EXHIBIT 4.2
GLOBE MANUFACTURING CORP.
$150,000,000
10% SENIOR SUBORDINATED NOTES DUE 2008
PURCHASE AGREEMENT
July 28, 1998
BANCAMERICA XXXXXXXXX XXXXXXXX
XXXXXXX XXXXX & CO.
c/o BancAmerica Xxxxxxxxx Xxxxxxxx
000 Xxxxx XxXxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Globe Elastic Co., Inc. (to be renamed Globe Manufacturing Corp. in
connection with the transactions described below), an Alabama corporation (the
"Company"), hereby confirms its agreement with you (the "Initial Purchasers"),
as set forth below. As used in this Agreement, references to the business and
operations of the Company shall include the business and operations to be
contributed to the Company in connection with the Asset Drop Down (as defined in
the Final Memorandum described below).
1. The Securities. Subject to the terms and conditions herein
contained, the Company proposes to issue and sell to the Initial Purchasers
$150,000,000 aggregate principal amount of its 10% Senior Subordinated Notes due
2008 (the "Notes"). The Notes are to be issued under an indenture (the
"Indenture") to be dated as of July 31, 1998 by and among the Company, each of
the Guarantors party thereto from time to time, and Norwest Bank Minnesota,
National Association, as trustee (the "Trustee").
The Notes are being issued and sold in connection with the
recapitalization of the Company (the "Recapitalization") pursuant to the
Agreement and Plan of Merger, dated June 23, 1998 (the "Merger Agreement"),
between Globe Acquisition Company and Globe Manufacturing Co. (to be renamed
Globe Holdings, Inc. in connection with the transactions described below), a
Massachusetts corporation ("Globe Holdings"). The Recapitalization will be
financed by (i) the proceeds from the issuance of the Notes, (ii) proceeds from
an investment by Code, Xxxxxxxx &
Xxxxxxx III, L.P. and certain other investors in Globe Holdings, and (iii)
borrowings under the Senior Credit Facility (as defined in the Final
Memorandum).
The Notes will be offered and sold to the Initial Purchasers without
being registered under the Securities Act of 1933, as amended (the "Securities
Act"), in reliance on exemptions therefrom.
In connection with the sale of the Notes, the Company has prepared a
preliminary offering memorandum dated July 15, 1998 (the "Preliminary
Memorandum"), and the Company will prepare a final offering memorandum dated
July 28, 1998 (the "Final Memorandum"); the Preliminary Memorandum and the Final
Memorandum each herein being referred to as a "Memorandum") setting forth or
including a description of the terms of the Notes, the terms of the offering of
the Notes, a description of the Company and the Company's subsidiary listed in
Schedule 1 attached hereto (the "Subsidiary") and any material developments
relating to the Company and the Subsidiary occurring after the date of the most
recent historical financial statements included therein.
The Initial Purchasers and their direct and indirect transferees of
the Notes will be entitled to the benefits of the Registration Rights Agreement,
substantially in the form attached hereto as Exhibit A (the "Registration Rights
Agreement"), pursuant to which the Company has agreed, among other things, to
file a registration statement (the "Registration Statement") with the Securities
and Exchange Commission (the "Commission") in order to register the Notes or the
Exchange Notes (as defined in the Registration Rights Agreement) under the
Securities Act.
2. Representations and Warranties. The Company represents and
warrants to and agrees with, on the date hereof, each of the Initial Purchasers
that:
(a) Neither the Final Memorandum nor any amendment or supplement
thereto as of the date thereof and at all times subsequent thereto up to the
Closing Date (as defined in Section 3 below) contained or contains any untrue
statement of a material fact or omitted or omits to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations and
warranties set forth in this Section 2(a) do not apply to statements or
omissions made in reliance upon and in conformity with information relating to
either of the Initial Purchasers furnished to the Company in writing by or on
behalf of such Initial Purchaser expressly for use in the Final Memorandum or
any amendment or supplement thereto.
(b) The Subsidiary is the only subsidiary of the Company; all of the
outstanding Equity Interests (as defined below) of the Company and the
Subsidiary have been, and as of the Closing Date will be, duly authorized and
validly issued, are fully paid and non-assessable and were
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not issued in violation of any preemptive or similar rights; as of the Closing
Date, Globe Holdings will own of record all of the outstanding Equity Interests
of the Company; as of the Closing Date, all of the outstanding Equity Interests
of each of the Company and the Subsidiary will be free and clear of all liens,
encumbrances, equities and claims or restrictions on voting or transferability
(other than those imposed by the Senior Credit Facility (as defined in the Final
Memorandum) or by the Securities Act and the securities or "Blue Sky" laws of
certain jurisdictions and other than those permitted under the Indenture);
except as set forth in the Final Memorandum, there are no (i) options, warrants
or other rights to purchase from the Company or the Subsidiary, (ii) agreements
or other obligations of the Company or the Subsidiary to issue or (iii) other
rights to convert any obligation into, or exchange any securities for, Equity
Interests in the Company or the Subsidiary outstanding. As used herein "Equity
Interest" of any person means any and all shares, interests, rights to purchase,
warrants, options, participations or other equivalents of or interests in
(however designated) corporate stock or other equity participations, including
partnership interests, whether general or limited, of such person.
(c) Each of the Company and the Subsidiary has been duly organized, is
validly existing and is in good standing under the laws of the jurisdiction of
its organization, with all requisite power and authority to own its properties
and conduct its business as now conducted, and as described in the Final
Memorandum; each of the Company and the Subsidiary is duly qualified to do
business as a foreign corporation and is in good standing in all other
jurisdictions where the ownership or leasing of its properties or the conduct of
its business requires such qualification, except where the failure to be so
qualified, individually or in the aggregate, would not (i) have a material
adverse effect on the general affairs, management, business, condition
(financial or otherwise), prospects or results of operations of the Company and
the Subsidiary, taken as a whole, or (ii) materially impair either of the
Company's or the Subsidiary's ability to perform the obligations contemplated by
the Transaction Documents (as defined below) to which it is a party and the
transactions contemplated to be performed by it described in the Final
Memorandum (any such event, a "Material Adverse Effect").
(d) The Company has all requisite power and authority to execute,
deliver and perform each of its obligations under the Notes, the Exchange Notes
(as defined in the Final Memorandum) and the Private Exchange Notes (as defined
in the Registration Rights Agreement). The Notes, the Exchange Notes and the
Private Exchange Notes have each been duly and validly authorized by the Company
and, when executed by the Company and authenticated by the Trustee in accordance
with the provisions of the Indenture and, in the case of the Notes, when
delivered to and paid for by the Initial Purchasers in accordance with the terms
of this Agreement, will have been duly executed, issued and delivered and will
constitute valid and legally binding obligations of the Company, entitled to the
benefits of the Indenture and enforceable against the Company in accordance with
their terms, except that the enforcement thereof may be subject to (i)
bankruptcy,
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insolvency, reorganization, fraudulent conveyance, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights generally, and
(ii) general principles of equity and the discretion of the court before which
any proceeding with respect thereto may be brought.
(e) The Company has all requisite power and authority to execute,
deliver and perform its obligations under the Indenture. The Indenture meets
the requirements for qualification under the Trust Indenture Act of 1939, as
amended (the "TIA"). The Indenture has been duly and validly authorized by the
Company and, when executed and delivered by the Company (assuming the due
authorization, execution and delivery by the Trustee), will constitute a valid
and legally binding agreement of the Company, enforceable against the Company in
accordance with its terms, except that the enforcement thereof may be subject to
(i) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or
other similar laws now or hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity and the discretion of the court
before which any proceeding with respect thereto may be brought.
(f) The Company has all requisite power and authority to execute,
deliver and perform its obligations under this Agreement, the Registration
Rights Agreement and the Senior Credit Facility. When executed and delivered by
the Company (assuming the due authorization, execution and delivery by each
other party thereto) each of this Agreement and the Registration Rights
Agreement will constitute the valid and legally binding agreement of the
Company, enforceable against the Company in accordance with its terms, except
that (A) the enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (ii) general
principles of equity and the discretion of the court before which any proceeding
relating thereto may be brought and (B) any rights to indemnity or contribution
thereunder may be limited by federal or state securities laws or public policy
considerations. This Agreement, the Indenture, the Notes, the Exchange Notes,
the Private Exchange Notes and the Registration Rights Agreement are referred to
herein as the "Transaction Documents."
(g) No consent, approval, authorization or order of any court or
governmental agency or body, or third party is required for the performance by
the Company of its obligations under the Transaction Documents or the
consummation by the Company of the transactions contemplated thereby or hereby,
except such as shall have been made or obtained prior to the Closing Date, such
as may be required in connection with the registration of the Notes or the
Exchange Notes under the Securities Act in accordance with the Registration
Rights Agreement, such as may be required under state securities or "Blue Sky"
laws, such as may be required for qualification of the Indenture under the TIA
and such that the failure to obtain would not, singularly or in the aggregate,
reasonably be expected to have a Material Adverse Effect. Neither the Company
nor the Subsidiary is (i) in violation of its certificate of incorporation or
bylaws (or similar
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organizational documents), (ii) (assuming compliance with all applicable state
securities or "Blue Sky" laws and assuming the accuracy of the representations
and warranties of the Initial Purchasers in Section 8 hereof) in breach or
violation of any statute, judgment, decree, order, rule or regulation applicable
to either of them or any of their respective properties or assets, except for
any such breach or violation which, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect, or (iii) in breach of
or default under (nor has any event occurred which, with notice or passage of
time or both, would constitute a default under) or in violation of any of the
terms or provisions of any indenture, mortgage, deed of trust, loan agreement,
note, lease, license, franchise agreement, distributor agreement, permit,
certificate, contract or other agreement or instrument to which either of them
is a party or to which either of them or their respective properties or assets
is subject (collectively, "Contracts"), except for any such breach, default,
violation or event which, individually or in the aggregate, would not reasonably
be expected to have a Material Adverse Effect.
(h) The issuance, sale and delivery of the Notes and the execution,
delivery and performance by the Company of each of the Transaction Documents,
and the consummation by the Company of the transactions contemplated thereby and
hereby, and the fulfillment of the terms thereof or hereof, will not conflict
with or constitute or result in a breach of or a default under or an event which
with notice or passage of time or both would constitute a default under or
violation of or cause an acceleration of any material obligation under, or
result in the imposition or creation of (or the obligation to create or impose)
a lien on any property or assets of the Company with respect to (i) any of the
terms or provisions of any Contract, except for any such conflict, breach,
violation, default or event which, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect, (ii) the certificate
of incorporation or bylaws (or similar organizational documents) of the Company
or the Subsidiary, or (iii) (assuming compliance with all applicable state
securities or "Blue Sky" laws and assuming the accuracy of the representations
and warranties of the Initial Purchasers in Section 8 hereof) any statute,
judgment, decree, order, rule or regulation applicable to the Company or the
Subsidiary or any of their respective properties or assets, except for any such
conflict, breach or violation which, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect.
(i) The historical consolidated financial statements (including the
related notes thereto) of Globe Holdings, the sole stockholder of the Company,
included in the Final Memorandum present fairly in all material respects the
financial position, results of operations and cash flows of Globe Holdings at
the dates and for the periods to which they relate and have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis except as otherwise stated therein. The financial data in the Final
Memorandum under the headings "Offering Memorandum Summary--Summary Consolidated
Financial Data" and "Selected Consolidated Financial Data" present fairly in all
material respects the information purported to be
5
shown therein and have been prepared and compiled on a basis consistent with the
financial statements included therein, except as otherwise stated therein. Ernst
& Young LLP (the "Independent Accountants") is an independent public accounting
firm with respect to each of Globe Holdings and the Company within the meaning
of Rule 101 of the Code of Professional Conduct of the American Institute of
Certified Public Accountants ("AICPA") and its interpretations and rulings
thereunder, as of the dates of above-referenced financial statements.
(j) The pro forma financial information included in the Final
Memorandum (i) has been properly computed on the bases described therein and the
assumptions used in the preparation of the pro forma financial data and other
pro forma financial information included in the Final Memorandum are reasonable,
and the adjustments used therein are appropriate to give effect to the
transactions or circumstances referred to therein; and (ii) presents fairly, in
all material respects, the information purported to be shown therein.
(k) Except as described in the Final Memorandum, there is not pending
or, to the knowledge of the Company or the Subsidiary, threatened any action,
suit or proceeding to which any of the Company, the Subsidiary or any of their
respective affiliates is a party, or to which the property or assets of any of
the Company, the Subsidiary or their respective affiliates are subject, before
or brought by any court, arbitrator or governmental agency or body which, if
determined adversely to either the Company or the Subsidiary, individually or in
the aggregate, would reasonably be expected to have a Material Adverse Effect or
which seeks to restrain, enjoin, prevent the consummation of or otherwise
challenge the issuance or sale of the Notes to be sold hereunder or the
consummation of the other transactions on the Closing Date contemplated by the
Transaction Documents or otherwise described in the Final Memorandum. Neither
the Company nor the Subsidiary has received any notice or claim of any default
(or event, condition or omission which with notice or lapse of time or both
would result in a default) under any of their respective Contracts, including
those referred to in the Final Memorandum, or any other Transaction Document to
which it is a party or has knowledge of any breach of any of such Contracts by
the other party or parties thereto, except such defaults or breaches as would
not reasonably be expected to result in a Material Adverse Effect.
(l) Each of the Company and the Subsidiary owns or possesses adequate
licenses or other rights to use all patents, trademarks, service marks, trade
names, copyrights and know-how necessary to conduct the businesses now or
proposed to be operated by it as described in the Final Memorandum except where
the failure to possess or make the same would not reasonably be expected to have
a Material Adverse Effect, and neither the Company nor the Subsidiary has
received any notice of infringement of or conflict with (or knows of any such
infringement of or conflict with) asserted rights of others with respect to any
patents, trademarks, service marks, trade names, copyrights or know-how which,
if such assertion of infringement or conflict were sustained,
6
individually or in the aggregate, would have a Material Adverse Effect.
(m) Since the date of the most recent financial statements appearing
in the Final Memorandum, except as described therein or as contemplated by the
Transaction Documents or the Merger Agreement, (i) neither the Company nor the
Subsidiary has incurred any liabilities or obligations, direct or contingent, or
entered into or agreed to enter into any transactions or contracts (written or
oral) not in the ordinary course of business which liabilities, obligations,
transactions or contracts, individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect, (ii) neither the Company nor the
Subsidiary has purchased any of its outstanding Equity Interests, or declared,
paid or otherwise made any dividend or distribution of any kind on its Equity
Interests and (iii) there has not been any change in the long term indebtedness
of the Company or the Subsidiary that, individually or in the aggregate, would
have a Material Adverse Effect. Since the respective dates as of which
information is given in the Final Memorandum, except as described therein, there
has been no occurrence or any fact or event known to the Company which has had,
or would reasonably be expected to have, a Material Adverse Effect.
(n) Each of the Company and the Subsidiary has filed all necessary
federal, state and foreign income and franchise tax returns required to be filed
through the date hereof except where the failure to so file such returns,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect, and has paid all taxes shown as due thereon prior to
the date upon which penalties attach thereto, except for taxes which the Company
or the Subsidiary is contesting in good faith for which adequate reserves have
been established; and other than tax deficiencies which the Company or the
Subsidiary is contesting in good faith and for which the Company or the
Subsidiary has provided adequate reserves, there is no tax deficiency that has
been asserted against the Company or the Subsidiary that, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect.
(o) The statements set forth under the heading "Description of the
Notes" in the Final Memorandum, insofar as such statements purport to summarize
certain provisions of the Notes and the Indenture, provide a fair summary of
such provisions and information with respect thereto; the statements set forth
under the heading "Description of Senior Credit Facility" in the Final
Memorandum, insofar as such statements purport to summarize certain provisions
of the Senior Credit Facility provide a fair summary of such provisions and
information with respect thereto; the statements set forth under the heading
"Certain Relationships and Related Transactions" in the Final Memorandum,
insofar as such statements purport to summarize certain provisions of the
Recapitalization, the Merger Agreement, the Management Agreement, the
Stockholders Agreement, the Registration Agreement and the Tax Sharing Agreement
(each as defined in the Final Memorandum), provide a fair summary of such
provisions and information with respect thereto; the statements set forth under
the subheading "Recapitalization" under the heading "Certain
7
Relationships and Related Transactions" in the Final Memorandum, insofar as such
statements purport to summarize certain provisions of the Recapitalization (as
defined in the Final Memorandum), provide a fair summary of such provisions and
information with respect thereto.
(p) The statistical and market-related data included in the Final
Memorandum are based on or derived from sources which the Company believes to be
reliable and accurate.
(q) No part of the proceeds of the sale of the Notes will be used,
directly or indirectly, for any purpose that violates any provision of
Regulation T, U or X of the Board of Governors of the Federal Reserve System, in
each case as in effect, or as the same may hereafter be in effect, on the
Closing Date.
(r) Each of the Company and the Subsidiary has good and marketable
title in fee simple to all real property and owns all personal property
described in the Final Memorandum as being owned by it and holds a leasehold
estate in the real and personal property described in the Final Memorandum as
being leased by it, in each case, free and clear of all liens, charges,
encumbrances or restrictions, except (i) liens, encumbrances and claims securing
the Senior Credit Facility or otherwise permitted under the Indenture, (ii) as
described in the Final Memorandum or (iii) to the extent the failure to have
such title or the existence of such liens, charges, encumbrances or
restrictions, individually or in the aggregate, would not reasonably be expected
to have a Material Adverse Effect. All leases, contracts and agreements to
which either the Company or the Subsidiary is a party or by which either of them
is bound are valid and enforceable against the Company or the Subsidiary, as the
case may be, and, to the Company's knowledge, are valid and enforceable against
the other party or parties thereto (in each case, subject to (i) bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights generally, and
(ii) general principles of equity and the discretion of the court before which
any proceeding with respect thereto may be brought) and are in full force and
effect with only such exceptions as, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect.
(s) Except as described in the Final Memorandum or as, individually or
in the aggregate, would not reasonably be expected to have a Material Adverse
Effect (A) each of the Company and the Subsidiary is in compliance with and not
subject to liability under applicable Environmental Laws (as defined below), (B)
each of the Company and the Subsidiary has made all filings and provided all
notices required under any applicable Environmental Law, and has and is in
compliance with all permits required under any applicable Environmental Laws and
each of them is in full force and effect, (C) there is no civil, criminal or
administrative action, suit, claim, hearing, notice of violation, investigation,
proceeding, written notice or demand letter or request for information pending
or, to the knowledge of the Company or the Subsidiary, threatened against the
8
Company or the Subsidiary under any Environmental Law, (D) no lien, encumbrance
or restriction has been recorded under any Environmental Law with respect to any
assets, facility or property owned, operated, leased or controlled by the
Company or the Subsidiary, (E) none of the Company or the Subsidiary has
received notice that it has been identified as a potentially responsible party
under the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended ("CERCLA") or any comparable state law, (F) no property or
facility of the Company or the Subsidiary is (i) listed or proposed for listing
on the National Priorities List under CERCLA or is (ii) listed in the
Comprehensive Environmental Response, Compensation, Liability Information System
List promulgated pursuant to CERCLA, or on any comparable list maintained by any
state or local governmental authority.
For purposes of this Agreement, "Environmental Laws" means the common
law and all applicable federal, state and local laws or regulations, codes,
orders, decrees, judgments or injunctions issued, promulgated, approved or
entered thereunder, relating to pollution or protection of public or employee
health and safety or the environment, including, without limitation, laws
relating to (i) emissions, discharges, releases or threatened releases of
hazardous substances as defined by CERCLA, including, without limitation,
petroleum, crude oil or any fraction thereof (collectively, "Hazardous
Materials"), into the environment (including, without limitation, ambient air,
surface water, ground water, land surface or subsurface strata) and (ii) the
manufacture, processing, distribution, use, generation, treatment, storage,
disposal, transport or handling of Hazardous Materials.
(t) There is no strike, labor dispute, slowdown or work stoppage with
the employees of any of the Company or the Subsidiary which is pending or, to
the knowledge of the Company or the Subsidiary, threatened, which would
reasonably be expected to have a Material Adverse Effect. No employees of the
Company or the Subsidiary are covered by a collective bargaining agreement nor
is any union organizing effort or campaign pending or, to the knowledge of the
Company or the Subsidiary, threatened with respect to any such employees.
(u) Each of the Company and the Subsidiary maintains insurance in such
amounts and covering such risks as are reasonable and customary given the nature
of the Company's business and the value of its properties.
(v) Neither the Company nor the Subsidiary has any liability for any
prohibited transaction or accumulated funding deficiency (as defined in Section
412 of the Code) or any complete or partial withdrawal liability with respect to
any pension, profit sharing or other plan which is subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), to which either of
the Company or the Subsidiary makes or ever has made a contribution and in which
any employee of the Company or the Subsidiary is or has ever been a participant.
9
With respect to such plans, the Company and the Subsidiary is in compliance in
all material respects with all applicable provisions of ERISA.
(w) Each of the Company and the Subsidiary (i) makes and keeps
reasonably accurate books and records and (ii) maintains internal accounting
controls which provide reasonable assurance that (A) transactions are executed
in accordance with management's general or specific authorizations, (B)
transactions are recorded as necessary to permit preparation of its financial
statements and to maintain accountability for its assets, (C) access to its
assets is permitted only in accordance with management's general or specific
authorizations and (D) the reported accountability for its assets is compared
with existing assets at reasonable intervals and appropriate action has been
taken with respect to any differences.
(x) Neither the Company nor the Subsidiary is or will be an
"investment company" or "promoter" or "principal underwriter" for an "investment
company," as such terms are defined in the Investment Company Act of 1940, as
amended, and the rules and regulations thereunder.
(y) Neither the Company nor the Subsidiary does business with the
government of Cuba or with any person or affiliate located in Cuba within the
meaning of Section 517.075, Florida Statutes 1985, as amended, and all
regulations promulgated thereunder.
(z) No condition, omission, event or act has occurred with respect to
the Company or the Subsidiary which, had the Indenture already been executed and
delivered, would (or, with the giving of notice and/or the lapse of time and/or
the issuance of a certificate, could) constitute a Default (as defined in the
Indenture).
(aa) Except as described in the Final Memorandum, no holder of
securities of the Company or the Subsidiary will be entitled to have such
securities registered under the registration statement required to be filed by
the Company pursuant to the Registration Rights Agreement other than as
expressly permitted thereby.
(bb) Immediately after the consummation of the transactions
contemplated by this Agreement (including the Related Transactions (as defined
below)), the fair value and present fair saleable value of the assets of the
Company (on a consolidated and going concern basis) will exceed the sum of its
stated liabilities and identified contingent liabilities; the Company (on a
consolidated basis) is not, nor will the Company (on a consolidated basis) be,
after giving effect to the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby (including the
Transactions (as defined below)), (a) left with unreasonably small capital with
which to carry on its business as it is proposed to be conducted, or (b) unable
to pay its debts
10
(contingent or otherwise) as they mature.
(cc) Assuming the accuracy of the representations and warranties of
the Initial Purchasers contained in Section 8 hereof and their compliance with
the agreements set forth therein, none of the Company, the Subsidiary or any of
their respective Affiliates (as defined in Rule 501(b) of Regulation D under the
Securities Act) has directly, or through any authorized agent, (i) sold, offered
for sale, solicited offers to buy or otherwise negotiated in respect of, any
"security" (as defined in the Securities Act) which is or will be integrated
with the sale of the Notes in a manner that would require the registration under
the Securities Act of the Notes or (ii) engaged in any form of general
solicitation or general advertising (as those terms are used in Rule 502(C)
under the Securities Act) in connection with the offering of the Notes or in any
manner involving a public offering within the meaning of Section 4(2) of the
Securities Act.
(dd) Assuming the accuracy of the representations and warranties of
the Initial Purchasers in Section 8 hereof and their compliance with the
agreements set forth therein, it is not necessary in connection with the offer,
sale and delivery of the Notes to the Initial Purchasers in the manner
contemplated by this Agreement to register any of the Notes under the Securities
Act or to qualify the Indenture under the TIA.
(ee) No securities of the Company or the Subsidiary are of the same
class (within the meaning of Rule 144A under the Securities Act) as the Notes
and listed on a national securities exchange registered under Section 6 of the
Exchange Act, or quoted in a United States automated inter-dealer quotation
system.
(ff) Neither the Company nor the Subsidiary has taken, nor will either
of them take, directly or indirectly, any action designed to, or that might be
reasonably expected to, cause or result in stabilization or manipulation of the
price of the Notes in violation of Regulation M under the Exchange Act.
3. Purchase, Sale and Delivery of the Notes. On the basis of the
representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to the Initial Purchasers, and each of the Initial Purchasers,
acting severally and not jointly, agrees to purchase from the Company the Notes
at 97% of their principal amounts, in the respective principal amounts set forth
opposite its name on Schedule 2 hereto. One or more certificates in definitive
form for the Notes that the Initial Purchasers have agreed to purchase
hereunder, and in such denomination or denominations and registered in such name
or names as the Initial Purchasers request upon notice to the Company at least
thirty-six (36) hours prior to the Closing Date, shall be delivered by or on
behalf of the Company to the Initial Purchasers on the Closing Date, against
payment by or on behalf of the Initial
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Purchasers of the purchase price therefor by wire transfer (same day funds), to
such account or accounts as the Company shall specify prior to the Closing Date,
or by such means as the parties hereto shall agree prior to the Closing Date.
The Notes will be represented by one or more definitive global securities in
book-entry form which will be deposited by or on behalf of the Company with The
Depository Trust Company or its designated custodian. For purposes of Rule 15c6-
1 under the Exchange Act, the Closing Date shall be the date for payment of
funds and delivery of securities for all the Notes sold pursuant to the offering
of the Notes. Such delivery of and payment for the Notes shall be made at the
offices of Winston & Xxxxxx, 00 Xxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx, at 10:00
A.M., Chicago time, on July 31, 1998, or at such other place, time or date as
the Initial Purchasers, on the one hand, and the Company, on the other hand, may
agree upon, such time and date of delivery against payment being herein referred
to as the "Closing Date." The Company will make such certificate or certificates
for the Notes available for checking and packaging by the Initial Purchasers at
the offices of Winston & Xxxxxx in Chicago, Illinois, or at such other place as
BancAmerica Xxxxxxxxx Xxxxxxxx may designate, at least twenty-four (24) hours
prior to the Closing Date.
The Company hereby agrees to pay any transfer taxes payable in
connection with the initial delivery to the Initial Purchasers of the Notes.
4. Offering by the Initial Purchasers. The Initial Purchasers
propose to make an offering of the Notes at the price and upon the terms set
forth in the Final Memorandum, as soon as practicable after this Agreement is
entered into and as in the judgment of the Initial Purchasers is advisable.
5. Covenants of the Company. The Company covenants and agrees with
each of the Initial Purchasers that:
(a) The Company will not amend or supplement the Final Memorandum or
any amendment or supplement thereto of which the Initial Purchasers shall not
previously have been advised and furnished a copy for a reasonable period of
time prior to the proposed amendment or supplement and as to which the Initial
Purchasers shall have objected to by notice to the Company, unless the Company
is advised by counsel that such amendment or supplement is legally required. The
Company will promptly, upon the reasonable request of the Initial Purchasers or
counsel for the Initial Purchasers, make any amendments or supplements to the
Preliminary Memorandum or the Final Memorandum that may be necessary or
advisable in connection with the resale of the Notes by the Initial Purchasers.
(b) The Company will cooperate with the Initial Purchasers in
arranging for the qualification of the Notes for offering and sale under the
securities or "Blue Sky" laws of such
12
jurisdictions as the Initial Purchasers may reasonably designate and will
continue such qualifications in effect for as long as may be necessary to
complete the resale of the Notes; provided, however, that in connection
herewith, the Company shall not be required to qualify as a foreign entity or to
execute a general consent to service of process in any jurisdiction or subject
itself to taxation in any such jurisdiction where it is not then so subject or
qualified.
(c) If, at any time prior to the completion of the resale by the
Initial Purchasers of the Notes, any event occurs or information becomes known
as a result of which, in the reasonable opinion of counsel for the Company, the
Final Memorandum as then amended or supplemented would include any untrue
statement of a material fact, or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made and at the time made, not misleading, or if for any other reason it is
necessary, in the reasonable opinion of counsel for the Company, at any time to
amend or supplement the Final Memorandum to comply with applicable law, the
Company will promptly notify the Initial Purchasers thereof and will prepare, at
the expense of the Company, an amendment or supplement to the Final Memorandum
that corrects such statement or omission or effects such compliance.
(d) The Company will, without charge, provide to the Initial
Purchasers and to counsel for the Initial Purchasers as many copies of the
Preliminary Memorandum and the Final Memorandum or any amendment or supplement
thereto as the Initial Purchasers may reasonably request.
(e) For and during the period commencing on the date hereof and ending
on the date that no Notes are outstanding, the Company will furnish to the
Initial Purchasers copies of all reports and other communications (financial or
otherwise) furnished by the Company to the Trustee, or the holders of the Notes
and, as soon as available, copies of any reports or financial statements
furnished to or filed by the Company with the Commission or any national
securities exchange or governing body of any automated quotation system on which
any class of securities of the Company may be listed.
(f) Prior to the Closing Date, the Company will furnish to the Initial
Purchasers, as soon as they are available to the Company, a copy of any
unaudited interim financial statements of Globe Holdings, the Company and the
Subsidiary, for any period subsequent to the period covered by the most recent
financial statements appearing in the Final Memorandum.
(g) None of the Company, the Subsidiary or any of their respective
affiliates will sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any "security" (as defined in the Securities Act) which
could be integrated with the sale of the Notes in a manner which would require
the registration under the Securities Act of the Notes.
13
(h) None of Globe Holdings, the Company or the Subsidiary shall, for
a period of 120 days following the date hereof, without the prior written
consent of the Initial Purchasers, offer, sell, contract to sell or otherwise
dispose of, directly or indirectly, any debt securities of Globe Holdings, the
Company or the Subsidiary, other than the Notes, the Exchange Notes, the Private
Exchange Notes, and debt securities evidencing indebtedness under the Senior
Credit Facility, indebtedness otherwise permitted under the Senior Credit
Facility , indebtedness of Globe Holdings pursuant to the Discount Note Offering
(as defined in the Final Memorandum) or indebtedness under a loan or similar
agreement entered into between the Company or the Subsidiary and banks or
banking or other financial institutions or otherwise relating to receivables or
inventory financings entered into by the Company or the Subsidiary.
(i) Prior to the effectiveness of the Exchange Registration Statement
(as defined in the Registration Rights Agreement) or the Shelf Registration
Statement (as defined in the Registration Rights Agreement), as the case may be,
and thereafter only to the extent contemplated by such registration statements,
none of the Company or its affiliates will engage in any form of general
solicitation or general advertising (as those terms are used in Regulation D
under the Securities Act) in connection with the offering of the Notes or in any
manner involving a public offering within the meaning of Section 4(2) of the
Securities Act.
(j) For so long as any of the Notes remain outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act, the Company will make available, upon request, to any holder of
such Notes the information specified in Rule 144A(d)(4) under the Act, unless
the Company is then subject to Section 13 or 15(d) of the Exchange Act.
(k) The Company will use its reasonable best efforts to (i) permit
the Notes to be designated PORTAL securities in accordance with the rules and
regulations adopted by the National Association of Securities Dealers (the
"NASD") relating to trading in the Private Offerings, Resales and Trading
through Automated Linkages Market (the "Portal Market") and (ii) permit the
Notes to be eligible for clearance and settlement through The Depository Trust
Company and its participants.
6. Expenses. The Company agrees to pay all costs and expenses
incident to the performance of its obligations under this Agreement, whether or
not the transactions contemplated herein are consummated or this Agreement is
terminated pursuant to Section 11 hereof, including all costs and expenses
incident to (i) the printing, word processing or other production of documents
with respect to the transactions contemplated hereby, including any costs of
printing the Preliminary Memorandum and the Final Memorandum and any amendment
or supplement thereto, and any "Blue Sky" memoranda, (ii) all arrangements
relating to the delivery to the Initial Purchasers of copies of the foregoing
documents, (iii) the fees and disbursements of the counsel, the accountants and
any other experts or advisors retained by the Company, (iv) preparation
(including printing), issuance
14
and delivery to the Initial Purchasers of the Notes, (v) the qualification of
the Notes under state securities and "Blue Sky" laws, including filing fees and
reasonable fees and expenses of counsel for the Initial Purchasers relating
thereto, (vi) reasonable fees and expenses of the Trustee including reasonable
fees and expenses of counsel thereto, (vii) all expenses and listing fees
incurred in connection with the application for quotation of the Notes on the
PORTAL Market and (viii) any fees charged by investment rating agencies for the
rating of the Notes; provided, however, that except as expressly provided in the
last sentence of this Section 6, the Initial Purchasers shall pay their own
costs and expenses. If the sale of the Notes provided for herein is not
consummated because any condition to the obligations of the Initial Purchasers
set forth in Section 7 hereof is not satisfied, because this Agreement is
terminated pursuant to Section 11 hereof or because of any failure, refusal or
inability on the part of the Company to perform all obligations and satisfy all
conditions on its part to be performed or satisfied hereunder (other than solely
by reason of a default by either of the Initial Purchasers of its obligations
hereunder after all conditions hereunder have been satisfied in accordance
herewith), the Company agrees to promptly reimburse the Initial Purchasers upon
demand for all out-of-pocket expenses (including reasonable fees and expenses of
Winston & Xxxxxx, counsel for the Initial Purchasers) that shall have been
incurred by the Initial Purchasers in connection with the proposed purchase and
sale of the Notes.
7. Conditions of the Initial Purchasers' Obligations. The
obligation of the Initial Purchasers to purchase and pay for the Notes shall, in
their sole discretion, be subject to the satisfaction or waiver of the following
conditions on or prior to the Closing Date:
(a) On the Closing Date, the Initial Purchasers shall have received
the opinion, dated as of the Closing Date and addressed to the Initial
Purchasers, of Xxxxxxx, Xxxxxx & Xxxx, special counsel for the Company,
substantially in the form set forth on Exhibit B hereto, with such changes
thereto as are acceptable to counsel for the Initial Purchasers.
(b) On the Closing Date, the Initial Purchasers shall have received
the opinion, dated as of the Closing Date and addressed to the Initial
Purchasers, of Xxxxxxxx & Xxxxx, counsel for the Company, substantially in the
form set forth on Exhibit C hereto, with such changes thereto as are acceptable
to counsel for the Initial Purchasers. In addition, the Initial Purchasers
shall have received a letter or letters permitting it to rely on any opinions
rendered by counsel to MergerCo, the Company and Globe Holdings in connection
with the Transactions.
(c) On the Closing Date, the Initial Purchasers shall have received
the opinion, in form and substance satisfactory to the Initial Purchasers, dated
as of the Closing Date and addressed to the Initial Purchasers, of Winston &
Xxxxxx, counsel for the Initial Purchasers, with respect to certain legal
matters relating to this Agreement and such other related matters as the Initial
Purchasers may reasonably require. In rendering such opinion, Winston & Xxxxxx
shall have
15
received and may rely upon such certificates and other documents and information
as it may reasonably request to pass upon such matters.
(d) The Initial Purchasers shall have received from the Independent
Accountants a comfort letter or letters dated the date hereof and the Closing
Date, in form and substance reasonably satisfactory to counsel for the Initial
Purchasers.
(e) The representations and warranties of the Company contained in
this Agreement shall be true and correct on and as of the date hereof and on and
as of the Closing Date as if made on and as of the Closing Date; the statements
of the Company's officers made pursuant to any certificate delivered in
accordance with the provisions hereof shall be true and correct and as of the
date made and on and as of the Closing Date; the Company shall have performed
all covenants and agreements and satisfied all conditions on its part to be
performed or satisfied hereunder at or prior the Closing Date; and, except as
described in the Final Memorandum (exclusive of any amendment or supplement
thereto after the date hereof), subsequent to the date of the most recent
financial statements in such Final Memorandum, there shall have been no event or
development that, individually or in the aggregate, has or would reasonably be
expected to have a Material Adverse Effect.
(f) Neither the sale of the Notes hereunder nor any of the Related
Transactions shall be enjoined (temporarily or permanently) on the Closing Date.
(g) Subsequent to the date of the most recent financial statements in
the Final Memorandum (exclusive of any amendment or supplement thereto after the
date hereof), the conduct of the business and operations of the Company or the
Subsidiary shall not have been interfered with by strike, fire, flood,
hurricane, accident or other calamity (whether or not insured) or by any court
or governmental action, order or decree, and, except as otherwise stated
therein, the properties of the Company or the Subsidiary shall not have
sustained any loss or damage (whether or not insured) as a result of any such
occurrence, except any such interference, loss or damage which, individually or
in the aggregate, would not reasonably be expected to have a Material Adverse
Effect.
(h) The Initial Purchasers shall have received a certificate of the
Company, dated the Closing Date, signed by its Chairman of the Board, President
or any Vice President and the Chief Financial Officer (in their respective
capacities as such), to the effect that:
(i) The representations and warranties of the Company contained
in this Agreement are true and correct as of the date hereof and as of
the Closing Date, and the Company has performed all covenants and
agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date;
16
(ii) At the Closing Date, since the date hereof or since the
date of the most recent financial statements in the Final Memorandum
(exclusive of any amendment or supplement thereto after the date
hereof), no event or events have occurred, no information has become
known nor does any condition exist that, individually or in the
aggregate, would reasonably be expected to have a Material Adverse
Effect;
(iii) Neither the sale of the Notes nor any of the Related
Transactions hereunder has been enjoined (temporarily or permanently);
and
(iv) The Related Transactions have been consummated or are being
consummated on the Closing Date concurrently with the closing
hereunder. As used herein, "Related Transactions" means (i) the
Recapitalization of Globe Holdings (as defined in the Final
Memorandum) pursuant to the Merger Agreement (as defined below), (ii)
the Merger (as defined in the Final Memorandum), (iii) the Asset Drop
Down (as defined in the Final Memorandum), (iv) the entry by the
Company into the Senior Credit Facility and the initial borrowing by
the Company of approximately $120 million thereunder, (v) the
repayment of all outstanding obligations under the Old Credit Facility
(as defined in the Final Memorandum) and the release of all liens on
property of the Company granted in connection therewith and (vi) the
other transactions contemplated by the Merger Agreement. As used
herein, the Merger Agreement means the Agreement and Plan of Merger
dated June 23, 1998, by and among Globe Holdings and Globe Acquisition
Company, a newly formed affiliate of Code Xxxxxxxx & Xxxxxxx III,
L.P., as amended through the date hereof.
(i) On the Closing Date, the Initial Purchasers shall have received
the Registration Rights Agreement executed by the Company and such agreement
shall be in full force and effect at all times from and after the Closing Date
except as otherwise terminated in accordance with its terms.
(j) MergerCo shall have received an investment from Code, Xxxxxxxx &
Xxxxxxx, other investors and certain existing stockholders in the aggregate
amount of $75.0 million (the "Gross Proceeds") through (i) a bridge loan of
$25.0 million, (ii) a cash investment of approximately $42.8 million and (iii)
the conversion of capital stock of Globe Holdings which, for purposes of the
Recapitalization, is valued at approximately $7.2 million.
(k) The conditions to the obligations of Globe Acquisition Company
under the Merger Agreement shall have been satisfied in all material respects,
and the Merger shall have been consummated in accordance with the terms of the
Merger Agreement and as described in the Final Memorandum.
17
(l) The Related Transactions shall have been consummated, or shall be
consummated on the Closing Date concurrently with the closing hereunder, and
counsel to the Initial Purchasers shall have received such documents relating
thereto and other evidence thereof as they may request in form and substance
reasonably satisfactory to such counsel.
(m) On the Closing Date, the Initial Purchasers shall have received
certified copies of the Tax Sharing Agreement, the Management Agreement, the
Registration Agreement, the Senior Credit Facility, the Merger Agreement and the
agreement effecting the Asset Drop Down, each executed by the Company and the
other signatories thereto and in form and substance reasonably satisfactory to
the Initial Purchasers.
(n) On the Closing Date, the Initial Purchasers shall have received
the opinion dated as of the Closing Date and addressed to the Initial Purchasers
of Valuation Research Corporation, addressed to the Initial Purchasers,
regarding the solvency of the Company after giving effect to the Transactions,
together with copies of all officers' certificates and other documents referred
to therein, and such opinion and other documents shall be in form and substance
reasonably satisfactory to the Initial Purchasers.
On or before the Closing Date, the Initial Purchasers and counsel for
the Initial Purchasers shall have received such further documents, opinions,
certificates, letters and schedules or instruments relating to the business,
corporate, legal and financial affairs of the Company and the Subsidiary as they
shall have heretofore reasonably requested from the Company.
All such documents, opinions, certificates, letters, schedules or
instruments delivered pursuant to this Agreement will comply with the provisions
hereof only if they are reasonably satisfactory in all material respects to the
Initial Purchasers and counsel for the Initial Purchasers. The Company shall
furnish to the Initial Purchasers such conformed copies of such documents,
opinions, certificates, letters, schedules and instruments in such quantities as
the Initial Purchasers shall reasonably request.
8. Offering of Notes; Restrictions on Transfer. Each of the Initial
Purchasers agrees with the Company, severally and not jointly, that (i) it has
not and will not solicit offers for, or offer or sell, the Notes by any form of
general solicitation or general advertising (as those terms are used in
Regulation D under the Securities Act) or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act; and (ii) it
has and will solicit offers for the Notes only from, and has offered or sold and
will offer, sell or deliver, the Notes only to (A) in the case of offers inside
the United States, (x) persons whom the Initial Purchasers reasonably believe to
be QIBs or, if any such person is buying for one or more institutional accounts
for which such person is acting as fiduciary or agent, only when such person has
represented to the Initial Purchasers
18
that each such account is a QIB, to whom notice has been given that such sale or
delivery is being made in reliance on Rule 144A, and, in each case, in
transactions under Rule 144A or (y) a limited number of other institutional
investors reasonably believed by the Initial Purchasers to be Accredited
Investors that, prior to their purchase of the Notes, deliver to the Initial
Purchasers a letter containing the representations and agreements set forth in
Annex A to the Final Memorandum and (B) in the case of offers outside the United
States, to persons other than U.S. persons, in each case, in compliance with
Regulation S under the Securities Act ("foreign purchasers," which term shall
include dealers or other professional fiduciaries in the United States acting on
a discretionary basis for foreign beneficial owners (other than an estate or
trust)); provided, however, that, in the case of this clause (B), in purchasing
such Notes such persons are deemed to have represented and agreed as provided
under the caption "Notice to Investors" contained in the Final Memorandum.
9. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless the Initial Purchasers, and each person, if any, who
controls any Initial Purchaser within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, against any losses, claims,
damages or liabilities to which any Initial Purchaser or such controlling person
may become subject under the Securities Act, the Exchange Act or otherwise,
insofar as any such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of any
material fact contained in any Memorandum or any amendment or
supplement thereto or any application, or any amendment or supplement
thereto, prepared or executed by the Company or the Subsidiary or
based upon written information furnished by or on behalf of the
Company or the Subsidiary filed in any jurisdiction in order to
qualify the Notes under the securities or "Blue Sky" laws thereof or
filed with any securities association or securities exchange (each an
"Application"); or
(ii) the omission or alleged omission to state, in any Memorandum
or any amendment or supplement thereto or any Application, a material
fact required to be stated therein or necessary to make the statements
therein in light of the circumstances in which they were made, not
misleading,
and will reimburse, promptly after demand, the Initial Purchasers and each such
controlling person for any reasonable legal or other expenses reasonably
incurred by the Initial Purchasers or such controlling person in connection with
investigating, defending against or appearing as a third-party witness in
connection with any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, the Company will not be liable in any
such case to the extent that any such loss, claim, damage, or liability arises
out of or is based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in any Memorandum or any amendment or
19
supplement thereto or any Application in reliance upon and in conformity with
written information concerning the Initial Purchasers furnished to the Company
by the Initial Purchasers specifically for use therein; and further provided,
that the indemnity agreement provided in this Section 9(a) with respect to any
such untrue statement in or omission from the Preliminary Memorandum shall not
inure to the benefit of any Initial Purchaser (or to the benefit of any person
controlling such Initial Purchaser or any officer, director, partner, employee,
representative or agent of such Initial Purchaser) on account of any loss,
claim, damage or liability arising from the sale of Notes by such Initial
Purchaser to any person if the untrue statement or alleged untrue statement of
material fact or omission or alleged omission to state therein a material fact
in the Preliminary Memorandum was corrected in the Final Memorandum and such
Initial Purchaser sold Notes to that person without sending or giving at or
prior to the written confirmation of such sale, a copy of the Final Memorandum
(as then amended or supplemented) if the Company had previously furnished copies
thereof to the Initial Purchasers in accordance with the terms of this
Agreement. This indemnity agreement will be in addition to any liability that
the Company may otherwise have to the indemnified parties. The Company shall not
be liable under this Section 9 for any settlement of such claim or action
effected without its consent, which shall not be unreasonably withheld.
(b) Each of the Initial Purchasers severally agrees to indemnify and
hold harmless the Company and its directors, officers, employees,
representatives, affiliates and agents and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act against any losses, claims, damages or liabilities to which the
Company or any such director, officer, employee, representative, affiliate,
agent or controlling person may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material fact contained
in any Memorandum or any amendment or supplement thereto or any Application, or
(ii) the omission or the alleged omission to state therein a material fact
required to be stated in any Memorandum or any amendment or supplement thereto
or any Application, or necessary to make the statements therein in light of the
circumstances in which they were made, not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information concerning such Initial Purchaser, furnished
to the Company by or on behalf of such Initial Purchaser specifically for use
therein; and subject to the limitation set forth immediately preceding this
clause, will reimburse, promptly after demand, any reasonable legal or other
expenses reasonably incurred by the Company or any such director, officer,
employee, representative, affiliate, agent or controlling person in connection
with investigating or defending against or appearing as a third party witness in
connection with any such loss, claim, damage, liability or action in respect
thereof. This indemnity agreement will be in addition to any liability that the
Initial Purchasers may otherwise have to the indemnified parties. The Initial
Purchasers shall not be liable under this Section 9 for any settlement of any
claim or
20
action effected without their consent, which shall not be unreasonably withheld.
(c) Promptly after receipt by an indemnified party under this Section
9 of notice of the commencement of any action for which such indemnified party
is entitled to indemnification under this Section 9, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 9, notify the indemnifying party of the commencement thereof
in writing; but the omission to so notify the indemnifying party (i) will not
relieve it from any liability under paragraph (a) or (b) above unless and to the
extent such failure results in the forfeiture by the indemnifying party of
substantial rights and defenses and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraphs (a) and (b) above. In case any
such action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party;
provided, however, that if (i) the use of counsel chosen by the indemnifying
party to represent the indemnified party would present such counsel with a
conflict of interest, (ii) the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have been advised by counsel that there may be one or more legal defenses
available to it and/or other indemnified parties that are different from or
additional to those available to the indemnifying party, or (iii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after receipt by the indemnifying party of notice of the institution of
such action, then, in each such case, the indemnifying party shall not have the
right to direct the defense of such action on behalf of such indemnified party
or parties and such indemnified party or parties shall have the right to select
separate counsel to defend such action on behalf of such indemnified party or
parties. After notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof and approval by such indemnified
party of counsel appointed to defend such action (which approval shall not be
unreasonably withheld), the indemnifying party will not be liable to such
indemnified party under this Section 9 for any legal or other expenses, other
than reasonable costs of investigation, subsequently incurred by such
indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the immediately preceding sentence (it being understood, however,
that in connection with such action the indemnifying party shall not be liable
for the expenses of more than one separate counsel (in addition to local
counsel) in any one action or separate but substantially similar actions in the
same jurisdiction arising out of the same general allegations or circumstances,
designated by the Initial Purchasers in the case of paragraph (a) of this
Section 9 or the Company in the case of paragraph (b) of this Section 9,
representing the indemnified parties under such paragraph (a) or paragraph (b),
as the case may be, who are parties to such action or actions) or (ii) the
indemnifying party has authorized in writing the
21
employment of counsel for the indemnified party at the expense of the
indemnifying party. After such notice from the indemnifying party to such
indemnified party, the indemnifying party will not be liable for the costs and
expenses of any settlement of such action effected by such indemnified party
without the prior written consent of the indemnifying party (which consent shall
not be unreasonably withheld), unless such indemnified party waived in writing
its rights under this Section 9, in which case the indemnified party may effect
such a settlement without such consent.
(d) In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this Section 9 is unavailable to, or insufficient to
hold harmless, an indemnified party in respect of any losses, claims, damages or
liabilities (or actions in respect thereof), each indemnifying party, in order
to provide for just and equitable contribution, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect (i) the relative benefits received by the indemnifying
party or parties on the one hand and the indemnified party on the other from the
offering of the Notes or (ii) if the allocation provided by the foregoing clause
(i) is not permitted by applicable law, not only such relative benefits but also
the relative fault of the indemnifying party or parties on the one hand and the
indemnified party on the other in connection with the statements or omissions or
alleged statements or omissions that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof). The relative benefits received by
the Company on the one hand and any Initial Purchaser on the other shall be
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company and the total discounts and
commissions received by such Initial Purchaser on the other hand, bear to the
total gross proceeds from the sale of the Notes. The relative fault of the
parties shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
on the one hand, or such Initial Purchaser on the other, the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission or alleged statement or omission, and any other
equitable considerations appropriate in the circumstances. The Company and the
Initial Purchasers agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the first sentence of this paragraph (d).
Notwithstanding any other provision of this paragraph (d), no Initial Purchaser
shall be obligated to make contributions hereunder that in the aggregate exceed
the total discounts, commissions and other compensation received by such Initial
Purchaser under this Agreement, less the aggregate amount of any damages that
such Initial Purchaser has otherwise been required to pay by reason of the
untrue or alleged untrue statements or the omissions or alleged omissions to
state a material fact, and no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes
22
of this paragraph (d), each person, if any, who controls an Initial Purchaser
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act shall have the same rights to contribution as the Initial
Purchasers, and each director, officer, employee, representative, affiliate and
agent of the Company and each person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, shall have the same rights to contribution as the Company.
10. Survival Clause. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company, its
officers and directors and the Initial Purchasers set forth in this Agreement or
made by or on behalf of them pursuant to this Agreement shall remain in full
force and effect until termination of this Agreement, except as set forth in the
following sentence, regardless of (i) any investigation made by or on behalf of
the Company, any of its officers or directors, the Initial Purchasers or any
controlling person referred to in Section 9 hereof and (ii) delivery of and
payment for the Notes. The respective agreements, covenants, indemnities and
other statements set forth in Sections 6, 9 and 15 hereof shall remain in full
force and effect, regardless of any termination or cancellation of this
Agreement.
11. Termination. (a) This Agreement may be terminated in the sole
discretion of the Initial Purchasers by notice to the Company given prior to the
Closing Date in the event that the Company shall have failed, refused or been
unable to perform all obligations and satisfy all conditions on its part to be
performed or satisfied hereunder at or prior thereto or, if on and after the
date hereof and at or prior to the Closing Date:
(i) the Company or the Subsidiary shall have sustained any loss
or interference with respect to its businesses or properties from
fire, flood, hurricane, accident or other calamity, whether or not
covered by insurance, or from any strike, labor dispute, slowdown or
work stoppage or any legal or governmental proceeding, which loss or
interference, in the sole judgment of the Initial Purchasers, has had
or could be reasonably likely to have a Material Adverse Effect, or
there shall have been, in the sole judgment of the Initial Purchasers,
any event or development that, individually or in the aggregate, has
or could be reasonably likely to have a Material Adverse Effect
(including without limitation a change in control of any of the
Company), except in each case as described in the Final Memorandum
(exclusive of any amendment or supplement thereto);
(ii) trading in securities generally on the New York Stock
Exchange, American Stock Exchange or the Nasdaq National Market System
shall have been suspended or minimum or maximum prices shall have been
established on any such exchange or market;
23
(iii) a banking moratorium shall have been declared by New York
or United States authorities;
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, or (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or any other national or international
calamity or emergency, or (C) any material change in the financial
markets of the United States which, in the case of (A), (B) or (C)
above and in the sole judgment of the Initial Purchasers, makes it
impracticable or inadvisable to proceed with the offering or the
delivery of the Notes as contemplated by the Final Memorandum; or
(v) any securities of the Company shall have been downgraded or
placed on any "watch list" for possible downgrading by any nationally
recognized statistical rating organization.
(b) Termination of this Agreement pursuant to this Section 11 shall
be without liability of any party to any other party except as provided in
Section 10 hereof.
12. Information Supplied by the Initial Purchasers. The statements
set forth (i) in the last paragraph on the front cover page of the Final
Memorandum, (ii) in the first paragraph on page i of the Final Memorandum and
(iii) in the third, fifth and sixth paragraphs and in the second sentence of the
fourth paragraph under the heading "Plan of Distribution" of the Final
Memorandum constitute the only information furnished by the Initial Purchasers
to the Company for the purposes of Sections 2(a) and 9 hereof.
13. Notices. All communications hereunder shall be in writing and,
if sent to the Initial Purchasers, shall be mailed or delivered to (i)
BancAmerica Xxxxxxxxx Xxxxxxxx, 000 X. XxXxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxx,
Xxxxxxxx 00000, Attention: Xxxxxx X. XxXxxxx, with a copy to Winston & Xxxxxx,
00 X. Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X. Xxxxx; if sent to
the Company, shall be mailed or delivered to Globe Manufacturing Corp., 000
Xxxxxxx Xxxxxx, Xxxx Xxxxx, Xxxxxxxxxxxxx 00000, Attention: President, with a
copy to Code, Xxxxxxxx & Xxxxxxx LLC, 00 Xxxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx
00000, Attention: Xxxxx X. Xxxxxx, and to Xxxxxxxx & Xxxxx, 000 Xxxx Xxxxxxxx
Xxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxx.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days after
being deposited in the mail, postage prepaid, if mailed; and one business day
after being timely delivered to a next-day air courier.
24
14. Successors. This Agreement shall inure to the benefit of and be
binding upon the Initial Purchasers, the Company and their respective successors
and legal representatives, and nothing expressed or mentioned in this Agreement
is intended or shall be construed to give any other person any legal or
equitable right, remedy or claim under or in respect of this Agreement, or any
provisions herein contained; this Agreement and all conditions and provisions
hereof being intended to be and being for the sole and exclusive benefit of such
persons and for the benefit of no other person except that (i) the indemnities
of the Company contained in Section 9 of this Agreement shall also be for the
benefit of any person or persons who control the Initial Purchasers within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
and (ii) the indemnities of the Initial Purchasers contained in Section 9 of
this Agreement shall also be for the benefit of the directors, officers,
employees, representatives, affiliates and agents and any person or persons who
control the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act. No purchaser of Notes from the Initial
Purchasers will be deemed a successor because of such purchase.
15. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED WHOLLY THEREIN, WITHOUT GIVING EFFECT TO ANY
PROVISIONS THEREOF RELATING TO CONFLICTS OF LAW OTHER THAN SECTION 5-1401 OF THE
NEW YORK GENERAL OBLIGATIONS LAW.
16. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[Signature pages follow]
25
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement among the Company and
the Initial Purchasers.
Very truly yours,
Globe Elastics Co., Inc.
(to be renamed Globe Manufacturing Corp.),
an Alabama corporation
By /s/ X.X. Xxxxxxx, III
------------------------------------------
Name: X.X. Xxxxxxx, III
Title: President
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above written.
BANCAMERICA XXXXXXXXX XXXXXXXX
By: /s/ Xxxxxx X. Xxxxx
--------------------------------
Title: Director
XXXXXXX XXXXX & CO.
By: /s/ illegible
--------------------------------
Title: Vice President
SCHEDULE 1
SUBSIDIARY OF THE COMPANY
JURISDICTION OF
NAME INCORPORATION
------------------------------------------- ---------------------------------
Globe Manufacturing FSC Ltd. Barbados
SCHEDULE 2
PRINCIPAL AMOUNT
INITIAL PURCHASERS OF NOTES
-------------------------------------------------- -------------------------
BancAmerica Xxxxxxxxx Xxxxxxxx $ 97,500,000
Xxxxxxx Xxxxx & Co. $ 52,500,000
------------
TOTAL $150,000,000
============
Exhibit A: Form of Registration Rights Agreement
Exhibit B: Form of Opinion of Maynard, Cooper, & Xxxx, P.C., special counsel
to Globe Manufacturing Corp.
Exhibit C: Form of Opinion of Xxxxxxxx & Xxxxx, special counsel to Globe
Manufacturing Corp.
