SEALY CORPORATION 8% Senior Secured Third Lien Convertible Notes due 2016 Offered Pursuant to Subscription Rights Distributed to Record Holders of Sealy CorporationConvertible Promissory Note |
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8% Senior Secured
Third Lien Convertible Notes due 2016 Offered Pursuant to May 27, 2009 To
Brokers, Securities Dealers, Commercial Banks, This letter is being distributed to brokers, securities dealers, commercial banks, trust companies and other nominees in connection with a rights offering (the "Rights Offering") by Sealy Corporation, a Delaware corporation ("Sealy"), of 8% Senior Secured Third Lien Convertible Notes due 2016 (the "Notes") pursuant to transferable subscription rights (the "Rights"). The Rights are being distributed to all holders of record ("Recordholders") of Sealy's common shares (the "Common Shares") at 5:00 p.m., New York City time, on May 26, 2009 (the "Record Date"). The Rights and the Rights Offering are described in Sealy's Prospectus Supplement dated May 27, 2009, to the Prospectus dated April 9, 2009 (together, the "Prospectus"). In the Rights Offering, Sealy is offering an aggregate of 7,085,280 Notes. The Rights will expire, if not exercised, by 5:00 p.m., New York City time, on July 2, 2009, unless the period in which to exercise the Rights is extended in the sole discretion of Sealy (as it may be extended by Sealy, the "Expiration Date"). As described in the Prospectus, Recordholders will receive one Right for each Common Share owned of record as of 5:00 p.m., New York City time, on the Record Date. Every 13 rights will allow the holder thereof to subscribe for one Note with a subscription price and an initial principal amount of $25.00 (the "Subscription Price") and each Note will initially be convertible into 25 Common Shares at an effective conversion rate of $1 per share. Rights may only be exercised in increments of 13. Fractional Rights will not be issued in the Rights Offering. The rights will be aggregated for all of the Common Shares a holder owns on the record date. To the extent you exercise your Rights in increments of less than 13, the Rights that exceed the multiple of 13 will be returned to you, together with any subscription price relating to such excess, without deduction or interest. Sealy Holding LLC, Sealy's majority shareholder and an affiliate of Kohlberg Kravis Roberts & Co. L.P., has agreed, subject to certain conditions, to exercise all the Rights that are distributed to it in the Rights Offering, which Rights will cover $89,665,225 aggregate initial principal amount of the Notes, and to oversubscribe for all the Notes that are not subscribed for (after giving effect to the oversubscription privileges) upon the exercise of Rights distributed to Sealy's other stockholders in the Rights Offering. &nb |
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