Exhibit 10.1

AMENDMENT NO. 3 AND CONSENT

THIS AMENDMENT NO. 3 AND CONSENT, dated as of June 8, 2007 (this “Amendment”),
of that certain Credit Agreement referenced below is by and among TEMPUR WORLD,
LLC, a Delaware limited liability company (successor by merger to Tempur World
Holdings, LLC, a Delaware limited liability company, and TEMPUR-PEDIC, INC., a
Kentucky corporation), and TEMPUR PRODUCTION USA, INC., a Virginia corporation,
as Domestic Borrowers, DAN-FOAM ApS, a private limited liability company
existing under the laws of Denmark (“Dan-Foam”), as Foreign Borrower;
TEMPUR-PEDIC INTERNATIONAL INC., a Delaware corporation, and certain of its
subsidiaries and affiliates, as Guarantors; the Lenders, L/C Issuers, BANK OF
AMERICA, N.A., as Administrative Agent and Domestic Collateral Agent, and NORDEA
BANK DANMARK A/S, as Foreign Collateral Agent. Capitalized terms used but not
otherwise defined herein shall have the meanings provided in the Credit
Agreement.

WITNESSETH

WHEREAS, a $340 million term loan and revolving credit facility was established
in favor of the Borrowers pursuant to the terms of that certain Credit
Agreement, dated as of October 18, 2005 (as amended, restated, extended,
supplemented or otherwise modified, the “Credit Agreement”), among the Borrowers
named therein, the Guarantors named therein, the Lenders party thereto, the
Administrative Agent, the Domestic Collateral Agent and the Foreign Collateral
Agent;

WHEREAS, pursuant to Amendment No. 1 to the Credit Agreement, dated as of
February 8, 2006, the Lenders agreed to certain modifications to the terms of
the Credit Agreement, including a $60 million increase in the Domestic Revolving
Commitments and a $10 million reduction in the Foreign Revolving Commitments,
resulting in $390 million in revolving credit and term loan commitments under
the Credit Agreement;

WHEREAS, pursuant to Amendment No. 2 and Consent to the Credit Agreement, dated
as of December 13, 2006, the Lenders agreed to certain modifications to the
terms of the Credit Agreement, including a $64 million increase in the Domestic
Revolving Commitments, resulting in approximately $394 million in domestic and
foreign revolving and term loan commitments under the Credit Agreement;

WHEREAS, the Domestic Borrowers have requested certain modifications to the
terms of the Credit Agreement, including, among other things, to increase the
Aggregate Domestic Revolving Commitments and the Aggregate Foreign Revolving
Commitments under the Credit Agreement;

WHEREAS, the Lenders have agreed to the requested consents and amendments on the
terms and conditions set forth herein;

NOW, THEREFORE, in consideration of these premises and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows:

1. Consent. Without limiting the provisions of Section 7.14 of the Credit
Agreement which provides for the pledge of additional collateral interests on
request, the undersigned Lenders hereby consent to the release by the Foreign
Collateral Agent, in its discretion, of collateral security interests and liens
(the “Foreign Collateral Security”) under the Foreign Collateral Documents
securing the Obligations under the Credit Agreement from time to time at the
request of the Foreign Credit Parties, other than (i) the pledge of interests in
Capital Stock under Section 7.13, (ii) the property subject to the Mortgage Deed
(IPR) Pledge Agreement, dated October 18, 2005 (as amended or restated from time
to time), in Denmark, (iii) the property subject to the Mortgage Deed (Real
Property) Pledge Agreement, dated

 

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October 18, 2005 (as amended or restated from time to time), in Denmark and
(iii) the collateral interests referenced in subsections (b), (d) and (e) of
Section 7.16. In considering any such request for release of Foreign Collateral
Security, the Foreign Collateral Agent shall, in consultation with the Foreign
Credit Parties, do an analysis of the relative benefits associated with the
collateral interests and costs, circumstances and requirements under local law
taking local custom and practice into account, but decisions regarding release
of Foreign Collateral Security (other than the interests excepted out above)
shall be in the discretion of the Foreign Collateral Agent.

2. Amendments to the Credit Agreement. The Credit Agreement is hereby amended in
the following respects:

2.1 On the cover page to the Credit Agreement, the reference to “Tempur-Pedic,
Inc.” is amended to read as “Tempur World, LLC”.

2.2 Clauses (i) and (iii) in the introductory paragraph are amended to read as
follows:

(i) TEMPUR WORLD, LLC, a Delaware limited liability company (“TW”), and TEMPUR
PRODUCTION USA, INC., a Virginia corporation (“TPUSA”), as Domestic Borrowers;

*    *    *

(iii) TEMPUR-PEDIC INTERNATIONAL INC., a Delaware corporation (the “Parent”),
and certain subsidiaries and affiliates identified herein, as Guarantors;

2.3 Each reference in the Credit Agreement to “Parent Guarantors” is amended to
read as “Parent”, and each reference “Foreign Loan Obligations” is amended to
read as “Foreign Revolving Obligations”.

2.4 Section 1.01 is amended as follows:

(a) The definitions for “Consolidated Fixed Charge”, “Consolidated Fixed Charge
Coverage Ratio”, “Equity Transaction”, “Parent Guarantors”, “TPI”, “TWH”,
“Foreign Loan Obligations” and “Foreign Term Lenders”, “Foreign Term Loan”,
“Foreign Term Loan Commitment”, “Foreign Term Loan Commitment Percentage”,
“Foreign Term Note” and “Required Foreign Term Lenders” in Section 1.01 are
deleted in their entirety.

(b) Clause (f) of the definition of “Change of Control” is amended to read as
follows:

“(f) any of the Domestic Borrowers shall cease to be a direct or indirect Wholly
Owned Subsidiary of the Parent, and if an indirect subsidiary of the Parent,
shall cease to be a direct or indirect subsidiary of TW;”

2.5 The following definitions are added to Section 1.01 or, if already contained
therein, amended to read as follows:

“Aggregate Commitments” means the Domestic Revolving Commitments and the Foreign
Revolving Commitments.

“Aggregate Commitment Percentage” means, for each Lender, a fraction (expressed
as a percentage carried to the ninth decimal place), the numerator of which is
the amount of such Lender’s respective Domestic Revolving Commitment and Foreign
Revolving Commitment, and the denominator of which is the amount of the
Aggregate Commitments.

 

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“Applicable Percentage” means the following percentages per annum, based on the
Consolidated Leverage Ratio as set forth in the most recent Compliance
Certificate received by the Administrative Agent pursuant to Section 7.02(b):

 

Pricing
Level   

Consolidated Leverage Ratio

  

Applicable Margin for
Eurocurrency Rate Loans
(Domestic Revolving Loans
and Foreign Revolving
Loans) and Letter of Credit
Fee for Standby Letters of
Credit (other than the IRB
Letter of Credit)

   Letter of
Credit Fee
for the IRB
Letter of
Credit   Applicable
Margin for
Base Rate
Loans   Facility
Fee I    Less than or equal to 1.00:1.0    0.625%    0.375%   0.000%   0.125% II
   Greater than 1.00:1.0 but less than or equal to 1.75:1.0    0.750%    0.500%
  0.000%   0.150% III    Greater than 1.75:1.0 but less than or equal to
2.50:1.0    1.000%    0.750%   0.000%   0.200% IV    Greater than 2.50:1.0   
1.250%    1.150%   0.000%   0.250%

Any increase or decrease in the Applicable Percentage resulting from a change in
the Consolidated Leverage Ratio shall become effective not later than the date
five Business Days immediately following the date a Compliance Certificate is
delivered pursuant to Section 7.02(b); provided, however, that if a Compliance
Certificate is not delivered when due in accordance therewith, then Pricing
Level IV shall apply as of the first Business Day after the date on which such
Compliance Certificate was required to have been delivered until the date not
later than five Business Days immediately following delivery thereof.
Determinations by the Administrative Agent of the appropriate Pricing Level
shall be conclusive absent manifest error.

“Commitments” means the Domestic Revolving Commitments, the Domestic L/C
Commitment, the Domestic Swingline Commitments, the Foreign Revolving
Commitments, the Foreign L/C Commitment and the Foreign Swingline Commitments.

“Consolidated Interest Coverage Ratio” means, as of the last day of each fiscal
quarter, the ratio of (a) Consolidated EBITDA for the period of the four prior
fiscal quarters ending on such date to (b) Consolidated Interest Expense for
such period.

“Designated Borrower Limit” means (a) with respect to Newco, an amount equal to
the Aggregate Foreign Revolving Committed Amount, with respect to Borrowings of
Foreign Revolving Loans, and (b) with respect to any other Designated Borrower,
an amount equal to the lesser of the Aggregate Commitments and $5,000,000. The
Designated Borrower Limit is part of, and not in addition to, the Aggregate
Commitments.

“Exposure” means, with respect to any Lender, the sum at such time, without
duplication, of (a) such Lender’s Domestic Revolving Commitment Percentage of
the Outstanding Amount of the Domestic Revolving Obligations (including any
participation interests in Domestic Letters of Credit) plus (b) such Lender’s
Foreign Revolving Commitment Percentage of the Outstanding Amount of the Foreign
Revolving Obligations (including any participation interests in Foreign Letters
of Credit).

 

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“Foreign L/C Expiration Date” means the day that is seven days prior to the
Revolving Termination Date then in effect (or, if such day is not a Business
Day, the immediately preceding Business Day).

“Interest Payment Date” means, (a) as to any Base Rate Loan (including Domestic
Swingline Loans), the last Business Day of each March, June, September and
December, and the Revolving Termination Date and, in the case of any Swingline
Loan, any other dates as may be mutually agreed upon by the Borrowers and the
Swingline Lender, and (b) as to any Eurocurrency Rate Loan (including Foreign
Swingline Loans), the last Business Day of each Interest Period for such Loan,
the date of repayment of principal of such Loan, and the Revolving Termination
Date, and in addition, where the applicable Interest Period exceeds three
months, the date every three months after the beginning of such Interest Period.
If an Interest Payment Date falls on a date that is not a Business Day, such
Interest Payment Date shall be deemed to be the immediately succeeding Business
Day.

“Interest Period” means, as to each Eurocurrency Rate Loan, the period
commencing on the date such Eurocurrency Rate Loan is disbursed or converted to
or continued as a Eurocurrency Rate Loan and ending on the date one, two, three
or six months thereafter, as selected by the Borrowers in their Loan Notice;
provided that:

(a) any Interest Period that would otherwise end on a day that is not a Business
Day shall be extended to the immediately succeeding Business Day unless such
Business Day falls in another calendar month, in which case such Interest Period
shall end on the immediately preceding Business Day;

(b) any Interest Period that begins on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last Business Day of
the calendar month at the end of such Interest Period; and

(c) no Interest Period with respect to any Revolving Loan shall extend beyond
the Revolving Termination Date.

“Permitted Disposition” shall mean a Disposition permitted under Section 8.05.

“Revolving Termination Date” means June 8, 2012.

“Tranche” means a category of Commitments and Credit Extensions thereunder. For
purposes hereof, each of the following comprises a separate Tranche: (a) the
Domestic Revolving Commitments and the Domestic Revolving Loans and (b) the
Foreign Revolving Commitments and the Foreign Revolving Loans.

2.6 Section 1.06 is amended to read as follows:

1.06 Additional Alternative Currencies.

(a) The Borrowers may from time to time request that Eurocurrency Rate Loans be
made and/or Letters of Credit be issued in a currency other than those
specifically listed in the definition of “Alternative Currency;” provided that
such requested currency is a lawful currency (other than Dollars) that is
readily available and freely transferable and convertible into Dollars. In the
case of any such request with

 

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respect to the making of Eurocurrency Rate Loans in such other Alternative
Currency, such request shall be subject to the approval of the Administrative
Agent and the Foreign Revolving Lenders, with respect to Foreign Revolving
Loans, and also the Foreign Swingline Lender, with respect to Foreign Swingline
Loans, and the Foreign L/C Issuer, with respect to Foreign Letters of Credit.

(b) Any such request shall be made to the Administrative Agent not later than
11:00 a.m., twenty (20) Business Days prior to the date of the desired Credit
Extension (or such other time or date as may be agreed by the Administrative
Agent and, in the case of any such request pertaining to Letters of Credit, the
applicable L/C Issuer, in its or their sole discretion). In the case of any such
request pertaining to Eurocurrency Rate Loans, the Administrative Agent shall
promptly notify each effected Lender thereof; and in the case of any such
request pertaining to Letters of Credit, the Administrative Agent shall promptly
notify the applicable L/C Issuer thereof. Each affected Lender (in the case of
any such request pertaining to Eurocurrency Rate Loans) or the applicable L/C
Issuer (in the case of a request pertaining to Letters of Credit) shall notify
the Administrative Agent, not later than 11:00 a.m., ten (10) Business Days
after receipt of such request whether it consents, in its sole discretion, to
the making of Eurocurrency Rate Loans or the issuance of Letters of Credit, as
the case may be, in such requested currency.

(c) Any failure by a Lender or an L/C Issuer, as the case may be, to respond to
such request within the time period specified in the preceding sentence shall be
deemed to be a refusal by such Lender or such L/C Issuer, as the case may be, to
permit Eurocurrency Rate Loans to be made or Letters of Credit to be issued in
such requested currency. If the Administrative Agent and the applicable Lenders
consent to making Eurocurrency Rate Loans in such requested currency, the
Administrative Agent shall so notify the applicable Borrowers and such currency
shall thereupon be deemed for all purposes to be an Alternative Currency
hereunder for purposes of any Borrowings of Eurocurrency Rate Loans; and if the
Administrative Agent and the applicable L/C Issuer consent to the issuance of
Letters of Credit in such requested currency, the Administrative Agent shall so
notify the applicable Borrowers and such currency shall thereupon be deemed for
all purposes to be an Alternative Currency hereunder for purposes of any Letter
of Credit issuances. If the Administrative Agent shall fail to obtain consent to
any request for an additional currency under this Section 1.06, the
Administrative Agent shall promptly so notify the applicable Borrowers. Any
specified currency of an Existing Letter of Credit that is neither Dollars nor
one of the Alternative Currencies specifically listed in the definition of
“Alternative Currency” shall be deemed an Alternative Currency with respect to
such Existing Letter of Credit only.

2.7 Section 2.01 is amended as follows:

(a) in the proviso in subsection (a), the reference to “THREE HUNDRED
TWENTY-FOUR MILLION DOLLARS ($324,000,000)” is amended to read as “FOUR HUNDRED
NINETY MILLION DOLLARS ($490,000,000)”;

(b) in the proviso in subsection (b), Clause (A) is amended to read as follows:

(A) the Outstanding Amount of Domestic L/C Obligations shall not exceed ONE
HUNDRED FIFTY MILLION DOLLARS ($150,000,000) (as such amount may be decreased in
accordance with the provisions hereof, the “Domestic L/C Sublimit”),

 

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(c) in the proviso in subsection (d), the reference to “TWENTY MILLION DOLLARS
($20,000,000)” is amended to read as “FIFTY MILLION DOLLARS” ($50,000,000)”

(d) in the proviso in subsection (e), Clause (A) is amended to read as follows:

(A) the Outstanding Amount of Foreign L/C Obligations shall not exceed TWENTY
MILLION DOLLARS ($20,000,000) (as such amount may be decreased in accordance
with the provisions hereof, the “Foreign L/C Sublimit”)

(e) in the provision in subsection (f), the reference to “TWENTY MILLION DOLLARS
($20,000,000)” is amended to read as “THIRTY MILLION DOLLARS ($30,000,000)”.

(f) in subsection (h), the lead-in language before the proviso is amended to
read as follows:

“Subject to the terms and conditions set forth herein, the Domestic Borrowers
may, at any time after the date of Amendment No. 3 and Consent, dated as of
June 8, 2007, upon written notice to the Administrative Agent increase the
Aggregate Domestic Revolving Committed Amount by an amount up to ONE HUNDRED
MILLION DOLLARS ($100,000,000); provided that:”

2.8 The heading for Section 2.02 is amended to read as “Borrowings, Conversions
and Continuations under Revolving Loans”, and each reference to “and the Foreign
Term Loan” or “or the Foreign Term Loan” in subsections (a) and (b) is deleted.

2.9 Subsection (c) of Section 2.05 is deleted in its entirety.

2.10 Section 2.06 is amended as follows:

(a) In subsection (a), the “; and” at the end of clause (ii) is amended to be
“.”, and clause (iii) is deleted in its entirety.

(b) In subsection (b), clause (iii) in respect of “Equity Transactions” is
deleted in its entirety.

(c) Subsection (c) is amended as follows:

(i) in clause (i), the sentence “Voluntary prepayments on the Foreign Term Loan
may not be reborrowed.” is deleted in its entirety;

(ii) in clause (ii), subclause (B) is amended to read as follows:

(B) Mandatory prepayments in respect of Dispositions and Involuntary
Dispositions under subsection (b)(ii) above shall be applied, (1) if the assets
subject to a prepayment resulting from a Disposition or Involuntary Disposition
were owned by a Foreign Subsidiary first, to outstanding Foreign Revolving Loans
as selected by the Foreign Borrowers, and second to Cash Collateralize
outstanding Foreign Letters of Credit and (2) if the assets subject to

 

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a prepayment resulting from a Disposition or Involuntary Disposition were owned
by a Domestic Subsidiary, to the Domestic Revolving Obligations, first, to the
Domestic Revolving Loans and, second, to Cash Collateralize outstanding Domestic
Letters of Credit.

(iii) in clause (ii), subclause (C) in respect of “Equity Transactions” is
deleted in its entirety.

2.11 In Section 2.07 is amended as follows:

(a) in the next to last sentence in subsection (a), the text “or Foreign Term
Loan Commitment Percentage, as applicable” is deleted; and

(b) clause (iii) of subsection (b) is deleted in its entirety.

2.12 In subsection (a) of Section 2.09, clause (iii) is deleted in its entirety,
clause (iv) is relabeled as clause (iii), and the first parenthetical expression
in clause (iii) is amended to read as “(and thereafter so long as any Revolving
Loans, Swingline Loans, or L/C Obligations remain outstanding)” and the
reference to “, on the date of the final payment of principal on the Foreign
Term Loan” is deleted.

2.13 The reference to “TPI” in Section 2.14(e) is amended to read as “TW”.

2.14 In Section 2.16, subsection (e) is amended to read as follows:

“(e) [Intentionally Omitted].”

2.15 Section 8.04 is amended to read as follows:

8.04 Mergers and Dissolutions.

(a) Enter into a transaction of merger or consolidation; provided that so long
as no Default or Event of Default then exists or would result therefrom:

(i) the Parent and other members of the Consolidated Group that are Domestic
Subsidiaries may merge or consolidate with other members of the Consolidated
Group, provided that (A) if the Parent is a party to the merger or
consolidation, it shall be the surviving entity, (B) if a Domestic Subsidiary
that is a Borrower hereunder shall be a party to the merger or consolidation,
then it shall be the surviving entity (unless the Parent or another Domestic
Subsidiary that is a Borrower is also a party to the merger or consolidation, in
which case the Parent or the other Domestic Subsidiary that is a Borrower shall
be the surviving entity), and (C) if the transaction of merger or consolidation
involves both a Domestic Subsidiary and a Foreign Subsidiary, then the Domestic
Subsidiary shall be the surviving entity;

(ii) members of the Consolidated Group that are Foreign Subsidiaries may merge
or consolidate with other members of the Consolidated Group, provided that
(A) if the Parent is a party to the merger or consolidation, it shall be the
surviving entity, (B) if a Foreign Subsidiary that is a Borrower hereunder is a
party to a merger or consolidation, then it shall be the surviving entity
(unless the Parent or a Domestic Subsidiary that is a Borrower are a party to
the merger or consolidation, in which case the Parent or the Domestic Subsidiary
that is a Borrower shall be the

 

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surviving entity), (C) if the transaction of merger or consolidation involves
both a Domestic Subsidiary and a Foreign Subsidiary, then the Domestic
Subsidiary shall be the surviving entity, and (D) if the transaction of merger
or consolidation involves two or more Foreign Subsidiaries and one or more of
the Foreign Subsidiaries are organized under the laws of an Approved
Jurisdiction, then the surviving entity shall be a Foreign Subsidiary that is
organized under the laws of an Approved Jurisdiction; and

(iii) members of the Consolidated Group may merge or consolidate with Persons
that are not members of the Consolidated Group, provided that (A) if the Parent
is a party to the merger or consolidation, it shall be the surviving entity,
(B) if a Subsidiary of the Parent that is a Domestic Borrower or a Foreign
Borrower is a party to the merger or consolidation, the Subsidiary that is a
Borrower will be the surviving entity, and (C) the transaction shall be a
Permitted Acquisition or a Permitted Disposition.

(b) Except for the Parent and Subsidiaries that are Borrowers under the Credit
Agreement, members of the Consolidated Group may be dissolved, liquidated or
otherwise have their existence terminated.

2.16 Clause (ii) of paragraph (d) of Section 8.06 is amended to read as follows:

(ii) after giving effect thereto on a Pro Forma Basis, (A) the Consolidated
Group will be in compliance with the financial covenants in Section 8.11 and
(B) a Responsible Officer of the Parent can demonstrate that the Consolidated
Leverage Ratio will be less than or equal to 2.75:1.0.

2.17 Section 8.11 is amended to read as follows:

8.11 Financial Covenants.

(a) Consolidated Interest Coverage Ratio. Permit the Consolidated Interest
Coverage Ratio as of the end of any fiscal quarter to be less than 3.00:1.0.

(b) Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio as of
the end of any fiscal quarter to be greater than 3.00:1.0.

2.18 In Section 11.01, subsection (d) is deleted in its entirety, and existing
subsections (e), (f), (g) and (h) are relabeled (d), (e), (f) and (g),
respectively.

2.19 In Section 11.06(b)(i), the reference to “and $1 million, in the case of
the Foreign Term Loans” is deleted.

2.20 Schedule 2.01. Schedule 2.01 (Lenders and Commitments) to the Credit
Agreement is amended to read as set forth on Schedule 2.01 attached hereto.

3. New Lender Joinder. National City Bank and Regions Bank, being new lenders
under the Credit Agreement (the “New Lenders”) hereby agree to provide Domestic
Revolving Commitments in the amounts set forth on Schedule 2.01 attached hereto.

3.1 Each New Lender shall be deemed to have purchased without recourse a risk
participation from the Domestic L/C Issuer in all Domestic Letters of Credit
issued or existing under the Credit Agreement (including Domestic Existing
Letters of Credit) and the obligations arising thereunder

 

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in an amount equal to its pro rata share of the obligations under such Domestic
Letters of Credit (based on the respective Domestic Revolving Commitment
Percentages of each New Lender as set forth on Schedule 2.01 as attached
hereto), and shall absolutely, unconditionally and irrevocably assume, as
primary obligor and not as surety, and be obligated to pay to the Domestic L/C
Issuer therefor and discharge when due, its pro rata share of the obligations
arising under such Domestic Letter of Credit.

3.2 Each New Lender (a) represents and warrants that it is a commercial lender,
other financial institution or other “accredited” investor (as defined in SEC
Regulation D) that makes or acquires loans in the ordinary course of business
and that it will make or acquire Loans for its own account in the ordinary
course of business, (b) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 6.05 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Amendment and the Credit Agreement; (c) agrees that it will, independently and
without reliance upon the Administrative Agent or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Credit Agreement; (d) appoints and authorizes the Administrative Agent to
take such action as agent on its behalf and to exercise such powers and
discretion under the Credit Agreement as are delegated to the Administrative
Agent by the terms thereof, together with such powers and discretion as are
reasonably incidental thereto; and (e) agrees that, as of the date hereof, such
New Lender shall (i) be a party to the Credit Agreement and the other Credit
Documents, (ii) be a “Lender” for all purposes of the Credit Agreement and the
other Credit Documents, (iii) perform all of the obligations that by the terms
of the Credit Agreement are required to be performed by it as a “Lender” under
the Credit Agreement and (iv) shall have the rights and obligations of a Lender
under the Credit Agreement and the other Credit Documents.

3.3 Each of the Borrowers and the Guarantors agree that, as of the date hereof,
each of the New Lenders shall (a) be a party to the Credit Agreement and the
other Credit Documents, (b) be a “Lender” for all purposes of the Credit
Agreement and the other Credit Documents, and (c) have the rights and
obligations of a Lender under the Credit Agreement and the other Credit
Documents.

3.4 The notice address of each New Lender will be the address in the
administrative questionnaire provided to the Administrative Agent or such other
address as shall be designated by a New Lender in written notices to the
Administrative Agent and the Borrowers.

4. Conditions Precedent. This Amendment shall be effective immediately upon
satisfaction of the following conditions:

(a) receipt by the Administrative Agent of all of the following, each in form
and substance satisfactory to the Administrative Agent and the requisite
Lenders:

(i) Executed Amendment. Multiple counterparts of this Amendment duly executed by
the Borrowers, the Guarantors, the requisite Lenders, the Administrative Agent,
the Domestic Collateral Agent, and the Foreign Collateral Agent.

(ii) Secretary’s Certificate. A duly executed certificate of a Responsible
Officer of each of the Domestic Borrowers and the Domestic Guarantors, attaching
each of the following documents and certifying that each is true, correct and
complete and in full force and effect as of the date hereof:

(A) Resolutions. Copies of its resolutions approving and adopting this
Amendment, the transactions contemplated therein, and authorizing the execution
and delivery hereof; and

 

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(B) Incumbency. Incumbency certificates identifying the Responsible Officers of
the Credit Parties who are authorized to execute this Amendment and related
documents and to act on the Credit Parties’ behalf in connection with this
Amendment and the Credit Documents.

(iii) Legal Opinions. Opinions of legal counsel to the Borrowers and the
Guarantors, in form and substance acceptable to the Administrative Agent.

(iv) Compliance Certificate. A compliance certificate signed by a Responsible
Officer demonstrating compliance with the financial covenants set forth in
Section 8.11 of the Credit Agreement on a Pro Forma Basis after giving effect to
this Amendment.

(b) Fees. The amendment fees, upfront fees and all other fees (including all
reasonable fees, expenses and disbursements of Moore & Van Allen PLLC) due in
connection herewith, which fees shall be deemed fully earned and due and payable
on the effective date of this Amendment.

For purposes of determining compliance with the conditions specified in this
Section 2, each Lender that has signed this Amendment shall be deemed to have
consented to, approved or accepted or to be satisfied with, each document or
other matter required hereunder to be consented to or approved by or acceptable
or satisfactory to a Lender, unless the Administrative Agent shall have received
notice from such Lender prior to the date hereof specifying its objection
thereto.

5. Conversion of Foreign Term Loan into Foreign Revolving Loans. Immediately
upon this Amendment becoming effective, the outstanding Foreign Term Loans will
be converted into Foreign Revolving Loans.

6. Condition Subsequent to Amendment. The Parent and the Borrowers shall execute
and deliver, or shall cause the execution and delivery of (a) amendments to, or
the amendment and restatement of, the guaranties executed by the Foreign
Guarantors, the Foreign Pledge Agreements, the Foreign Mortgage, and the Foreign
Security Agreements, in each case, in effect on the date hereof (each, a
“Foreign Document”, and collectively, the “Foreign Documents”), which
amendments/amendments and restatements confirm that the guaranty or grant of
security under the applicable Foreign Documents shall extend to the Foreign
Revolving Commitments as increased by this Amendment and the Foreign Revolving
Obligations under the Credit Agreement as amended by this Amendment, on or
before the date that is 45 days after the date hereof and (b) copies of
resolutions of each of Dan-Foam, Tempur World Holdings, S.L. and Tempur Danmark
A/S (i) approving, adopting and ratifying its execution and delivery of this
Amendment and the transactions contemplated herein and (ii) confirming that the
security and guarantees provided by it under the Guaranty and Foreign Collateral
Documents to which it is a party shall extend, respectively, to the Guaranteed
Obligations and Secured Obligations (as such terms are defined and used in the
applicable Guaranty and the applicable Foreign Collateral Documents,
respectively) as amended and increased by this Amendment, on or before the date
that is 4 Business Days after the date hereof. The parties hereto understand and
agree that the failure to satisfy clauses (a) and (b) of this Section 6 shall
constitute an Event of Default.

7. Effectiveness of Amendment. On and after the date hereof, all references to
the Credit Agreement in each of the Credit Documents shall hereafter mean the
Credit Agreement as amended by this Amendment. Except as specifically amended
hereby or otherwise agreed, the Credit Agreement is hereby ratified and
confirmed and shall remain in full force and effect according to its terms.

 

10

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8. Representations and Warranties; Defaults. The Credit Parties hereby affirm
each of the following:

(a) all necessary action to authorize the execution, delivery and performance of
this Amendment has been taken;

(b) after giving effect to this Amendment, the representations and warranties
set forth in the Credit Agreement and the other Credit Documents are true and
correct in all material respects as of the date hereof (except to the extent
that such representations and warranties specifically refer to an earlier date,
in which case they shall be true and correct as of such earlier date, and except
that for purposes of this Section 6, the representations and warranties
contained in subsections (a) and (b) of Section 6.05 of the Credit Agreement
shall be deemed to refer to the most recent statements furnished pursuant to
clauses (a) and (b), respectively, of Section 7.01 of the Credit Agreement).

(c) before and after giving effect to this Amendment, no Default or Event of
Default shall exist; and

(d) except as expressly provided otherwise herein, the liens and security
interests created and granted in the Credit Documents remain in full force and
effect and this Amendment is not intended to adversely affect or impair such
liens and security interests in any manner.

9. Full Force and Effect. Except as modified hereby, all of the terms and
provisions of the Credit Agreement and the other Credit Documents (including
schedules and exhibits thereto) shall remain in full force and effect.

10. Counterparts. This Amendment may be executed in any number of counterparts,
each of which when so executed and delivered shall be deemed an original, and it
shall not be necessary in making proof of this Amendment to produce or account
for more than one such counterpart. Delivery by any party hereto of an executed
counterpart of this Amendment by facsimile shall be effective as such party’s
original executed counterpart and shall constitute a representation that such
party’s original executed counterpart will be delivered.

11. Fees and Expenses. The Borrowers agree to pay all reasonable costs and
expenses of the Administrative Agent and the Foreign Collateral Agent in
connection with the preparation, execution and delivery of this Amendment,
including the reasonable fees and expenses of Moore & Van Allen, PLLC, Paul,
Hastings, Janofsky & Walker LLP and local foreign counsel to the Foreign
Collateral Agent.

12. Governing Law. This Amendment shall be governed by, and construed in
accordance with, the law of the State of New York.

[SIGNATURES ON FOLLOWING PAGES]

 

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

 

DOMESTIC BORROWERS:    

TEMPUR WORLD, LLC,

   

a Delaware limited liability company

    By:  

/s/ William H. Poche

    Name:   William H. Poche     Title:   Treasurer    

TEMPUR PRODUCTION USA, INC.,

   

a Virginia corporation

    By:  

/s/ William H. Poche

    Name:   William H. Poche     Title:   Treasurer FOREIGN BORROWER:    
DAN-FOAM ApS,     a private limited liability company existing under the laws of
Denmark     By:  

/s/ Dale E. Williams

    Name:   Dale E. Williams     Title:   Attorney in Fact DOMESTIC GUARANTORS:
    TEMPUR-PEDIC INTERNATIONAL INC.,     a Delaware corporation     By:  

/s/ William H. Poche

    Name:   William H. Poche     Title:   Treasurer     TEMPUR-PEDIC NORTH
AMERICA, INC.,     a Delaware corporation (formerly known as Tempur-Pedic
Retail, Inc. and as Tempur-Pedic NA, Inc. and successor in interest to
Tempur-Pedic Medical, Inc. and Tempur-Pedic, Direct Response, Inc.)     By:  

/s/ William H. Poche

    Name:   William H. Poche     Title:   Treasurer

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    DAWN SLEEP TECHNOLOGIES, INC.,     a Delaware corporation    

By:

 

/s/ William H. Poche

   

Name:

  William H. Poche    

Title:

  Treasurer    

TEMPUR-PEDIC TECHNOLOGIES, INC.,

   

a Delaware corporation

   

By:

 

/s/ William H. Poche

   

Name:

  William H. Poche    

Title:

  Treasurer FOREIGN GUARANTORS:     TEMPUR WORLD HOLDINGS, S.L.,     a company
organized under the laws of Spain     By:  

/s/ Dale E. Williams

    Name:   Dale E. Williams     Title:   Director     TEMPUR DANMARK A/S,     a
stock company existing under the laws of Denmark     By:  

/s/ Dale E. Williams

    Name:   Dale E. Williams     Title:   Attorney in Fact

 

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ADMINISTRATIVE AGENT:    

BANK OF AMERICA, N.A.,

   

as Administrative Agent and Domestic Collateral Agent

    By:  

/s/ Anne Zeschke

    Name:   Anne Zeschke     Title:   Assistant Vice President

 

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LENDERS:    

BANK OF AMERICA, N.A.,

   

as Domestic L/C Issuer and as a Lender

    By:  

/s/ Thomas C. Kilcrease

    Name:   Thomas C. Kilcrease     Title:   Senior Vice President

 

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        NORDEA BANK DANMARK A/S,     as Foreign L/C Issuer, Foreign Swingline
Lender, Foreign Collateral Agent and a Lender     By:  

/s/ Hans Christiansen

    Name:   Hans Christiansen     Title:   Head of Corporate     By:  

/s/ Pia Dahl Haughuus

    Name:   Pia Dahl Haughuus     Title:   VIP

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    FIFTH THIRD BANK,     as a Lender and Domestic Swingline Lender     By:  

/s/ Robert J. Heiple

    Name:   Robert J. Heiple     Title:   Senior Vice President

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SUNTRUST BANK,

   

as a Lender

    By:  

/s/ Heidi M. Khambatta

    Name:   Heidi M. Khambatta     Title:   Director

 

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JPMORGAN CHASE BANK, N.A.,

   

as a Lender

    By:  

/s/ Steven P. Sullivan

    Name:   Steve P. Sullivan     Title:   Vice President

 

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WELLS FARGO BANK, N.A.,

   

as a Lender

    By:  

/s/ Sam Belk

    Name:   Sam Belk     Title:   Senior Vice President

 

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NATIONAL CITY BANK,

   

as a Lender

    By:  

/s/ Susan A. Dean

    Name:   Susan A. Dean     Title:   Senior Vice President

 

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REGIONS BANK,

   

as a Lender

    By:  

/s/ Scott Corley

    Name:   Scott Corley     Title:   Senior Vice President