EXHIBIT 2.2
ASSET TRANSFER AGREEMENT
ASSET TRANSFER AGREEMENT made as of July 29, 1998, by and among Globe
Elastic Co., Inc., an Alabama corporation with its principal office at 1301
Industrial Park Drive, Tuscaloosa, Alabama 35406 (the "Transferee"), and Globe
Manufacturing Co., a Massachusetts corporation with its principal office at 456
Bedford Street, Fall River, Massachusetts 02720 (the "Transferor").
Preliminary Statement
The Transferee desires to acquire from the Transferor, and the Transferor
desires to transfer to the Transferee, all of the assets and business of the
Transferor (which assets and business relate to the manufacture and sale of
elastomeric threads and fibers (the "Business")), and in connection with such
acquisition, the Transferee will assume substantially all of the Transferor's
liabilities, all on the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual promises hereinafter set
forth and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereby agree as follows:
1. Contribution and Delivery of the Assets
1.1 Delivery of the Assets. Subject to and upon the terms and
conditions of this Agreement, at the closing of the transactions contemplated by
this Agreement (the "Closing"), the Transferor shall contribute, transfer,
convey, assign and deliver to the Transferee, and the Transferee shall acquire
from the Transferor, all of the Transferor's properties, assets and other
claims, rights and interests (collectively, the "Assets"), including without
limitation, the following:
(i) all inventories, finished goods, office supplies, maintenance
supplies, packaging materials, spare parts and similar items of the Transferor
(collectively, the "Inventory") which exist on the Closing Date (as defined
below);
(ii) all accounts, accounts receivable, notes and notes receivable
existing on the Closing Date which are payable to the Transferor, including any
security held by the Transferor for the payment thereof (the "Accounts
Receivable");
(iii) all prepaid expenses, deposits, bank accounts and other similar
assets of the Transferor existing on the Closing Date, including the cash
represented by such assets;
(iv) all rights of the Transferor under all of the contracts, agreements,
leases, licenses and other instruments to which the Transferor is a party,
including without limitation those contracts set forth on Schedule 1 attached
hereto (collectively, the "Contract Rights");
(v) all books, records and accounts, correspondence, manuals, customer
lists, employment records, studies, reports or summaries relating to or arising
out of the Business;
(vi) all rights of the Transferor under express or implied warranties
from the suppliers of the Transferor;
(vii) all of the machinery, equipment, furniture, leasehold or feehold
improvements and construction in progress owned by the Transferor on the Closing
Date, which are reflected as "fixed assets" or "capital assets" in the
accounting records of the Transferor (collectively, the "Fixed Assets");
(viii) all of the Transferor's right, title and interest in and to all
intangible property rights, including but not limited to inventions,
discoveries, trade secrets, processes, formulas, know-how, United States and
foreign patents, patent applications, trade names, including without limitation
the names "Glospan" and "Cleerspan" or any derivation thereof, trademarks,
trademark registrations, applications for trademark registrations, copyrights,
copyright registrations, owned or, where not owned, used by the Transferor in
its business and all licenses and other agreements to which the Transferor is a
party (as licensor or licensee) or by which the Transferor is bound relating to
any of the foregoing kinds of property or rights to any "know-how" or disclosure
or use of ideas (collectively, the "Intangible Property");
(ix) all of the Transferor's right, title and interest in and to its real
properties, including without limitation, its real properties situated in Fall
River, Massachusetts and Gastonia, North Carolina (and all associated fixtures,
improvements and personal property); and
(x) all other assets, properties, claims, rights and interests of the
Transferor which exist on the Closing Date, of every kind and nature and
description, whether tangible or intangible, real, personal or mixed.
Notwithstanding the foregoing, the Assets shall not include shares of
capital stock in Transferee which are owned by Transferor, or the rights of
Transferor under the agreements listed on Schedule 2 hereto.
1.2 Further Assurances. At any time and from time to time after the
Closing, at the Transferee's request and without further consideration, the
Transferor promptly shall execute and deliver such instruments of sale,
transfer, conveyance, assignment and confirmation, and take such other action,
as the Transferee may reasonably request to more effectively transfer, convey
and assign to the Transferee, and to confirm the Transferee's title to, all of
the Assets, to put the Transferee in actual possession and operating control
thereof, to assist the Transferee in
-2-
exercising all rights with respect thereto and to carry out the purpose and
intent of this Agreement.
1.3 Assumption of Liabilities; Bill of Sale Etc. At the Closing, the
Transferee shall execute and deliver an Instrument of Assumption, substantially
in the form attached hereto as Exhibit A, pursuant to which it shall assume and
agree to perform, pay and discharge all of the liabilities, obligations and
commitments of the Transferor other than the Excluded Liabilities described
below (all such liabilities to be assumed, the "Assumed Liabilities"), which
shall include, but not be limited to, the following:
(i) All obligations of the Transferor continuing after the Closing under
the leases and contracts of the Business, including without limitation the
contracts set forth on Schedule 1 attached hereto;
(ii) Accounts payable incurred by Transferor for purchase of supplies or
otherwise and all of Transferor's other accrued expenses;
(iii) All liabilities of the Transferor under outstanding purchase orders
from Transferor's customers;
(iv) All obligations and liabilities of Transferor associated with the
operation of its facilities in Fall River, Massachusetts, and Gastonia, North
Carolina, including without limitation, obligations under all applicable
federal, state and local environmental permits (Transferee hereby assuming all
of the obligations under such permits and agreeing to be bound by the terms and
conditions thereof); and
(v) All obligations and liabilities of Transferor in respect of
Transferor's employee benefit, bonus, medical and other benefit plans, and other
compensation obligations related to Transferor's employees and executive
officers.
Notwithstanding the foregoing, the parties hereby agree and acknowledge
that the Assumed Liabilities will not include certain of Transferor's
liabilities which will be repaid or otherwise satisfied in full on or about the
Closing Date, or which will otherwise remain liabilities of the Transferor, and
which liabilities are listed on Schedule 2 attached hereto (the "Excluded
Liabilities").
At the Closing the Transferor shall deliver to the Transferee a Bill of
Sale, substantially in the form attached hereto as Exhibit B, pursuant to which
Transferor shall convey to Transferee the Assets.
1.4 The Closing. The closing of the transactions contemplated hereby
(the "Closing") shall take place on or before the date on which the closing of
the transactions contemplated by that certain Agreement and Plan of Merger dated
June 23, 1998, by and between
-3-
the Transferor and Globe Acquisition Company (the "Merger Agreement") occurs, at
the offices of Hale and Dorr LLP, 60 State Street, Boston, Massachusetts 02109,
at 9:00 a.m., or at such other place, time and date as may be mutually
determined by Transferee and the Transferor. The transfer of the Assets by the
Transferor to the Transferee shall be deemed to occur at 9:00 a.m., Boston time,
on the date of the Closing (the "Closing Date").
2. No Representations or Warranties. The Assets to be transferred
pursuant to and in accordance with this Agreement are to be transferred "as is",
and neither party is making any express or implied representation or warranty to
the other as to the Assets, their condition, the Assumed Liabilities, or as to
any other matter.
3. Termination of Agreement. This Agreement shall terminate at 5:00
p.m., Boston time, on September 30, 1998, if the transactions contemplated
hereby have not been consummated by such date, unless such date is extended by
the written consent of all of the parties hereto. In the event of any such
termination, the Transferee shall have no further obligation or liability to the
Transferor under this Agreement, and the Transferor shall have no further
obligation or liability to the Transferee under this Agreement.
4. Transfer and Sales Tax. Notwithstanding any provisions of law
imposing the burden of such taxes on the Transferor or the Transferee, as the
case may be, the Transferee shall be responsible for and shall pay (a) all
sales, use and transfer taxes, and (b) all governmental charges, if any, upon
the sale or transfer of any of the Assets hereunder.
5. Notices. Any notices or other communications required or permitted
hereunder shall be sufficiently given if delivered personally or sent by federal
express or other reputable overnight courier, registered or certified mail,
postage prepaid, addressed as follows or to such other address of which the
parties may have given notice:
To the Transferor: Globe Manufacturing Co.
456 Bedford Street
Fall River, Massachusetts 02720
To the Transferee: Globe Elastic Co., Inc.
1301 Industrial Park Drive
Tuscaloosa, AL 35406
With a copies to: Hale and Dorr LLP
60 State Street
Boston, MA 02109
Attn: John H. Chory, Esq.
Code, Hennessy & Simmons LLC
10 South Wacker Drive, Suite 3175
-4-
Chicago, IL 60606
Attn: Peter Gotsch, Esq.
Kirkland & Ellis
200 East Randolph Drive
Chicago, IL 60601
Attn: Stephen L. Ritchie, Esq.
Unless otherwise specified herein, such notices or other communications shall be
deemed received (a) on the date delivered, if delivered personally; (b) one
business day after delivery to an overnight courier, if sent by overnight
courier; or (c) three business days after being sent, if sent by registered or
certified mail.
6. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, except that the Transferee and the Transferor may not assign their
respective obligations hereunder without the prior written consent of the other
party.
7. Entire Agreement; Amendments; Attachments
(a) This Agreement, all Schedules and Exhibits hereto, and all
agreements and instruments to be delivered by the parties pursuant hereto
represent the entire understanding and agreement between the parties hereto with
respect to the subject matter hereof and supersede all prior oral and written
and all contemporaneous oral negotiations, commitments and understandings
between such parties. The Transferee and the Transferor may amend or modify
this Agreement, in such manner as may be agreed upon, by a written instrument
executed by the Transferee and the Transferor, provided that the parties shall
notify Code, Hennessy & Simmons LLC of any amendment to this Agreement proposed
to be made by the parties hereto (to the extent reasonably practicable, not less
than 48 hours in advance of the execution thereof), and shall provide to Code,
Hennessy & Simmons LLC, at the address indicated above, a copy of any amendment
hereto.
(b) If the provisions of any Schedule or Exhibit to this Agreement are
inconsistent with the provisions of this Agreement, the provisions of the
Agreement shall prevail. The Exhibits and Schedules attached hereto or to be
attached hereafter are hereby incorporated as integral parts of this Agreement.
8. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts.
9. Section Headings. The section headings are for the convenience of the
parties and in no way alter, modify, amend, limit, or restrict the contractual
obligations of the parties.
-5-
10. Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
11. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
shall be one and the same document.
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto as of and on the date first above written.
TRANSFEROR:
GLOBE MANUFACTURING CO.
By: /s/ Lawrence R. Walsh
----------------------------------------------
Name: Lawrence R. Walsh
--------------------------------------------
Title: Vice President, Finance and Administration
-------------------------------------------
TRANSFEREE:
GLOBE ELASTIC CO., INC.
By: /s/ Lawrence R. Walsh
----------------------------------------------
Name: Lawrence R. Walsh
-------------------------------------------
Title: Vice President, Finance and Administration
-------------------------------------------
-6-
Schedule 1
Material Contracts
Supply arrangement between BASF Company and Globe Manufacturing Co.
Energy Services Agreement by and between Globe Manufacturing Co. and EUA
Cogenex Corp., dated March 15, 1988 relating to lease of certain energy services
equipment; EUA Cogenex Corp. sold this contract to Ridgewood Power Corp. on or
about December 18, 1995.
Split Dollar Insurance Arrangement and a Supplemental Executive
Compensation Plan.
Employment contracts with the following members of Transferor's senior
management: Thomas A. Rodgers, III, Americo Reis, Robert Bailey and Lawrence
Walsh.
-7-
Schedule 2
Excluded Liabilities
1. Liabilities of the Transferor under the Amended and Restated Credit
Agreement with Fleet National Bank in its capacity as agent for certain lenders
for a $72,000,000 term loan (dated April 16, 1997), as amended by the First
Amendment to the Amended and Restated Credit Agreement with Fleet National Bank
in its capacity as agent for certain lenders for a $14,000,000 term loan (dated
February 12, 1998). Such liabilities will be discharged on or before the closing
of the transactions contemplated by the Merger Agreement.
2. Liabilities of the Transferor Stock and Warrant Purchase and
Recapitalization Agreement, dated December 21, 1992 by and among the Transferor
and certain stockholders.
3. Junior Subordinated Notes (a) to be issued by the Transferor to those
persons who are (or will become) Class C stockholders of the Transferor, and (b)
to be assumed by Transferor from Globe Acquisition Company, in connection with
the consummation of the transactions contemplated by the Merger Agreement.
-8-
Exhibit A
Form of Instrument of Assumption
-9-
Exhibit B
Form of Bill of Sale
-10-