EXHIBIT 10.15
EXECUTION COPY
PLEDGE AGREEMENT
This Pledge Agreement (this "Pledge Agreement") is made as of March
----------------
31, 1999, between Xxxxxxx Xxxxxxx ("Pledgor"), and Sealy Mattress Company, an
-------
Ohio corporation (the "Company"). The Company is a wholly-owned subsidiary of
-------
Sealy Corporation, a Delaware corporation ("Parent").
------
Reference is hereby made to the Stock Purchase Agreement, dated as of
the date hereof, among Xxxx Capital Fund V-B, L.P. ("Seller"), the Company,
------
Pledgor, the other "Buyers" listed therein and the other parties named therein
pursuant to which, on the date hereof, Pledgor has purchased from Seller 4,617
shares of Parent's Class A Common Stock, par value $.01 per share, and 513
shares of Parent's Class L Common Stock, par value $.01 per share (such shares
of Class A Common and Class L Common, the "Pledged Shares"), for an aggregate
--------------
purchase price of $26,617 (the "Purchase Price"). The Company has loaned the
--------------
Purchase Price to Pledgor and Pledgor has issued to the Company a recourse
promissory note (the "Note") in principal amount equal to the Purchase Price.
----
This Pledge Agreement provides the terms and conditions upon which the Note is
secured by a pledge to the Company of the Pledged Shares.
NOW, THEREFORE, in consideration of the premises contained herein and
other good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, and in order to induce the Company to accept the Note,
Pledgor and the Company hereby agree as follows:
1. Pledge. Pledgor hereby pledges to the Company, and grants to the
------
Company a security interest in, the Pledged Shares as security for the prompt
and complete payment when due of the unpaid principal of and interest on the
Note and full payment and performance of the obligations and liabilities of
Pledgor hereunder.
2. Delivery of Pledged Shares. Upon the execution of this Pledge
--------------------------
Agreement, Pledgor shall deliver to the Company the certificate(s) representing
the Pledged Shares, together with duly executed forms of assignment or stock
powers sufficient to transfer title thereto to the Company.
3. Voting Rights. Notwithstanding anything to the contrary
-------------
contained herein, during the term of this Pledge Agreement until such time as
there exists a default in the payment of principal on the Note or any other
default under the Note or hereunder, Pledgor shall be entitled to all voting
rights with respect to the Pledged Shares. Upon the occurrence of and during
the continuance of any such default, Pledgor shall no longer be able to vote the
Pledged Shares.
4. Stock Dividends; Distributions, etc. If, while this Pledge
-----------------------------------
Agreement is in effect, Pledgor becomes entitled to receive or receives any
securities or other property in addition to, in substitution of, or in exchange
for any of the Pledged Shares (whether as a distribution in
connection with any recapitalization, reorganization or reclassification, a
stock distribution or dividend or otherwise), Pledgor shall accept such
securities or other property on behalf of and for the benefit of the Company as
additional security for Pledgor's obligations under the Note and shall promptly
deliver such additional security to the Company together with duly executed
forms of assignment or stock powers, and such additional security shall be
deemed to be part of the Pledged Shares hereunder.
5. Default. If Pledgor defaults in the payment of the principal or
-------
interest under the Note when it becomes due (whether upon acceleration or
otherwise) or any other event of default under the Note or this Pledge Agreement
occurs (including the bankruptcy or insolvency of Pledgor), the Company may
exercise any and all the rights, powers and remedies of any owner of the Pledged
Shares (including the right to vote the shares) and shall have and may exercise
without demand any and all the rights and remedies granted to a secured party
upon default under the Uniform Commercial Code of North Carolina or otherwise
available to the Company under applicable law. Without limiting the foregoing,
the Company is authorized to sell, assign and deliver at its discretion, from
time to time, all or any part of the Pledged Shares at any private sale or
public auction, on not less than ten days written notice to Pledgor, in a
commercially reasonable manner. Pledgor shall have no right to redeem the
Pledged Shares after any such sale or assignment. At any such sale or auction,
the Company may bid for, and become the purchaser of, the whole or any part of
the Pledged Shares offered for sale. In case of any such sale, after deducting
the costs, attorneys' fees and other expenses of sale and delivery, the
remaining proceeds of such sale shall be applied to the principal of and accrued
interest on the Note; provided that after payment in full of the indebtedness
evidenced by the Note, the balance of the proceeds of sale then remaining shall
be paid to Pledgor and Pledgor shall be entitled to the return of any of the
Pledged Shares remaining in the hands of the Company. Pledgor shall be liable
for any deficiency if the remaining proceeds are insufficient to pay the
indebtedness under the Note in full, including the reasonable fees of any
attorneys employed by the Company to collect such deficiency.
6. Costs and Attorneys' Fees. All costs and expenses (including
-------------------------
reasonable attorneys' fees) incurred in exercising any right, power or remedy
conferred by this Pledge Agreement or in the enforcement thereof, shall become
part of the indebtedness secured hereunder and shall be paid by Pledgor or
repaid from the proceeds of the sale of the Pledged Shares hereunder.
7. Payment of Indebtedness and Release of Pledged Shares. Upon
-----------------------------------------------------
payment in full of the indebtedness evidenced by the Note (including all
principal and accrued interest thereof), the Company shall surrender the Pledged
Shares to Pledgor together with all forms of assignment or stock powers.
8. No Other Liens; No Sales or Transfers. Pledgor hereby represents
-------------------------------------
and warrants that he or she has good and valid title to all of the Pledged
Shares, free and clear of all liens, security interests and other encumbrances,
and Pledgor hereby covenants that, until such time as all of the outstanding
principal of and interest on the Note has been repaid, Pledgor shall not (i)
create, incur, assume or suffer to exist any pledge, security interest,
encumbrance, lien or charge of any kind against the Pledged Shares or Pledgor's
rights or a holder thereof, other than pursuant to this Pledge
2
Agreement, or (ii) without the prior written consent of the Company (with
approval of Parent's board of directors), sell or otherwise transfer any Pledged
Shares or any interest therein.
9. Further Assurances. Pledgor agrees that at any time and from
------------------
time to time upon the written request of the Company, Pledgor shall execute and
deliver such further documents (including UCC financing statements) and do such
further acts and things as the Company may reasonably request in order to effect
the purposes of this Pledge Agreement.
10. Severability. Any provision of this Pledge Agreement which is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11. No Waiver; Cumulative Remedies. The Company shall not by any
------------------------------
act, delay, omission or otherwise be deemed to have waived any of its rights or
remedies hereunder, and no waiver shall be valid unless in writing, signed by
the Company (with approval of Parent's board of directors), and then only to the
extent therein set forth. A waiver by the Company of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy which the Company would otherwise have on any future occasion. No
failure to exercise nor any delay in exercising on the part of the Company, any
right, power or privilege hereunder shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided are cumulative and may be exercised singly or
concurrently, and are not exclusive of any rights or remedies provided by law.
12. Amendments; Applicable Law. None of the terms or provisions of
--------------------------
this Pledge Agreement may be altered, modified or amended except by an
instrument in writing, duly executed by the Company (with approval of Parent's
board of directors) and Pledgor. This Agreement and all obligations of the
Pledgor hereunder shall together with the rights and remedies of the Company
hereunder, inure to the benefit of the Company and its successors and assigns.
This Pledge Agreement shall be governed by and construed in accordance with the
laws of the state of North Carolina, without giving effect to any rules,
principles or provisions of choice of law or conflict of laws.
* * * * *
3
IN WITNESS WHEREOF, this Pledge Agreement has been executed as of the date
first above written.
SEALY MATTRESS COMPANY
________________________________
Name:
Title:
________________________________
Xxxxxxx Xxxxxxx
