Document:

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                                                                    Exhibit 10.5
                                                                    ------------

                              STANDSTILL AGREEMENT
                              --------------------

     This is a STANDSTILL AGREEMENT, dated as of August 2, 2002, by and among
Mattress Discounters Corporation, a Delaware corporation, ("MD") and each of the
holders of MD's 12-5/8% Senior Notes, Series A and Series B, due 2007 (the
"Senior Notes") party hereto as listed on the signature pages hereof (each such
holder a "Consenting Holder" and all such holders collectively the "Consenting
Holders").

     WHEREAS, MD issued Senior Notes in the total aggregate principal amount of
$140 million pursuant to a certain Indenture (the "Indenture") dated as of
August 6, 1999, by and among MD, as Issuer, certain Guarantors named therein, as
Guarantors, and State Street Bank and Trust Company, as Trustee (the "Trustee");

     WHEREAS, the Consenting Holders beneficially own Senior Notes in the total
aggregate principal amount of $92.645 million;

     WHEREAS, in accordance with the terms of the Senior Notes and the
Indenture, MD was obligated to make an interest payment in excess of $8 million
on July 15, 2002 (the "July Interest Payment");

     WHEREAS, MD has not made the July Interest Payment;

     WHEREAS, MD and the Consenting Holders, among others, have been in
negotiations regarding a possible recapitalization or other financial
restructuring of MD in order to address MD's current financial condition (the
"Restructuring Negotiations");

     WHEREAS, in order to give the parties a more meaningful opportunity to
pursue the Restructuring Negotiations and, at the same time, to help preserve
the value of MD during the period of such Restructuring Negotiations, MD has
requested that the Consenting Holders agree to refrain from exercising any
rights or remedies or otherwise taking any action under the Senior Notes and /or
the Indenture on the basis of MD's failure to make the July Interest Payment;
and

     WHEREAS, the Consenting Holders have agreed to refrain from exercising any
rights or remedies or otherwise taking any action under the Senior Notes and/or
the Indenture on the basis of MD's failure to make the July Interest Payment, in
accordance with and to the extent set forth below in this Agreement.

     NOW, THEREFORE, in consideration of the above, the promises contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

     1. Definitions. All capitalized terms used herein without definitions shall
have the respective meanings provided therefore in the Indenture.

     2. Standstill. Each of the Consenting Holders agrees that from the
Effective Date (as defined below) until the Termination Date, no Consenting
Holder shall: (i) instruct the Trustee,

<PAGE>

or otherwise take any action, to accelerate the indebtedness under the Senior
Notes; or (ii) instruct the Trustee, or otherwise take any action, to commence
any suit or other action or to exercise any other remedy to collect any portion
of the July Interest Payment or other amounts from MD or any other party. For
purposes hereof, "Effective Date" means the date on which Sealy, Inc. delivers
to MD an executed counterpart of a letter in the form of Exhibit A hereto or in
such other form as may be agreed to by the Consenting Holders (the "Sealy
Letter").

     3. Termination. This Agreement shall become effective on the Effective Date
and shall remain in effect until the date (the "Termination Date") that is the
earlier to occur of : (i) September 30, 2002; (ii) the occurrence of an Event of
Default other than due to or based upon MD's failure to make the July Interest
Payment; or (iii) any termination or modification of the Sealy Letter or the
business relationship contemplated thereby.

     4. Miscellaneous. This Agreement shall be governed by the laws of the State
of New York without giving effect to its conflict of laws provisions. The
headings of each section of this Agreement are for convenience only and shall
not define or limit the provisions thereof. This Agreement and all rights and
obligations hereunder shall be binding upon and inure to the benefit of MD, the
Consenting Holders and each of their respective successors and assigns. Each
Consenting Holder agrees not to sell any of its Senior Notes unless its
purchaser agrees in writing to be bound by the terms of this Agreement. This
Agreement constitutes the entire agreement of the parties with respect to the
subject matter hereof and supercedes all prior negotiations. Except as
specifically provided for in paragraph 2 above, nothing herein shall constitute
a waiver, amendment or modification of any of the Consenting Holders' rights
with respect to the Senior Notes.

     5. Representation by Consenting Holders. Each of the Consenting Holders
represents to MD, and certifies to the Trustee, that it has power to vote the
Senior Notes in the amount set forth opposite its signature and/or its name on
Schedule A attached hereto. Upon the Effective Date, the signature of each
Consenting Holder to this Agreement shall constitute the instructions to the
Trustee by each such Consenting Holder to not take action to accelerate the
indebtedness under the Senior Notes, or to commence any suit or other action or
to exercise any other remedy to collect any indebtedness under the Senior Notes
prior to the occurrence of the Termination Date.

                   [Remainder of page is intentionally blank]

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     IN WITNESS WHEREOF, intending to be legally bound, each of MD and the
Consenting Holders has caused this Agreement to be duly executed as of the date
first above written.

                        MATTRESS DISCOUNTERS CORPORATION

                        By:          /s/ Stephen J. Newton
                            ----------------------------------------------------
                            Name:  Stephen J. Newton
                            Title: President and Chief Executive Officer

                        CONSENTING HOLDERS:

                        ARES LEVERAGED INVESTMENT FUNDS

                        By: ARES MANAGEMENT, L.P.

                        By:     /s/ Eric Beckman
                            ----------------------------------------------------
                            Name:  Eric Beckman
                            Title:

                        BLACKROCK

                        By:      /s/ Peter Schwartzman
                            ----------------------------------------------------
                            Name:  Peter Schwartzman
                            Title: Director

                        BILL AND MELINDA GATES FOUNDATION

                        By:      /s/ Kevin J. Buckle
                            ----------------------------------------------------
                            Name:  Kevin J. Buckle
                            Title: Senior Vice President

                        ARROW INVESTMENT PARTNERS

                        By:       /s/ Kevin J. Buckle
                            ----------------------------------------------------
                            Name:  Kevin J. Buckle
                            Title: Senior Vice President

                        SALOMON BROTHERS ASSET MANAGEMENT AS INVESTMENT ADVISOR
                        TO CERTAIN BENEFICIAL HOLDERS OF $[        ] IN
                        PRINCIPAL AMOUNT OF SENIOR NOTES

                        By:      /s/ Jeffrey Kobylarz
                            ----------------------------------------------------
                            Name:  Jeffrey Kobylarz
                            Title: Director

<PAGE>

                        SANKATY HIGH YIELD ASSET PARTNERS, L.P.

                        By:       /s/ Timothy M. Barns
                            ----------------------------------------------------
                            Name:  Timothy M. Barns
                            Title: Senior Vice President

                        SANKATY HIGH YIELD PARTNERS II, L.P.

                        By:       /s/ Timothy M. Barns
                            ----------------------------------------------------
                            Name:  Timothy M. Barns
                            Title: Senior Vice President

                        SANKATY ADVISORS, INC., AS COLLATERAL MANAGER FOR BRANT
                        POINT CBO 1999-1 LTD., AS TERM LENDER

                        By:       /s/ Timothy M. Barns
                            ----------------------------------------------------
                            Name:  Timothy M. Barns
                            Title: Senior Vice President

                        SANKATY ADVISORS, LLC, AS COLLATERAL MANAGER FOR BRANT
                        POINT IICBO 2001-1, LTD., AS TERM LENDER

                        By:       /s/ Timothy M. Barns
                            ----------------------------------------------------
                            Name:  Timothy M. Barns
                            Title: Senior Vice President

                        SANKATY ADVISORS, INC., AS COLLATERAL MANAGER FOR GREAT
                        POINT CBO 1998-1 LTD., AS TERM LENDER

                        By:       /s/ Timothy M. Barns
                            ----------------------------------------------------
                            Name:  Timothy M. Barns
                            Title: Senior Vice President

                        SANKATY ADVISORS, LLC, AS COLLATERAL MANAGER FOR GREAT
                        POINT CLO 1999-1 LTD., AS TERM LENDER

                        By:       /s/ Timothy M. Barns
                            ----------------------------------------------------
                            Name:  Timothy M. Barns
                            Title: Senior Vice President

<PAGE>

                        ING-GHENT ASSET MANAGEMENT

                        By:       /s/ J. Paul Gillin
                            ----------------------------------------------------
                            Name:  J. Paul Gillin
                            Title: Managing Director

                        WELLS FARGO BANK

                        By:       /s/ Peta Swidler
                            ----------------------------------------------------
                            Name:  Peta Swidler
                            Title: Senior Vice President

                        SUTTER CBO 1998-1, LTD.

                        By:       /s/ Peta Swidler
                            ----------------------------------------------------
                            Name:  Peta Swidler
                            Title: Senior Vice President

                        SUTTER CBO 1999-1, LTD.

                        By:       /s/ Peta Swidler
                            ----------------------------------------------------
                            Name:  Peta Swidler
                            Title: Senior Vice President

                        SUTTER CBO 2000-2, LTD.

                        By:       /s/ Peta Swidler
                            ----------------------------------------------------
                            Name:  Peta Swidler
                            Title: Senior Vice President<PAGE>

                                                                    Exhibit 10.6
                                                                    ------------

                              STANDSTILL AGREEMENT

         STANDSTILL AGREEMENT, dated as of August 12, 2002, by and among
Mattress Discounters Corporation, a Delaware corporation ("MD") and each of the
lenders (the "Lenders") party hereto as listed on the signature pages hereof and
JPMorgan Chase Bank, as Administrative Agent (the "Administrative Agent").

         WHEREAS, MD issued Senior Notes in the total aggregate principal amount
of $140 million pursuant to a certain Indenture (the "Indenture") dated as of
August 6, 1999, by and among MD, as Issuer, certain Guarantors named therein, as
Guarantors, and State Street Bank and Trust Company, as Trustee (the "Trustee");

         WHEREAS, in accordance with the terms of the Senior Notes and the
Indenture, MD was obligated to make an interest payment on July 15, 2002, in the
total aggregate amount of approximately $8.8 million (the "July Interest
Payment");

         WHEREAS, MD has not made the July Interest Payment;

         WHEREAS, MD, Mattress Holding Corporation ("Holdings"), the Lenders,
the Administrative Agent and the Co-Agent named therein are parties to the
Credit Agreement, dated as of August 6, 1999, as amended and restated as of
January 11, 2002, as amended by the First Amendment, dated as of May 14, 2002,
and as amended by the Second Amendment, dated as of June 20, 2002 (as further
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement");

         WHEREAS, under the Credit Agreement, MD's failure to make the July
Interest Payment on or before August 14, 2002 will constitute an Event of
Default pursuant to Section 8(e) of the Credit Agreement (the "Cross-Default
Event of Default");

         WHEREAS, MD has informed the Administrative Agent and the Lenders that
it is in default under Section 7.1 of the Credit Agreement with respect to the
required minimum Consolidated EBITDA for the fiscal quarter ending June 29,
2002, which constitutes an Event of Default pursuant to Section 8(c) of the
Credit Agreement (the "EBITDA Event of Default").

         WHEREAS, MD and the Lenders, among others, have been in negotiations
regarding a possible recapitalization or other financial restructuring of MD in
order to address MD's current financial condition (the "Restructuring
Negotiations");

         WHEREAS, in order to give the parties a more meaningful opportunity to
pursue the Restructuring Negotiations and, at the same time, to help preserve
the value of MD during the period of such Restructuring Negotiations, MD has
requested that the Lenders agree to refrain from exercising any rights or
remedies or otherwise taking any action under the Credit Agreement or any of the
other Loan Documents on the basis of the Cross-Default Event of Default or the
EBITDA Event of Default; and

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                                                                               2

         WHEREAS, the Lenders have agreed to refrain from exercising any rights
or remedies, including, without limitation, by foreclosure or setoff, or
otherwise taking any action under the Credit Agreement or any of the other Loan
Documents on the basis of the Cross-Default Event of Default or the EBITDA Event
of Default, in accordance with and to the extent set forth below in this
Agreement.

         NOW, THEREFORE, in consideration of the above, the promises contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

         1. Definitions. All capitalized terms used herein without definitions
shall have the respective meanings provided for them in the Credit Agreement.

         2. Standstill. Each of the Lenders agrees that from the Effective Date
(as defined below) until the Termination Date, no Lender shall: (i) instruct the
Administrative Agent, or otherwise take any action, to accelerate the
Obligations; or (ii) instruct the Administrative Agent, or otherwise take any
action, to commence any suit or other action or to exercise any other remedy to
collect any portion of the Obligations from MD or any Guarantor or to take any
action to exercise remedies with respect to the Collateral. The Administrative
Agent also agrees not to take such actions. This Standstill Agreement shall
become effective on and as of the date that the Administrative Agent shall have
received counterparts of this Standstill Agreement, duly executed and delivered
by a duly authorized officer of each of Holdings, MD, the Administrative Agent
and the Required Lenders.

         3. Further Agreements. MD agrees to pay a standstill fee in the
aggregate amount of $30,000, which fee shall be earned on the Effective Date and
shall be paid by MD within one business day thereafter. MD agrees to cooperate
with the Administrative Agent in working toward the creation of a cash
management system reasonably satisfactory to the Administrative Agent and the
Lenders, including, without limitation, on before August 30, 2002, (i)
establishing (but not funding or implementing) a collateral account and a
funding account at JPMorgan Chase Bank and (ii) executing and delivering to the
Administrative Agent letters directing, inter alia, account debtors of MD and
other parties holding funds owing to MD to remit all payments on such accounts
and amounts owing directly to the collateral account at JPMorgan Chase Bank (the
"Direction Letters"). MD agrees to use its reasonable best efforts to work with
the Administrative Agent to implement the cash management system and fund the
accounts in a manner reasonably satisfactory to the Administrative Agent in the
event of and prior to any filing by MD of a petition for relief (a "Filing").
The Administrative Agent agrees not to deliver the Direction Letters prior to a
Filing unless otherwise agreed by MD, provided, however, if MD has not complied
with its agreement set forth in the immediately preceding sentence in the
reasonable judgment of the Administrative Agent, MD acknowledges and agrees that
the Administrative Agent may, upon prior written notice to MD, deliver the
Direction Letters immediately prior to a Filing.

         4. Termination. This Agreement shall become effective on the Effective
Date and shall remain in effect until the date (the "Termination Date") that is
the earlier to occur of: (i) September 25, 2002; (ii) the occurrence of a
Default or Event of Default other than the Cross

<PAGE>
                                                                               3

Default Event of Default or the EBITDA Event of Default; (iii) any termination
or modification of the letter agreement with Sealy, Inc, dated August 2, 2002
(the "Sealy Letter") or the business relationship contemplated thereby; (iv) the
occurrence of the Termination Date under the Standstill Agreement dated as of
August 2, 2002 among MD and the Consenting Holders of the Senior Notes (as
defined therein); or (v) the occurrence of any material breach by MD of its
obligations hereunder.

         5. Miscellaneous. This Agreement shall be governed by the laws of the
State of New York. The headings of each section of this Agreement are for
convenience only and shall not define or limit the provisions thereof. This
Standstill Agreement and all rights and obligations hereunder shall be binding
upon and inure to the benefit of MD, the Lenders and each of their respective
successors and assigns. This Standstill Agreement constitutes the entire
agreement of the parties with respect to the subject matter hereof and
supersedes all prior negotiations. Except as specifically provided for in
paragraph 2 above, the Credit Agreement and the Loan Documents shall continue to
be, and shall remain, in full force and effect. This Standstill Agreement shall
not be deemed to be a waiver of, or consent to, or a modification of any term or
condition of the Credit Agreement or of any of the other Loan Documents or to
prejudice any rights or remedies which the Lenders now have or may in the future
have under or in connection with the Credit Agreement or any of the other Loan
Documents or any of the instruments or agreements referred to therein, as the
same may be amended from time to time. This Standstill Agreement may be
exercised by one or more of the parties hereto in any number of separate
counterparts.

<PAGE>
                                                                               4

         IN WITNESS WHEREOF, intending to be legally bound, each of MD and the
Lenders has caused this Agreement to be duly executed as of the date first above
written.

                                        MATTRESS DISCOUNTERS CORPORATION

                                        By: /s/ Rick Frier
                                            ---------------------------------
                                            Name: Rick Frier
                                            Title: Chief Financial Officer

                                        JPMORGAN CHASE BANK, as Administrative
                                         Agent and as a Lender
                                         By: /s/ Elizabeth H. Eisen
                                             --------------------------------
                                             Name: Elizabeth H. Eisen
                                             Title: Managing Director

                                        FLEET NATIONAL BANK, as a Lender

                                        By: /s/ Vincent J. Pitts
                                            ---------------------------------
                                            Name: Vincent J. Pitts
                                            Title: Vice President

                                        ARK II CLO 2001-1, LIMITED, as a Lender

                                        By: Patriarch Partners II, LLC, its
                                             Collateral Manager

                                        By: /s/ Lynn Tilton
                                            ---------------------------------
                                            Name: Lynn Tilton
                                            Title: Authorized Signatory

                       [SIGNATURES CONTINUE ON NEXT PAGE]

<PAGE>
                                                                               5

ACKNOWLEDGED AND AGREED:
MATTRESS DISCOUNTERS HOLDING CORPORATION

By: /s/ Stephen K. Gunn
    -------------------------------------
    Name: Stephen K. Gunn
    Title: Chief Executive Officer

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