LETTERHEAD OF SEALY, INC. Sealy Drive One Office Parkway Trinity, NC 27370 January 1, 2000 Mr. Stephen A. Walker Chief Executive Officer Mattress Discounters 9822 Fallard Ct. Upper Marlboro, MD 10772 Dear Steve: This letter is to confirm our mutual...

                            LETTERHEAD OF SEALY, INC.
                                   Sealy Drive
                               One Office Parkway
                                Trinity, NC 27370



                                 January 1, 2000


Xx. Xxxxxxx X. Xxxxxx
Chief Executive Officer
Mattress Discounters
9822 Fallard Ct.
Upper Marlboro, MD 10772

Dear Xxxxx:

         This letter is to confirm our mutual understanding effective August 6,
1999 that our letter agreement, dated March 17, 1997, as amended to date (the
"Mattress Discounters Agreement"), has been extended for two additional one-year
periods: Year 6, consisting of July 1, 2002 through June 30, 2003; and Year 7,
consisting of July 1, 2003 through June 30, 2004. These two periods shall be
added to Section 1 of the Mattress Discounters Agreement.


                                  Sincerely,
                                  SEALY, INC.


                                      By: /s/ Xxx X. Xxxxx
                                          --------------------------------------
                                          Name: Xxx X. Xxxxx
                                          Title: Chairman and Chief Executive
                                                 Officer


Agreed and Accepted:
MATTRESS DISCOUNTERS CORPORATION



By: /s/ Xxxxx X. Xxxxxxxx
    -------------------------------
    Name: Xxxxx X. Xxxxxxxx
    Title:  Chief Financial Officer