation system.

(d) The Pricing Disclosure Package and Offering Memorandum. Neither the Pricing
Disclosure Package, as of the Time of Sale, nor the Final Offering Memorandum,
as of its date or (as amended or supplemented in accordance with Section 3(a),
as applicable) as of the Closing Date, contains or represents an untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided that this representation,
warranty and

 

5

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

agreement shall not apply to statements in or omissions from the Pricing
Disclosure Package, the Final Offering Memorandum or any amendment or supplement
thereto made in reliance upon and in conformity with information furnished to
the Company in writing by any Initial Purchaser through the Representative
expressly for use in the Pricing Disclosure Package, the Final Offering
Memorandum or any amendment or supplement thereto, as the case may be. The
Pricing Disclosure Package contains, and the Final Offering Memorandum will
contain, all the information specified in, and meeting the requirements of, Rule
144A. The Company has not distributed and will not distribute, prior to the
later of the Closing Date and the completion of the Initial Purchasers’
distribution of the Securities, any offering material in connection with the
offering and sale of the Securities other than the Pricing Disclosure Package
and the Final Offering Memorandum.

(e) Company Additional Written Communications. The Company has not prepared,
made, used, authorized, approved or distributed and will not prepare, make, use,
authorize, approve or distribute any written communication that constitutes an
offer to sell or solicitation of an offer to buy the Securities other than
(i) the Pricing Disclosure Package, (ii) the Final Offering Memorandum and
(iii) any electronic road show or other written communications, in each case
used in accordance with Section 3(a). Each such communication by the Company or
its agents and representatives pursuant to clause (iii) of the preceding
sentence (each, a “Company Additional Written Communication”), when taken
together with the Pricing Disclosure Package, did not as of the Time of Sale,
and at the Closing Date will not, contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided that this representation, warranty and agreement shall not
apply to statements in or omissions from each such Company Additional Written
Communication made in reliance upon and in conformity with information furnished
to the Company in writing by any Initial Purchaser through the Representative
expressly for use in any Company Additional Written Communication.

(f) Incorporated Documents. The documents incorporated or deemed to be
incorporated by reference in the Offering Memorandum at the time they were or
hereafter are filed with the Commission (collectively, the “Incorporated
Documents”) complied and will comply in all material respects with the
requirements of the Exchange Act. Each such Incorporated Document, when taken
together with the Pricing Disclosure Package, did not as of the Time of Sale,
and at the Closing Date will not, contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.

(g) The Purchase Agreement and Joinder Agreement. This Agreement has been duly
authorized, executed and delivered by the Company and each of the Initial
Guarantors. On or prior to the Escrow Release Date, the Joinder Agreement will
have been duly authorized, executed and delivered by each of the Specified
Guarantors.

(h) The Registration Rights Agreement; DTC Agreement; RRA Joinder. The
Registration Rights Agreement has been duly authorized by the Company and the
Initial Guarantors, and on the Closing Date the Registration Rights Agreement
will have been duly executed and delivered by the Company and the Initial
Guarantors and will constitute a valid and binding

 

6

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

agreement of the Company and the Initial Guarantors, enforceable in accordance
with its terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable
principles. On or prior to the Escrow Release Date, the RRA Joinder will have
been duly authorized, executed and delivered by the Specified Guarantors and the
Registration Rights Agreement will constitute a valid and binding agreement of
the Specified Guarantors, enforceable in accordance with its terms, except as
the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights and remedies of creditors or by general equitable principles. The DTC
Agreement has been duly authorized by the Company and, on the Closing Date, will
have been duly executed and delivered by, and will constitute a valid and
binding agreement of, the Company, enforceable in accordance with its terms,
except as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights and remedies of creditors or by general equitable principles.

(i) Authorization of the Notes, the Guarantees and the Exchange Notes. The Notes
to be purchased by the Initial Purchasers from the Company will on the Closing
Date be in the form contemplated by the Indenture, have been duly authorized for
issuance and sale pursuant to this Agreement and the Indenture and, at the
Closing Date, will have been duly executed by the Company and, when
authenticated in the manner provided for in the Indenture and delivered against
payment of the purchase price therefor, will constitute valid and binding
obligations of the Company, enforceable in accordance with their terms, except
as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights and remedies of creditors or by general equitable principles and will be
entitled to the benefits of the Indenture. The Exchange Notes have been duly and
validly authorized for issuance by the Company, and when issued and
authenticated in accordance with the terms of the Indenture, the Registration
Rights Agreement and the Exchange Offer, will constitute valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium, or similar laws relating to or affecting
enforcement of the rights and remedies of creditors or by general principles of
equity and will be entitled to the benefits of the Indenture. The Guarantees of
the Notes by the Initial Guarantors on the Closing Date, the Guarantees of the
Notes by the Specified Guarantors on the Escrow Release Date, and the Guarantees
of the Exchange Notes by the Guarantors, when issued, will be in the respective
forms contemplated by the Indenture and will have been duly authorized for
issuance pursuant to this Agreement and the Indenture. The Guarantees of the
Notes, at the Closing Date, will have been duly executed by each of the Initial
Guarantors and, when the Notes have been authenticated in the manner provided
for in the Indenture and issued and delivered against payment of the purchase
price therefor, the Guarantees of the Notes will constitute valid and binding
agreements of the Initial Guarantors, in each case, enforceable in accordance
with their terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles and will be entitled to the benefits of the Indenture. The
Guarantees of the Notes, at the Escrow Release Date, will have been duly
executed by each of the Specified Guarantors and will constitute valid and
binding agreements of the Specified Guarantors, in each case, enforceable in
accordance with their terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or

 

7

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

affecting the rights and remedies of creditors or by general equitable
principles and will be entitled to the benefits of the Indenture. When the
Exchange Notes have been authenticated in the manner provided for in the
Indenture and issued and delivered in accordance with the Registration Rights
Agreement, the Guarantees of the Exchange Notes will constitute valid and
binding agreements of the Guarantors, in each case, enforceable in accordance
with their terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles and will be entitled to the benefits of the Indenture.

(j) Authorization of the Indenture. The Indenture has been duly authorized by
the Company and the Initial Guarantors. On the Closing Date, the Indenture will
have been duly executed and delivered by the Company and the Initial Guarantors
and, assuming the due authorization, execution and delivery thereof by the
Trustee, will constitute a valid and binding agreement of the Company and the
Initial Guarantors, enforceable in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights and
remedies of creditors or by general equitable principles.

(k) Authorization of the Supplemental Indenture. The Supplemental Indenture will
have been duly authorized by each Specified Guarantor on or prior to the Escrow
Release Date, and, on the Escrow Release Date, the Supplemental Indenture will
have been duly executed and delivered by each Specified Guarantor and, when the
Supplemental Indenture has been duly executed and delivered by the Specified
Guarantors, the Indenture, as supplemented, will constitute a valid and legally
binding instrument, enforceable in accordance with its terms against the Company
and each Guarantor, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles.

(l) Authorization of the Escrow Agreement. The Escrow Agreement has been duly
authorized by the Company and, on the Closing Date, the Escrow Agreement will
have been duly executed and delivered by the Company and, assuming the due
authorization, execution and delivery thereof by the Escrow Agent and the
Trustee, will constitute a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights and
remedies of creditors or by general equitable principles. When executed and
delivered to the Escrow Agent and the Trustee on the Closing Date, the Escrow
Agreement will grant and create a valid and enforceable perfected first-priority
security interest in the Escrowed Property in favor of the Trustee to secure the
obligations under the Securities.

(m) Description of the Transaction Documents. The Transaction Documents will
conform in all material respects to the respective statements relating thereto
contained in the Offering Memorandum.

(n) No Material Adverse Change. Except as otherwise disclosed in the Offering
Memorandum (exclusive of any amendment or supplement thereto), subsequent to the
respective dates as of which information is given in the Offering Memorandum
(exclusive of any amendment

 

8

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

or supplement thereto): (i) there has been no material adverse change, or any
development that could reasonably be expected to result in a material adverse
change, in the condition, financial or otherwise, or in the earnings, business,
operations or prospects, whether or not arising from transactions in the
ordinary course of business, of the Company and its Subsidiaries, considered as
one entity (any such change is called a “Material Adverse Change”); (ii) the
Company and its Subsidiaries, considered as one entity, have not incurred any
material liability or obligation, indirect, direct or contingent, not in the
ordinary course of business nor entered into any material transaction or
agreement not in the ordinary course of business; and (iii) there has been no
dividend or distribution of any kind declared, paid or made by the Company or,
except for dividends paid to the Company or other Subsidiaries, any of its
Subsidiaries on any class of capital stock or repurchase or redemption by the
Company or any of its Subsidiaries of any class of capital stock.

(o) Independent Accountants. Ernst & Young LLP, which expressed its opinion with
respect to the Company’s financial statements (which term as used in this
Agreement includes the related notes thereto) and supporting schedules filed
with the Commission and included in the Offering Memorandum is an independent
registered public accounting firm within the meaning of the Securities Act, the
Exchange Act and the rules of the Public Company Accounting Oversight Board, and
any non-audit services provided by Ernst & Young LLP to the Company or any of
its Subsidiaries (excluding Sealy and its Subsidiaries) have been approved by
the Audit Committee of the Board of Directors of the Company. Deloitte & Touche
LLP, which expressed its opinion with respect to Sealy’s financial statements
and supporting schedules filed with the Commission and included in the Offering
Memorandum is an independent registered public accounting firm within the
meaning of the Securities Act, the Exchange Act and the rules of the Public
Company Accounting Oversight Board, and, to the Company’s knowledge after due
inquiry, any non-audit services provided by Deloitte & Touche LLP to Sealy or
any of its Subsidiaries have been approved by the Audit Committee of the Board
of Directors of Sealy.

(p) Preparation of the Financial Statements. The financial statements, together
with the related schedules and notes, included or incorporated by reference in
the Offering Memorandum present fairly in all material respects the consolidated
financial position of the entities (including the Company and its Subsidiaries
and Sealy and its Subsidiaries) to which they relate as of and at the dates
indicated and the results of their operations and cash flows for the periods
specified. Such financial statements have been prepared in conformity with
generally accepted accounting principles as applied in the United States
(“GAAP”) applied on a consistent basis throughout the periods involved, except
as may be expressly stated in the related notes thereto. The financial data set
forth in the Offering Memorandum under the captions “Summary–Summary
Consolidated Financial Data–Tempur-Pedic,” “Summary–Summary Consolidated
Financial Data–Sealy,” “Selected Historical Financial Information–Tempur-Pedic”
and “Selected Historical Financial Information–Sealy” fairly present in all
material respects the information set forth therein on a basis consistent with
that of the audited financial statements contained in the Offering Memorandum.
The pro forma condensed combined financial statements of the Company and its
Subsidiaries and the related notes thereto included under the captions
“Summary–Summary Unaudited Pro Forma Consolidated Financial Data,”
“Capitalization” and “Unaudited Pro Forma Condensed Combined Financial
Information” and elsewhere in the Offering Memorandum present fairly in all
material respects the information contained therein, have been prepared in
accordance with the Commission’s rules and guidelines with respect to pro forma
financial

 

9

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

statements and have been properly presented on the bases described therein, and
the assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the transactions and
circumstances referred to therein. The statistical and market-related data and
forward-looking statements included in the Offering Memorandum are based on or
derived from sources that the Company believes to be reliable and the Company
believes such data is accurate in all material respects and represents its good
faith estimates that are made on the basis of data derived from such sources.
The interactive data in eXtensible Business Reporting Language included or
incorporated by reference in the Offering Memorandum and the Pricing Disclosure
Package fairly present the information called for in all material respects and
have been prepared in accordance with the Commission’s rules and guidelines
applicable thereto.

(q) Incorporation and Good Standing of the Company and its Subsidiaries. Each of
the Company and its Subsidiaries has been duly incorporated or formed, as
applicable, and is validly existing as a corporation, limited partnership or
limited liability company, as applicable, in good standing under the laws of the
jurisdiction of its incorporation or formation, as applicable, and has
corporate, partnership or limited liability company, as applicable, power and
authority to own, lease and operate its properties and to conduct its business
as described in the Offering Memorandum and, in the case of the Company and the
Guarantors, to enter into and perform its obligations under each of the
Transaction Documents to which it is a party. Each of the Company and each
Subsidiary is duly qualified as a foreign corporation, limited partnership or
limited liability company, as applicable, to transact business and is in good
standing or equivalent status in each jurisdiction in which such qualification
is required, whether by reason of the ownership or leasing of property or the
conduct of business, except for such jurisdictions where the failure to so
qualify or to be in good standing would not, individually or in the aggregate,
result in a Material Adverse Change. All of the issued and outstanding capital
stock or other ownership interest of each Subsidiary has been duly authorized
and validly issued, is fully paid and non-assessable and is owned by the Company
(or, with respect to Sealy and its Subsidiaries, will be owned by the Company
upon consummation of the Sealy Acquisition), directly or through Subsidiaries,
free and clear of any security interest, mortgage, pledge, lien, encumbrance or
claim, except as disclosed in the Offering Memorandum. The Company does not own
or control, directly or indirectly, a majority of the total voting power of any
corporation, association or other entity other than (i) the Subsidiaries listed
in Exhibit 21.1 to the Company’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2011 and, (ii) after consummation of the Sealy Acquisition,
(x) Sealy as well as (y) Sealy’s Subsidiaries listed in Exhibit 21.1 to Sealy’s
Annual Report on Form 10-K for the fiscal year ended November 27, 2011.

(r) Capitalization. At September 30, 2012, on a consolidated basis, after giving
pro forma effect to the Transactions, the Company would have an authorized and
outstanding capitalization as set forth in the Offering Memorandum under the
caption “Capitalization” (other than for subsequent issuances of capital stock,
if any, pursuant to employee benefit plans described in the Offering Memorandum
or upon exercise of outstanding options described in the Offering Memorandum).

(s) Non-Contravention of Existing Instruments; No Further Authorizations or
Approvals Required. Neither the Company nor any of its Subsidiaries is (i) in
violation of its charter, bylaws or other constitutive document or (ii) in
default (or, with the giving of notice or lapse of time, would be in default)
(“Default”) under any indenture, mortgage, loan or credit

 

10

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

agreement, note, contract, franchise, lease or other instrument to which the
Company or any of its Subsidiaries is a party or by which it or any of them may
be bound (including, without limitation, the Company’s New Credit Agreement or,
on the Escrow Release Date, the Convertible Notes indenture), or to which any of
the property or assets of the Company or any of its Subsidiaries is subject
(each, an “Existing Instrument”), except, in the case of clause (ii) above, for
such Defaults as would not, individually or in the aggregate, result in a
Material Adverse Change and such Defaults that would occur on the Escrow Release
Date pursuant to any indebtedness governed by an Existing Instrument being
repaid, prepaid, repurchased, redeemed, legally defeased or otherwise retired by
the Company at the Escrow Release Date. The execution, delivery and performance
of the Transaction Documents by the Company and the Guarantors party thereto,
and the issuance and delivery of the Securities and the Exchange Securities, and
consummation of the Transactions contemplated hereby and thereby and by the
Offering Memorandum (i) have been (or, with respect to Sealy and its
Subsidiaries, will be on or prior to the Escrow Release Date) duly authorized by
all necessary corporate action and will not result in any violation of the
provisions of the charter, bylaws or other constitutive document of the Company
or any Subsidiary, (ii) will not conflict with or constitute a breach of, or
Default or a Debt Repayment Triggering Event (as defined below) under, or result
in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its Subsidiaries pursuant to, or
require the consent of any other party to, any Existing Instrument, and
(iii) will not result in any violation of any law, administrative regulation or
administrative or court decree applicable to the Company or any Subsidiary,
except, in the case of clauses (ii) and (iii) of this sentence, for such
conflicts, breaches, Defaults, Debt Repayment Triggering Events, liens, charges,
encumbrances or violations as would not, individually or in the aggregate,
result in a Material Adverse Change and except, in the case of clause (ii) of
this sentence, for such conflicts, breaches, Defaults, Debt Repayment Triggering
Events, liens, charges or encumbrances pursuant to any indebtedness governed by
an Existing Instrument (which conflicts, breaches, Defaults, Debt Repayment
Triggering Events, liens, charges or encumbrances do not arise from the
incurrence of the Notes but from the other Transactions) being repaid, prepaid,
repurchased, redeemed, legally defeased or otherwise retired by the Company at
the Escrow Release Date. Assuming the Initial Purchasers observe the procedures
set forth in Section 7 herein, no consent, approval, authorization or other
order of, or registration or filing with, any court or other governmental or
regulatory authority or agency is required for the execution, delivery and
performance of the Transaction Documents by the Company and the Guarantors to
the extent a party thereto, or the issuance and delivery of the Securities or
the Exchange Securities, or consummation of the Transactions contemplated hereby
and thereby and by the Offering Memorandum, except for UCC-1 financing
statements and mortgage related security documents to be filed in connection
with the New Credit Agreement and a certificate of merger in connection with the
Sealy Acquisition, except such as have been obtained or made by the Company and
are in full force and effect under the Securities Act, applicable securities
laws of the several states of the United States or provinces of Canada and
except such as may be required by the securities laws of the several states of
the United States or provinces of Canada with respect to the Company’s
obligations under the Registration Rights Agreement. As used herein, a “Debt
Repayment Triggering Event” means any event or condition which gives, or with
the giving of notice or lapse of time would give, the holder of any note,
debenture or other evidence of indebtedness (or any person acting on such
holder’s behalf) the right to require the repurchase, redemption or repayment of
all or a portion of such indebtedness by the Company or any of its Subsidiaries.

 

11

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

(t) No Material Actions or Proceedings. Except as otherwise disclosed in the
Offering Memorandum, there are no legal or governmental actions, suits or
proceedings pending or, to the Company’s knowledge, threatened (i) against or
involving the Company or any of its Subsidiaries or (ii) which has as the
subject thereof any property owned or leased by, the Company or any of its
Subsidiaries and any such action, suit or proceeding, if determined adversely to
the Company or such Subsidiary, that would result in a Material Adverse Change
or adversely affect the consummation of the Transactions. No material labor
dispute with the employees of the Company or any of its Subsidiaries exists or,
to the Company’s knowledge, is threatened or imminent. To the Company’s
knowledge, no material labor dispute with the employees of any principal
supplier of the Company exists or is threatened or imminent.

(u) Intellectual Property Rights. Except as otherwise disclosed in the Offering
Memorandum, the Company and its Subsidiaries own or possess or have the right to
use on reasonable terms all trademarks, trade names, patent rights, copyrights,
licenses, approvals, trade secrets and other similar rights (collectively,
“Intellectual Property Rights”) necessary to conduct their respective businesses
as now conducted, as described in the Offering Memorandum, except where the
failure to own or possess or have the right to use the same would not,
individually or in the aggregate, result in a Material Adverse Change; and the
expected expiration of any of such Intellectual Property Rights would not result
in a Material Adverse Change. Neither the Company nor any of its Subsidiaries
has received any notice of infringement or conflict with asserted Intellectual
Property Rights of others, which infringement or conflict, if the subject of an
unfavorable decision, would result in a Material Adverse Change.

(v) All Necessary Permits, etc. The Company and each Subsidiary possess such
valid and current certificates, authorizations or permits issued by the
appropriate state, federal or foreign regulatory agencies or bodies necessary to
own, lease and operate its properties and to conduct their respective
businesses, except where the failure so to possess would not, individually or in
the aggregate, result in a Material Adverse Change, and neither the Company nor
any Subsidiary has received any notice of proceedings relating to the revocation
or modification of, or non-compliance with, any such certificate, authorization
or permit which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a Material Adverse Change.

(w) Title to Properties. The Company and each of its Subsidiaries has good and
marketable title to all the properties and assets reflected as owned in the
financial statements referred to in Section 1(p) hereof, in each case free and
clear of any security interests, mortgages, liens, encumbrances, equities,
claims and other defects, except as disclosed in the Offering Memorandum and
except such as do not materially and adversely affect the value of such property
and do not materially interfere with the use made or proposed to be made of such
property by the Company or such Subsidiary. The real property, improvements,
equipment and personal property held under lease by the Company or any
Subsidiary are held under valid and enforceable leases, with such exceptions as
are not material and do not materially interfere with the use made or proposed
to be made of such real property, improvements, equipment or personal property
by the Company or such Subsidiary.

(x) Tax Law Compliance. Except as otherwise disclosed in the Offering
Memorandum, the Company and its Subsidiaries have filed all necessary federal,
state and foreign income

 

12

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

and franchise tax returns and have paid all taxes required to be paid by any of
them and, if due and payable, any related or similar assessment, fine or penalty
levied against any of them except as may be being contested in good faith and by
appropriate proceedings and except for such taxes, assessments, fines or
penalties the nonpayment of which would not, individually or in the aggregate,
result in a Material Adverse Change. The Company has made adequate charges,
accruals and reserves in accordance with GAAP in the applicable financial
statements referred to in Section 1(p) hereof in respect of all federal, state
and foreign income and franchise taxes for all periods as to which the tax
liability of the Company or any of its Subsidiaries has not been finally
determined.

(y) Company and Guarantors Not an “Investment Company”. The Company has been
advised of the rules and requirements under the Investment Company Act of 1940,
as amended (the “Investment Company Act,” which term, as used herein, includes
the rules and regulations of the Commission promulgated thereunder). Neither the
Company nor any Guarantor is, or after receipt of payment for the Securities
will be, an “investment company” within the meaning of the Investment Company
Act, and the Company and the Initial Guarantors, and following the Escrow
Release Date, the Specified Guarantors, will each conduct its business in a
manner so that it will not become subject to the Investment Company Act.

(z) Insurance. Each of the Company and its Subsidiaries is insured by
recognized, financially sound institutions with policies in such amounts and
with such deductibles and covering such risks as are generally deemed adequate
and customary for their businesses including, without limitation, policies
covering real and personal property owned or leased by the Company and its
Subsidiaries against theft, damage, destruction, acts of vandalism, flood and
earthquakes. The Company has no reason to believe that it or any Subsidiary will
not be able (i) to renew its existing insurance coverage as and when such
policies expire or (ii) to obtain comparable coverage from similar institutions
as may be necessary or appropriate to conduct its business as now conducted and
at a cost that would not result in a Material Adverse Change. In the past five
years, neither of the Company nor any Subsidiary has been denied any insurance
coverage which it has sought or for which it has applied that, individually or
in the aggregate, would result in a Material Adverse Change.

(aa) No Price Stabilization or Manipulation. None of the Company or any of the
Guarantors has taken and will not take, directly or indirectly, any action
designed to or that might be reasonably expected to cause or result in
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities.

(bb) Solvency. The Company and the Guarantors, taken as a whole, are, and
immediately after the Closing Date will be, Solvent. As used herein, the term
“Solvent” means, with respect to any person on a particular date, that on such
date (i) the fair market value of the assets of such person is greater than the
total amount of liabilities (including contingent liabilities) of such person,
(ii) the present fair salable value of the assets of such person is greater than
the amount that will be required to pay the probable liabilities of such person
on its debts as they become absolute and matured, (iii) such person is able to
realize upon its assets and pay its debts and other liabilities, including
contingent obligations, as they mature and (iv) such person does not have
unreasonably small capital.

 

13

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

(cc) Compliance with Sarbanes-Oxley. The Company and its Subsidiaries and their
respective officers and directors are in compliance in all material respects
with the applicable provisions of the Sarbanes-Oxley Act of 2002 (the
“Sarbanes-Oxley Act,” which term, as used herein, includes the rules and
regulations of the Commission promulgated thereunder).

(dd) Company’s Accounting System. The Company and its Subsidiaries maintain a
system of accounting controls that is in compliance with the Sarbanes-Oxley Act
and is sufficient to provide reasonable assurances that: (i) transactions are
executed in accordance with management’s general or specific authorization;
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management’s general
or specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.

(ee) Disclosure Controls and Procedures. The Company has established and
maintains disclosure controls and procedures (as such term is defined in Rules
13a-15 and 15d-15 under the Exchange Act); such disclosure controls and
procedures are designed to ensure that material information relating to the
Company and its Subsidiaries is made known to the chief executive officer and
chief financial officer of the Company by others within the Company or any of
its Subsidiaries, and such disclosure controls and procedures are reasonably
effective to perform the functions for which they were established subject to
the limitations of any such control system; the Company’s auditors and the Audit
Committee of the Board of Directors of the Company have been advised of: (i) any
significant deficiencies or material weaknesses in the design or operation of
internal controls which could adversely affect the Company’s ability to record,
process, summarize, and report financial data; and (ii) any fraud, whether or
not material, that involves management or other employees who have a role in the
Company’s internal controls; and since the date of the most recent evaluation of
such disclosure controls and procedures, there have been no significant changes
in internal controls or in other factors that could significantly affect
internal controls, including any corrective actions with regard to significant
deficiencies and material weaknesses.

(ff) Regulations T, U, X. Neither the Company nor any Guarantor nor any of their
respective Subsidiaries nor any agent thereof acting on their behalf has taken,
and none of them will take, any action that might cause this Agreement or the
issuance or sale of the Securities to violate Regulation T, Regulation U or
Regulation X of the Board of Governors of the Federal Reserve System.

(gg) Compliance with and Liability Under Environmental Laws. Except as otherwise
disclosed in the Offering Memorandum or as would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Change:
(i) each of the Company and its Subsidiaries and their respective operations and
facilities are in compliance with, and not subject to any known liabilities
under, applicable Environmental Laws, which compliance includes, without
limitation, having obtained and being in compliance with any permits, licenses
or other governmental authorizations or approvals, and having made all filings
and provided all financial assurances and notices, required for the ownership
and operation of the business, properties and facilities of the Company or its
Subsidiaries under applicable Environmental Laws, and compliance with the terms
and conditions thereof; (ii) neither the Company nor any of its Subsidiaries

 

14

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

has received any written communication from a governmental authority, citizens
group, employee or otherwise that alleges that the Company or any of its
Subsidiaries is in violation of any Environmental Law; (iii) there is no claim,
action or cause of action filed with a court or governmental authority, no
investigation with respect to which the Company has received written notice, and
no written notice by any person, entity or governmental authority alleging
actual or potential liability on the part of the Company or any of its
Subsidiaries based on or pursuant to any Environmental Law pending or, to the
best of the Company’s knowledge, threatened against the Company or any of its
Subsidiaries or any person or entity whose liability under or pursuant to any
Environmental Law the Company or any of its Subsidiaries has retained or assumed
either contractually or by operation of law; (iv) neither the Company nor any of
its Subsidiaries is conducting or paying for, in whole or in part, any
investigation, response or other corrective action pursuant to any Environmental
Law at any site or facility, nor is any of them subject or a party to any order,
judgment, decree, contract or agreement which imposes any obligation or
liability under any Environmental Law; (v) no lien, charge, encumbrance or
restriction has been recorded pursuant to any Environmental Law with respect to
any assets, facility or property owned, operated or leased by the Company or any
of its Subsidiaries; and (vi) there are no past or present actions, activities,
circumstances, conditions or occurrences, including, without limitation, the
Release or threatened Release of any Material of Environmental Concern, that
could reasonably be expected to result in a violation of or liability under any
Environmental Law on the part of the Company or any of its Subsidiaries,
including without limitation, any such liability which the Company or any of its
Subsidiaries has retained or assumed either contractually or by operation of
law.

For purposes of this Agreement, “Environment” means ambient air, indoor air,
surface water, groundwater, drinking water, soil, surface and subsurface strata,
and natural resources such as wetlands, flora and fauna. “Environmental Laws”
means the common law and all federal, state, local and foreign laws or
regulations, ordinances, codes, orders, decrees, judgments and injunctions
issued, promulgated or entered thereunder, relating to pollution or protection
of the Environment or human health, including without limitation, those relating
to (i) the Release or threatened Release of Materials of Environmental Concern;
and (ii) the manufacture, processing, distribution, use, generation, treatment,
storage, transport, handling or recycling of Materials of Environmental Concern.
“Materials of Environmental Concern” means any substance, material, pollutant,
contaminant, chemical, waste, compound, or constituent, in any form, including
without limitation, petroleum and petroleum products, subject to regulation or
which can give rise to liability under any Environmental Law. “Release” means
any release, spill, emission, discharge, deposit, disposal, leaking, pumping,
pouring, dumping, emptying, injection or leaching into the Environment, or into,
from or through any building, structure or facility.

(hh) Periodic Review of Costs of Environmental Compliance. In the ordinary
course of its business, the Company conducts a periodic review of the effect of
Environmental Laws on the business, operations and properties of the Company and
its Subsidiaries (excluding Sealy and its Subsidiaries), in the course of which
it identifies and evaluates associated costs and liabilities (including, without
limitation, any capital or operating expenditures required for clean-up, closure
of properties or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties). On the basis of such review and the amount of its
established reserves, the Company has reasonably

 

15

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

concluded that such associated costs and liabilities would not, individually or
in the aggregate, result in a Material Adverse Change. To the Company’s
knowledge, there are no such costs and liabilities relating to Sealy and its
Subsidiaries that would, individually or in the aggregate, result in a Material
Adverse Change.

(ii) ERISA Compliance. The Company and its Subsidiaries and any “employee
benefit plan” (as defined under the Employee Retirement Income Security Act of
1974 (as amended, “ERISA,” which term, as used herein, includes the regulations
and published interpretations thereunder) established or maintained by the
Company, its Subsidiaries or their ERISA Affiliates (as defined below) are in
compliance in all material respects with ERISA and, to the knowledge of the
Company, each “multiemployer plan” (as defined in Section 4001 of ERISA) to
which the Company, its Subsidiaries or an ERISA Affiliate contributes (a
“Multiemployer Plan”) is in compliance in all material respects with ERISA.
“ERISA Affiliate” means, with respect to the Company or a Subsidiary, any member
of any group of organizations described in Section 414 of the Internal Revenue
Code of 1986 (as amended, the “Code,” which term, as used herein, includes the
regulations and published interpretations thereunder) of which the Company or
such Subsidiary is a member. No “reportable event” (as defined under ERISA) has
occurred or is reasonably expected to occur with respect to any “employee
benefit plan” established or maintained by the Company, its Subsidiaries or any
of their ERISA Affiliates. No “single employer plan” (as defined in Section 4001
of ERISA) established or maintained by the Company, its Subsidiaries or any of
their ERISA Affiliates, if such “employee benefit plan” were terminated, would
have any “amount of unfunded benefit liabilities” (as defined under ERISA) that
is material to the Company and its Subsidiaries, considered as one entity.
Neither the Company, its Subsidiaries nor any of their ERISA Affiliates has
incurred or reasonably expects to incur any material liability under (i) Title
IV of ERISA with respect to termination of, or withdrawal from, any “employee
benefit plan” or (ii) Sections 412, 4971, 4975 or 4980B of the Code. Each
“employee benefit plan” established or maintained by the Company, its
Subsidiaries or any of their ERISA Affiliates that is intended to be qualified
under Section 401 of the Code is so qualified and nothing has occurred, whether
by action or failure to act, which would cause the loss of such qualification.

(jj) Compliance with Labor Laws. Except as would not, individually or in the
aggregate, result in a Material Adverse Change, (i) there is (A) no unfair labor
practice complaint pending or, to the Company’s knowledge, threatened against
the Company or any of its Subsidiaries before the National Labor Relations
Board, and no grievance or arbitration proceeding arising out of or under
collective bargaining agreements pending, or to the Company’s knowledge,
threatened, against the Company or any of its Subsidiaries, (B) no strike, labor
dispute, slowdown or stoppage pending or, to the Company’s knowledge, threatened
against the Company or any of its Subsidiaries and (C) no union representation
question existing with respect to the employees of the Company or any of its
Subsidiaries and, to the Company’s knowledge, no union organizing activities
taking place and (ii) there has been no violation of any federal, state or local
law relating to discrimination in hiring, promotion or pay of employees or of
any applicable wage or hour laws.

(kk) Related Party Transactions. After giving effect to the consummation of the
Sealy Acquisition, no relationship, direct or indirect, exists between or among
any of the Company or any Affiliate of the Company, on the one hand, and any
director, officer, member, stockholder,

 

16

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

customer or supplier of the Company or any Affiliate of the Company, on the
other hand, which is required by the Securities Act to be disclosed in a
registration statement on Form S-1 which is not so disclosed in the Offering
Memorandum. After giving effect to the consummation of the Sealy Acquisition,
there are no outstanding loans, advances (except advances for business expenses
in the ordinary course of business) or guarantees of indebtedness by the Company
or any Affiliate of the Company to or for the benefit of any of the officers or
directors of the Company or any Affiliate of the Company or any of their
respective family members.

(ll) No Unlawful Contributions or Other Payments. Neither the Company nor any of
its Subsidiaries nor, to the knowledge of the Company, any director, officer,
agent, employee or Affiliate of the Company or any of its Subsidiaries is aware
of or has taken any action, directly or indirectly, that has resulted or would
result in a violation by such persons of the FCPA, including, without
limitation, making use of the mails or any means or instrumentality of
interstate commerce corruptly in furtherance of an offer, payment, promise to
pay or authorization of the payment of any money, or other property, gift,
promise to give, or authorization of the giving of anything of value to any
“foreign official” (as such term is defined in the FCPA) or any foreign
political party or official thereof or any candidate for foreign political
office, in contravention of the FCPA and the Company, its Subsidiaries and, to
the knowledge of the Company, its Affiliates have conducted their businesses in
compliance with the FCPA and have instituted and maintain policies and
procedures designed to ensure, and which are reasonably expected to continue to
ensure, continued compliance therewith.

“FCPA” means Foreign Corrupt Practices Act of 1977, as amended, and the rules
and regulations thereunder.

(mm) No Conflict with Money Laundering Laws. The operations of the Company and
its Subsidiaries are and have been conducted at all times in compliance in all
material respects with applicable financial recordkeeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act of 1970, as
amended, the money laundering statutes of all applicable jurisdictions, the
rules and regulations thereunder and any related or similar applicable rules,
regulations or guidelines issued, administered or enforced by any governmental
agency (collectively, the “Money Laundering Laws”) and no action, suit or
proceeding by or before any court or governmental agency, authority or body or
any arbitrator involving the Company or any of its Subsidiaries with respect to
the Money Laundering Laws is pending or, to the best knowledge of the Company,
threatened.

(nn) No Conflict with Sanctions Laws. Neither the Company nor any of its
Subsidiaries nor, to the knowledge of the Company, any director, officer, agent,
employee or Affiliate of the Company or any of its Subsidiaries is currently
subject to any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department, the U.S. Department of Commerce, the
U.S. Department of State , the United Nations Security Council, the European
Union, Her Majesty’s Treasury, or other relevant sanctions authority
(collectively, “Sanctions”), nor is the Company or any of its Subsidiaries
located, organized or resident in a country or territory that is the subject of
Sanctions. The Company will not, directly or indirectly, use any of the proceeds
of the offering contemplated by this Agreement, or lend, contribute or otherwise
make available such proceeds to any Subsidiary, joint venture partner or other
person, (i) to fund any activities of or business with any person that, at the
time of such funding, is the subject of Sanctions,

 

17

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

or is in Burma/Myanmar, Cuba, Iran, Libya, North Korea, Sudan or in any other
country or territory, that, at the time of such funding, is the subject of
Sanctions, or (ii) in any other manner that will result in a violation by any
person (including any person participating in the offering, whether as
underwriter, advisor, investor or otherwise) of Sanctions.

(oo) New Credit Agreement. The New Credit Agreement has been duly and validly
authorized by the Company and the Initial Guarantors and, when duly executed and
delivered by the Company and the Initial Guarantors, will be the valid and
legally binding obligation of the Company and the Initial Guarantors,
enforceable in accordance with its terms, except as the enforcement thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights and remedies of creditors or by
general equitable principles. On or prior to the Escrow Release Date, a joinder
agreement to the New Credit Agreement will have been duly authorized, executed
and delivered by the Specified Guarantors and the New Credit Agreement will
constitute a valid and binding agreement of the Specified Guarantors,
enforceable in accordance with its terms, except as the enforcement thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights and remedies of creditors or by
general equitable principles.

(pp) Bank Amendment. The Bank Amendment has been duly and validly authorized,
executed and delivered by the Company and the Subsidiaries of the Company party
thereto and the Existing Credit Agreement as amended by the Bank Amendment
constitues the valid and legally binding obligation of the Company and such
Subsidiaries, enforceable in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights and
remedies of creditors or by general equitable principles.

(qq) Regulation S. The Company, the Guarantors and their respective Affiliates
and all persons acting on their behalf (other than the Initial Purchasers, as to
whom the Company and the Guarantors make no representation) have complied with
and will comply with the offering restrictions requirements of Regulation S in
connection with the offering of the Securities outside the United States and, in
connection therewith, the Offering Memorandum will contain the disclosure
required by Rule 902. The Company is a “reporting issuer”, as defined in
Rule 902 under the Securities Act.

Any certificate signed by an officer of the Company or any Guarantor and
delivered to the Initial Purchasers or to counsel for the Initial Purchasers
shall be deemed to be a representation and warranty by the Company or such
Guarantor to each Initial Purchaser as to the matters set forth therein.

SECTION 2. Purchase, Sale and Delivery of the Securities.

(a) The Securities. Each of the Company and the Guarantors agrees to issue and
sell to the Initial Purchasers, severally and not jointly, all of the
Securities, and, subject to the conditions set forth herein, the Initial
Purchasers agree, severally and not jointly, to purchase from the Company and
the Guarantors the aggregate principal amount of Securities set forth opposite
their names on Schedule A, at a purchase price of 100% of the principal amount
thereof (which amount includes the Deferred Discount referred to below), payable
on the Closing Date, on the basis of the representations, warranties and
agreements herein contained, and upon the terms herein set forth.

 

18

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

(b) The Closing Date. Delivery of certificates for the Securities in global form
to be purchased by the Initial Purchasers and payment therefor shall be made at
the offices of Davis Polk & Wardwell LLP, 450 Lexington Avenue, New York, NY
10017 (or such other place as may be agreed to by the Company and Merrill Lynch)
at 9:00 a.m. New York City time, on December 19, 2012, or such other time and
date as Merrill Lynch shall designate by notice to the Company (the time and
date of such closing are called the “Closing Date”). The Company hereby
acknowledges that circumstances under which Merrill Lynch may provide notice to
postpone the Closing Date as originally scheduled include, but are in no way
limited to, any determination by the Company or the Initial Purchasers to
recirculate to investors copies of an amended or supplemented Offering
Memorandum or a delay as contemplated by the provisions of Section 17 hereof.

(c) Delivery of the Securities. The Company shall deliver, or cause to be
delivered, to Merrill Lynch for the accounts of the several Initial Purchasers
certificates for the Notes at the Closing Date against the irrevocable release
of a wire transfer of immediately available funds for the amount of the purchase
price therefor; provided that payment of such purchase price (which payment
shall include the Deferred Discount) shall be made on behalf of the Company to
the Escrow Agent by wire transfer in Federal or other funds immediately
available in New York City to a bank account designated by the Escrow Agent
against delivery of the Notes by the Company to Merrill Lynch for the accounts
of the several Initial Purchasers. The certificates for the Notes shall be in
such denominations and registered in the name of Cede & Co., as nominee of the
Depositary, pursuant to the DTC Agreement, and shall be made available for
inspection on the business day preceding the Closing Date at the offices of
Davis Polk & Wardwell LLP, 450 Lexington Avenue, New York, NY 10017 (or such
other place in New York City as Merrill Lynch may designate). If the Escrow
Release Conditions are satisfied, on the Escrow Release Date, a deferred
discount in the amount of $7,500,000 (the “Deferred Discount”) shall be released
to Merrill Lynch, as Representative of the Initial Purchasers. If the Escrow
Release Conditions have not been satisfied on or prior to the Outside Date, the
Escrowed Property (including the Deferred Discount) shall be used to redeem the
Securities pursuant to the terms of the Escrow Agreement.

(d) Initial Purchasers as Qualified Institutional Buyers. Each Initial Purchaser
severally and not jointly represents and warrants to, and agrees with, the
Company that:

(i) it will offer and sell Securities only to (a) persons who it reasonably
believes are “qualified institutional buyers” within the meaning of Rule 144A
(“Qualified Institutional Buyers”) in transactions meeting the requirements of
Rule 144A or (b) upon the terms and conditions set forth in Annex II to this
Agreement;

(ii) it is an institutional “accredited investor” within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act; and

 

19

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

(iii) it will not offer or sell Securities by any form of general solicitation
or general advertising, including but not limited to the methods described in
Rule 502(c) under the Securities Act.

SECTION 3. Additional Covenants. Each of the Company and the Guarantors (in the
case of the Specified Guarantors, upon execution and delivery of the Joinder
Agreement) further covenants and agrees with each Initial Purchaser as follows:

(a) Preparation of Final Offering Memorandum; Initial Purchasers’ Review of
Proposed Amendments and Supplements and Company Additional Written
Communications. As promptly as practicable following the Time of Sale and in any
event not later than the second business day following the date hereof, the
Company will prepare and deliver to the Initial Purchasers the Final Offering
Memorandum, which shall consist of the Preliminary Offering Memorandum as
modified only by the information contained in the Pricing Supplement. The
Company will not amend or supplement the Preliminary Offering Memorandum or the
Pricing Supplement, other than in accordance with Section 3(b) below. The
Company will not amend or supplement the Final Offering Memorandum prior to the
Closing Date unless Merrill Lynch shall previously have been furnished a copy of
the proposed amendment or supplement at least two business days prior to the
proposed use or filing, and shall not have objected to such amendment or
supplement. Before making, preparing, using, authorizing, approving or
distributing any Company Additional Written Communication, the Company will
furnish to Merrill Lynch a copy of such written communication for review and
will not make, prepare, use, authorize, approve or distribute any such written
communication to which Merrill Lynch reasonably objects.

(b) Amendments and Supplements to the Final Offering Memorandum and Other
Securities Act Matters. If at any time prior to the Closing Date (i) any event
shall occur or condition shall exist as a result of which any of the Pricing
Disclosure Package as then amended or supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading or (ii) it is necessary to amend or
supplement any of the Pricing Disclosure Package to comply with law, the Company
and the Guarantors will, as promptly as possible, notify the Initial Purchasers
thereof and forthwith prepare and (subject to Section 3(a) hereof) furnish to
the Initial Purchasers such amendments or supplements to any of the Pricing
Disclosure Package as may be necessary so that the statements in any of the
Pricing Disclosure Package as so amended or supplemented will not, in the light
of the circumstances under which they were made, be misleading or so that any of
the Pricing Disclosure Package will comply with all applicable law. If, prior to
the completion of the placement of the Securities by the Initial Purchasers with
the Subsequent Purchasers, any event shall occur or condition exist as a result
of which it is necessary to amend or supplement the Final Offering Memorandum,
as then amended or supplemented, in order to make the statements therein, in the
light of the circumstances when the Final Offering Memorandum is delivered to a
Subsequent Purchaser, not misleading, or if in the reasonable judgment of the
Representative or counsel for the Initial Purchasers it is otherwise necessary
to amend or supplement the Final Offering Memorandum to comply with law, the
Company and the Guarantors agree to promptly prepare (subject to Section 3(a)
hereof) and furnish at their own expense to the Initial Purchasers, amendments
or supplements to the Final Offering Memorandum so that the statements in the
Final Offering Memorandum as so amended or supplemented will not, in the light
of the circumstances at the Closing Date and at the time of sale of the
Securities, be misleading or so that the Final Offering Memorandum, as amended
or supplemented, will comply with all applicable law.

 

20

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

Following the consummation of the Exchange Offer or the effectiveness of an
applicable shelf registration statement and for so long as the Securities are
outstanding, if, in the reasonable judgment of the Representative, the Initial
Purchasers or any of their Affiliates are required under applicable law to
deliver a prospectus in connection with sales of, or market-making activities
with respect to, the Securities, the Company and the Guarantors agree to
periodically amend the applicable registration statement so that the information
contained therein complies with the requirements of Section 10 of the Securities
Act, to amend the applicable registration statement or supplement the related
prospectus or the documents incorporated therein when necessary to reflect any
material changes in the information provided therein so that the registration
statement and the prospectus will not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances existing as of the date
the prospectus is so delivered, not misleading and to provide the Initial
Purchasers with copies of each amendment or supplement filed and such other
documents as the Initial Purchasers may reasonably request.

The Company hereby expressly acknowledges that the indemnification and
contribution provisions of Sections 8 and 9 hereof are specifically applicable
and relate to each offering memorandum, registration statement, prospectus,
amendment or supplement referred to in this Section 3.

(c) Copies of the Offering Memorandum. The Company agrees to furnish the Initial
Purchasers, without charge, as many copies of the Pricing Disclosure Package and
the Final Offering Memorandum and any amendments and supplements thereto as they
shall reasonably request.

(d) Blue Sky Compliance. Each of the Company and the Guarantors shall cooperate
with the Representative and counsel for the Initial Purchasers to qualify or
register (or to obtain exemptions from qualifying or registering) all or any
part of the Securities for offer and sale under the securities laws of the
several states of the United States, the provinces of Canada or any other
jurisdictions designated by the Representative, shall comply with such laws and
shall continue such qualifications, registrations and exemptions in effect so
long as required for the distribution of the Securities. None of the Company or
any of the Guarantors shall be required to qualify as a foreign corporation or
to take any action that would subject it to general service of process in any
such jurisdiction where it is not presently qualified or where it would be
subject to taxation as a foreign corporation. The Company will advise the
Representative promptly of the suspension of the qualification or registration
of (or any such exemption relating to) the Securities for offering, sale or
trading in any jurisdiction or any initiation or threat of any proceeding for
any such purpose, and in the event of the issuance of any order suspending such
qualification, registration or exemption, each of the Company and the Guarantors
shall use its best efforts to obtain the withdrawal thereof.

(e) Use of Proceeds. The Company shall apply the net proceeds from the sale of
the Securities sold by it in the manner described under the caption “Use of
Proceeds” in the Pricing Disclosure Package.

 

21

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

(f) The Depositary. The Company will cooperate with the Initial Purchasers and
use its best efforts to permit the Securities to be eligible for clearance and
settlement through the facilities of the Depositary.

(g) Additional Issuer Information. Prior to the completion of the placement of
the Securities by the Initial Purchasers with the Subsequent Purchasers, the
Company shall file, on a timely basis, with the Commission and the New York
Stock Exchange (the “NYSE”) all reports and documents required to be filed under
Section 13 or 15 of the Exchange Act. Additionally, at any time when the Company
is not subject to Section 13 or 15 of the Exchange Act, for the benefit of
holders and beneficial owners from time to time of the Securities, the Company
shall furnish, at its expense, upon request, to holders and beneficial owners of
Securities and prospective purchasers of Securities information (“Additional
Issuer Information”) satisfying the requirements of Rule 144A(d).

(h) Agreement Not To Offer or Sell Additional Securities. During the period of
90 days following the date hereof, the Company will not, without the prior
written consent of Merrill Lynch (which consent may be withheld at the sole
discretion of Merrill Lynch), directly or indirectly, sell, offer, contract or
grant any option to sell, pledge, transfer or establish an open “put equivalent
position” within the meaning of Rule 16a-1 under the Exchange Act, or otherwise
dispose of or transfer, or announce the offering of, or file any registration
statement under the Securities Act in respect of, any debt securities of the
Company or securities exchangeable for or convertible into debt securities of
the Company (other than as contemplated by this Agreement and to register the
Exchange Securities).

(i) Future Reports to the Initial Purchasers. At any time when the Company is
not subject to Section 13 or 15 of the Exchange Act and any Securities or
Exchange Securities remain outstanding, the Company will furnish to the
Representative and, upon request, to each of the other Initial Purchasers:
(i) as soon as practicable after the end of each fiscal year, copies of the
Company’s balance sheet as of the close of such fiscal year and statements of
income, stockholders’ equity and cash flows for the year then ended and the
opinion thereon of the Company’s independent public or certified public
accountants; (ii) as soon as practicable after the filing thereof would
otherwise be required pursuant to the rules and regulations under Section 13 or
15 of the Exchange Act, copies of each proxy statement, Annual Report on Form
10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other report
that would otherwise be filed by the Company with the Commission, the Financial
Industry Regulatory Authority (“FINRA”) or any securities exchange; and (iii) as
soon as available, copies of any report or communication of the Company mailed
generally to holders of its capital stock or debt securities (including the
holders of the Securities), if, in each case, such documents are not filed with
the Commission within the time periods specified by the Commission’s rules and
regulations under Section 13 or 15 of the Exchange Act. Any filings made by the
Company pursuant to this section with the Commission’s Electronic Data
Gathering, Analysis, and Retrieval system (EDGAR) shall be deemed to have been
furnished to the Representative and the other Initial Purchasers.

(j) No Integration. The Company agrees that it will not and will cause its
Affiliates not to make any offer or sale of securities of the Company of any
class if, as a result of the doctrine of “integration” referred to in Rule 502
under the Securities Act, such offer or sale would render invalid (for the
purpose of (i) the sale of the Securities by the Company to the Initial
Purchasers,

 

22

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

(ii) the resale of the Securities by the Initial Purchasers to Subsequent
Purchasers or (iii) the resale of the Securities by such Subsequent Purchasers
to others) the exemption from the registration requirements of the Securities
Act provided by Section 4(2) thereof or by Rule 144A or by Regulation S
thereunder or otherwise.

(k) No General Solicitation or Directed Selling Efforts. The Company agrees that
it will not and will not permit any of its Affiliates or any other person acting
on its or their behalf (other than the Initial Purchasers, as to which no
covenant is given) to (i) solicit offers for, or offer or sell, the Securities
by means of any form of general solicitation or general advertising within the
meaning of Rule 502(c) of Regulation D or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act or (ii) engage
in any directed selling efforts with respect to the Securities within the
meaning of Regulation S, and the Company will and will cause all such persons to
comply with the offering restrictions requirement of Regulation S with respect
to the Securities.

(l) No Restricted Resales. From the Closing Date through consummation of the
Exchange Offer, the Company will not, and will not permit any of its affiliates
(as defined in Rule 144 under the Securities Act) to resell any of the Notes
that constitute “restricted securities” under Rule 144 that have been reacquired
by any of them.

(m) Legended Securities. Each certificate for a Note will bear the legend
contained in “Notice to Investors” in the Preliminary Offering Memorandum for
the time period and upon the other terms stated in the Preliminary Offering
Memorandum.

(n) Escrow Account. The Company shall deposit or cause to be deposited the
Escrowed Property into the Escrow Account.

(o) Escrow Release Conditions. Concurrently with the release of the Escrowed
Property on the Escrow Release Date,

(i) the Company shall deliver to the Initial Purchasers executed copies of any
certificates, evidence and documents confirming compliance with and satisfaction
of the Escrow Release Conditions in accordance with the Escrow Agreement and
such other certificates as the Initial Purchasers may reasonably request;

(ii) the Transactions shall have been consummated on substantially the terms and
conditions described in the Final Offering Memorandum.

(iii) the Specified Guarantors shall enter into the Joinder Agreement, the RRA
Joinder and the Supplemental Indenture and shall deliver executed copies thereof
to the Initial Purchasers;

(iv) the Escrow Agent shall, upon instruction of the Company, release a wire
transfer of immediately available funds for the amount of the Deferred Discount
to Merrill Lynch, as Representative of the Initial Purchasers;

(v) the Specified Guarantors shall enter into a joinder agreement to the New
Credit Agreement and shall deliver executed copies thereof to the Initial
Purchasers;

 

23

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

(vi) the Company shall cause Bingham McCutchen LLP, counsel for certain
Specified Guarantors incorporated or organized in Delaware, New York, Virginia,
Massachusetts, Maryland and California, and special local counsel for each of
the remaining Specified Guarantors incorporated or organized in Ohio, Georgia,
Missouri, Tennessee, Illinois, Minnesota, North Carolina, Texas and Michigan,
respectively, to deliver in each case favorable opinions with respect to valid
existence, good standing and corporate power of such Specified Guarantors; due
authorization, execution and delivery by such Specified Guarantors and
enforceability against such Specified Guarantors of the Joinder Agreement, RRA
Joinder, Supplemental Indenture and Guarantees; and as to the absence of
required consents and non-contravention of organizational documents, laws,
contracts and judgments, in each case on terms substantially consistent with the
opinions delivered as to such matters on the Closing Date, and in each case
dated as of the Escrow Release Date, in forms reasonably satisfactory to the
Initial Purchasers;

(vii) the Company and the Specified Guarantors shall deliver to the Initial
Purchasers, among other documents and certificates as the Initial Purchasers
shall reasonably request, Secretary’s Certificates, dated the Escrow Release
Date, reasonably satisfactory to the Initial Purchasers which shall include the
following documents with respect to the Specified Guarantors: (a) certificates
of incorporation or organization, (b) by-laws or comparable organizational
documents, (c) resolutions of the Board of Directors of each entity or
comparable documents, (d) certificates of good standing from the jurisdiction of
incorporation or organization of each such entity and (e) certificates of good
standing and/or qualifications to do business as a foreign corporation in such
jurisdictions as the Initial Purchasers reasonably request.

The Representative on behalf of the several Initial Purchasers, may, in its sole
discretion, waive in writing the performance by the Company or any Guarantor of
any one or more of the foregoing covenants or extend the time for their
performance.

SECTION 4. Payment of Expenses. Each of the Company and the Guarantors agrees to
pay all costs, fees and expenses incurred in connection with the performance of
its obligations hereunder and in connection with the Transactions, including,
without limitation, (i) all expenses incident to the issuance and delivery of
the Securities (including all printing and engraving costs), (ii) all necessary
issue, transfer and other stamp taxes in connection with the issuance and sale
of the Securities to the Initial Purchasers, (iii) all fees and expenses of the
Company’s and the Guarantors’ counsel, independent public or certified public
accountants and other advisors, (iv) all costs and expenses incurred in
connection with the preparation, printing, filing, shipping and distribution of
the Pricing Disclosure Package and the Final Offering Memorandum (including
financial statements and exhibits), and all amendments and supplements thereto,
and the Transaction Documents, (v) all filing fees, attorneys’ fees and expenses
incurred by the Company, the Guarantors or the Initial Purchasers in connection
with qualifying or registering (or obtaining exemptions from the qualification
or registration of) all or any part of the Securities for offer and sale under
the securities laws of the several states of the United States, the provinces of
Canada or other jurisdictions designated by the Initial Purchasers (including,
without limitation, the cost of preparing, printing and mailing preliminary and
final blue sky or legal investment memoranda and any related supplements to the
Pricing Disclosure Package or the Final Offering Memorandum), (vi) the fees and
expenses of the Trustee and Escrow Agent, including the fees

 

24

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

and disbursements of counsel for the Trustee and Escrow Agent in connection with
the Indenture, the Escrow Agreement, the Securities and the Exchange Securities,
(vii) any fees payable in connection with the rating of the Securities or the
Exchange Securities with the ratings agencies, (viii) any filing fees incident
to, and any reasonable fees and disbursements of counsel to the Initial
Purchasers in connection with the review by FINRA, if any, of the terms of the
sale of the Securities or the Exchange Securities, (ix) all fees and expenses
(including reasonable fees and expenses of counsel) of the Company and the
Guarantors in connection with approval of the Securities by the Depositary for
“book-entry” transfer, and the performance by the Company and the Guarantors of
their respective other obligations under this Agreement and (x) all expenses
incident to the “road show” for the offering of the Securities, including the
cost of any chartered airplane or other transportation, with such expenses
incurred under this clause (x) subject to a maximum aggregate amount of $300,000
except in respect of expenses approved by the Company in writing. Except as
provided in this Section 4 and Sections 6, 8 and 9 hereof, the Initial
Purchasers shall pay their own expenses, including the fees and disbursements of
their counsel.

SECTION 5. Conditions of the Obligations of the Initial Purchasers. The
obligations of the several Initial Purchasers to purchase and pay for the
Securities as provided herein on the Closing Date shall be subject to the
accuracy of the representations and warranties on the part of the Company and
the Guarantors set forth in Section 1 hereof as of the date hereof and as of the
Closing Date as though then made and to the timely performance by the Company of
its covenants and other obligations hereunder, and to each of the following
additional conditions:

(a) Accountants’ Comfort Letters. On the date hereof, the Initial Purchasers
shall have received from Ernst & Young LLP, the independent registered public
accounting firm for the Company, and Deloitte & Touche LLP, the independent
registered public accounting firm for Sealy, “comfort letters” dated the date
hereof addressed to the Initial Purchasers, in form and substance satisfactory
to the Representative, covering the financial statements and certain financial
information in the Pricing Disclosure Package and other customary matters. In
addition, on the Closing Date, the Initial Purchasers shall have received from
such accountants “bring-down comfort letters” dated the Closing Date addressed
to the Initial Purchasers, in form and substance satisfactory to the
Representative, in the form of the “comfort letters” delivered on the date
hereof, except that (i) such bring-down comfort letters shall cover the
financial statements and certain financial information in the Final Offering
Memorandum and any amendment or supplement thereto and (ii) procedures shall be
brought down to a date no more than 3 days prior to the Closing Date.

(b) No Material Adverse Change or Ratings Agency Change. For the period from and
after the date of this Agreement and prior to the Closing Date:

(i) in the reasonable judgment of the Representative there shall not have
occurred any Material Adverse Change; and

(ii) there shall not have occurred any downgrading, nor shall any notice have
been given of any intended or potential downgrading or of any review for a
possible change that does not indicate the direction of the possible change, in
the rating accorded the Company or any of its Subsidiaries or any of their
securities or indebtedness by any “nationally recognized statistical rating
organization” as such term is defined in Section 3(a)(62) of the Exchange Act.

 

25

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

(c) Opinion of Counsel for the Company. On the Closing Date the Initial
Purchasers shall have received the favorable opinions of Bingham McCutchen LLP,
counsel for the Company and the Initial Guarantors, and of the Company’s General
Counsel, each dated as of such Closing Date, the forms of which are attached as
Exhibit A.

(d) Opinion of Counsel for the Initial Purchasers. On the Closing Date the
Initial Purchasers shall have received the favorable opinion of Davis Polk &
Wardwell LLP, counsel for the Initial Purchasers, dated as of such Closing Date,
with respect to such matters as may be reasonably requested by the Initial
Purchasers.

(e) Officers’ Certificate. On the Closing Date the Initial Purchasers shall have
received a written certificate executed by the Chairman of the Board, Chief
Executive Officer or President of the Company and each Guarantor and the Chief
Financial Officer or Chief Accounting Officer of the Company and each Guarantor,
dated as of the Closing Date, to the effect set forth in Section 5(b)(ii)
hereof, and further to the effect that:

(i) for the period from and after the date of this Agreement and prior to the
Closing Date there has not occurred any Material Adverse Change;

(ii) the representations, warranties and covenants of the Company and the
Guarantors set forth in Section 1 hereof were true and correct as of the date
hereof and are true and correct as of the Closing Date with the same force and
effect as though expressly made on and as of the Closing Date; and

(iii) each of the Company and the Guarantors has complied with all the
agreements and satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Date.

(f) Indenture; Registration Rights Agreement. (A) The Company and the Initial
Guarantors shall have executed and delivered the Indenture, in form and
substance reasonably satisfactory to the Initial Purchasers, and the Initial
Purchasers shall have received executed copies thereof and (B) the Company and
the Initial Guarantors shall have executed and delivered the Registration Rights
Agreement, in form and substance reasonably satisfactory to the Initial
Purchasers, and the Initial Purchasers shall have received executed copies
thereof.

(g) Bank Amendment. On or before the Closing Date, the Company and the parties
thereto shall have entered into the Bank Amendment and the Initial Purchasers
shall have received executed copies thereof.

(h) Escrow Agreement. The Company shall have, on or prior to the Closing Date,
executed and delivered to the Initial Purchasers an executed copy of the Escrow
Agreement, deposited or caused to be deposited the Escrowed Property into the
Escrow Account, filed or caused to be filed any agreements, financing statements
or other instruments to give the Trustee a valid, perfected first-priority
security interest in the Escrowed Property and the Escrow Account (as
contemplated by the terms of the Escrow Agreement), complied with the terms and
provisions in the Escrow Agreement and provided such evidence as the Initial
Purchasers may reasonably require of the foregoing.

 

26

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

(i) Additional Documents. On or before the Closing Date, the Initial Purchasers
and counsel for the Initial Purchasers shall have received such information,
documents and opinions as they may reasonably require for the purposes of
enabling them to pass upon the issuance and sale of the Securities as
contemplated herein, or in order to evidence the accuracy of any of the
representations and warranties, or the satisfaction of any of the conditions or
agreements, herein contained.

If any condition specified in this Section 5 is not satisfied when and as
required to be satisfied, this Agreement may be terminated by Merrill Lynch by
notice to the Company at any time on or prior to the Closing Date, which
termination shall be without liability on the part of any party to any other
party, except that Sections 4, 6, 8 and 9 hereof shall at all times be effective
and shall survive such termination.

SECTION 6. Reimbursement of Initial Purchasers’ Expenses. If (x) this Agreement
is terminated by Merrill Lynch pursuant to Section 5 or 10 hereof, including if
the sale to the Initial Purchasers of the Securities on the Closing Date is not
consummated because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or to comply with any provision hereof,
or (y) the Escrow Release Conditions are not satisfied on or prior to the
Outside Date and the Deferred Discount is not released to Merrill Lynch as
Representative of the Initial Purchasers, the Company agrees to reimburse the
Initial Purchasers, severally, upon demand for all documented out-of-pocket
expenses that shall have been reasonably incurred by the Initial Purchasers in
connection with the proposed purchase and the offering and sale of the
Securities, including, without limitation, fees and disbursements of counsel,
printing expenses, travel expenses, postage, facsimile and telephone charges.

SECTION 7. Offer, Sale and Resale Procedures. Each of the Initial Purchasers, on
the one hand, and the Company and each of the Guarantors, on the other hand,
hereby agree to observe the following procedures in connection with the offer
and sale of the Securities:

(a) Offers and sales of the Securities will be made only by the Initial
Purchasers or Affiliates thereof qualified to do so in the jurisdictions in
which such offers or sales are made. Each such offer or sale shall only be made
to persons whom the offeror or seller reasonably believes to be Qualified
Institutional Buyers or non-U.S. persons outside the United States to whom the
offeror or seller reasonably believes offers and sales of the Securities may be
made in reliance upon Regulation S upon the terms and conditions set forth in
Annex II hereto, which Annex II is hereby expressly made a part hereof.

(b) The Securities will be offered by approaching prospective Subsequent
Purchasers on an individual basis. No general solicitation or general
advertising (within the meaning of Rule 502 under the Securities Act) will be
used in the United States in connection with the offering of the Securities.

(c) Upon original issuance by the Company, and until such time as the same is no
longer required under the applicable requirements of the Securities Act, the
Notes (and all securities issued in exchange therefor or in substitution
thereof, other than the Exchange Notes) shall bear the following legend:

 

27

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

“THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER

(1) REPRESENTS THAT

(A) IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL
BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT
EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT,

(B) IT IS AN INSTITUTIONAL “ACCREDITED INVESTOR” (WITHIN THE MEANING OF RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) (AN “INSTITUTIONAL
ACCREDITED INVESTOR”) OR

(C) IT IS NOT A U.S. PERSON (WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT) AND

(2) AGREES FOR THE BENEFIT OF THE ISSUER THAT IT WILL NOT OFFER, SELL, PLEDGE OR
OTHERWISE TRANSFER THIS NOTE OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT IN
ACCORDANCE WITH THE SECURITIES ACT AND ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES AND ONLY

(A) TO THE ISSUER,

(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE
SECURITIES ACT,

(C) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT,

(D) IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER
THE SECURITIES ACT,

 

28

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

(E) IN A PRINCIPAL AMOUNT OF NOT LESS THAN $100,000 TO AN INSTITUTIONAL
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, DELIVERS TO THE TRUSTEE A DULY
COMPLETED AND SIGNED CERTIFICATE (THE FORM OF WHICH MAY BE OBTAINED FROM THE
TRUSTEE) RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS NOTE, OR

(F) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT.

PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(C) ABOVE OR
(2)(D) ABOVE, A DULY COMPLETED AND SIGNED CERTIFICATE (THE FORM OF WHICH MAY BE
OBTAINED FROM THE TRUSTEE) MUST BE DELIVERED TO THE TRUSTEE. PRIOR TO THE
REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(E) OR (F) ABOVE, THE ISSUER
RESERVES THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS,
CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO
DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE
AS TO THE AVAILABILITY OF ANY RULE 144 EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT.”

Following the sale of the Securities by the Initial Purchasers to Subsequent
Purchasers pursuant to the terms hereof, the Initial Purchasers shall not be
liable or responsible to the Company for any losses, damages or liabilities
suffered or incurred by the Company, including any losses, damages or
liabilities under the Securities Act, arising from or relating to any resale or
transfer of any Security.

SECTION 8. Indemnification.

(a) Indemnification of the Initial Purchasers. Each of the Company and the
Guarantors, jointly and severally, agrees to indemnify and hold harmless each
Initial Purchaser, its Affiliates, directors, officers and employees, and each
person, if any, who controls any Initial Purchaser within the meaning of the
Securities Act and the Exchange Act against any loss, claim, damage, liability
or expense, as incurred, to which such Initial Purchaser, Affiliate, director,
officer, employee or controlling person may become subject, under the Securities
Act, the Exchange Act or other federal or state statutory law or regulation, or
at common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of the Company), insofar as such
loss, claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based: (i) upon any untrue statement or
alleged

 

29

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

untrue statement of a material fact contained in the Preliminary Offering
Memorandum, the Pricing Supplement, any Company Additional Written Communication
or the Final Offering Memorandum (or any amendment or supplement thereto), or
the omission or alleged omission therefrom of a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; or (ii) in whole or in part upon any inaccuracy
in the representations and warranties of the Company contained herein; and to
reimburse each Initial Purchaser and each such Affiliate, director, officer,
employee or controlling person for any and all expenses (including the fees and
disbursements of one firm of counsel chosen by Merrill Lynch in addition to any
local counsel) as such expenses are reasonably incurred by such Initial
Purchaser or such Affiliate, director, officer, employee or controlling person
in connection with investigating, defending, settling, compromising or paying
any such loss, claim, damage, liability, expense or action; provided, however,
that the foregoing indemnity agreement shall not apply, with respect to an
Initial Purchaser, to any loss, claim, damage, liability or expense to the
extent, but only to the extent, arising out of or based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of such Initial Purchaser through the Representative
expressly for use in the Preliminary Offering Memorandum, the Pricing
Supplement, any Company Additional Written Communication or the Final Offering
Memorandum (or any amendment or supplement thereto). The indemnity agreement set
forth in this Section 8(a) shall be in addition to any liabilities that the
Company may otherwise have.

(b) Indemnification of the Company and the Guarantors. Each Initial Purchaser
agrees, severally and not jointly, to indemnify and hold harmless the Company,
each Guarantor, each of their respective directors, officers and each person, if
any, who controls the Company or any Guarantor within the meaning of the
Securities Act or the Exchange Act, against any loss, claim, damage, liability
or expense, as incurred, to which the Company, any Guarantor or any such
director, officer or controlling person may become subject, under the Securities
Act, the Exchange Act, or other federal or state statutory law or regulation, or
at common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of such Initial Purchaser),
insofar as such loss, claim, damage, liability or expense (or actions in respect
thereof as contemplated below) arises out of or is based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Preliminary Offering Memorandum, the Pricing Supplement, any Company Additional
Written Communication or the Final Offering Memorandum (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Preliminary Offering
Memorandum, the Pricing Supplement, any Company Additional Written Communication
or the Final Offering Memorandum (or any amendment or supplement thereto), in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of such Initial Purchaser through the Representative
expressly for use therein; and to reimburse the Company, any Guarantor and each
such director, officer or controlling person for any and all expenses (including
the fees and disbursements of counsel) as such expenses are reasonably incurred
by the Company, any Guarantor or such director, officer or controlling person in
connection with investigating, defending, settling, compromising or paying any
such loss, claim, damage, liability, expense or action. Each of the Company

 

30

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

and the Guarantors hereby acknowledges that the only information that the
Initial Purchasers through the Representative have furnished to the Company
expressly for use in the Preliminary Offering Memorandum, the Pricing
Supplement, any Company Additional Written Communication or the Final Offering
Memorandum (or any amendment or supplement thereto) are the statements set forth
in the third and fourth sentences of the seventh paragraph under the caption
“New Issue of Notes” and the ninth and tenth paragraphs under the caption “Short
Positions”, each under the section “Plan of Distribution” in the Preliminary
Offering Memorandum and the Final Offering Memorandum. The indemnity agreement
set forth in this Section 8(b) shall be in addition to any liabilities that each
Initial Purchaser may otherwise have.

(c) Notifications and Other Indemnification Procedures. Promptly after receipt
by an indemnified party under this Section 8 of notice of the commencement of
any action, such indemnified party will, if a claim in respect thereof is to be
made against an indemnifying party under this Section 8, notify the indemnifying
party in writing of the commencement thereof; provided that the failure to so
notify the indemnifying party will not relieve it from any liability which it
may have to any indemnified party under this Section 8 except to the extent that
it has been materially prejudiced by such failure (through the forfeiture of
substantive rights and defenses) and shall not relieve the indemnifying party
from any liability that the indemnifying party may have to an indemnified party
other than under this Section 8. In case any such action is brought against any
indemnified party and such indemnified party seeks or intends to seek indemnity
from an indemnifying party, the indemnifying party will be entitled to
participate in and, to the extent that it shall elect, jointly with all other
indemnifying parties similarly notified, by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party; provided, however, if the defendants in
any such action include both the indemnified party and the indemnifying party
and the indemnified party shall have reasonably concluded that a conflict may
arise between the positions of the indemnifying party and the indemnified party
in conducting the defense of any such action or that there may be legal defenses
available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on behalf of
such indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of such indemnifying party’s election so to
assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party
under this Section 8 for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the immediately preceding sentence (it being understood, however,
that the indemnifying party shall not be liable for the expenses of more than
one separate counsel (together with local counsel (in each jurisdiction)), which
shall be selected by Merrill Lynch (in the case of counsel representing the
Initial Purchasers or their related persons), representing the indemnified
parties who are parties to such action) or (ii) the indemnifying party shall not
have employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of the
action, in each of which cases the fees and expenses of counsel shall be at the
expense of the indemnifying party.

 

31

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

(d) Settlements. The indemnifying party under this Section 8 shall not be liable
for any settlement of any proceeding effected without its written consent, which
will not be unreasonably withheld, but if settled with such consent or if there
be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party against any loss, claim, damage, liability or
expense by reason of such settlement or judgment. Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by this Section 8, the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request or disputed in good faith the indemnified party’s entitlement
to such reimbursement prior to the date of such settlement. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement, compromise or consent to the entry of judgment in any pending or
threatened action, suit or proceeding in respect of which any indemnified party
is or could have been a party and indemnity was or could have been sought
hereunder by such indemnified party, unless such settlement, compromise or
consent (i) includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such action, suit or
proceeding and (ii) does not include any statements as to or any findings of
fault, culpability or failure to act by or on behalf of any indemnified party.

SECTION 9. Contribution. If the indemnification provided for in Section 8 hereof
is for any reason held to be unavailable to or otherwise insufficient to hold
harmless an indemnified party in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount paid or payable by such indemnified party, as
incurred, as a result of any losses, claims, damages, liabilities or expenses
referred to therein (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Guarantors, on the one hand,
and the Initial Purchasers, on the other hand, from the offering of the
Securities pursuant to this Agreement or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company and the Guarantors, on the
one hand, and the Initial Purchasers, on the other hand, in connection with the
statements or omissions or inaccuracies in the representations and warranties
herein which resulted in such losses, claims, damages, liabilities or expenses,
as well as any other relevant equitable considerations. The relative benefits
received by the Company and the Guarantors, on the one hand, and the Initial
Purchasers, on the other hand, in connection with the offering of the Securities
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Securities
pursuant to this Agreement (before deducting expenses but after deducting
Initial Purchaser discounts and commissions) received by the Company, and the
total discount received by the Initial Purchasers bear to the aggregate initial
offering price of the Securities. The relative fault of the Company and the
Guarantors, on the one hand, and the Initial Purchasers, on the other hand,
shall be determined by reference to, among other things, whether any such untrue
or alleged untrue statement of a material fact or omission or alleged omission
to state a material fact or any such inaccurate or alleged inaccurate
representation or warranty relates to information supplied by the Company and
the Guarantors, on the one hand, or the Initial Purchasers, on the other hand,
and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission or inaccuracy.

 

32

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

The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in Section 8 hereof, any legal or other
fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in
Section 8 hereof with respect to notice of commencement of any action shall
apply if a claim for contribution is to be made under this Section 9; provided,
however, that no additional notice shall be required with respect to any action
for which notice has been given under Section 8 hereof for purposes of
indemnification.

The Company, the Guarantors and the Initial Purchasers agree that it would not
be just and equitable if contribution pursuant to this Section 9 were determined
by pro rata allocation (even if the Initial Purchasers were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in this Section 9.

Notwithstanding the provisions of this Section 9, no Initial Purchaser shall be
required to contribute any amount in excess of the discount received by such
Initial Purchaser in connection with the Securities distributed by it. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11 of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Initial Purchasers’ obligations
to contribute pursuant to this Section 9 are several, and not joint, in
proportion to their respective commitments as set forth opposite their names in
Schedule A. For purposes of this Section 9, each director, officer and employee
of an Initial Purchaser and each person, if any, who controls an Initial
Purchaser within the meaning of the Securities Act and the Exchange Act shall
have the same rights to contribution as such Initial Purchaser, and each
director of the Company or any Guarantor, and each person, if any, who controls
the Company or any Guarantor within the meaning of the Securities Act and the
Exchange Act shall have the same rights to contribution as the Company and the
Guarantors.

SECTION 10. Termination of this Agreement. Prior to the Closing Date, this
Agreement may be terminated by Merrill Lynch by notice given to the Company if
at any time: (i) trading or quotation in any of the Company’s securities shall
have been suspended or limited by the Commission or by the NYSE, or trading in
securities generally on either the Nasdaq Stock Market or the NYSE shall have
been suspended or limited, or minimum or maximum prices shall have been
generally established on any of such quotation system or stock exchange by the
Commission or FINRA; (ii) a general banking moratorium shall have been declared
by any of federal, New York authorities; (iii) there shall have occurred any
outbreak or escalation of national or international hostilities or any crisis or
calamity, or any change in the United States or international financial markets
as in the judgment of Merrill Lynch is material and adverse and makes it
impracticable or inadvisable to proceed with the offering sale or delivery of
the Securities in the manner and on the terms described in the Pricing
Disclosure Package or to enforce contracts for the sale of securities; or
(iv) in the judgment of Merrill Lynch there shall have occurred any Material
Adverse Change. Any termination pursuant to this Section 10 shall be without
liability on the part of (i) the Company or any Guarantor to any Initial
Purchaser, except that

 

33

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

the Company and the Guarantors shall be obligated to reimburse the expenses of
the Initial Purchasers pursuant to Sections 4 and 6 hereof, (ii) any Initial
Purchaser to the Company, or (iii) any party hereto to any other party, except
that the provisions of Sections 8 and 9 hereof shall at all times be effective
and shall survive such termination.

SECTION 11. Representations and Indemnities to Survive Delivery. The respective
indemnities, agreements, representations, warranties and other statements of the
Company, the Guarantors, their respective officers and the several Initial
Purchasers set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation made by or on behalf of any
Initial Purchaser, the Company, any Guarantor or any of their partners, officers
or directors or any controlling person, as the case may be, and will survive
delivery of and payment for the Securities sold hereunder and any termination of
this Agreement.

SECTION 12. Notices. All communications hereunder shall be in writing and shall
be mailed, hand delivered, couriered or facsimiled and confirmed to the parties
hereto as follows:

If to the Initial Purchasers:

Merrill Lynch, Pierce, Fenner & Smith Incorporated

50 Rockefeller Plaza

New York, New York 10020

Facsimile: 212-901-7897

Attention: HY Legal Department

with a copy to:

Davis Polk & Wardwell LLP

450 Lexington Avenue

New York, New York 10017

Facsimile: 212-701-5111

Attention: Michael Kaplan

If to the Company or the Guarantors:

Tempur-Pedic International Inc.

1000 Tempur Way

Lexington, Kentucky 40511

Facsimile: 859-455-2805

Attention: Chief Financial Officer

with a copy to:

Bingham McCutchen LLP

399 Park Avenue

New York, New York 10022

Facsimile: 212-752-5378

Attention: John R. Utzschneider

 

34

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

Any party hereto may change the address or facsimile number for receipt of
communications by giving written notice to the others.

SECTION 13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto, and to the benefit of the indemnified parties
referred to in Sections 8 and 9 hereof, and in each case their respective
successors, and no other person will have any right or obligation hereunder. The
term “successors” shall not include any Subsequent Purchaser or other purchaser
of the Securities as such from any of the Initial Purchasers merely by reason of
such purchase.

SECTION 14. Authority of the Representative. Any action by the Initial
Purchasers hereunder may be taken by Merrill Lynch on behalf of the Initial
Purchasers, and any such action taken by Merrill Lynch shall be binding upon the
Initial Purchasers.

SECTION 15. Partial Unenforceability. The invalidity or unenforceability of any
section, paragraph or provision of this Agreement shall not affect the validity
or enforceability of any other section, paragraph or provision hereof. If any
section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.

SECTION 16. Governing Law Provisions. THIS AGREEMENT AND ANY CLAIM, CONTROVERSY
OR DISPUTE RELATING TO OR ARISING OUT OF THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE WITHOUT REGARD
TO CONFLICTS OF LAW PRINCIPLES THEREOF.

(a) Consent to Jurisdiction. Any legal suit, action or proceeding arising out of
or based upon this Agreement or the transactions contemplated hereby (“Related
Proceedings”) may be instituted in the federal courts of the United States of
America located in the City and County of New York or the courts of the State of
New York in each case located in the City and County of New York (collectively,
the “Specified Courts”), and each party irrevocably submits to the exclusive
jurisdiction (except for suits, actions, or proceedings instituted in regard to
the enforcement of a judgment of any Specified Court in a Related Proceeding (a
“Related Judgment”), as to which such jurisdiction is non-exclusive) of the
Specified Courts in any Related Proceeding. Service of any process, summons,
notice or document by mail to such party’s address set forth above shall be
effective service of process for any Related Proceeding brought in any Specified
Court. The parties irrevocably and unconditionally waive any objection to the
laying of venue of any Specified Proceeding in the Specified Courts and
irrevocably and unconditionally waive and agree not to plead or claim in any
Specified Court that any Related Proceeding brought in any Specified Court has
been brought in an inconvenient forum.

SECTION 17. Default of One or More of the Several Initial Purchasers. If any one
or more of the several Initial Purchasers shall fail or refuse to purchase
Securities that it or they have agreed to purchase hereunder on the Closing
Date, and the aggregate number of Securities which such defaulting Initial
Purchaser or Initial Purchasers agreed but failed or refused to purchase

 

35

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

does not exceed 10% of the aggregate number of the Securities to be purchased on
such date, the other Initial Purchasers shall be obligated, severally, in the
proportions that the number of Securities set forth opposite their respective
names on Schedule A bears to the aggregate number of Securities set forth
opposite the names of all such non-defaulting Initial Purchasers, or in such
other proportions as may be specified by the Initial Purchasers with the consent
of the non-defaulting Initial Purchasers, to purchase the Securities which such
defaulting Initial Purchaser or Initial Purchasers agreed but failed or refused
to purchase on the Closing Date. If any one or more of the Initial Purchasers
shall fail or refuse to purchase Securities and the aggregate number of
Securities with respect to which such default occurs exceeds 10% of the
aggregate number of Securities to be purchased on the Closing Date, and
arrangements satisfactory to the Initial Purchasers and the Company for the
purchase of such Securities are not made within 48 hours after such default,
this Agreement shall terminate without liability of any party to any other party
except that the provisions of Sections 4, 6, 8 and 9 hereof shall at all times
be effective and shall survive such termination. In any such case either the
Initial Purchasers or the Company shall have the right to postpone the Closing
Date, as the case may be, but in no event for longer than seven days in order
that the required changes, if any, to the Final Offering Memorandum or any other
documents or arrangements may be effected.

As used in this Agreement, the term “Initial Purchaser” shall be deemed to
include any person substituted for a defaulting Initial Purchaser under this
Section 17. Any action taken under this Section 17 shall not relieve any
defaulting Initial Purchaser from liability in respect of any default of such
Initial Purchaser under this Agreement.

SECTION 18. No Advisory or Fiduciary Responsibility. Each of the Company and the
Guarantors acknowledges and agrees that: (i) the purchase and sale of the
Securities pursuant to this Agreement, including the determination of the
offering price of the Securities and any related discounts and commissions, is
an arm’s-length commercial transaction between the Company and the Guarantors,
on the one hand, and the several Initial Purchasers, on the other hand, and the
Company and the Guarantors are capable of evaluating and understanding and
understand and accept the terms, risks and conditions of the transactions
contemplated by this Agreement; (ii) in connection with each transaction
contemplated hereby and the process leading to such transaction each Initial
Purchaser is and has been acting solely as a principal and is not the agent or
fiduciary of the Company and the Guarantors or their respective Affiliates,
stockholders, creditors or employees or any other party; (iii) no Initial
Purchaser has assumed or will assume an advisory or fiduciary responsibility in
favor of the Company and the Guarantors with respect to any of the transactions
contemplated hereby or the process leading thereto (irrespective of whether such
Initial Purchaser has advised or is currently advising the Company and the
Guarantors on other matters) or any other obligation to the Company and the
Guarantors except the obligations expressly set forth in this Agreement;
(iv) the several Initial Purchasers and their respective Affiliates may be
engaged in a broad range of transactions that involve interests that differ from
those of the Company and the Guarantors, and the several Initial Purchasers have
no obligation to disclose any of such interests by virtue of any fiduciary or
advisory relationship; and (v) the Initial Purchasers have not provided any
legal, accounting, regulatory or tax advice with respect to the offering
contemplated hereby, and the Company and the Guarantors have consulted their own
legal, accounting, regulatory and tax advisors to the extent they deemed
appropriate.

 

36

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

This Agreement, together with the Joinder Agreement, supersedes all prior
agreements and understandings (whether written or oral) between the Company, the
Guarantors and the several Initial Purchasers, or any of them, with respect to
the subject matter hereof. The Company and the Guarantors hereby waive and
release, to the fullest extent permitted by law, any claims that the Company and
the Guarantors may have against the several Initial Purchasers with respect to
any breach or alleged breach of fiduciary duty. Notwithstanding the foregoing,
this Agreement shall not supersede in any respect that certain Amended and
Restated Commitment Letter dated as of October 23, 2012 (the “Commitment
Letter”) between the lenders party thereto and the Company (it being understood
that the securities being sold hereunder will constitute Securities as
referenced in the Commitment Letter and issuance thereof will, pursuant to the
terms of the Commitment Letter, reduce commitments thereunder).

SECTION 19. General Provisions. This Agreement, together with the Joinder
Agreement, constitutes the entire agreement of the parties to this Agreement and
the Joinder Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof. This Agreement may be executed in two or more
counterparts, each one of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument. Delivery of an
executed counterpart of a signature page to this Agreement by telecopier,
facsimile or other electronic transmission (i.e., a “pdf” or “tif”) shall be
effective as delivery of a manually executed counterpart thereof. This Agreement
may not be amended or modified unless in writing by all of the parties hereto,
and no condition herein (express or implied) may be waived unless waived in
writing by each party whom the condition is meant to benefit. The section
headings herein are for the convenience of the parties only and shall not affect
the construction or interpretation of this Agreement.

 

37

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

If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to the Company the enclosed copies hereof, whereupon this
instrument, along with all counterparts hereof, shall become a binding agreement
in accordance with its terms.

Very truly yours,

Tempur-Pedic International Inc. By:   /s/ William H. Poche   Name:   William H.
Poche   Title:   Treasurer Tempur-Pedic Management, LLC

Tempur World, LLC

Tempur-Pedic Manufacturing, Inc.

Tempur Production USA, LLC

Dawn Sleep Technologies, Inc.

Tempur-Pedic Sales, Inc.

Tempur-Pedic North America, LLC

Tempur-Pedic Technologies, Inc.

Tempur-Pedic America, LLC,

as Initial Guarantors

By:   /s/ William H. Poche   Name:   William H. Poche   Title:   Treasurer

 

38

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

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

 

BY: MERRILL LYNCH, PIERCE, FENNER & SMITH
                                INCORPORATED By:   /s/ Douglas M. Ingram  
Managing Director    

Acting on behalf of itself

and as the Representative of

the several Initial Purchasers

 

39

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

SCHEDULE A

 

Initial Purchasers

   Aggregate
Principal
Amount of
Securities to be
Purchased  

Merrill Lynch, Pierce, Fenner & Smith Incorporated

   $ 206,250,000   

Barclays Capital Inc.

   $ 50,000,000   

J.P. Morgan Securities LLC

   $ 50,000,000   

Wells Fargo Securities, LLC

   $ 50,000,000   

Fifth Third Securities, Inc.

   $ 18,750,000   

Total

   $ 375,000,000   

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

SCHEDULE B

The Specified Guarantors

Sealy Corporation

Sealy Mattress Corporation

Sealy Mattress Company

Sealy Mattress Company of Puerto Rico

Ohio-Sealy Mattress Manufacturing Co. Inc.

Ohio-Sealy Mattress Manufacturing Co.

Sealy Mattress Company of Kansas City, Inc.

Sealy Mattress Company of Memphis

Sealy Mattress Company of Illinois

A. Brandwein & Co.

Sealy Mattress Company of Albany, Inc.

Sealy of Maryland and Virginia, Inc.

Sealy of Minnesota, Inc.

North American Bedding Company

Sealy, Inc.

Mattress Holdings International, LLC

The Ohio Mattress Company Licensing and Components Group

Sealy Mattress Manufacturing Company, Inc.

Sealy Technology LLC

Sealy-Korea, Inc.

Sealy Real Estate, Inc.

Sealy Texas Management, Inc.

Sealy Mattress Co. of S.W. Virginia

Western Mattress Company

Advanced Sleep Products

Sealy Components-Pads, Inc.

Sealy Mattress Company of Michigan, Inc.

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

ANNEX I

Form of Joinder Agreement

[                    ], 2012

Reference is hereby made to the Purchase Agreement, dated December 12, 2012 (the
“Purchase Agreement”), among Tempur-Pedic International Inc., a Delaware
corporation (the “Company”), the Guarantors party thereto, and Merrill Lynch,
Pierce, Fenner & Smith Incorporated, as representative (the “Representative”) of
the Initial Purchasers named on Schedule A thereto (the “Initial Purchasers”),
providing for the issuance and sale of the Securities (as defined therein) by
the Company and the Guarantors.

Capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed to such terms in the Purchase Agreement.

Each of the undersigned hereby acknowledges, agrees and confirms that, by its
execution of this Joinder Agreement, it shall be deemed to be a party to the
Purchase Agreement as if it were an original signatory thereto and hereby makes
the representations and warranties and expressly assumes, and agrees to perform
and discharge, all of the obligations and liabilities of a “Guarantor” as the
case may be, under the Purchase Agreement, including without limitation, any
indemnity and contribution obligations under the Purchase Agreement. All
references in the Purchase Agreement to the “Guarantors” and the “Specified
Guarantors” shall hereafter include each of the undersigned and their respective
successors, as applicable.

Each of the undersigned hereby agrees to promptly execute and deliver any and
all further documents and take such further action as the Company or any
undersigned party or the Initial Purchasers may reasonably require to effect the
purpose of this Joinder Agreement.

This Joinder Agreement shall be governed by and construed in accordance with the
laws of the State of New York without regard to principles of conflict of laws
that would result in the application of any law other than the laws of the State
of New York.

[Signature Pages Follow]

 

Annex I-1

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

IN WITNESS WHEREOF, the undersigned has executed this Joinder Agreement as of
the date first set forth above.

 

[The Specified Guarantors] By       Name:     Title:  

 

Annex I-2

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

ANNEX II

Resale Pursuant to Regulation S or Rule 144A. Each Initial Purchaser understands
that:

Such Initial Purchaser agrees that it has not offered or sold and will not offer
or sell the Securities in the United States or to, or for the benefit or account
of, a U.S. person (other than a distributor), in each case, as defined in
Rule 902 of Regulation S (i) as part of its distribution at any time and
(ii) otherwise until 40 days after the later of the commencement of the offering
of the Securities pursuant hereto and the Closing Date, other than in accordance
with Regulation S or another exemption from the registration requirements of the
Securities Act. Such Initial Purchaser agrees that, during such 40-day
restricted period, it will not cause any advertisement with respect to the
Securities (including any “tombstone” advertisement) to be published in any
newspaper or periodical or posted in any public place and will not issue any
circular relating to the Securities, except such advertisements as are permitted
by and include the statements required by Regulation S.

Such Initial Purchaser agrees that, at or prior to confirmation of a sale of
Securities by it to any distributor, dealer or person receiving a selling
concession, fee or other remuneration during the 40-day restricted period
referred to in Rule 903 of Regulation S, it will send to such distributor,
dealer or person receiving a selling concession, fee or other remuneration a
confirmation or notice to substantially the following effect:

“The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933, as amended (the “Securities Act”), and may not be
offered and sold within the United States or to, or for the account or benefit
of, U.S. persons (i) as part of your distribution at any time or (ii) otherwise
until 40 days after the later of the date the Securities were first offered to
persons other than distributors in reliance upon Regulation S and the Closing
Date, except in either case in accordance with Regulation S under the Securities
Act (or in accordance with Rule 144A under the Securities Act or to accredited
investors in transactions that are exempt from the registration requirements of
the Securities Act), and in connection with any subsequent sale by you of the
Securities covered hereby in reliance on Regulation S under the Securities Act
during the period referred to above to any distributor, dealer or person
receiving a selling concession, fee or other remuneration, you must deliver a
notice to substantially the foregoing effect. Terms used above have the meanings
assigned to them in Regulation S under the Securities Act.”

 

Annex II-1