EXHIBIT 10.1
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") is entered into as of
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March 31, 1999, by and among Xxxx Capital Fund V, L.P. ("Bain Fund V"); Xxxx
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Capital Fund V-B, L.P. ("Bain Fund V-B"); BCIP Associates ("BCIP"); BCIP Trust
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Associates, L.P. ("BCIP Trust"); Xxxxxxxx Street Partners II ("Xxxxxxxx");
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Xxxx/Chilmark Fund, L.P. ("Seller"); and Sealy Corporation, a Delaware
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corporation (the "Company"). Bain Fund V, Bain Fund V-B, BCIP, BCIP Trust and
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Xxxxxxxx are referred to collectively herein as "Buyers". Buyers, Seller and
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the Company are referred to collectively herein as the "Parties".
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WHEREAS, as of immediately prior to the execution of this Agreement, Seller
owns 2,862,000 shares (such shares, the "Pre-Converted Class A Shares") of Class
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A Common (as herein defined) and 318,000 shares (such shares, the "Pre-Converted
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Class L Shares") of Class L Common (as herein defined);
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WHEREAS, pursuant to Section 2(a) of this Agreement, on the date hereof,
Bain Fund V is converting (x) 285,240.4503 of the shares of Class A Common owned
by Bain Fund V into 285,240.4503 shares of Class B Common (as herein defined)
and (y) 65,015.3152 of the shares of Class L Common owned by Bain Fund V into
65,015.3152 shares of Class M Common (as herein defined);
WHEREAS, pursuant to Section 2(b) of this Agreement, on the date hereof,
Bain Fund V-B is converting (x) 3,000,000 of the shares of Class A Common owned
by Bain Fund V-B into 3,000,000 shares of Class B Common and (y) 400,000 of the
shares of Class L Common owned by Bain Fund V-B into 400,000 shares of Class M
Common;
WHEREAS, pursuant to Section 2(c) of this Agreement, on the date hereof,
BCIP is converting (x) 107,687.2807 of the shares of Class A Common owned by
BCIP into 107,687.2807 shares of Class B Common and (y) 24,580.1103 of the
shares of Class L Common owned by BCIP into 24,580.1103 shares of Class M
Common;
WHEREAS, pursuant to Section 2(d) of this Agreement, on the date hereof,
BCIP Trust is converting (x) 320,050.0166 of the shares of Class A Common owned
by BCIP Trust into 320,050.0166 shares of Class B Common and (y) 73,064.5515 of
the shares of Class L Common owned by BCIP Trust into 73,064.5515 shares of
Class M Common;
WHEREAS, pursuant to Section 2(e) of this Agreement, on the date hereof,
Seller is converting (x) 2,240,372.7328 of the Pre-Converted Class A Shares into
2,240,372.7328 shares of Class B Common and (y) 248,930.3036 of the Pre-
Converted Class L Shares into 248,930.3036 shares of Class M Common, so that,
after such conversion, Seller owns 621,627.2672 shares of Class A Common,
2,240,372.7328 shares of Class B Common, 69,069.6964 shares of Class L Common
and 248,930.3036 shares of Class M Common (such shares of Class A Common, Class
B Common, Class L Common and Class M Common, the "Purchase Shares");
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WHEREAS, the Seller has notified the Company and the Buyers that it
proposes to Transfer (as such term is defined in the Stockholders Agreement) the
Purchase Shares;
WHEREAS, the Company has (by execution of a counterpart of this Agreement)
waived its right of first offer under Section 4(c) of the Stockholders Agreement
with respect to the Purchase Shares;
WHEREAS, each of the Buyers is a "Bain Offering Holder" under Section
4(c)(iii) of the Stockholders Agreement; and
WHEREAS, the Buyers (as Bain Offering Holders) have exercised their
respective rights of first offer under Section 4(c)(iii) of the Stockholders
Agreement with respect to the Purchase Shares, and the Seller, in respect of its
obligations under the Stockholders Agreement, and in accordance with the terms
and conditions of this Agreement, desires to sell to Buyers, and Buyers desire
to purchase, the Purchase Shares.
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows.
1. Definitions.
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"Adverse Consequences" means all actions, suits, proceedings, hearings,
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investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, reasonable
amounts paid in settlement, liabilities, obligations, taxes, liens, losses,
expenses, and fees, including court costs and reasonable attorneys' fees and
expenses.
"Class A Common" means the Company's Class A Common Stock, par value $.01
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per share.
"Class B Common" means the Company's Class B Common Stock, par value $.01
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per share.
"Class L Common" means the Company's Class L Common Stock, par value $.01
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per share.
"Class M Common" means the Company's Class M Common Stock, par value $.01
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per share.
"Confidential Information" means any information concerning the businesses
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and affairs of the Company and its subsidiaries that is not already generally
available to the public.
"Person" means an individual, a partnership, a corporation, an association,
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a joint stock company, a trust, a joint venture, an unincorporated organization,
or a governmental entity (or any department, agency, or political subdivision
thereof).
"Registration Rights Agreement" means the Registration Rights Agreement,
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dated as of December 18, 1997, among the Company, Seller, the Buyer and the
other equityholders of the Company named therein.
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"Sealy Certificate of Incorporation" means the Certificate of Incorporation
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of the Company as in effect on the date hereof.
"Securities Act" means the Securities Act of 1933, as amended.
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"Security Interest" means any mortgage, pledge, lien, encumbrance, charge,
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or other security interest.
"Stockholders Agreement" means the Stockholders Agreement, dated as of
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December 18, 1997, among the Company, Seller, the Buyer and the other
equityholders of the Company named therein.
2. Conversion of Common Stock by Seller and certain of the Buyers.
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(a) As permitted by Section 6 of Part C of Article Four of the Sealy
Certificate of Incorporation, Bain Fund V hereby converts (the "Bain Fund V
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Conversion") as of immediately prior to the Closing (as herein defined) (x)
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285,240.4503 of the shares of Class A Common owned by Bain Fund V into
285,240.4503 shares of Class B Common and (y) 65,015.3152 of the shares of Class
L Common owned by Bain Fund V into 65,015.3152 shares of Class M Common.
(b) As permitted by Section 6 of Part C of Article Four of the Sealy
Certificate of Incorporation, Bain Fund V-B hereby converts (the "Bain Fund V-B
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Conversion") as of immediately prior to the Closing (x) 3,000,000 of the shares
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of Class A Common owned by Bain Fund V-B into 3,000,000 shares of Class B Common
and (y) 400,000 of the shares of Class L Common owned by Bain Fund V-B into
400,000 shares of Class M Common.
(c) As permitted by Section 6 of Part C of Article Four of the Sealy
Certificate of Incorporation, BCIP hereby converts (the "BCIP Conversion") as of
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immediately prior to the Closing (x) 107,687.2807 of the shares of Class A
Common owned by BCIP into 107,687.2807 shares of Class B Common and (y)
24,580.1103 of the shares of Class L Common owned by BCIP into 24,580.1103
shares of Class M Common.
(d) As permitted by Section 6 of Part C of Article Four of the Sealy
Certificate of Incorporation, BCIP Trust hereby converts (the "BCIP Trust
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Conversion") as of immediately prior to the Closing (x) 320,050.0166 of the
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shares of Class A Common owned by BCIP Trust into 320,050.0166 shares of Class B
Common and (y) 73,064.5515 of the shares of Class L Common owned by BCIP Trust
into 73,064.5515 shares of Class M Common.
(e) As permitted by Section 6 of Part C of Article Four of the Sealy
Certificate of Incorporation, Seller hereby converts (the "Xxxx Conversion") as
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of immediately prior to the Closing 2,240,372.7328 of the Pre-Converted Class A
Shares into 2,240,372.7328 shares of Class B Common and (y) 248,930.3036 of the
Pre-Converted Class L Shares into 248,930.3036 shares of Class M Common.
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(f) Seller, each Buyer and the Company hereby acknowledge and consent
to the Bain Fund V Conversion, the Bain Fund V-B Conversion, the BCIP
Conversion, the BCIP Trust Conversion and the Xxxx Conversion.
3. Purchase and Sale of Purchase Shares.
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(a) Basic Transaction. At the Closing, subject to the terms and
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conditions set forth herein, each Buyer shall purchase from Seller, and Seller
shall sell to each Buyer, the number and class of Purchase Shares for the
applicable purchase price, in each case, as set forth opposite the name of such
Buyer on Exhibit A hereto.
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(b) The Closing. The closing of the transactions contemplated by this
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Agreement (the "Closing") shall take place at the offices of Xxxxxxxx & Xxxxx,
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000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 10 a.m. local time on the date
hereof (the "Closing Date").
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(c) Deliveries at the Closing. At the Closing, (i) Seller will
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deliver to Buyers stock certificates representing the Purchase Shares, endorsed
in blank or accompanied by duly executed assignment documents, (ii) Seller will
deliver to Buyers and the Company an opinion of counsel, in the form of Exhibit
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B hereto, and (iii) each Buyer will deliver to Seller cash payable by wire
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transfer to an account designated by Buyer in the amount of the total purchase
price set forth opposite such Buyer's name on Exhibit A hereto.
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4. Representations and Warranties of Seller. Seller hereby represents
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and warrants to Buyers that:
(a) Authorization of Transaction. Seller has full power and authority
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to execute and deliver this Agreement and to perform its obligations hereunder.
This Agreement constitutes the legal, valid and binding obligation of Seller,
enforceable in accordance with its terms and conditions.. Seller need not give
any notice to, make any filing with, or obtain any authorization, consent, or
approval of any government or governmental agency in order to consummate the
transactions contemplated by this Agreement.
(b) Noncontravention. Neither the execution and the delivery of this
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Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which Seller is subject or, any provision of
its limited partnership agreement or other formation or organizational documents
or (ii) conflict with, result in a breach of, constitute a default under, result
in the acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel any agreement, contract, lease, license, instrument, or other
arrangement to which Seller is a party or by which it is bound or to which any
of its assets is subject.
(c) Brokers' Fees. Seller has no liability or obligation to pay any
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fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which any Buyer could become
liable or obligated.
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(d) Purchase Shares. Assuming the due authorization and valid
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issuance of the shares of common stock issued to Seller by the Company upon the
Xxxx Conversion, Seller owns of record and owns beneficially the Purchase
Shares. Upon consummation of the transactions contemplated hereby in accordance
with the terms hereof, Buyers shall acquire the Purchase Shares, free and clear
of any restrictions on transfer (subject to any restrictions under applicable
securities laws, the Stockholders Agreement, the Registration Rights Agreement
or the Sealy Certificate of Incorporation) and free and clear of any Security
Interests, options, warrants, or any type of purchase right.
5. Representations and Warranties of the Buyers. Each Buyer hereby
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represents and warrants to the Company, Seller and each other Buyer on behalf of
itself that:
(a) Such Buyer is an "accredited investor," as defined under Rule 501
promulgated under the Securities Act.
(b) The Purchase Shares to be acquired by such Buyer pursuant to this
Agreement will be acquired by such Buyer without an intention by such Buyer to
distribute such Purchase Shares in violation of the Securities Act.
(c) This Agreement constitutes the legal, valid and binding obligation
of such Buyer, enforceable in accordance with its terms and conditions.
(d) Neither the execution and the delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, will (i) violate any
constitution, statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any government, governmental agency, or
court to which such Buyer is subject or, any provision of its formation or
organizational documents or (ii) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel any material agreement,
contract, lease, license, instrument, or other arrangement to which such Buyer
is a party or by which it is bound or to which any of its assets is subject.
6. Post-Closing Covenants. The Parties agree as follows with respect to
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the period following the Closing:
(a) General. In case at any time after the Closing any further action
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is necessary to carry out the purposes of this Agreement, each of the Parties
will take such further action (including the execution and delivery of such
further instruments and documents) as any other Party reasonably may request,
all at the sole cost and expense of the requesting Party (unless the requesting
Party is entitled to indemnification therefor under Section 7 below).
(b) Confidentiality. Seller will treat and hold as such all of the
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Confidential Information, refrain from using any of the Confidential Information
except in connection with this Agreement, and deliver promptly to the Company or
destroy, at the request and option of the Company, all tangible embodiments (and
all copies) of the Confidential Information which are in his or its possession.
In the event that Seller is requested or required (by oral question or request
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information or documents in any legal proceeding, interrogatory, subpoena, civil
investigative demand, or similar process) to disclose any Confidential
Information, that Seller will notify the Company promptly of the request or
requirement so that the Company or Buyers may seek an appropriate protective
order or waive compliance with the provisions of this Section 6(b). If, in the
absence of a protective order or the receipt of a waiver hereunder, Seller is,
on the advice of counsel, compelled to disclose any Confidential Information to
any tribunal or else stand liable for contempt, Seller may disclose the
Confidential Information to the tribunal; provided, however, that Seller shall
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use its reasonable best efforts to obtain, at the reasonable request of the
Company, an order or other assurance that confidential treatment will be
accorded to such portion of the Confidential Information required to be
disclosed as the Company shall designate.
7. Survival and Indemnification.
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(a) Survival of Representations and Warranties. All of the
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representations and warranties of the Parties contained in this Agreement shall
survive the Closing (even if the damaged Party knew or had reason to know of any
misrepresentation or breach of warranty at the time of Closing) and continue in
full force and effect forever thereafter (subject to any applicable statutes of
limitations).
(b) Indemnification Provisions for Benefit of Buyers. In the event
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Seller breaches any of its representations, warranties or covenants contained
herein, Seller agrees to indemnify each Buyer from and against the entirety of
any Adverse Consequences any such Buyer may suffer through and after the date of
the claim for indemnification resulting from, arising out of, relating to, in
the nature of, or caused by the breach.
(c) Indemnification Provisions for Benefit of Seller. In the event
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any Buyer breaches any of its representations, warranties or covenants contained
herein, such Buyer agrees to indemnify Seller and each of the other Buyers from
and against the entirety of any Adverse Consequences Seller or such other
Buyers, as the case may be, may suffer through and after the date of the claim
for indemnification resulting from, arising out of, relating to, in the nature
of, or caused by the breach.
(d) Determination of Adverse Consequences. The Parties shall make
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appropriate adjustments for tax benefits and insurance coverage in determining
Adverse Consequences for purposes of this Section 7.
(e) Exclusive Remedy. The Buyers and Seller agree that the foregoing
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indemnification provisions in this Section 7 shall be the exclusive remedy of
the Buyers and the Seller in the event of any breach of a representation or
warranty contained herein or otherwise, with respect to the transactions
contemplated hereby.
8. Right of First Offer. With respect to the purchase and sale of
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Purchase Shares pursuant to this Agreement, the Company hereby waives, and the
Buyers hereby exercise their rights of first offer pursuant to Section 4(c) of
the Stockholders Agreement.
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9. Miscellaneous.
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(a) No Third-Party Beneficiaries. This Agreement shall not confer any
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rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns.
(b) Entire Agreement. This Agreement (including the documents
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referred to herein) constitutes the entire agreement among the Parties and
supersedes any prior understandings, agreements, or representations by or among
the Parties, written or oral, to the extent they related in any way to the
subject matter hereof.
(c) Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(d) Headings. The section headings contained in this Agreement are
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inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(e) Governing Law. This Agreement shall be governed by and construed
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in accordance with the domestic laws of the State of New York without giving
effect to any choice or conflict of law provision or rule (whether of the State
of New York or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of New York.
(f) Amendments and Waivers. No amendment of any provision of this
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Agreement shall be valid unless the same shall be in writing and signed by
Buyers and Seller. No waiver by any Party of any default, misrepresentation, or
breach of warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.
(g) Severability. Any term or provision of this Agreement that is
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invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(h) Expenses. Each of the Parties will bear its own costs and
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expenses (including legal fees and expenses) incurred in connection with this
Agreement and the transactions contemplated hereby, except that the fees and
expenses of Xxxxxxxx & Xxxxx shall be paid by the Company. Seller agrees that
none of the Company and its subsidiaries has borne or will bear any of Seller's
costs and expenses (including any of its legal fees and expenses) in connection
with this Agreement or any of the transactions contemplated hereby.
(i) Press Releases and Public Announcements. No Party shall, directly
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or indirectly, issue any press release or make any public announcement relating
to the subject matter of this Agreement without the prior written approval of
Bain Fund V-B, Seller and the Company;
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provided, however, that the Company may make any public disclosure it believes
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in good faith is required by any agreement which relates to its or its
subsidiaries publicly-traded securities or is required by applicable law;
provided, further, that Seller may make any disclosure it believes in good
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faith to be necessary disclosure it believes in good faith to be necessary or
proper to any of its direct or indirect partners.
(j) Succession and Assignment. This Agreement shall be binding upon
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and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this Agreement or
any of its rights, interests, or obligations hereunder without the prior written
approval of Bain Fund V-B and the Company.
(k) Construction. The Parties have participated jointly in the
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negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local,
or foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation.
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the date first above written.
SEALY CORPORATION
By: _______________________________
Name:
Title:
XXXX CAPITAL FUND V, L.P.
By: Xxxx Capital Partners V, L.P.,
its General Partner
By: Xxxx Capital Investors V, Inc.,
its General Partner
By: _______________________________
Name:
Title:
XXXX CAPITAL FUND V-B, L.P.
By: Xxxx Capital Partners V, L.P.,
its General Partner
By: Xxxx Capital Investors V, Inc.,
its General Partner
By: _______________________________
Name:
Title:
BCIP ASSOCIATES
By: _______________________________
A General Partner
[CONTINUATION OF SIGNATURES FOR THIS STOCK PURCHASE AGREEMENT]
BCIP TRUST ASSOCIATES, L.P.
By: _______________________________
A General Partner
XXXXXXXX STREET PARTNERS II
By: _______________________________
A General Partner
XXXX/CHILMARK FUND, L.P.
By: ZC Limited Partnership, its General Partner
By: ZC Partnership, its General Partner
By: ZC, Inc., its General Partner
By: _______________________________
Name:
Title:
