FIRST AMENDMENT TO SECOND FORBEARANCE AGREEMENT; FOURTH AMENDMENT TO THE SECOND AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT AND SECOND AMENDMENT TO THE PLEDGE AND SECURITY AGREEMENT

This FIRST AMENDMENT TO SECOND FORBEARANCE AGREEMENT; FOURTH AMENDMENT TO THE SECOND AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT AND SECOND AMENDMENT TO THE PLEDGE AND SECURITY AGREEMENT (this “ Amendment ”) is entered into as of March 25, 2009, by and among Simmons Bedding Company (the “ Company ”), THL-SC Bedding Company and certain subsidiaries of the Company party to the Credit Agreement (as hereafter defined) as Guarantors (together with the Company, the “ Credit Parties ”), the financial institutions party hereto as Lenders (as hereinafter defined) under the Credit Agreement (as hereinafter defined) and Deutsche Bank AG, New York Branch, individually as a Lender (“ DBNY ”) and as administrative agent and collateral agent for the Lenders (in such capacities, the “ Agent ”). Capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms in the Credit Agreement.

WHEREAS, the Company, the other Credit Parties and the Lenders are parties to that certain Second Amended and Restated Credit and Guaranty Agreement, dated as of May 25, 2006 (as has been or may be further amended, restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), pursuant to which, among other things, the financial institutions from time to time party thereto as lenders (collectively, the “Lenders”) have agreed, subject to the terms and conditions set forth in the Credit Agreement, to make certain loans and other financial accommodations to the Company.

WHEREAS, the Company, the other Credit Parties and certain Lenders are parties to that certain Second Forbearance Agreement; Third Amendment to the Second Amended and Restated Credit and Guaranty Agreement and First Amendment to the Pledge and Security Agreement, dated as of December 10, 2008 (the “ Second Forbearance Agreement ”), pursuant to which the Second Forbearance Period (as defined thereunder) shall terminate on March 31, 2009.

WHEREAS, as of the date hereof, one or more of the Defaults or Events of Default listed on Exhibit A to the Second Forbearance Agreement (as modified hereby) hereto have occurred and are continuing, or may occur during the Second Forbearance Period (the Defaults and Events of Default described on Exhibit A hereto being herein collectively called the “ Specified Defaults ”).

WHEREAS, upon the Company’s request, the Lenders have agreed, subject to the terms and conditions set forth herein, to amend certain provisions of the Second Forbearance Agreement and the Credit Agreement.

WHEREAS, upon the Company’s request, the Lenders have agreed, subject to the terms and conditions set forth herein, to amend certain provisions of the Pledge and Security Agreement dated as of December 19, 2003 by and between each of the Grantors party thereto and the Agent in its capacity as Collateral Agent (as supplemented and in effect on the date hereof, the “ Pledge and Security Agreement ”).

NOW, THEREFORE, in consideration of the foregoing, the terms, covenants and conditions contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

SECTION 1.                                 Confirmation by the Company of Obligations and Specified Defaults .

(a)   The Company and each other Credit Party acknowledge and agree that as of March 19, 2009, the respective aggregate principal balances of the Loans as of such date and aggregate face amount of Letters of Credit were as follows (such amounts, in the aggregate, the “ Existing Principal and Letters of Credit ”):

Tranche D Term Loans:                                                      $465,000,000.00

Revolving Loans:                                                      $64,532,384.22

Letters of Credit:                                                      $10,427,327.00

The Company and each Credit Party acknowledge and agree that as of March 19, 2009, the aggregate amount of accrued and unpaid interest, less any overpayment, on the Tranche D Term Loans and Revolving Loans is $1,813,588.97 (the “ Existing Interest ”), and the accrued and unpaid commitment fees payable pursuant to Section 2.10(a) of the Credit Agreement is $8.81 (the “ Existing Commitment Fees ”) and the accrued and unpaid letter of credit fees payable pursuant to Section 2.10(b) of the Credit Agreement is $39,749.84 (the “ Existing LC Fees ” and together with the Existing Principal and Letters of Credit, the Existing Interest, and the Existing Commitment Fees, the “ Outstanding Indebtedness ”). The foregoing amounts do not include other fees, expenses and other amounts which are chargeable or otherwise reimbursable under the Credit Agreement and the other Credit Documents.  None of the Company and the other Credit Parties have any rights of offset, defenses, claims or counterclaims with respect to any of the Obligations and each of the Credit Parties are jointly and severally obligated with respect thereto, in accordance with the terms of the Credit Documents.

(b)   The Company and each other Credit Party acknowledge and agree that each of the Specified Defaults constitutes a Default or an Event of Default that has occurred and is continuing as of the First Amendment Forbearance Effective Date (as hereinafter defined) or that may occur and continue during the Second Forbearance Period, as the case may be.

Effective as of the First Amendment Forbearance Effective Date, the following provisions of the Second Forbearance Agreement shall be amended as set forth below.

(a)   Section 2(a) is hereby amended by:

(i)   in clause (iv) thereof, deleting “quarter ending September 27, 2008” and inserting in lieu thereof “any of the quarters ending September 27, 2008, March 28, 2009 and June 27, 2009 and the annual report on Form 10-K for the year ending December 27, 2008”;

(ii)   deleting the word “or” immediately preceding clause “(v)” thereof and amending and restating clause “(v)” thereof in its entirety to read as follows:

“(v) 11:59 p.m. (New York City time) on May 31, 2009; provided , however, that, in respect of clause (v) of this Section 2(a) only, the Lenders and the Agent shall, on or before May 31, 2009, extend the date provided therein to July 31, 2009, so long as (x) the Second Forbearance Termination Date has not theretofore occurred and (y) the Company has commenced, on or before May 31, 2009, a solicitation process seeking consent for, or votes to effect, a Proposed Transaction, which  Proposed Transaction at the time of extension shall be acceptable to the Requisite Lenders (as determined by them in their sole discretion) (the “ Selected Transaction ”) pursuant to a written notice executed by the Agent at the direction of the Requisite Lenders and delivered to the Company on or before May 31, 2009 or”; and

(iii)   inserting the following new clause “(vi)” immediately after clause (v) thereof:

“(vi) 12:01 a.m. (New York City time) on June 1, 2009, if and only if the “Forbearance Period” under, and as defined in, the Forbearance Agreement to Indenture (as hereinafter defined) has not been extended to July 31, 2009, as contemplated by the proviso to Section 2(a)(i) thereof (the earliest to occur of clauses (i) through (vi) being the “ Second Forbearance Termination Date ”).”.

(b)   Section 2(c) is hereby amended by (x) deleting the word “The” at the beginning of the last sentence thereof, (y) inserting the phrase “Except as specifically provided in Section 2(a), the” at the beginning of the last sentence thereof and (z) by inserting the following phrase at the end of the last sentence thereof:

“(and no prior extension, waiver, forbearance or amendment by a party shall in any way operate as a continuing waiver or forbearance other than as provided in this Agreement)”.

(c)   Section 5 is hereby amended by:

(i)   amending and restating clause “(h)” thereof in its entirety to read as follows:

“(h)            Management Discussions .  The Company shall cause its senior management team, and use its commercially reasonable efforts to cause Miller Buckfire & Co., LLC (“ Miller Buckfire ”) and other appropriate legal advisors, to discuss (at the option of the Company, in person or telephonically), on a bi-weekly basis during regular business hours and for reasonable durational periods, with the Agent, its legal advisor and Moelis and Company (“ Moelis ”) and such other professional advisors retained from time to time by the Agent, and the Lenders identified to the Company as the steering committee (the “ Steering Committee ”), the ongoing financial performance, operations and liquidity of the Company.”

(ii)   amending and restating clause “(l)” thereof in its entirety to read as follows:

“(l)            Subordinated Indebtedness Payments .                                                                                     The Company shall give the Agent ten (10) Business Days’ prior notice of its intent to make any payment (including any payment of interest but excluding (x) payments in respect of reasonable fees and expenses of one counsel and one financial advisor for the holders of Subordinated Indebtedness and (y) an Indenture Forbearance Amendment Fee (as hereinafter defined)) with respect to any Subordinated Indebtedness (the “ Payment Notice ”).”

(iii)   (x) re-lettering existing clause “(o)” thereof (“Additional Restrictions”) as clause “(r)”and (y) inserting the following new clauses “(o)”, “(p)” and “(q)” immediately after clause “(n)” thereof

“(o) Professional Advisors’ Meetings .  On a weekly basis (commencing from the First Amendment Forbearance Effective Date), the Company shall use commercially reasonable efforts to cause representatives of Miller Buckfire and Weil, Gotshal & Manges LLP (collectively, the “ Company Advisors ”) to (i) discuss (at the option of the Company Advisors, in person or telephonically), to the extent not prohibited by the terms of any applicable confidentiality obligation by which the Company is bound, with representatives of Moelis and White & Case LLP (collectively the “ Steering Committee Advisors ” and together with the Company Advisors, collectively, the “ Professional Advisors ”), during regular business hours and for reasonable durational periods, the process with respect to, and the status of, any asset sale, merger, consolidation or other business combination, equity infusion, financing proposals (of any type), change of control transaction or restructuring or plan proposal, in each case, contemplated in connection with the Company’s restructuring process (each, a “ Proposed Transaction ”), including, without limitation, by providing detailed updates and information with respect to the material terms and conditions of any such Proposed Transaction and (ii) from and after the First Amendment Forbearance Effective Date, promptly deliver to the Steering Committee Advisors for their review a copy of each bid and any operative document related thereto (each, a “ Proposed Transaction Document ”) received by the Company Advisors on or after March 6, 2009 with respect to any Proposed Transaction (the actions described in clauses (i) and (ii) above, collectively, comprising a “ Process Update ”); provided that, (a) if disclosing a Proposed Transaction Document is prohibited under the terms of any applicable confidentiality obligation by which the Company is bound, the Company Advisors shall, to the extent not prohibited by such confidentiality obligation, deliver a written summary of the material terms and conditions of such Proposed Transaction Document (a “ Proposed Transaction Document Summary ”) in lieu of a copy thereof; (b) with respect to any confidentiality obligation of the Company to the bidder or bidders selected by the Company to further evaluate a Proposed Transaction (any such bidder, a “ Selected Bidder ”), the Company agrees that it and the other Credit Parties shall use commercially reasonable efforts to obtain the consent of such Selected Bidder to permit the Company Advisors to provide an un-redacted copy of any Proposed Transaction Document to the Steering Committee Advisors, and if such consent is not obtained after using commercially reasonable efforts, the Company Advisors shall, to the extent not prohibited under the terms of any applicable confidentiality obligation by which the Company is bound, deliver a Proposed Transaction Document Summary in lieu thereof; and (c) with respect to any confidentiality obligation by which the Company is bound that arises on or after the First Amendment Forbearance Effective Date, the Company agrees that it, the other Credit Parties and the Company Advisors shall use commercially reasonable efforts to ensure that such confidentiality obligations do not prohibit (A) the Company, any of the other Credit Parties or the Company Advisors from providing any Proposed Transaction Document, Proposed Transaction Document Summary or any other Process Update, or any information relating thereto, to the Steering Committee Advisors or (B) the Professional Advisors’ further disclosure of such Proposed Transaction Documents, Proposed Transaction Document Summaries or other Process Updates to members of the Steering Committee in accordance with the following sentence. Notwithstanding anything to the contrary herein, prior to any disclosure of any information contained in any Proposed Transaction Document, Proposed Transaction Document Summary or Process Update to any Person, including, without limitation members of the Steering Committee or any Lender, the Professional Advisors will collectively determine the nature and extent of any such disclosure (which determination shall be documented in writing, including by email correspondence among the Professional Advisors); provided that, if there is a disagreement among the Company Advisors, on the one hand, and the Steering Committee Advisors, on the other hand, the information that is the subject of such disagreement shall not be disclosed by the Steering Committee Advisors to members of the Steering Committee, any Lender, or any other Person unless and until such disagreement is resolved as acknowledged by e-mail correspondence among the Professional Advisors.

(p) Bidders’ Meetings .  On or before April 17, 2009, the Company shall cause each Selected Bidder to hold one meeting, during regular business hours and for a reasonable durational period, with members of the Steering Committee who have not submitted a bid to acquire or provide equity in or pursuant to a Proposed Transaction, to discuss, in reasonable detail, the nature, structure and material terms of the Proposed Transaction sponsored by such Selected Bidder.

(q) Selected Transaction .  The Selected Transaction shall not be amended, supplemented or otherwise modified in any respect which is materially adverse to the interests of the Lenders, as Lenders, without the prior written consent of the Requisite Lenders.”

(d)   Exhibit A to the Second Forbearance Agreement is hereby amended by:

(i)   amending and restating paragraph 1 set forth thereon in its entirety to read as follows:

“The failure of the Company to comply with Section 6.6 of the Credit Agreement for the Fiscal Quarters ended on September 27, 2008 and December 27, 2008 and ending on March 28, 2009 and, solely to the extent the Second Forbearance Period has been extended pursuant to the proviso to Section 2(a)(v) of this Agreement, June 27, 2009.”

(ii)   amending and restating paragraph 2 set forth thereon in its entirety to read as follows:

“Any Default or Event of Default pursuant to Section 8.1(b) of the Credit Agreement occurring solely as a result of a “Default” or “Event of Default” under, and as defined in, the Senior Subordinated Note Indenture, which occurs (i) on or after January 15, 2009, as a result of the Company’s failure to make its regular scheduled interest payments with respect to the Senior Subordinated Notes on or after January 15, 2009 and (ii) on or after June 15, 2009, as a result of the Company’s failure to make its regular scheduled interest payments with respect to the Senior Subordinated Notes on or after June 15, 2009.”

(iii)   amending and restating paragraph 3 set forth thereon in its entirety to read as follows:

“Any Default or Event of Default pursuant to Section 8.1(b) of the Credit Agreement as a result of any default under (i) Section 4.03 of the Senior Subordinated Note Indenture as a result of the failure of the Company to furnish certain periodic reports or (ii) Section 4.04 of the Senior Subordinated Note Indenture as a result of the failure of the Company to furnish certain statements or certificates.”

(iv)   amending and restating paragraph 4 set forth thereon in its entirety to read as follows:

“Any Default or Event of Default pursuant to Section 8.1(e) of the Credit Agreement as a result of a default under Section 5.1(f) of the Credit Agreement arising in connection with the failure of any Credit Party to timely furnish any written statement of an independent certified public accountant required under Section 5.1(f) therein.”

(v)   Inserting the following new paragraph 5 immediately following paragraph 4 thereon:

“Any Default or Event of Default pursuant to Sections 5.1(h) or 8.1(d) of the Credit Agreement as a result of the events or conditions described in paragraphs 1-4 above.”

Effective as of the First Amendment Forbearance Effective Date, the following provisions of the Credit Agreement shall be amended as set forth below (which amendments are in addition to those contained in the Forbearance Agreement and the Second Forbearance Agreement, which shall remain in full force and effect except as expressly modified herein).  For the avoidance of doubt, the Credit Agreement shall remain amended as set forth in this section after the First Amendment Forbearance Termination Date, and these amendments shall not operate as a waiver of any Default or Event of Default.

(a)   Amendments to Section 1.1 .

(i)   the last sentence of the definition of “ Applicable Margin ” in Section 1.1 is hereby amended by (A) deleting the word “and” immediately preceding clause (y) thereof and inserting a comma in lieu thereof, (B) inserting immediately after the phrase “after the Second Forbearance Effective Date” appearing therein, the phrase “and to and including (but not on) the First Amendment Forbearance Effective Date” and (C) inserting the following new text immediately at the end of the existing text thereof:

“and (z) during all periods on and after the First Amendment Forbearance Effective Date, the “ Applicable Margin