Document:

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                                                                    Exhibit 10.3
                                                                    ------------

          Confidential Materials omitted and filed separately with the
         Securities and Exchange Commission. Asterisks denote omissions.

                      FOURTH AMENDMENT TO SUPPLY AGREEMENT
                      -----------------------------------

     This Amendment to Supply Agreement (this "Agreement" is entered. into by
and between Mattress Discounters Corporation., a Delaware corporation,
("Mattress Discounters") and Sealy, Inc., an Ohio Corporation ("Sealy") on this
10th day of January 2002.

     WHEREAS, Mattress Discounters and Sealy entered into a letter agreement
dated March 17, 1997 which established a supply arrangement under which Sealy
supplies bedding products to Mattress Discounters, and have amended that letter
agreement on June 30, 1997, in March 1998, and on August 11, 1999 (that letter
agreement as am. ended hereby is referred to herein as the "Supply Agreement");

     WHEREAS, Mattress Discounters' bankers have requested that the Supply
Agreement be amended, and

     WHEREAS, Mattress Discounters and Sealy each desire to amend the Supply
Agreement in the manner provided herein.

     NOW, THEREFORE, Mattress Discounters and Sealy hereby agree as follows:

     1. Payment Terms. The terms for Mattress Discounters payments to Sealy
under the Supply Agreement shall be changed to "[**] days, [**] days".

     2. Extension of Supply Agreement Term. The term of the Supply Agreement
shall be extended for three additional years through June 30,2007.

     3. Balance of Share. During the term of the Supply Agreement, Sealy, Inc.
products will represent a minimum of [**]percent ([**]%) of Mattress
Discounters' annual sales of retail bedding (as measured in retail sales
dollars) and will represent a minimum of [**] percent ([**]%) of Mattress
Discounters' retail bedding sales in each of Mattress Discounters' fiscal
quarters. The balance of Mattress Discounters bedding products shall be bedding
sold under Discounters' own label ("Private Label Products") which are either
produced by Mattress Discounters in its own factories or subcontracted as
substitutes for such manufacturing. Private Label Products can not be products
which are co-branded or labeled by any other bedding manufacturer other than
Mattress Discounters. Private Label Products may be sold by Mattress Discounters
at any price points. Mattress Discounters will begin to work towards these new
levels immediately and will have achieved them by the end of 2002.

     4. Differentiated Products. Sealy and Mattress Discounters shall work
together to develop, by no later that the end of 2002, differentiated Sealy
branded bedding products for Mattress Discounters. Such differentiated products
shall at a minimum have unique upholstery, ticking, labels and double edge
guards (or equivalent), and may work towards

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exclusive innersprings in the future. The parties shall ensure that the economic
impact of such differentiated products shall be favorable for both Sealy and
Mattress Discounters.

     5. Subsidy Rate. For the remaining term of the Supply Agreement the subsidy
rate shall remain at its current rate of [**] percent ([**]%) [**].

     6. Rebate Rate. For the remaining term of the Supply Agreement the rebate
rate shall remain at its current rate of [**] percent ([**]%) [**].

     7. Wholesale Price Increases. For the remaining term of the Supply
Agreement, the wholesale prices charged by Sealy for sales to Mattress
Discounters under the Supply Agreement for products shall be as follows:

          a. Brand Image ("BI") Products: Mattress Discounters will pay the [**]
     price established by Sealy on all BI products.

          b. In-line Branded Products: Wholesale prices for in-line branded
     products shall remain at their current price, [**] for comparable products.
     Changes in the wholesale price to Mattress Discounters' on such products
     shall [**] for comparable products. Price increases (or decreases) to
     Mattress Discounters will be calculated [**], and will take place at the
     same time [**].

          c. Custom Branded Products: Wholesale prices for branded products
     which Sealy custom makes for Mattress Discounters shall follow the
     procedure stated in the in-line branded products (above). In addition, the
     wholesale price of such custom branded product shall include [**] resulting
     from the [**] product [**] the comparable in-line branded product at that
     level.

          d. Custom Non-Branded Products ("Private Label"): Wholesale prices on
     custom non-branded products which Sealy makes for Mattress Discounters
     shall be priced to [**] product basis, as long as Mattress Discounters'
     purchases of Sealy manufactured private label products [**] of Mattress
     Discounters' total Sealy product purchases. New Private Label product
     pricing shall reflect any changes in MLO costs [**] at that level.

     8. Delivery. Sealy shall place Mattress Discounters' stores on 48-hour
delivery status if they are located in areas where Sealy's facilities and
delivery schedule are such that 48-hour delivery can be reasonably successfully
achieved on an economically reasonable basis. Purchaser agrees to comply with
Sealy's "order by time" that is determined by Sealy plants to facilitate 48-hour
delivery. Sealy can not guaranty that deliveries will be made in 48-hours to
stores placed on 48-hour delivery. Sealy and Mattress Discounters shall jointly
work together to implement an electronic ordering system to improve ordering and
delivery timing, as well as providing Sealy with as early as possible visibility
on Mattress Discounters' orders.

     9. Sales Associate Commissions. Mattress Discounters shall be free to
establish its commission structure for its retail sales associates.

     10. Product Returns. Mattress Discounters has the right to return any Sealy
products to Sealy, including customer warranty returns. This right shall be
[**] of Mattress Discounters' purchases from Sealy measured annually on a
national basis. If Mattress Discounters has [**], then Sealy will [**] payment.
That [**] shall be subject to an annual adjustment, if Sealy's annual warranty
return rate increases or decreases more than [**]% from its 2001 warranty return
rate.

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     11. Warranty. Sealy shall continue to offer Mattress Discounters' customers
Sealy's standard products warranty. Sealy and Mattress Discounters shall
consider a revision of product warranties for the mutual benefit of both
parties, sales support, and the enhancement of consumer confidence.

     12. Retail Acquisitions by Mattress Discounters. If Mattress Discounters
acquires another mattress retailer, the acquired retailer stores shall continue
to purchase Sealy product under the terms of such retailer's then existing
supply agreement with Sealy (including pricing, delivery and coop support) for
six (6) months. During such six (6) month period Mattress Discounters and Sealy
shall negotiate a revision, of the Supply Agreement terms to include sales to
such acquired stores on a basis fair to both parties.

     13. Sleep Country Canada. Mattress Discounters and Sealy each hereby
acknowledge that Sleep Country Canada is not covered by or subject to the Supply
Agreement - either before or after this Agreement.

     14. Cooperation. Sealy and Mattress Discounters shall form a "Steering
Committee" of one senior executive from each company to explore synergy
opportunities between the companies. Each company shall also designate other
executives to work either individually or on teams to address issues delegated
to them by the Steeling Committee. The Steering Committee may mutually invite
other parties to participate in the Steering Committee to explore synergy
opportunities.

     15. Disputes. Any significant disputes between Sealy and Mattress
Discounters shall be referred to their two senior executives on the Steering
Committee for a good faith effort at resolution. If they are not able to resolve
the dispute, it shall then be referred to the senior Bain Capital executive
responsible for managing Bain Capital's investment in each company (as long as
Bain Capital and Bain Capital's related parties control a major of the equity in
both companies). If Bain Capital's executive(s) are unable to resolve the
dispute, it shall be submitted to binding arbitration under the rules of the
American Arbitration Association. The location for such arbitration shall
alternate between the headquarters of each company with the initial arbitration
to occur at Mattress Discounters' headquarters.

     16. Counterparts. This Agreement may be executed in counterparts, each of
which shall be an original and all of which taken together shall constitute one
and the same.

     17. Interpretation. To the extent that this Agreement is in conflict with a
prior component of the Supply Agreement, this Agreement shall control.

     IN WITNESS WHEREOF the parties hereto have caused this Fourth Amendment to
Supply Agreement to be duly executed as of the date first listed above.

                                  MATTRESS DISCOUNTERS CORPORATION

                                  By: /s/ Steve Newton
                                      ----------------------
                                      Name: Steve Newton
                                      Title: President & CEO

                                        3

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                              SEALY, INC.

                              BV: By: /s/ David J. McIlquham
                                      ----------------------
                                      Name: David J. McIlquham
                                      Title: President & Chief Operating Officer

                                        4<PAGE>

                                                                    Exhibit 10.4
                                                                    ------------

          Confidential Materials omitted and filed separately with the
         Securities and Exchange Commission. Asterisks denote omissions.

                                    Agreement
                                    ---------

     This Agreement (the "Agreement") is entered into as of August 2, 2002 by
and between Mattress Discounters Corporation, a Delaware corporation ("MD") and
Sealy, Inc. ("Sealy").

     WHEREAS, MD and Sealy are party to a Supply Agreement dated as of March 17,
1997, as amended, by Amendment No. 1 dated June 30, 1997, Amendment No. 2 dated
as of March 1998, Amendment dated August 1, 1999 and a Fourth Amendment to
Supply Agreement dated January 10, 2002 (as amended, the "Supply Agreement");
and

     WHEREAS, MD has requested Sealy to provide MD with certain financial
accommodations in connection with the administration of the Supply Agreement;
and

     WHEREAS, Sealy has agreed to provide such financial accommodations subject
to the terms and conditions hereafter provided.

     NOW, THEREFORE, in consideration of the foregoing, the parties hereto
hereby agree as follows:

     1. Except as specifically provided for herein, the Supply Agreement shall
continue in full force and effect in accordance with the terms thereof. This
Agreement is for a term through and including September 30, 2002 and shall
expire on the earlier of (i) September 30, 2002 and (ii) expiration of that
certain Standstill Agreement dated August 2, 2002 between MD and certain of its
senior noteholders.

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     2. Notwithstanding the "Payment Terms" provided for in the Supply
Agreement, MD agrees to make and Sealy agrees to accept as current payment of
amounts due under the Supply Agreement from the date hereof through September
30, 2002 the following amounts:

     a.   MD will pay to Sealy on each Thursday that this Agreement is in effect
          and on September 30, 2002, [**] (a) the total account payable then
          owing by MD to Sealy according to Sealy's records [**] issued by Sealy
          and (ii) [**] through the date of such payment, and (b) $[**] as
          defined in paragraph 4 hereinbelow.

     b.   By way of estimation, MD has provided to Sealy the cash flow forecast
          attached hereto as Exhibit A showing the anticipated amounts of
          payment that MD expects to make to Sealy on each Thursday in order to
          comply with the requirements of paragraph (a) above.

     3. MD acknowledges and agrees that [**] payable to MD to [**] by MD to
Sealy is and will be in the [**] the same contract, namely, the Supply
Agreement, and that [**] does not and will not constitute a setoff or offset
within the meaning of Section 553 of the United States Bankruptcy Code or any
other transaction or transfer that may be avoided and recovered should MD become
a debtor under Title 11.

     4. All disputes that MD has to existing Sealy invoices (the "Disputed
Invoices") in the approximate amount of $[**] shall be resolved as follows:

     a.   MD and Sealy will use their reasonable commercial efforts to reach
          prompt agreement on resolving the Disputed Invoices. MD acknowledges
          and agrees that Sealy has already provided it with copies of the
          Disputed Invoices. Sealy will also provide MD with copies of the
          proofs of delivery for the Disputed Invoices. For its part, MD will
          provide Sealy with a written statement explaining the basis or bases
          for MD's disputing payment of the Disputed Invoices, together with a
          copy of all supporting records in MD's possession (e.g., MD's returned
          goods form, signed by Sealy, evidencing that goods covered by a
          Disputed Invoice have been returned to Sealy). On or before [**], MD
          and Sealy shall prepare and sign a written agreement (the "Disputed
          Invoice Agreement") identifying each Disputed Invoice resolved by
          agreement of the parties and stating the amount, if any, that MD owes
          Sealy with respect thereto.

     b.   Each Disputed Invoice that is not resolved by the Disputed Invoice
          Agreement shall be resolved as follows: (i) MD shall [**] provide MD
          with a copy of the proof of delivery relating thereto prior to [**];
          (ii) MD shall [**] if, prior to [**], Sealy has provided MD with the
          proof of delivery relating thereto and MD has not

                                       -2-

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          provided Sealy with its written statement explaining the basis or
          bases for disputing payment and business records to support MD's
          position and for which prior to [**] MD has not disputed in writing
          the accuracy of the proof of delivery ; (iii) MD shall be [**] for
          which prior to [**], MD has provided Sealy with a proof of delivery
          relating thereto and for which prior to [**], Sealy has not disputed
          in writing the accuracy of the proof of delivery; and (iv) all
          remaining Disputed Invoices not resolved pursuant to paragraphs 4.a.,
          4.b(i), 4.b(ii), and 4.b(iii) shall be resolved [**].

     c.   MD shall be [**] amounts that are determined not to be owed by MD in
          accordance with the dispute resolution process in paragraphs 4.a.
          and/or 4.b. hereof.

     5. MD will provide Sealy with daily updates of cash receipts and
disbursements.

     6. MD will not materially improve the payment terms of its other vendors
who are owed in excess of $[**].

     7. Notwithstanding any term of the Supply Agreement to the contrary, during
the term of this Agreement, MD will [**] all product purchased during the term
of this Agreement.

     8. Failure by MD to comply in any material respect with the terms of this
Agreement or the Supply Agreement as hereby modified could result in Sealy's
withdrawing its support to MD.

     9. All rebates and subsidies will be calculated as provided for in the
Supply Agreement (including without limitation a reduction in the annual rebate
due to MD's [**]) and paid by issuance of credit memos.

     10. Sealy is the holder of a participation interest in certain of MD's
obligations under the Credit Agreement among Mattress Holding Corporation,
Mattress Discounters Corporation and the Lenders Party thereto (the "Lenders"),
as amended and restated as of January 11, 2002, and as further amended through
the date hereof (the "Credit Agreement"). To the extent that Sealy has a right
to vote on actions to be taken or not taken by the Lenders, Sealy agrees to not
vote in favor of the Lenders taking any action to commence any suit or to
exercise any other

                                       -3-

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remedy to which the Lenders are entitled under the Credit Agreement through [**]
based upon the existence of [**]; provided, however, that nothing herein shall
require Sealy to breach its obligations as a participant under the Credit
Agreement or shall constitute a waiver of any default under the Credit
Agreement.

     11. In the event MD decides to commence a proceeding under Title 11 of the
United States Bankruptcy Code, MD agrees to commence any such proceeding either
in the Bankruptcy Court for the District of Maryland or the Southern District of
New York, in the sole determination of MD's board of directors.

     12. The provisions of paragraphs 3, 4 and 11 shall survive termination or
expiration of this Agreement.

     13. This Agreement has been reviewed and approved by a special committee of
MD's board of directors authorized to act with respect to this Agreement and
constitutes the entire agreement of the parties with respect to the subject
matters addressed hereby and supersedes all prior discussions and negotiations.

                                MATTRESS DISCOUNTERS CORPORATION

                                By: /s/ Stephen J. Newton
                                    ---------------------
                                    Stephen J. Newton

                                SEALY, INC.

                                By: /s/ Kenneth L. Walker
                                    ---------------------
                                    Kenneth L. Walker
                                    Vice Pres., General Counsel & Secretary

                                       -4-

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