exhibit10_1.htm


    MODIFICATION
      AGREEMENT

    


    THIS
      MODIFICATION AGREEMENT, dated as of August 6, 2007 (this “Agreement”), of
      that certain Credit Agreement referenced below is by and among TEMPUR WORLD,
      LLC, a Delaware limited liability company (as 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, as Foreign Borrower, TEMPUR-PEDIC
      INTERNATIONAL INC., a Delaware corporation, and certain of its subsidiaries
      and
      affiliates, as Domestic Guarantors, TEMPUR WORLD HOLDINGS, S.L., a company
      organized under the laws of Spain, and TEMPUR DANMARK A/S, a stock company
      existing under the laws of Denmark, as Foreign Guarantors, the Lenders party
      hereto, the L/C Issuers party hereto, 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.

    


    W
      I T N E
      S S E T H

    


    WHEREAS,
      a 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 Section 2.01(h) of the Credit Agreement, the Domestic Borrowers
      have
      requested that the aggregate amount of commitments for Domestic Revolving Loans
      be increased by $100 million from $490 million to $590 million; and

    


    WHEREAS,
      certain of the Domestic Revolving Lenders have agreed to increase their Domestic
      Revolving Commitments pursuant to Section 2.01(h) of the Credit Agreement,
      as
      shown on Schedule 2.01 attached hereto, on the terms and conditions set
      forth herein;

    


    NOW,
      THEREFORE, IN CONSIDERATION of the premises and other good and valuable
      consideration, the receipt and sufficiency of which are hereby acknowledged,
      the
      parties hereto agree as follows:

    


    1.           Increase
      in Domestic Revolving Commitments.  Each of the Domestic Revolving
      Lenders party to this Agreement agrees to provide Domestic Revolving Commitments
      under the Credit Agreement as set forth on Schedule 2.01 attached
      hereto.  The Domestic Revolving Commitment Percentages are revised to
      be as set forth on Schedule 2.01 attached hereto.  Schedule
      2.01 to the Credit Agreement is amended as set forth on Schedule 2.01
      attached hereto.

    


    2.           Conditions
      Precedent.  This Agreement shall be effective immediately upon
      receipt by the Administrative Agent of all of the following, each in form and
      substance satisfactory to the Administrative Agent and the Domestic Revolving
      Lenders party hereto:

    


    (a)           Executed
      Agreement.  Counterparts of this Agreement duly executed by the
      Credit Parties and the Required Lenders;

    


    (b)           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 of this Agreement:

    


    (i)           Charter
      Documents.  Copies of its articles or certificate of incorporation
      or formation or equivalent, certified to be true, correct and complete as of
      a
      recent date by the appropriate Governmental Authority of the jurisdiction of
      its
      organization or formation, unless a Responsible Officer certifies in the
      secretary’s certificate that articles or certificate of incorporation or
      formation previously delivered to the Administrative Agent at the closing of
      Amendment No. 3 has not been amended, supplemented or otherwise modified and
      remain in full force and effect as of the date hereof;

    


    (ii)           Bylaws.  Copies
      of its bylaws, operating agreement or partnership agreement, unless a
      Responsible Officer certifies in the secretary’s certificate that the bylaws
      previously delivered to the Administrative Agent at the closing of Amendment
      No.
      3 have not been amended, supplemented or otherwise modified and remain in full
      force and effect as of the date hereof;

    


    (iii)                      Resolutions.  Copies
      of its resolutions approving and adopting this Agreement, the transactions
      contemplated herein, and authorizing the execution and delivery
      hereof;

    


    (iv)                      Incumbency.  Incumbency
      certificates identifying its Responsible Officers who are authorized to execute
      this Agreement and related documents and to act on its behalf in connection
      with
      this Agreement and the Credit Documents, unless a Responsible Officer certifies
      in the secretary’s certificate that the incumbency certificates previously
      delivered to the Administrative Agent at the closing of Amendment No. 3 have
      not
      been amended, supplemented or otherwise modified and remain in full force and
      effect as of the date hereof; and

    


    (v)           Good
      Standing Certificates.  A certificate of good standing or the
      equivalent from its jurisdiction of organization or formation certified as
      of a
      recent date by the appropriate Governmental Authority.

    


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

    


    (d)           Fees
      and Expenses.  Payment of all fees and expenses (including fees
      and expenses of counsel to the Administrative Agent) in connection with this
      Agreement, including upfront fees, if any, in respect of the new commitments
      so
      established.

    


    For
      purposes of determining compliance with the conditions specified in this
Section 2, each of the Lenders that has signed this Agreement 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 effectiveness of this
      Agreement specifying its objection thereto.

    


    3.           Effectiveness
      of Agreement.  Upon execution and delivery of this Agreement, all
      references to the Credit Agreement in each of the Credit Documents shall
      hereafter mean the Credit Agreement as modified by this
      Agreement.  Except as specifically modified or amended hereby or
      otherwise agreed in writing, the Credit Agreement and the other Credit Documents
      (including, in each case, schedules and exhibits thereto) are hereby ratified
      and confirmed and shall remain in full force and effect according to its
      terms.

    


    4.           Representations
      and Warranties; Defaults.  Each of the Borrowers and the
      Guarantors affirms the following:

    


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

    


    (b)           after
      giving effect to this Agreement, 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 those which expressly relate
      to
      an earlier period);

    


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

    


    (d)           the
      liens and security interests created and granted in the Credit Documents remain
      in full force and effect, and this Agreement is not intended to adversely affect
      or impair such liens and security interests in any manner.

    


    5.           Guarantor
      Acknowledgments.

     

          
      (a)           Each
      Domestic Guarantor hereby (i) acknowledges and consents to all of the terms
      and
      conditions of this Agreement, (ii) reaffirms that, jointly and severally
      together with the other Domestic Guarantors, 

    it guarantees
      the prompt payment and performance of their obligations as provided in Article
      IV of the Credit Agreement and (iii) acknowledges and agrees that the such
      obligations will include any Obligations with respect to 

    or
      resulting from the increase in the Aggregate Domestic Revolving Committed Amount
      as provided hereunder.

    


          
      (b)           Each
      Foreign Guarantor hereby (i) acknowledges and consents to all of the terms
      and
      conditions of this Agreement and (ii) reaffirms that, jointly and severally
      together with the other Foreign Guarantors, it 

    guarantees
      the prompt payment and performance of their obligations as provided in Article
      IV of the Credit Agreement.

    


    6.           Domestic
      Revolving Lenders’ Representation and Warranties.  Each of the
      Domestic Revolving Lenders (including the New Lenders) party to this Agreement
      represents and warrants that it has full power and authority, and has taken
      all
      action necessary, to execute and deliver this Agreement and to consummate the
      transactions contemplated hereby.

    


    7.           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.

    


    8.           Counterparts.  This
      Agreement 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 Agreement to produce or account for more
      than
      one such counterpart.  Delivery by any party hereto of an executed
      counterpart of this Agreement 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.

    


    9.           Fees
      and Expenses.  Pursuant to Section 11.04(a) of the Credit
      Agreement, the Domestic Borrowers shall pay all reasonable costs and expenses
      of
      the Administrative Agent in connection with the preparation, execution and
      delivery of this Agreement, including the reasonable fees and expenses of Moore
      & Van Allen, PLLC.

    


    10.           Prepayment
      of Loans; Break-Funding Costs.  The Domestic Borrowers shall
      prepay any Loans outstanding on the date that the increase in the Aggregate
      Domestic Revolving Committed Amount becomes effective (and pay any additional
      amounts required pursuant to Section 3.05 of the Credit Agreement) to the extent
      necessary to keep the outstanding Loans ratable with any revised Domestic
      Revolving Commitment Percentages arising from any nonratable increase in the
      Domestic Revolving Commitments.

    


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


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


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

     

    DOMESTIC BORROWER:   

     

    
      	
            	TEMPUR
              WORLD, LLC (as successor
              by merger to Tempur World Holdings, LLC, a Deleware limited liability
              company, and Tempur-Pedic. Inc., a Kentucky corporation), 	 
	 	a
              Delaware limited liability company	 
	 	 	 	 
	
               

            	
              By:
                

            	/s/
              William H.
              Poche                                                          	 
	 	 	 William
              H. Poche	 
	 	 	Treasurer
              and Assistant
              Secretary	 


       

      	
            	TEMPUR
              PRODUCTION USA,
              INC,	 
	 	 a
              Virgina corporation	 
	 	 	 	 
	
               

            	
              By:
                

            	/s/ William
              H.
              Poche                                                             	 
	 	 	William
              H. Poche	 
	 	 	Treasurer	 


    

     

     

    FOREIGN
      BORROWER:                                                            

     

    
      	
            	DAN-FOAM
              ApS,	 
	 	 a
              private limited liability company existing under the laws of
              Denmark	 
	 	 	 	 
	
               

            	
              By:
                

            	/s/ Dale
              E. Williams	 
	 	 	Dale
              E. Williams	 
	 	 	Attorney
              in Fact	 




    DOMESTIC
      GUARANTORS:                                                                                

     

    
      	
            	TEMPUR-PEDIC
              INTERNATIONAL
              INC.,	 
	 	 a
              Delaware corporation	 
	 	 	 	 
	
               

            	
              By:
                

            	/s/
              William H.
              Poche	 
	 	 	William
              H. Poche	 
	 	 	Treasurer
              and Assistant
              Secretary	 



      	
            	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	 
	 	 	William
              H. Poche	 
	 	 	Treasurer
              and Secretary	 



      	
            	DAWN
              SLEEP TECHNOLOGIES,
              INC.,	 
	 	 a
              Delaware corporation	 
	 	 	 	 
	
               

            	
              By:
                

            	/s/ William
              H.
              Poche	 
	 	 	William
              H. Poche	 
	 	 	Treasurer
              and Secretary	 



      	
            	TEMPUR-PEDIC
              TECHNOLOGIES,
              INC.,	 
	 	 a
              Delaware corporation	 
	 	 	 	 
	
               

            	
              By:
                

            	/s/ William
              H.
              Poche	 
	 	 	William
              H. Poche	  
	 	 	Treasurer
              and Secretary	 




    FOREIGN
      GUARANTORS:                                                                                    

     

    
      	
            	TEMPUR
              WORLD HOLDINGS,
              S.L.,	 
	 	 a
              company organized under the laws of Spain	 
	 	 	 	 
	
               

            	
              By:
                

            	/s/ Dale
              E. Williams	 
	 	 	Dale
              E. Williams	  
	 	 	Director	 



      	
            	TEMPUR
              DANMARK A/S,	 
	 	 a
              stock company existing under the laws of Denmark	 
	 	 	 	 
	
               

            	
              By:
                

            	/s/ Dale
              E. Williams	 
	 	 	Dale
              E. Williams	  
	 	 	Attorney
              in Fact	 


    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     ADMINISTRATIVE
      AGENT:                                                                                  

     

    
      	
            	BANK
              OF AMERICA, N.A.,	 
	 	 as
              Administrative Agent and Domestic Collateral Agent	 
	 	 	 	 
	
               

            	
              By:
                

            	/s/ Anne
              Zeschke	 
	 	 	Anne
              Zeschke	  
	 	 	Assistant
              Vice
              President	 


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
    

    LENDERS:                                                                          

     

    
      	
            	BANK
              OF AMERICA, N.A.,	 
	 	 as
              Domestic L/C Issuer and as a Lender	 
	 	 	 	 
	
               

            	
              By:
                

            	/s/ Thomas
              C. Kilcrease, Jr.	 
	 	 	Thomas
              C. Kilcrease,
              Jr.	  
	 	 	Senior
              Vice President	 


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	NORDEA
              BANK DANMARK A/S,	 	 	 	 
	as
              Foreign L/C Issuer, Foreign Swingline Lender, Foreign Collateral Agent
              and
              a Lender	 	 
	 	 	 	 	 
	
              /s/
                Hans
                Christiansen

            	 	 	
              /s/
                Kaj
                Skouboe

            	 
	
              Hans
                Christiansen

            	 	 	
              Kaj
                Skouboe

            	 
	
              Head
                of
                Corporate

            	 	 	
              Region
                Branch
                Manager

            	 


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
            	FIFTH
              THIRD BANK	 
	 	 as
              Lender and Domestic Swingline Lender	 
	 	 	 	 
	
               

            	
              By:
                

            	/s/
              William D.
              Craycraft	 
	 	 	William
              D. Craycraft	  
	 	 	Vice
              President	 


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
            	SUNTRUST
              BANK	 
	 	 as a
              Lender 	 
	 	 	 	 
	
               

            	
              By:
                

            	/s/
              Susan M.
              Hall	 
	 	 	Susan
              M. Hall	  
	 	 	Managing
              Director


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    
      	
            	WELLS
              FARGO BANK, N.A.,	 
	 	 as a
              Lender 	 
	 	 	 	 
	
               

            	
              By:
                

            	/s/
              Bryan
              Hulker	 
	 	 	Bryan
              Hulker	  
	 	 	Vice
              President


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
            	REGIONS
              BANK	 
	 	 as a
              Lender 	 
	 	 	 	 
	
               

            	
              By:
                

            	/s/
              Scott
              Corley	 
	 	 	Scott
              Corley	  
	 	 	Senior
              Vice
              President


    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    
      	
            	NATIONAL
              CITY BANK,	 
	 	 as a
              Lender 	 
	 	 	 	 
	
               

            	
              By:
                

            	/s/
              Susan A.
              Dean	 
	 	 	Susan
              A. Dean	  
	 	 	Senior
              Vice
              President