Document:

<PAGE>
                                                                   Exhibit 10.36

                             SEALY MATTRESS COMPANY
                                SEALY CORPORATION

                      SECOND AMENDMENT TO CREDIT AGREEMENT

           This SECOND AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is dated
as of June 25, 1999 and entered into by and among Sealy Mattress Company, an
Ohio corporation ("Company"), Sealy Corporation, a Delaware corporation
("Holdings"), the financial institutions listed on the signature pages hereof
("Lenders"), Goldman Sachs Credit Partners L.P., as arranger and syndication
agent ("Syndication Agent"), Morgan Guaranty Trust Company of New York, as
administrative agent for Lenders ("Administrative Agent"; collectively,
Syndication Agent and Administrative Agent are referred to herein as "Agents"),
and Bankers Trust Company, as documentation agent for Lenders, and is made with
reference to (i) that certain Credit Agreement dated as of December 18, 1997 (as
amended, supplemented or otherwise modified to the date hereof, the
"Revolver/Term A Loan 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 Revolver/Term A Loan Credit Agreement are, collectively, the
"Credit Agreements"), in each case 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 Revolver/Term A Loan Credit Agreement or the AXEL Credit Agreement, as
applicable, or in subsection 1.1 hereof.

                                    RECITALS

           WHEREAS, Company, Holdings and Lenders desire to amend certain of the
terms and provisions of each of the Credit Agreements 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 AGREEMENTS

1.1     Amendments to Section 1:  Definitions
        -------------------------------------

        A. Subsection 1.1 of each of the Credit Agreements is hereby amended by
adding thereto the following definitions, which shall be inserted in proper
alphabetical order:

           "Second Amendment" means that certain Second Amendment to Credit
        Agreement dated as of June 25, 1999 by and among Company, Holdings and
        the Lenders party thereto.

           "Second Amendment Effective Date" has the meaning assigned to that
        term in the Second Amendment.

                                        1

<PAGE>

        B. Subsection 1.1 of the Revolver/Term A Loan Credit Agreement is hereby
further amended by adding thereto the following definition, which shall be
inserted in proper alphabetical order:

           "Total Assets" means the total consolidated assets of Company and its
        Restricted Subsidiaries (as defined in the AXEL Credit Agreement), as
        set forth on Company's most recent consolidated balance sheet.

        C. Subsection 1.1 of the AXEL Credit Agreement is hereby further amended
by adding thereto the following definition, which shall be inserted in proper
alphabetical order:

           "Total Assets" means the total consolidated assets of Company and its
        Restricted Subsidiaries, as set forth on Company's most recent
        consolidated balance sheet.

        D. Subsection 1.1 of the AXEL Credit Agreement is hereby further amended
by adding, immediately prior to the comma at the end of clause (x) of the
definition of "Permitted Investments", the following parenthetical phrase:

        "(it being understood that changes in value of all such outstanding
        Investments shall be given effect in calculating Total Assets at the
        time of the making of any new Investment proposed to be made pursuant to
        this clause (x), but that changes in value of any Investment which occur
        subsequent to the making of such Investment cannot result in a breach of
        this covenant unless a further Investment is made which is purported to
        be made pursuant to this clause (x) at a time when (A) the sum of (1)
        the fair market value of all outstanding Investments made pursuant to
        this clause (x), with such fair market value measured at the time of
        making of each such outstanding Investment, plus (2) the fair market
        value, measured at such time, of such further Investment, exceeds (B) 5%
        of Total Assets, measured at such time and giving effect to all changes
        in value of all outstanding Investments)"

        E. Subsection 1.1 of the Revolver/Term A Loan Credit Agreement is hereby
further amended by deleting the definition of "Consolidated Excess Cash Flow"
therefrom and substituting therefor the following:

           "Consolidated Excess Cash Flow" means, for any period, an amount (if
        positive) equal to (i) the sum, without duplication, of the amounts for
        such period of (a) Consolidated Adjusted EBITDA, (b) the Consolidated
        Working Capital Adjustment and (c) payments made to Holdings or any of
        its Subsidiaries as an adjustment to purchase price after the Closing
        Date under the Recapitalization Agreement, minus (ii) the sum, without
        duplication, of the amounts for such period (to the extent not financed
        with the proceeds of related financings) of (a) voluntary and scheduled
        repayments of Consolidated Total Debt (excluding repayments of Revolving
        Loans except to the extent the Revolving Loan Commitments are
        permanently reduced in connection with such repayments), (b)
        Consolidated Capital Expenditures (net of any proceeds of any related
        financings with respect to such

                                        2

<PAGE>

        expenditures) plus (or minus, if negative) the Carryforward for such
        period to be carried forward to the next period less the Carryforward
        (if any) for the preceding period carried forward to the current period,
        (c) Consolidated Cash Interest Expense, (d) payments made by Holdings
        and its Subsidiaries as an adjustment to purchase price after the
        Closing Date under the Recapitalization Agreement, (e) any cash payments
        made during such period with respect to items set forth on Schedule
        1.1(i) annexed hereto, (f) the provision for current taxes based on
        income of Holdings and its Subsidiaries and payable in cash with respect
        to such period, including taxes payable in cash within 90 days following
        the end of such period, (g) non-cash charges added in calculating
        Consolidated Adjusted EBITDA in a prior period to the extent such
        non-cash charges are paid in cash in the current period, (h) to the
        extent not otherwise deducted in determining Consolidated Excess Cash
        Flow, tender payments, fees and expenses paid during such period in
        connection with the exchange of the Senior Subordinated Notes and the
        Discount Notes, cash payments made during such period with respect to
        non-current liabilities and cash payments made during such period with
        respect to restructuring reserves and expenditures with respect to
        Permitted Acquisitions, and (i) any cash expenditures made during such
        period constituting Investments in Subsidiaries or Joint Ventures
        permitted under subsection 7.3(xxi).

        F. Subsection 1.1 of the AXEL Credit Agreement is hereby further amended
by deleting the definition of "Consolidated Excess Cash Flow" therefrom and
substituting therefor the following:

           "Consolidated Excess Cash Flow" means, for any period, an amount (if
        positive) equal to (i) the sum, without duplication, of the amounts for
        such period of (a) IR Consolidated Adjusted EBITDA, (b) the Consolidated
        Working Capital Adjustment and (c) payments made to Holdings or any of
        its Subsidiaries as an adjustment to purchase price after the Closing
        Date under the Recapitalization Agreement, minus (ii) the sum, without
        duplication, of the amounts for such period (to the extent not financed
        with the proceeds of related financings) of (a) voluntary and scheduled
        repayments of IR Consolidated Total Debt (excluding repayments of the
        Revolving Loans except to the extent the Revolving Loan Commitments are
        permanently reduced in connection with such repayments), (b)
        Consolidated Capital Expenditures (net of any proceeds of any related
        financings with respect to such expenditures) plus (or minus, if
        negative), so long as the Revolving Credit Agreement is in effect, the
        Carryforward (as defined in the Revolving Credit Agreement) for such
        period to be carried forward to the next period less the Carryforward
        (if any) for the preceding period carried forward to the current period,
        (c) Consolidated Cash Interest Expense, (d) payments made by Holdings
        and its Subsidiaries as an adjustment to purchase price after the
        Closing Date under the Recapitalization Agreement, (e) any cash payments
        made during such period with respect to items set forth on Schedule
                                                                   --------
        1.1(i) annexed hereto, (f) the provision for current taxes based on
        ------
        income of Holdings and its Subsidiaries and payable in cash with respect
        to such period, including taxes payable in cash within 90 days following
        the end of such period, (g) non-cash charges added in calculating IR
        Consolidated Adjusted EBITDA in a prior period to the extent such

                                        3

<PAGE>

        non-cash charges are paid in cash in the current period, (h) to the
        extent not otherwise deducted in determining Consolidated Excess Cash
        Flow, tender payments, fees and expenses paid during such period in
        connection with the exchange of the Senior Subordinated Notes and the
        Discount Notes, cash payments made during such period with respect to
        non-current liabilities and cash payments made during such period with
        respect to restructuring reserves and expenditures with respect to
        Permitted Acquisitions, and (i) any cash expenditures made during such
        period constituting Investments in Subsidiaries or Joint Ventures
        permitted hereunder pursuant to clause (x) of the definition of
        Permitted Investments.

1.2     Amendments to Section 2:  Amounts and Terms of Commitments and Loans
        --------------------------------------------------------------------

        A. Subsection 2.4B(iv)(a) of the Revolver/Term A Loan Credit Agreement
is hereby amended by deleting the first four sentences therefrom in their
entirety and substituting therefor the following:

        "On and after the Second Amendment Effective Date, any voluntary
        prepayments pursuant to subsection 2.4B(i) shall be applied (1) at
        Company's option to either Revolving Loans or Tranche A Term Loans; (2)
        if applied to Tranche A Term Loans, to reduce the scheduled installments
        of principal of the Tranche A Term Loans set forth in subsection 2.4A
        (x) on a pro rata basis (in accordance with the respective outstanding
        principal amounts thereof), or (y) in forward order of maturity
        (provided that any such prepayment may only be applied in forward order
        of maturity to the extent the scheduled installments of principal
        against which such prepayments are to be applied are due on or prior to
        the date which is one year from the date of such prepayment), or (z) in
        inverse order of maturity, at Company's option, in each case as
        specified by Company in the applicable notice of prepayment; and (3) if
        applied to Revolving Loans, first to repay outstanding Revolving Loans
        which are not Acquisition Loans to the full extent thereof, and second
        to repay outstanding Acquisition Loans and to reduce the Acquisition
        Loan Commitments in the amount of such prepayment, so as to minimize the
        amount of any repayment of the Acquisition Loans and any corresponding
        reduction of the Acquisition Loan Commitments. On and after the Second
        Amendment Effective Date, any voluntary reduction of Revolving Loan
        Commitments pursuant to subsection 2.4B(ii) shall be applied first to
        reduce the Revolving Loan Commitments, to the extent they exceed the
        Acquisition Loan Commitments, to the full extent of such excess, and
        second to reduce the remaining Revolving Loan Commitments (and
        Acquisition Loan Commitments) in the remaining amount of such reduction,
        so as to minimize the amount of any reduction of the Acquisition Loan
        Commitments."

        B. Subsection 2.4B(iv)(a) of the Revolver/Term A Loan Credit Agreement
is hereby further amended by deleting the last sentence therefrom in its
entirety.

        C. Subsection 2.4B(iii)(a) of the AXEL Credit Agreement is hereby
amended by deleting it in its entirety and substituting therefor the following:

                                        4

<PAGE>

           "(a) Application of Voluntary Prepayments by Type of Loans and Order
                ---------------------------------------------------------------
        of Maturity. On and after the Second Amendment Effective Date, any
        -----------
        voluntary prepayments of the Loans pursuant to subsection 2.4B(i) shall
        be applied (x) to prepay the AXELs Series B, the AXELs Series C and the
        AXELs Series D on a pro rata basis (in accordance with the respective
        outstanding principal amounts thereof) and (y) to reduce the scheduled
        installments of principal of the AXELs Series B, the AXELs Series C and
        the AXELs Series D set forth in subsections 2.4A(i), 2.4A(ii) and
        2.4A(iii) (x) on a pro rata basis (in accordance with the respective
        outstanding principal amounts thereof), or (y) in forward order of
        maturity (provided that any such prepayment may only be applied in
        forward order of maturity to the extent the scheduled installments of
        principal against which such prepayments are to be applied are due on or
        prior to the date which is one year from the date of such prepayment),
        or (z) in inverse order of maturity, at Company's option, as specified
        by Company in the applicable notice of prepayment); provided, however,
        that so long as any Tranche A Term Loans are outstanding, any prepayment
        of the Loans pursuant to subsection 2.4B(i) shall be applied to the
        repayment of the Tranche A Term Loans and the Loans on a pro rata basis
        according to the respective outstanding principal amounts thereof."

1.3     Amendment to Section 7:  Negative Covenants
        -------------------------------------------

        A. Subsection 7.3(xxi) of the Revolver/Term A Loan Credit Agreement is
hereby amended by deleting it in its entirety and substituting therefor the
following:

           "(xxi) Company and its Subsidiaries may make and own any Investment
        having a fair market value, together with the fair market value of all
        other Investments made pursuant to this subsection 7.3(xxi) that are at
        that time outstanding, not exceeding 5% of Total Assets at the time of
        such Investment (with the fair market value of each such Investment
        being measured at the time made and without giving effect to subsequent
        changes in value) (it being understood that changes in value of all such
        outstanding Investments shall be given effect in calculating Total
        Assets at the time of the making of any new Investment proposed to be
        made pursuant to this subsection 7.3(xxi), but that changes in value of
        any Investment which occur subsequent to the making of such Investment
        cannot result in a breach of this covenant unless a further Investment
        is made which is purported to be made pursuant to this subsection
        7.3(xxi) at a time when (A) the sum of (1) the fair market value of all
        outstanding Investments made pursuant to this subsection 7.3(xxi), with
        such fair market value measured at the time of making of each such
        outstanding Investment, plus (2) the fair market value, measured at such
        time, of such further Investment, exceeds (B) 5% of Total Assets,
        measured at such time and giving effect to all changes in value of all
        outstanding Investments); provided, that Company and its Subsidiaries
        (1) shall be in pro forma compliance with the covenants set forth in
        subsection 7.6 and (2) concurrently with the making of any such
        Investment, shall pledge or cause to be pledged to the Collateral Agent
        as security for the Obligations (x) any capital stock or other equity
        interests acquired by Company or any of its Subsidiaries as a result of
        any such Investment, except (in the case of an Investment in a Joint
        Venture) to the extent such pledge is

                                        5

<PAGE>

        expressly prohibited under the terms of the documentation relating to
        such Investment, and (y) any intercompany indebtedness representing
        loans made by Company or any of its Subsidiaries in connection with any
        such Investment; provided, however, that nothing in this subsection
        7.3(xxi) shall be construed to require, in the case of an Investment in
        a Subsidiary, that the capital stock of such Subsidiary be pledged to a
        greater extent than is required under the Collateral Documents."

Section 2. CONSENT OF LENDERS

        The undersigned Lenders hereby consent to execution by Collateral Agent
and Company or any of its Subsidiaries of such amendments, supplements or other
modifications of the Collateral Documents, and of such additional Collateral
Documents, as are reasonably deemed necessary from time to time by
Administrative Agent to permit Company and its Subsidiaries to pledge or cause
to be pledged to the Collateral Agent as security for the Obligations (i) any
capital stock or other equity interests acquired by Company or any of its
Subsidiaries as a result of any Investment permitted pursuant to subsection
7.3(xxi) of the Revolver/Term A Loan Credit Agreement, as amended hereby, or
(ii) any intercompany indebtedness representing loans made by Company or any of
its Subsidiaries in connection with any such Investment.

Section 3. CONDITIONS TO EFFECTIVENESS

        Anything herein to the contrary notwithstanding, Sections 1 and 2 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 "Second
Amendment Effective Date"):

           (i) On or before the Second 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 Second 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 Closing Date (or, in
           lieu thereof, certified copies of any such amendments), (ii) the
           Resolutions of its Board of Directors delivered on the Closing Date
           are in full force and effect without modification or amendment, and
           (iii) there have been no changes after the Closing 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), together with a good standing certificate
           with respect to Company from the Secretary of State of the State of
           Ohio, dated a recent date prior to the Second Amendment Effective
           Date; and

               (b) This Amendment, executed by Holdings, Company, Requisite
           Lenders under the Revolver/Term A Loan Credit Agreement and Requisite
           Lenders under the AXEL Credit Agreement.

                                        6

<PAGE>

           (ii) So long as Requisite Lenders under the Revolver/Term A Loan
        Credit Agreement and Requisite Lenders under the AXEL 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 June 17, 1999, an amendment fee in an amount equal to .05% of
        the aggregate Revolving Loan Exposure, Tranche A Term Loan Exposure,
        AXEL Series B Exposure, AXEL Series C Exposure and AXEL Series D
        Exposure of such Lender.

           (iii) Company shall have delivered to Administrative Agent for
        Lenders (with sufficient originally executed copies for each Lender and
        its counsel) originally executed copies of a written opinion letter of
        Kirkland & Ellis, special counsel to Company, dated the Closing Date and
        in form and substance reasonably satisfactory to Administrative Agent
        and its counsel, regarding certain customary matters.

Section 4. COMPANY'S REPRESENTATIONS AND WARRANTIES

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

        A. Incorporation of Representations and Warranties From Credit
Agreements. On and as of the date hereof and the Second Amendment Effective
Date, the representations and warranties contained in subsections 5.1A, 5.2A,
5.2B, 5.2C and 5.2D of the Revolver/Term A Loan Credit Agreement and subsections
4.1A, 4.2A, 4.2B, 4.2C and 4.2D of the AXEL Credit Agreement are and will be
true, correct and complete with respect to this Amendment and the Credit
Agreements as amended by this Amendment (each, as so amended, an "Amended
Agreement," and collectively, the "Amended Agreements") as if this Amendment and
the Amended Agreements 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 Revolver/Term A Loan 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 Second 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.

        B. 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
any of the Credit Agreements.

                                        7

<PAGE>

Section 5. MISCELLANEOUS

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

           (i) On and after the Second Amendment Effective Date, each reference
        in each of the Revolver/Term A Loan Credit Agreement and the AXEL Credit
        Agreement to "this Agreement", "hereunder", "hereof'", "herein" or words
        of like import referring to such Credit Agreement, and each reference in
        the other applicable Loan Documents to the "Credit Agreement",
        "thereunder", "thereof" or words of like import referring to such Credit
        Agreement shall mean and be a reference to the applicable Amended
        Agreement.

           (ii) Except as specifically amended by this Amendment, each 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, any Credit Agreement or any of
        the other Loan Documents relating thereto.

        B. Fees and Expenses. Company acknowledges that all reasonable costs,
fees and expenses incurred by Agents and their counsel with respect to this
Amendment and the documents and transactions contemplated hereby shall be for
the account of Company.

        C. 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.

        D. 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.

        E. 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 Sections 1 and 2 hereof) shall
become effective with respect to the Revolver/Term A Loan Credit Agreement and
the AXEL Credit Agreement upon (A) the execution of counterparts hereof by (1)
Requisite Lenders (as defined in the Revolver/Term A Loan Credit Agreement), (2)
Requisite Lenders (as defined in the AXEL Credit Agreement), (3) Company and (4)
Holdings, and (B) receipt by Company and Administrative Agent of written or
telephonic notification of such execution and authorization of delivery thereof.

                  [Remainder of page intentionally left blank]

                                        8

<PAGE>

        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:
                                -----------------------------------------------
                                Name:
                                Title:

                             SEALY CORPORATION

                             By:
                                -----------------------------------------------
                                Name:
                                Title:

                                       S-1

<PAGE>

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

                             By:
                                -----------------------------------------------
                                Name:
                                Title:

                             MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
                             individually and as Administrative Agent

                             By:
                                -----------------------------------------------
                                Name:
                                Title:

                             BANKERS TRUST COMPANY, individually
                             and as Documentation Agent

                             By:
                                -----------------------------------------------
                                Name:
                                Title:

                                       S-2

<PAGE>

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

                             [NAME OF LENDER]

                             By:
                                -----------------------------------------------
                                Name:
                                Title:

                                       S-3<PAGE>

                                                                   EXHIBIT 10.37

                             SEALY MATTRESS COMPANY
                                SEALY CORPORATION

                       THIRD AMENDMENT TO CREDIT AGREEMENT

                  This THIRD AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is
dated as of September 6, 2000 and entered into by and among Sealy Mattress
Company, an Ohio corporation ("Company"), Sealy Corporation, a Delaware
corporation ("Holdings"), the financial institutions listed on the signature
pages hereof ("Lenders"), Goldman Sachs Credit Partners L.P., as arranger and
syndication agent ("Syndication Agent"), Morgan Guaranty Trust Company of New
York, as administrative agent for Lenders ("Administrative Agent"; collectively,
Syndication Agent and Administrative Agent are referred to herein as "Agents"),
Bankers Trust Company, as documentation agent for Lenders and the Credit Support
Parties (as defined in Section 4 hereof) listed on the signature pages hereof,
and is made with reference to that certain Credit Agreement dated as of December
18, 1997 (as amended, supplemented or otherwise modified to the date hereof, the
"Credit Agreement") 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 Agreement or in
subsection 1.1 hereof.

                                    RECITALS

     WHEREAS, Company, Holdings and Lenders 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
     ------------------------------------

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

          "Third Amendment" means that certain Third Amendment to Credit
     Agreement dated as of September 6, 2000 by and among Company, Holdings, the
     Lenders party thereto and the other Persons listed on the signature pages
     thereof.

          "Third Amendment Effective Date" has the meaning assigned to that term
     in the Third Amendment.

<PAGE>

1.2  Amendments to Section 2: Amounts and Terms of Commitments and Loans
     -------------------------------------------------------------------

     A. Subsection 2.1A(ii) of the Credit Agreement is hereby amended by
deleting the final sentence of the first paragraph thereof in its entirety and
substituting therefor the following:

     "All Acquisition Loans borrowed under this subsection 2.1A(ii) which are
     repaid or prepaid after the Third Amendment Effective Date may be repaid
     and reborrowed to but excluding the Revolving Loan Commitment Termination
     Date."

     B.  Subsection 2.4B(iii)(d) of the Credit Agreement is hereby amended by
deleting the reference to "subsections 7.1(i) through (xvii)" contained therein
and substituting a reference to "subsections 7.1(i) through (xix)" therefor.

     C. Subsection 2.5B of the Credit Agreement is hereby amended by deleting it
in its entirety and substituting therefor the following:

     "B.  Post Closing Date Revolving Loans and Swing Line Loans.

          (i) Revolving Loans and Swing Line Loans made after the Closing Date
     in an aggregate amount not to exceed $100,000,000 at any time outstanding
     may be used by Company to make expenditures which are included in the
     definition of Consolidated Capital Expenditures and for working capital and
     general corporate purposes which may include the making of intercompany
     loans to any of Company's wholly owned Subsidiaries, in accordance with
     subsection 7.1(iv) or 7.1(v), for their own such capital expenditures and
     working capital and general corporate purposes and the making of
     intercompany loans to Company's Joint Ventures to the extent such
     Indebtedness is permitted hereunder, for their own such capital
     expenditures and working capital and general corporate purposes.

          "(ii) Revolving Loans and Swing Line Loans made after the Closing Date
     in an aggregate amount not to exceed $50,000,000 at any time outstanding
     may be used by Company or its Subsidiaries to finance Permitted
     Acquisitions."

1.3  Amendments to Section 7: Negative Covenants
     -------------------------------------------

     A. Subsection 7.1 of the Credit Agreement is hereby amended by (i) deleting
the "and" at the end of clause (xvii) thereof; (ii) deleting the "." at the end
of clause (xviii) thereof and substituting therefor ";and" and (iii) adding new
clause (xix) at the end thereof as follows:

        "(xix) non-wholly owned Subsidiaries of Company acquired pursuant to
     clause (A) of subsection 7.7(xiv)(b) may incur intercompany Indebtedness to
     Company and its wholly owned Subsidiaries so long as the aggregate amount
     of all such Indebtedness incurred, together with all other Investments made
     by Company and its wholly-owned Subsidiaries in such non-wholly owned
     Subsidiaries, shall not exceed the amount permitted under subsection
     7.3(xiv)."

                                       2

<PAGE>

         B. Subsection 7.3(xiv) of the Credit Agreement is hereby amended by
deleting it in its entirety and substituting therefor the following:

                  "(xiv) Company and its Subsidiaries may make and own
         Investments in Subsidiaries acquired pursuant to Permitted Acquisitions
         under subsection 7.7(xiv); provided, however, that (1) the sum of the
                                    --------  -------
         aggregate fair market value of all Investments (determined at the time
         any Investment by Company and its Subsidiaries is made in any
         non-wholly owned Subsidiary) by Company and its Subsidiaries in all
         non-wholly owned Subsidiaries acquired pursuant to clause (A) of
         subsection 7.7(xiv)(b) and any amounts advanced as to such non-wholly
         owned Subsidiaries pursuant to subsection 7.1(xix) shall not exceed 10%
         of Total Assets at the time of such Investment (with the fair market
         value of each such Investment being measured at the time made and
         without giving effect to subsequent changes in value) (it being
         understood that changes in value of all such outstanding Investments
         shall be given effect in calculating Total Assets at the time of the
         making of any new Investment proposed to be made pursuant to this
         subsection 7.3(xiv), but that changes in value of any Investment which
         occur subsequent to the making of such Investment cannot result in a
         breach of this covenant unless a further Investment is made which is
         purported to be made pursuant to this subsection 7.3(xiv) at a time
         when (A) the sum of (x) the fair market value of all outstanding
         Investments made pursuant to this subsection 7.3(xiv), with such fair
         market value measured at the time of making of each such outstanding
         Investment, plus (y) the fair market value, measured at such time, of
                     ----
         such further Investment, exceeds (B) 10% of Total Assets, measured at
         such time and giving effect to all changes in value of all outstanding
         Investments); and (2) no amount shall be paid after the Third Amendment
         Effective Date to any Persons other than Company and its Subsidiaries
         as a dividend or other distribution, direct or indirect, on account of
         the equity interests held by such Persons in any Subsidiary acquired
         pursuant to such Permitted Acquisitions unless Company and its
         Subsidiaries holding equity interests in such acquired Subsidiary
         simultaneously receive a ratable dividend or distribution (except that
         such non-wholly owned Subsidiaries may (I) repurchase, in an aggregate
         amount of up to $1,000,000 in any Fiscal Year (plus an amount equal to
                                                        ----
         the lesser of (X) the amount of such repurchases permitted under this
         clause (I) to be made during one or more preceding Fiscal Years but not
         made during such preceding Fiscal Years and (Y) $3,000,000) ending
         after the Third Amendment Effective Date, shares of their own capital
         stock from officers and other employees following termination of
         employment of any such officer or employee by reason of death,
         disability, discharge, retirement or resignation, and (II) pay
         distributions to holders of equity interests in any such non-wholly
         owned Subsidiary which is a "pass-through" entity for income tax
         purposes, so long as such distributions are solely in respect of the
         income of such non-wholly owned Subsidiary which is allocable to, and
         taxable with respect to, such holders;"

         C. Subsection 7.7(xiv)(b) of the Credit Agreement is hereby amended by
deleting it in its entirety and substituting therefor the following:

                                       3

<PAGE>

                  "(b) if such acquisition is structured as an acquisition of
         stock or other equity interests, then (A) the Person so acquired
         becomes a majority owned or wholly owned Subsidiary of Company, or (B)
         such Person is merged with and into Company or a wholly owned
         Subsidiary of Company (with Company or such wholly owned Subsidiary
         being the surviving corporation in such merger), and in any case, (1)
         all of the provisions of subsection 6.8 have been complied with in
         respect of such Person and (2) the stock or other equity interests of
         such Person have been made subject to a First Priority Lien in favor of
         Collateral Agent on behalf of Lenders to the extent required pursuant
         to the Collateral Documents;"

         D. Subsection 7.7(xiv)(e) of the Credit Agreement is hereby amended by
deleting it in its entirety and substituting therefor the following:

                  "(e) any assets acquired pursuant to such acquisition shall be
         subject to a First Priority Lien in favor of Collateral Agent on behalf
         of Lenders pursuant to the Collateral Documents; provided that the
         assets and/or stock or other equity interests of a Foreign Subsidiary
         shall not be required by this subsection (e) to made subject to such
         Lien to the extent a pledge of such stock or other equity interests is
         not required pursuant to the Collateral Documents;"

         E. Subsection 7.8 of the Credit Agreement is hereby amended by deleting
the table contained therein in its entirety and substituting therefor the
following:

               Fiscal Year                    Maximum Consolidated
                                              Capital Expenditures

                   1998                        $25,500,000
                   1999                        $19,000,000
                   2000                        $30,000,000
                   2001                        $32,500,000
           2002 and thereafter                 $35,000,000

         F. Subsection 7.12 of the Credit Agreement is hereby amended by adding
at the end thereof the following sentence:

         "Nothing in this subsection 7.12 shall prohibit Holdings and its
         Subsidiaries from pledging shares of capital stock or other equity
         Securities of their respective Subsidiaries pursuant to the Collateral
         Documents."

                                       4

<PAGE>

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 "Third Amendment Effective
Date"):

          (i) On or before the Third 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 Third 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 Closing Date (or, in
          lieu thereof, certified copies of any such amendments), (ii) the
          resolutions of its Board of Directors delivered on the Closing Date
          are in full force and effect without modification or amendment except
          as modified by the resolutions described in clause (b) below, and
          (iii) there have been no changes after the Closing 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), together with a good standing certificate
          with respect to Company from the Secretary of State of the State of
          Ohio, dated a recent date prior to the Third Amendment Effective Date;

               (b) Resolutions of Company's Board of Directors approving and
          authorizing the execution, delivery and performance of this Amendment,
          certified as of the Third Amendment Effective Date by its corporate
          secretary or an assistant secretary as being in full force and effect;
          and

               (c) This Amendment, executed by Holdings, Company 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 September 18, 2000,
an amendment fee in an amount equal to 0.10% of the aggregate Revolving Loan
Exposure and Tranche A Term Loan Exposure of such Lender.

          (iii) Company shall have delivered to Administrative Agent for Lenders
(with sufficient originally executed copies for each Lender and its counsel)
originally executed copies of a written opinion letter of Kirkland & Ellis,
special counsel to Company, dated the Closing Date and in form and substance
reasonably satisfactory to Administrative Agent and its counsel, regarding
certain customary matters.

                                       5

<PAGE>

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:

           A. Incorporation of Representations and Warranties From Credit
Agreement. On and as of the date hereof and the Third 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, the Credit Agreement as amended by this
Amendment (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 are and will be
true, correct and complete in all material respects on and as of the Third
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.

           B. 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 the Company, Holdings and each of 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

           A. Reference to and Effect on the Credit Agreement and the Other Loan
Documents.

              (i) On and after the Third 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 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.

                                       6

<PAGE>

              (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.

           B. Fees and Expenses. Company acknowledges that all reasonable costs,
fees and expenses incurred by Agents and their counsel with respect to this
Amendment and the documents and transactions contemplated hereby shall be for
the account of Company.

           C. 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.

           D. 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.

           E. 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 upon the execution of counterparts hereof by Requisite Lenders,
Company, Holdings and the Credit Support Parties and receipt by Company and
Administrative Agent of written or telephonic notification of such execution and
authorization of delivery thereof.

                  [Remainder of page intentionally left blank]

                                       7

<PAGE>

           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.

         COMPANY:

                                              SEALY MATTRESS COMPANY

                                              By:
                                                 -----------------------------
                                                 Name:
                                                 Title:

         HOLDINGS:

                                              SEALY CORPORATION

                                              By:
                                                 -----------------------------
                                                 Name:
                                                 Title:

                                       S-1

<PAGE>

SUBSIDIARY GUARANTORS:
                       THE SEALY MATTRESS COMPANY OF PUERTO RICO
                       OHIO-SEALY MATTRESS MANUFACTURING CO., INC.
                       OHIO-SEALY MATTRESS MANUFACTURING CO.-- FORT WORTH
                       OHIO-SEALY MATTRESS MANUFACTURING CO.
                       OHIO-SEALY MATTRESS MANUFACTURING CO.-- HOUSTON
                       SEALY MATTRESS COMPANY OF MICHIGAN, INC.
                       SEALY MATTRESS MANUFACTURING COMPANY OF KANSAS CITY, INC.
                       SEALY OF MARYLAND AND VIRGINIA, INC.
                       SEALY MATTRESS COMPANY OF ILLINOIS
                       A. BRANDWEIN & COMPANY
                       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.
                       THE STEARNS & FOSTER BEDDING COMPANY
                       THE STEARNS & FOSTER UPHOLSTERY FURNITURE COMPANY

                        By:
                           --------------------------------------------
                           Name:
                           Title:

                                    S-2

<PAGE>

AGENTS AND LENDERS:
                               GOLDMAN SACHS CREDIT PARTNERS L.P.,
                               individually and as Syndication Agent

                               By:
                                   -------------------------------------
                                    Name:
                                    Title:

                               MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
                               individually and as Administrative Agent

                               By:
                                  --------------------------------------
                                  Name:
                                  Title:

                               BANKERS TRUST COMPANY, individually
                               and as Documentation Agent

                               By:
                                   -------------------------------------
                                   Name:
                                   Title:

                                       S-3

<PAGE>

                                                     ---------------------------
                                                     [NAME OF LENDER]

                                                     By:
                                                        -----------------------
                                                        Name:
                                                        Title:

                                       S-4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00028-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00028-of-00352.parquet"}]]