Exhibit 10.1    Second Amendment to Amended and Restated Credit Agreement

 

SEALY MATTRESS COMPANY

SEALY CORPORATION

 

SECOND AMENDMENT TO AMENDED AND RESTATED

CREDIT AGREEMENT

 

This SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this
“Amendment”) is dated as of October 9, 2003 and entered into by and among Sealy
Mattress Company, an Ohio corporation (“Company”), Sealy Corporation, a Delaware
corporation (“Holdings”), Goldman Sachs Credit Partners L.P. (“GSCP”), as
co-lead arranger and syndication agent (in such capacity, “Syndication Agent”),
THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF, JPMORGAN CHASE
BANK, as administrative agent for Lenders, J.P. MORGAN SECURITIES INC., as
co-lead arranger, FLEET NATIONAL BANK (“Fleet”), as co-documentation agent and
WACHOVIA BANK, N.A., as a co-documentation agent, and is made with reference to
(i) that certain Amended and Restated Credit Agreement dated as of November 8,
2002 (as amended, supplemented or otherwise modified to the date hereof, the
“Credit Agreement”) and (ii) that certain AXEL Credit Agreement dated as of
December 18, 1997 (as amended, supplemented or otherwise modified to the date
hereof, the “AXEL Credit Agreement”; the AXEL Credit Agreement and the Credit
Agreement are, collectively, the “Credit Agreements”), by and among Company,
Holdings, certain Lenders, Syndication Agent and Administrative Agent.
Capitalized terms used herein without definition shall have the same meanings
herein as set forth in the Credit Agreements, as applicable, or in Section 1.1
hereof.

 

RECITALS

 

WHEREAS, Company, Holdings and the Lenders executing this Amendment desire to
amend certain of the terms and provisions of the Credit Agreement as set forth
below;

 

NOW, THEREFORE, in consideration of the premises and the agreements, provisions
and covenants herein contained, the parties hereto agree as follows:

 

SECTION 1.    AMENDMENTS TO THE CREDIT AGREEMENT

 

1.1    Amendments to Section 1: Definitions

 

Subsection 1.1 of the Credit Agreement is hereby amended by adding the following
definitions, which shall be inserted in proper alphabetical order:

 

“October 2003 Amendment” means that certain Second Amendment to Amended and
Restated Credit Agreement dated as of October 9, 2003 by and among Company,
Holdings, Subsidiary Guarantors and the Lenders party thereto.

 

“October 2003 Amendment Effective Date” means the “October 2003 Amendment
Effective Date” as defined in the October 2003 Amendment.

 

1.2    Amendments to Section 7: Holdings’ and Company’s Negative Covenants

 

(a) Clause (xvii) of subsection 7.3 is hereby amended by inserting the reference
“7.5(vii)” immediately prior to the reference “7.7(xi)” therein.

 

(b) Clause (ii) of subsection 7.5 is hereby amended by inserting a subclause
“(I)” immediately after “(y)” therein and inserting a new subclause (II)
immediately following the language “in respect of the Junior Subordinated Seller
Notes” and immediately prior to the language “in accordance with terms of” as
follows:

 

“and (II) so long as no Event of Default or Potential Event of Default has
occurred and is continuing or would be caused thereby, Restricted Junior
Payments to Holdings to the extent

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required for Holdings to make, and Holdings may make, regularly scheduled
payments of interest in respect of the Junior Subordinated Seller Notes;
provided such payments made pursuant to this clause (ii)(y)(II) shall in no
event exceed in the aggregate $5,000,000 per annum, in each case of subclauses
(I) and (II)”.

 

(c) Clause (vii) of subsection 7.5 is hereby amended by inserting a clause “(a)”
immediately prior to the language “any Existing Subordinated Notes not tendered”
therein and inserting the following language prior to the “,”at the end thereof:

 

“and (b) Junior Subordinated Seller Notes in an aggregate amount not to exceed
$25,000,000; provided, however, after giving effect to any such transaction, the
Company shall have no less than an aggregate $50,000,000 in (I) Cash or Cash
Equivalents plus (II) the aggregate Revolving Loan Commitments less the sum of
(1) the aggregate principal amount of outstanding Revolving Loans plus (2) the
Letter of Credit Usage”.

 

1.3    Consents to Amendments

 

Each undersigned Lender hereby consents to the amendments to the Credit
Agreement set forth in this Amendment.

 

SECTION 2.    CONDITIONS TO EFFECTIVENESS

 

Anything herein to the contrary notwithstanding, Section 1 of this Amendment
shall become effective only upon the prior or concurrent satisfaction or waiver
of all of the following conditions precedent (the date of satisfaction of such
conditions being referred to herein as the “October 2003 Amendment Effective
Date”):

 

(i) On or before the October 2003 Amendment Effective Date, each of Company and
Holdings shall have delivered to Lenders (or to Administrative Agent for Lenders
with sufficient originally executed copies, where appropriate, for each Lender
and its counsel) the following, each, unless otherwise noted, dated the October
2003 Amendment Effective Date:

 

(a) A certificate of its corporate secretary or an assistant secretary to the
effect that (i) there have been no amendments to its Certificate of
Incorporation or Bylaws after the Effective Date (as defined in the Credit
Agreement) (or, in lieu thereof, certified copies of any such amendments), (ii)
the execution and delivery of this Amendment and the performance of the Credit
Agreement as amended by this Amendment, and the other Loan Documents have been
duly authorized by all necessary corporate action, (iii) the Resolutions of its
Board of Directors delivered on the Effective Date are in full force and effect
without modification or amendment, and (iv) there have been no changes after the
Effective Date in the incumbency of its officers (or, in lieu thereof, a
certificate of signatures and incumbency for the officers executing this
Amendment and any related documents); and

 

(b) This Amendment, executed by Holdings, Company, Credit Support Parties and
Requisite Lenders under the Credit Agreement.

 

(ii) So long as Requisite Lenders under the Credit Agreement shall have executed
this Amendment, Administrative Agent shall have received from Company, for
distribution to each Lender that has executed and delivered this Amendment on or
prior to 5:00 p.m. (New York City time) on October 9, 2003, an amendment fee in
an amount equal to 0.125% of the total Loans and Commitments of each Lender
under the Credit Agreement, as well as payment for all reasonable fees, expenses
and disbursements, including, without limitation, those incurred by Skadden,
Arps, Slate, Meagher & Flom LLP through the October 2003 Amendment Effective
Date to the extent such fees are invoiced prior to the October 2003 Amendment
Effective Date.

 

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SECTION 3.    COMPANY’S REPRESENTATIONS AND WARRANTIES

 

In order to induce Lenders to enter into this Amendment and to amend the Credit
Agreement in the manner provided herein, Company represents and warrants to each
Lender under the Credit Agreement that the following statements are true,
correct and complete:

 

3.1    Incorporation of Representations and Warranties From Credit Agreements.

 

On and as of the date hereof and the October 2003 Amendment Effective Date, the
representations and warranties contained in subsections 5.1A, 5.2A, 5.2B, 5.2C
and 5.2D of the Credit Agreement are and will be true, correct and complete with
respect to this Amendment and the Credit Agreement as amended by this Amendment
(as so amended, the “Amended Agreement”) as if this Amendment and the Amended
Agreement were “Loan Documents” referred to in such representations and
warranties, and with the foregoing modifications such representations and
warranties are incorporated herein by this reference; and the representations
and warranties contained in Section 5 of the Credit Agreement and Section 4 of
the AXEL Credit Agreement are and will be true, correct and complete in all
material respects on and as of the October 2003 Amendment Effective Date to the
same extent as though made on and as of that date, except to the extent such
representations and warranties specifically relate to an earlier date, in which
case they were true, correct and complete in all material respects on and as of
such earlier date.

 

3.2    Absence of Default.

 

No event has occurred and is continuing or will result from the consummation of
the transactions contemplated by this Amendment that would constitute an Event
of Default or a Potential Event of Default under the Credit Agreement.

 

SECTION 4.    ACKNOWLEDGMENT AND CONSENT

 

Each of Company, Holdings and the Persons indicated as Subsidiary Guarantors on
the signature pages hereof (each individually a “Credit Support Party” and
collectively, the “Credit Support Parties”) hereby acknowledges and agrees that
each Loan Document to which it is a party is in full force and effect and shall
not be limited or impaired in any manner by the effectiveness of this Amendment
and the transactions contemplated hereby.

 

Section 5.    MISCELLANEOUS

 

5.1    Reference to and Effect on the Credit Agreements and the Other Loan
Documents.

 

(i) On and after the October 2003 Amendment Effective Date, each reference in
the Credit Agreement to “this Agreement”, “hereunder”, “hereof’”, “herein” or
words of like import referring to the Credit Agreement, and each reference in
the other applicable Loan Documents to the “Credit Agreement”, “thereunder”,
“thereof” or words of like import referring to the Credit Agreement shall mean
and be a reference to the applicable Amended Agreement.

 

(ii) Except as specifically amended by this Amendment, the Credit Agreement and
the other Loan Documents relating thereto shall remain in full force and effect
and are hereby ratified and confirmed.

 

(iii) The execution, delivery and performance of this Amendment shall not,
except as expressly provided herein or therein, constitute a waiver of any
provision of, or operate as a waiver of any right, power or remedy of any Agent
or any Lender under, the Credit Agreement or any of the other Loan Documents
relating thereto.

 

5.2    Fees and Expenses.    Company acknowledges that all reasonable costs,
fees and expenses incurred by Agents and their counsel that are due and payable
pursuant to Section 2(ii) hereto shall be for the account of Company.

 

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5.3    Headings.    Section and subsection headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.

 

5.4    Applicable Law.    THIS AMENDMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

5.5    Counterparts.    This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. This Amendment (other than Section 1 hereof) shall become
effective with respect to the Credit Agreement upon (A) the execution of
counterparts hereof by (1) Requisite Lenders (as defined in the Credit
Agreement), (2) Company and (3) Holdings and the other Credit Support Parties,
and (B) receipt by Company and Administrative Agent of written or telephonic
notification of such execution and authorization of delivery thereof.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered by their respective officers thereunto duly authorized as
of the date first written above.

 

SEALY MATTRESS COMPANY

By:

 

 

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Name:     Title:    

 

SEALY CORPORATION

By:

 

 

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Name:     Title:    

 

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SUBSIDIARY GUARANTORS:

 

SEALY MATTRESS COMPANY OF PUERTO RICO

OHIO-SEALY MATTRESS MANUFACTURING CO. INC.

OHIO-SEALY MATTRESS MANUFACTURING CO.

SEALY MATTRESS COMPANY OF MICHIGAN, INC.

SEALY MATTRESS COMPANY OF KANSAS CITY, INC.

SEALY OF MARYLAND AND VIRGINIA, INC.

SEALY MATTRESS COMPANY OF ILLINOIS

A. BRANDWEIN & CO.

SEALY MATTRESS COMPANY OF ALBANY, INC.

SEALY OF MINNESOTA, INC.

SEALY MATTRESS COMPANY OF MEMPHIS

THE OHIO MATTRESS COMPANY LICENSING AND COMPONENTS GROUP

SEALY MATTRESS MANUFACTURING COMPANY, INC.

SEALY, INC.

NORTH AMERICAN BEDDING COMPANY

MATTRESS HOLDINGS INTERNATIONAL, LLC

SEALY TECHNOLOGY LLC

SEALY-KOREA, INC.

SEALY REAL ESTATE, INC.

SEALY TEXAS MANAGEMENT, INC.

SEALY TEXAS HOLDINGS LLC

SEALY TEXAS L.P.

 

By:

 

 

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Name:     Title:    

 

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AGENTS AND LENDERS:

GOLDMAN SACHS CREDIT PARTNERS L.P., individually and as Syndication Agent

By:

 

 

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    Authorized Signatory

 

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JPMORGAN CHASE BANK,

individually and as Administrative Agent

By:

 

 

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Name:     Title:    

 

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FLEET NATIONAL BANK,

individually and as Co-Documentation Agent

By:

 

 

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Name:     Title:    

 

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WACHOVIA BANK, NATIONAL ASSOCIATION,

individually and as Co-Documentation Agent

By:

 

 

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Name:     Title:    

 

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