Document:

<PAGE>

                                                                    Exhibit 10.6

     Confidential treatment has been requested for certain portions of this
     document which have been omitted and filed separately with the Secretary of
     the Securities and Exchange Commission. Omitted portions are indicated by
     [REDACTED].

AMENDMENT No. 2 TO MATTRESS DISCOUNTERS/SEALY LETTER AGREEMENT AND TERMINATION
OF THE BEDDING EXPERTS/SEALY 5-YEAR AGREEMENT

     This Amendment and Termination Agreement (this "Document") is entered into
by, between and among Mattress Discounters ("Mattress Discounters"), The Bedding
Experts ("Bedding Experts") and Sealy, Inc. ("Sealy") on this ___ day of March,
1998.

     Mattress Discounters entered into a letter agreement with Sealy dated March
17, 1997 and amended June 30, 1997 ("Mattress Discounters Agreement") making
Sealy the only bedding supplier, other than bedding manufactured or produced by
Mattress Discounters in its own factories or as a substitute for such
manufacturing and subcontracted under their own label, to Mattress Discounters
through June 30, 2000.  Bedding Experts entered into a 5 year agreement with
Sealy effective May 1, 1997 ("Bedding Experts Agreement") making Sealy the sole
supplier of bedding to Bedding Experts through April 30, 2002.  Mattress
Discounters and Bedding Experts have informed Sealy that Mattress Discounters
has acquired Bedding Experts.  The parties now desire to terminate the Bedding
Experts Agreement and to amend the Mattress Discounters Agreement as follows.

1.        Termination of Bedding Experts Agreement
          ----------------------------------------

Effective at the close of business on January 31, 1998 the Bedding Experts
Agreement shall be terminated and neither Bedding Experts nor Sealy shall have
any further liability under that agreement, except that:

     a.        Bedding Experts shall pay for its Sealy bedding purchases made
               prior to February 1, 1998 on the terms provided in the Bedding
               Experts Agreement; and

     b.        Sealy shall make trade spending payments to Bedding Experts for
               Sealy bedding sales made to Bedding Experts prior to February 1,
               1998 on the terms provided in the Bedding Experts Agreement.

2.        Amendment of Mattress Discounters Agreement
          -------------------------------------------

Effective as of February 1, 1998 the Mattress Discounters Agreement shall be
amended as follows:

     a.        Two additional one-year periods:
<PAGE>

               (Year 4) - July 1, 2000 through June 30, 2001, and
               (Year 5) - July 1, 2001 through June 30, 2002
     shall be added to Section 1 "Sealy-only stores" of the Mattress Discounters
     Agreement.

     b.        The subsidy and rebate applicable to Year 4 and Year 5 shall be
               paid on the basis as set forth in the attached Schedule A.
               Sealy, Inc. shall reconcile and pay any rebate or subsidy
               adjustments for those years on July 31, 2001 and 2002.

     c.        The term of the Mattress Discounters Agreement, as provided in
               Section 12 thereof, shall now be for five (5) years, continuing
               through June 30, 2002.

     d.        Sealy shall pay to Mattress Discounters trade spending on the
               basis of the Mattress Discounters Agreement for net purchases of
               Sealy Posturepedic(R), Stearns and Foster, Sealy Correct Comfort
               (formerly Comfort Cell) products sold at former Bedding Experts
               stores now owned by Mattress Discounters.  Sealy shall pay to
               Mattress Discounters trade spending on the basis of the Mattress
               Discounters Agreement for net purchases of Sealy Satin Sleep
               pillow top and Sealy Geneva plush products through May 25, 1998
               sold at former Bedding Experts stores now owned by Mattress
               Discounters.  Sealy shall pay to Mattress Discounters trade
               spending of [REDACTED] on net purchases of Sealy Siena pillow top
               and Sealy Aspire plush products through May 25, 1998 at former
               Bedding Experts stores now owned by Mattress Discounters.  Sealy
               shall not make any trade spending payments to Mattress
               Discounters, on net purchases of other Sealy bedding products at
               former Bedding Experts stores now owned by Mattress Discounters.
               Correct Comfort will be made available after April 20, 1998 to
               former Bedding Experts Stores now owned by Mattress Discounters.

     e.        Mattress Discounters hereby guarantees the [REDACTED] liability
               of Bedding Experts to Sealy for the up-front money previously
               paid by Sealy to Bedding Experts.  This liability shall be
               forgiven by Sealy at a rate of [REDACTED] per month for each
               month that the Mattress Discounters Agreement continues.

     f.        Mattress Discounters and Sealy acknowledge that this program and
               its terms are confidential which if disclosed to third parties
               could cause harm to either party.  Each party agrees to exercise
               reasonable commercial efforts to maintain the confidentiality of
               this Agreement with respect to its own as well as its parents,
<PAGE>

               subsidiaries, or affiliates employees except as to employees with
               a reasonable need for access to this Agreement in order to
               conduct either parties business.  Neither Mattress Discounters
               nor Sealy shall disclose the same to any third party except its
               attorneys or accountants and except as may be required by law or
               as may be necessary to enforce the terms of the Agreement.
               Either party may seek to recover actual damages or injunctive
               relief from the other party for an actual documented breach of
               this provision, however a breach of this provision shall not be
               considered a breach of the Agreement.

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

MATTRESS DISCOUNTERS           THE BEDDING EXPERTS

By:    /s/ Jon M. Studner      By:    /s/ Jon M. Studner
       ------------------             ------------------
Name:  Jon M. Studner          Name:  Jon M. Studner

Title: Senior V.P.             Title: Senior V.P.

SEALY INC.

By:    /s/ Gary Fazio
       --------------

Name:  Gary Fazio

Title: V.P. Sales
<PAGE>

[REDACTED]<PAGE>

                                                                    Exhibit 10.7

  Confidential treatment has been requested for certain portions of this
  document which have been omitted and filed separately with the Secretary of
  the Securities and Exchange Commission. Omitted portions are indicated by
  [REDACTED].

                                LETTERHEAD OF:
                                  SEALY, INC.
                        1228 Euclid Avenue, 10th Floor
                          Cleveland, Ohio 44115-1886
                                 216/522-1310
                       Fax 216/522-1366 or 216/522-0602

March 11, 1998

Mr. Jon Studner
Executive Vice President
Mattress Discounters
9822 Fallard Ct.
Upper Marlboro, MD 20772

Dear Jon:

The following is in reply to your most recent request regarding the Mattress
Discounters acquisition of Bedding Experts, the extension of our original
agreement and the price increase issue.

1.        Any agreement we reach in regard to the Mattress Discounters
          acquisition of Bedding Experts will be effective as of February 1,
          1998.  PM's paid to Bedding Experts sales associates since February 1,
          1998 will need to be subtracted.

2.        On the March 4, 1998 conference call we agreed to the following plan
          to transition products from Bedding Experts to Mattress Discounters.

     a.        The transition period will be ninety days ending June 8, 1998.

     b.        Prior to the Memorial Day holiday weekend (May 23, 1998) we will
               transition all Bedding Experts' Sealy Promotional products out,
               bringing in the Sealy Spine Control Regent, Medallion, and Milan
               or "the Smoothtop" products, along with Comfort Source as you
               decide.  We will begin shipping Correct Comfort floor samples by
               April 20, 1998.

     c.        All other products will be transitioned by June 8, 1998.
<PAGE>

Mr. Jon Studner
Mattress Discounters
March 11, 1998
Page 2

We agree to include the following Bedding Experts products in the existing
Mattress Discounters deal.  We will pay the "full ride" on all Posturepedics,
Stearns & Foster, Satin Sleep Pillowtop, and Geneva Plush.  To serve you in your
request we will pay [REDACTED] on the Siena Pillowtop and Aspire Plush through
May 25, 1998.  We are unable to provide any subsidies on any other promotional
products.  It should also be noted that the Satin Sleep Pillowtop and Geneva
will also transition out no later than June 8, 1998.

The Sealy Inc. product assortment on a permanent basis at Bedding Experts
locations should be the following:

Sealy Promotional:  Milan or "the Smoothtop," Spine Control Regent, Spine
-----------------
Control Medallion

Sealy Posturepedic:  Hotel Deluxe, Bradley, Windham II, Windwood, Hillrock,
------------------
Benwick PT, Edgecomb Elite

S&F:  Cresthill, Drayton, Hartley, Edmond, Sharondale, New Castle Royale
---
(possibly at selected locations)

Correct Comfort: Winterset, Waterville, Rockingham, Sorensia
---------------

3.        After my discussion with Steve and Ray in Chicago and subsequently
     with you, we have agreed to the following regarding price increases:

     Option C - Leave as is, which is a price increase of [REDACTED] effective
     --------
     with the February shipment of new 1998 Posturepedics, and all other Sealy
     branded products effective March 1, 1998.

4.        Enclosed is the revised contract extension that includes the corrected
          language for point 2.

5.        In an attempt to avoid confusion regarding price increases, Sealy will
          price merchandise, taking into consideration reasonable material cost
          increases, reasonable labor increases, and any other reasonable cost
          increases.  Any annual price increase to Mattress Discounters shall be
          consistent and in line with overall pricing and price increases passed
          along by Sealy to other National Accounts.

6.        [REDACTED]
<PAGE>

Mr. Jon Studner
Mattress Discounters
March 11, 1998
Page 3

I believe we are ready to move forward and make 1998 a year that will solidify
our partnership. We have the opportunity in 1998 to execute efficiently and
effectively all of the plans and ideas we have discussed.  If you have any
questions or concerns, please call me.

Sincerely,

/s/ Gary T. Fazio

Gary T. Fazio
Vice President of Sales

GTF:lsr
Enclosure
VIA FAX (301-856-0380) and FEDERAL EXPRESS

cc:  Steve Lytell
     Ray Bojanowski
     Steve Bergman
     Chuck Dawson
     Myles Aydelotte
<PAGE>

                                LETTERHEAD OF:
                                  SEALY, INC.
                        1228 Euclid Avenue, 10th Floor
                          Cleveland, Ohio 44115-1886
                                 216/522-1310
                        Fax 216/522-1366 or 216/522-0602

March 11, 1998

Mr. Jon Studner
Executive Vice President
Mattress Discounters
9822 Fallard Ct.
Upper Marlboro, MD 10772

Dear Jon:

I want to thank Ray Bojanowski, Steve Bergman, and you for attending the
management meeting on February 6, 1998.  The common goal of enhancing our
successful partnership continues to propel us in the right direction.

The following were the topics and agreements of our meeting:

1.        All Sealy products (not including Stearns & Foster) will receive a
          2.4% price increase beginning March 1, 1998.  The 1998 Posturepedics:
          Chardon Elite Firm, Hillrock Firm, Windwood Plush, Windham II Firm,
          Bradley, and Hotel Deluxe will go into effect with floor sample orders
          shipped in February, 1998.  A price list is enclosed.

2.        Correct Comfort products will continue with the current specifications
          through September 30, 1998.  As of October 1, 1998, Mattress
          Discounters will incorporate a [REDACTED] in their product assortment.
          This will include a price increase or a remerchandising of the product
          assortment, or a combination of both.  Mattress Discounters may
          choose, at that time, not to carry the [REDACTED] (which we have been
          told retails for approximately $699 Queen, and that you may vacate
          that price for a higher Correct Comfort price point, thereby
          maintaining at least four Correct Comfort model).

3.        The Mattress Discounters/Sealy pricing program will be reviewed on an
          annual basis.  The first review is expected to occur approximately
          December 15, 1998, and new pricing will be effective March 1, 1999.
          Subsequent reviews will follow the same annual schedule as outlined
          above.
<PAGE>

Mr. Jon Studner
Mattress Discounters
March 11, 1998
Page 2

Jon, I appreciate your confidence in our partnership and look forward to working
with you to reach the next level of success for both our companies.

Sincerely,

/s/ Gary T. Fazio                    /s/ Jon Studner

Gary T. Fazio                        Jon Studner
Vice President of Sales              Mattress Discounters

GTF:lsr
Enclosure
VIA FAX (301-856-0380) and FEDERAL EXPRESS

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