MATTRESS DISCOUNTERS CORPORATION
THIS AGREEMENT is made as of April 2, 2003, by and among Sealy Mattress Company, an Ohio corporation (the “
Lender ”), Mattress Holding International, LLC (“ MHI ”), Mattress Holding Corporation (the “ Purchaser ”), and Mattress
Discounters Corporation (the “ Borrower ”). The Lender is the Lender under the Credit Agreement, dated as of March 14, 2003
(the “ Credit Agreement ”), among the Purchaser, Mattress Discounters Corporation East (“ Parent ”), the Borrower, and the
Lender. Capitalized terms used herein and not defined herein shall have the meanings given to them in the Credit Agreement.
The parties hereto agree as follows:
Section 1. Purchase and Sale .
1A. Purchase .
(i) Credit Agreement . On the terms and subject to the conditions set forth in this Agreement, (i) the Lender
hereby agrees to sell and assign to the Purchaser the Lender’s entire interest (the “ Interest ”) in and to the Lender’s rights
and obligations under the Credit Agreement and the other Credit Documents, and (ii) the Purchaser agrees to purchase and
assume such rights and obligations.
(ii) Parent Common Stock . The Lender hereby agrees to transfer, prior to the date of the Closing (as defined
below), the Lender’s right to receive the shares of common stock, par value $0.01 per share, of Parent (the “ Shares ”)
pursuant to the Lender’s rights as an unsecured creditor under the First Amended Joint Chapter 11 Plan of Reorganization
of the Parent and the Borrrower, dated January 8, 2003, as confirmed by the United States Bankruptcy Court for the District
of Maryland (Greenbelt Division) pursuant to an order dated March 4, 2003, to a newly formed Delaware corporation (“
Newco ”), all of the capital stock of which shall be owned by the Lender, and Newco shall have no other assets or liabilities
other than such right to receive the Shares. On the terms and subject to the conditions set forth in this Agreement, (i) the