EXHIBIT 10.32
MANAGEMENT SUBSCRIPTION AND STOCK PURCHASE AGREEMENT
This Management Subscription and Stock Purchase Agreement (the
"Agreement") is entered into as of the 19th day of December, 2003, by and among
THL Bedding Holding Company, a Delaware corporation (the "Company"), and the
persons set forth on the signature page hereto as Employees (the "Employees").
WHEREAS, the Company believes it to be in the best interests of the
Company and its shareholders to take action to promote work-force stability, to
reward performance and otherwise align employee interests with those of the
Company;
WHEREAS, the Employees wish to purchase from the Company, and the
Company wishes to issue and sell to the Employees shares of the Company's class
A common stock, par value $0.01 per share ("Class A Common Stock"); and
WHEREAS, the Company desires to be assured that the confidential
information and good will of the Company will be preserved for the exclusive
benefit of the Company.
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in this
Agreement, the parties to this Agreement, intending to be legally bound,
mutually agree as follows:
ARTICLE I
Purchase and Sale of Shares
1.1 Sale and Issuance of Shares. Subject to the terms and conditions of
this Agreement, each Employee does hereby subscribe for and agree to purchase at
the Closing (as defined below), and the Company does hereby agree to sell to
each Employee at the Closing, the number of shares of Class A Common Stock set
forth below the name of such Employee on such Employee's counterpart signature
page hereto (collectively, the "Shares") for the total purchase price set forth
below the name of each Employee on the signature pages hereto (the "Purchase
Price").
1.2 Closing. The issuance, sale and purchase of the shares of Class A
Common Stock hereunder shall occur at a closing (the "Closing") to be held
simultaneously with the closing of the transactions contemplated by that certain
Stock Purchase Agreement dated as of November 17,2003 (the "Purchase Agreement")
among THL Bedding Company, Xxxxxxx Holdings, Inc. and the other sellers party
thereto. Payment of the Purchase Price shall be made to the Company or its
designees at the Closing by delivery of a wire transfer of same day funds
denominated in U.S. dollars, unless otherwise mutually agreed in writing with
the Company.
1.3 Assurances. Each of the parties hereto agrees to use all
commercially reasonable efforts to bring about the fulfillment of the conditions
precedent contained in this Agreement.
ARTICLE II
Representations and Warranties of the Company
The Company represents and warrants to the Employees that:
2.1 Organization and Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to carry on its
business as now conducted and as proposed to be conducted.
2.2 Authorization. All corporate action on the part of the Company
necessary for the authorization, execution, delivery and performance of this
Agreement by the Company, and for the authorization, issuance and delivery of
the Shares being sold under this Agreement, has been taken. This Agreement, when
executed and delivered by all parties hereto, shall constitute the valid and
legally binding obligation of the Company, except to the extent the
enforceability thereof may be limited by bankruptcy laws, insolvency laws,
reorganization laws, moratorium laws or other laws affecting creditors' rights
generally or by general equitable principles.
2.3 Validity of Shares. The Shares, when issued, sold and delivered in
accordance with the terms of this Agreement, shall be duly and validly issued,
and fully paid and nonassessable.
2.4 Securities Act. The sale of Shares in accordance with the terms of
this Agreement (assuming the accuracy of the representations and warranties of
the Employee contained in Article III hereof) is exempt from the registration
requirements of the Securities Act of 1933, as amended (the "1933 Act").
ARTICLE III
Representations, Warranties and Agreements of the Employees
3.1 Authorization. Each Employee represents and warrants, as to himself
or herself only, that this Agreement, when executed and delivered by him or her,
will constitute his or her valid and legally binding obligation, except to the
extent the enforceability thereof may be limited by bankruptcy laws, insolvency
laws, reorganization laws, moratorium laws or other laws affecting creditors'
rights generally or by general equitable principles.
3.2 Investment Representations.
(a) This Agreement is made with each Employee in reliance upon
his or her representation to the Company, which by his or her acceptance hereof,
each Employee hereby confirms, as to himself or herself only, that (i) the
Shares to be received by him or her will be acquired by him or her for
investment for his or her own account, not as a nominee or agent, and not with a
view to the sale or distribution of any part thereof in violation of applicable
federal and state securities laws, (ii) he or she has no current intention of
selling, granting participation in or otherwise distributing the same in
violation of applicable federal and state securities laws, and (iii) such
Employee's address is as set forth below such Employee's counterpart signature
page
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hereto. By executing this Agreement, each Employee further represents that he or
she does not have any contract, undertaking, agreement or arrangement with any
person to sell, transfer or grant participation to such person, or to any third
person, with respect to any of the Shares in violation of applicable federal and
state securities laws.
(b) Each Employee understands that the Shares have not been
registered under the 1933 Act on the basis that the sale provided for in this
Agreement and the issuance of securities hereunder is exempt from registration
under the 1933 Act pursuant to Section 4(2) thereof and regulations issued
thereunder, and that the Company's reliance on such exemption is predicated on
representations of the Employee set forth herein.
(c) Each Employee represents that he or she, either acting
alone or in conjunction with Xxxxx Xxxx, of Xxxxxx Human Resources & Investor
Solutions, as such Employee's Purchaser Representative (as such term is defined
under Regulation D of the 1933 Act), has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of his or her investment. Each Employee further represents that he or she
has had access, during the course of the transactions contemplated hereby and
prior to his or her purchase of Shares, to the same kind of information that is
specified in Part I of a registration statement under the 1933 Act and that he
or she has had, during the course of the transactions contemplated hereby and
prior to his or her purchase of the Shares, the opportunity to ask questions of,
and receive answers from, the Company concerning the terms and conditions of the
offering and to obtain additional information (to the extent the Company
possessed such information or could acquire it without unreasonable effort or
expense) necessary to verify the accuracy of any information furnished to him or
her or to which he or she had access. Each Employee understands that no federal
or state agency has passed upon this investment or upon the Company, nor has any
such agency made any finding or determination as to the fairness of this
investment.
(d) Each Employee understands that the Shares may not be sold,
transferred or otherwise disposed of without registration under the 1933 Act or
an exemption therefrom, and that in the absence of an effective registration
statement covering the Shares or an available exemption from registration under
the 1933 Act, the Shares must be held indefinitely. Each Employee must be
prepared to bear the economic risk of this investment for an indefinite period
of time. In particular, each Employee acknowledges that he or she is aware that
the Shares may not be sold pursuant to Rule 144 promulgated under the 1933 Act
unless all of the conditions of that Rule are met. Among the current conditions
for use of Rule 144 by certain holders is the availability to the public of
current information about the Company. Such information is not now available,
and the Company has no current plans to make such information available. Each
Employee represents that, in the absence of an effective registration statement
covering the Shares, he or she will sell, transfer or otherwise dispose of the
Shares only in a manner consistent with his or her representations set forth
herein and then only in accordance with the Securityholders' Agreement referred
to in Article VI.
(e) Independent of the additional restrictions on the transfer
of shares of Class A Common Stock contained in the Securityholders' Agreement
referred to in Article VI, each Employee agrees that he or she will not make a
transfer, disposition or pledge of any of the Shares other than pursuant to an
effective registration statement under the 1933 Act, unless and
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until (i) he or she shall have notified the Company of the proposed disposition
and shall have furnished the Company with a statement of the circumstances
surrounding the disposition, and (ii) if requested by the Company, at the
expense of such Employee or his or her transferee, he or she shall have
furnished to the Company an opinion of counsel, reasonably satisfactory to the
Company and its counsel, to the effect that such transfer may be made without
registration of the Shares under the 1933 Act.
(f) Each Employee acknowledges that this investment is not
recommended for investors who have any need for a current return on this
investment or who cannot bear the risk of losing their entire investment. Each
Employee acknowledges that: (i) he or she has adequate means of providing for
his or her current needs and possible personal contingencies and has no need for
liquidity in this investment; (ii) his or her commitment to investments which
are not readily marketable is not disproportionate to his or her net worth; and
(iii) his or her investment in the Shares will not cause his or her overall
financial commitments to become excessive.
3.3 Legends; Stop Transfer.
(a) Each Employee acknowledges that all certificates
evidencing the Shares shall bear the following legend:
"TRANSFER RESTRICTED
The securities represented by this Certificate have not been
registered under the Securities Act of 1933, as amended, and
may not be sold, offered for sale, pledged or hypothecated in
the absence of an effective registration statement as to the
securities under said Act or an opinion of counsel
satisfactory to the Company and its counsel that such
registration is not required."
(b) The certificates evidencing the Shares shall also bear any
legend required by any applicable state securities law and the Securityholders'
Agreement.
(c) The Company shall make a notation regarding the
restrictions on transfer of the Shares in its stock books, and the Shares shall
be transferred on the books of the Company only if transferred or sold pursuant
to an effective registration statement under the 1933 Act covering such Shares
or pursuant to and in compliance with the provisions of Section 3.2(e) hereof.
All shares of Class A Common Stock and Class B Common Stock of the Company
hereafter issued to each Employee shall bear the same endorsement, shall be
subject to all the terms and conditions of this Agreement. A copy of this
Agreement, together with any amendments thereto, shall remain on file with the
Secretary of the Company and shall be available for inspection to any properly
interested person without charge within five (5) days after the receipt of a
written request therefor by the Company.
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ARTICLE IV
Conditions to Obligations of the Employee at Closing
The obligations of each Employee under Article I of this Agreement are
subject to the fulfillment on or before the Closing of each of the following
conditions:
4.1 Representations and Warranties. The representations and warranties
of the Company contained in Article II hereof shall be true on and as of the
Closing with the same force and effect as if they had been made at the Closing.
4.2 Performance. The Company shall have performed and complied with all
agreements and conditions contained in this Agreement required to be performed
or complied with by it on or before the Closing.
4.3 Qualifications. All authorizations, approvals or permits, if any,
of any governmental authority or regulatory body of the United States or of any
state that are required in connection with the lawful issuance and sale of the
Shares pursuant to this Agreement shall have been duly obtained and shall be
effective on and as of the Closing.
ARTICLE V
Conditions to the Obligations of the Company at Closing
The obligations of the Company under Article I of this Agreement are
subject to the fulfillment on or before the Closing of each of the following
conditions:
5.1 Representations. The representations, warranties and agreements of
each Employee contained in Article III hereof shall be true on and as of the
Closing Date with the same force and effect as if they had been made at the
Closing.
5.2 Qualifications. All authorizations, approvals or permits, if any,
of any governmental authority or regulatory body of the United States or of any
state that are required in connection with the lawful issuance and sale of the
Shares pursuant to this Agreement shall have been duly obtained and shall be
effective on and as of the Closing.
5.3 Performance. The Employees shall have performed in all material
respects all of his or her obligations and materially complied with each and all
of his or her covenants required to be performed or complied with on or prior to
the Closing, including without limitation the execution and delivery of the
agreements and undertakings provided for in this Agreement and the closing of
the transactions contemplated by the Purchase Agreement.
ARTICLE VI
Mutual Conditions Precedent
The obligations of the Company and Employee under Article I of this
Agreement are subject to the fulfillment on or before the Closing of the
following condition:
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6.1 Securityholders' Agreement. The Company and each Employee shall
have executed and delivered a counterpart signature page to that certain
Securityholders' Agreement to be dated the date of the Closing.
ARTICLE VII
Miscellaneous
7.1 No Waiver; Modifications in Writing. This Agreement sets forth the
entire understanding of the parties, and supersedes all prior agreements,
arrangements and communications, whether oral or written, with respect to the
subject matter hereof. No waiver of or consent to any departure from any
provision of this Agreement shall be effective unless signed in writing by the
party entitled to the benefit thereof, provided that notice of any such waiver
shall be given to each party hereto as set forth below. Except as otherwise
provided herein, no amendment, modification or termination of any provision of
this Agreement shall be effective against the Company or an Employee unless
signed in writing by or on behalf of the Company and such Employee. Any
amendment, supplement or modification of or to any provision of this Agreement,
any waiver of any provision of this Agreement, and any consent to any departure
by the Company from the terms of any provision of this Agreement, shall be
effective only in the specific instance and for the specific purpose for which
made or given. Except where notice is specifically required by this Agreement,
no notice to or demand on the Company in any case shall entitle the Company to
any other or further notice or demand in similar or other circumstances.
7.2 Notices. All notices and other communications necessary or
contemplated under this Agreement shall be in writing and shall be delivered in
the manner specified herein or, in the absence of such specification, shall be
deemed to have been duly given when delivered by hand, one day after sending by
overnight delivery service, or three days after sending by certified mail,
postage prepaid, return receipt requested to the respective addresses of the
parties set forth below:
If to an Employee: To the address set forth below his or
her name on the signature pages hereto.
If to the Company: THL, Bedding Holding Company
Xxx Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Chief Financial Officer and
General Counsel
With a copy to: Xxxxxx X. Xxx Partners, L.P.
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
Xxxx Xxxxxxxx
Xxxxxx Xxxxxx
By notice complying with the foregoing provisions of this Section 7.2, each
party shall have the right to change the mailing address for future notices and
communications to such party.
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7.3 Costs, Expenses and Taxes. The Company and the Employees shall pay
its, his or her own costs and expenses incurred in connection with this
Agreement and the Securityholders' Agreement, any amendment or supplement to or
modification of any of the foregoing, and any and all other documents furnished
pursuant hereto or thereto or in connection herewith or therewith. The Company
shall pay any and all stamp, transfer and other similar taxes payable or
determined to be payable in connection with the execution and delivery of this
Agreement or the original issuance of the Shares but excluding all federal,
state and local income or similar taxes and shall save and hold the Employees
harmless from and against any and all liabilities with respect to or resulting
from any delay in paying, or omission to pay, such taxes.
7.4 Execution of Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto on separate counterparts,
each of which counterparts, when so executed and delivered, shall be deemed to
be an original and all of which counterparts, taken together, shall constitute
but one and the same Agreement.
7.5 Binding Effect; Assignment. The rights and obligations of the
Employees under this Agreement may not be assigned to any other person. Except
as expressly provided in this Agreement, this Agreement shall not be construed
so as to confer any right or benefit upon any person other than the parties to
this Agreement, and their respective successors and assigns. This Agreement
shall be binding upon the Company and each Employee, and their respective
successors and assigns.
7.6 Governing Law. This Agreement shall be governed by the laws of the
State of Delaware as to all matters, including but not limited to matters of
validity, construction, effect, performance and remedies.
7.7 Severability of Provisions. Any provision of this 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 or
affecting the validity or enforceability of such provision in any other
jurisdiction.
7.8 Exhibits and Headings. All Exhibits to this Agreement shall be
deemed to be a part of this Agreement. The Article and Section headings used or
contained in this Agreement are for convenience of reference only and shall not
affect the construction of this Agreement.
7.9 Injunctive Relief. Each of the parties to this Agreement hereby
acknowledges that in the event of a breach by any of them of any material
provision of this Agreement, the aggrieved party may be without an adequate
remedy at law. Each of the parties therefore agrees that, in the event of a
breach of any provision of this Agreement, the aggrieved party may elect to
institute and prosecute proceedings to enforce specific performance or to enjoin
the continuing breach of such provision, as well as to obtain damages for breach
of this Agreement. By seeking or obtaining any such relief, the aggrieved party
will not be precluded from seeking or obtaining any other relief to which it may
be entitled.
7.10 Survival of Agreements, Representations and Warranties. All
agreements, representations and warranties contained herein or made in writing
by or on behalf of the Company or the Employees, as the case may be, in
connection with the transactions contemplated
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by this Agreement shall survive the execution and delivery of this Agreement and
the sale and purchase of the Shares and payment therefor.
[Remainder of Page Intentionally Left Blank]
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MANAGEMENT SUBSCRIPTION AND STOCK PURCHASE AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as an instrument under seal, as of the date first above written.
THL BEDDING HOLDING COMPANY
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
Aggregate Number of Shares of Class A
Common Stock to be sold: 17,031
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EMPLOYEE:
The Xxxxxxx Xxx Xxxxx Revocable Trust
by: /s/ Xxxxxxx X. Xxxxx, Trustee
Number of Shares of Class A Common
Stock to be purchased: 10,000
Aggregate purchase price for Shares of
Class A Common Stock: $1,000,000
Address: 0000 Xxxxx Xxxx Xx.
Xxxxxx, Xxxxxxx 00000
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EMPLOYEE:
/s/ Xxxxx Xxxxxxx
---------------------------------------
Xxxxx Xxxxxxx, individually
Number of Shares of Class A Common
Stock to be purchased: 547.91
Aggregate purchase price for Shares of
Class A Common Stock: $54,790.(96)
Address: 0000 Xxxxx Xxxxxx Xx.
Xxxxxxx, XX 00000
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EMPLOYEE:
/s/ Xxxxxx Xxxxxx
---------------------------------------
Xxxxxx Xxxxxx, individually
Number of Shares of Class A Common
Stock to be purchased: 5,233.5
Aggregate purchase price for Shares of
Class A Common Stock: $523,350.--
Address: 0000 Xxxxx Xxxxx Xx.
Xxxxxxx, XX 00000
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EMPLOYEE:
/s/ Xxxxx X. Xxxxxxxx
---------------------------------------
Xxxxx X. Xxxxxxxx, individually
Number of Shares of Class A Common
Stock to be purchased: 1,250
Aggregate purchase price for Shares of
Class A Common Stock: $125,000.--
Address: 0 Xxxxxxxx Xxx
Xxxxxxx, XX 00000
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EMPLOYEE:
/s/ Xxxxx X. Xxxxx
---------------------------------------
Xxxxx X. Xxxxx, individually
Number of Shares of Class A Common
Stock to be purchased: 2,000
Aggregate purchase price for Shares of
Class A Common Stock: $200,000.--
Address: 0000 Xxxxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
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EMPLOYEE:
/s/ Xxxxxx Xxxxxxxxx
---------------------------------------
Xxxxxx Xxxxxxxxx, individually
Number of Shares of Class A Common
Stock to be purchased: 2,500
Aggregate purchase price for Shares of
Class A Common Stock: $250,000.--
Address: P. 0. Xxx 00
Xxxxxxxxxxx, XX 00000
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