Exhibit 2.5
PURCHASE AGREEMENT
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THIS PURCHASE AGREEMENT (the "Agreement") is made as of July 31, 1998
by and among Globe Acquisition Company, a Delaware corporation ("MergerCo"),
Code, Hennessy & Simmons III, L.P., a Delaware limited partnership ("CHS"), and
each of the other Persons listed on Schedule A attached hereto (collectively,
CHS and the other Persons listed on Schedule A are referred to sometimes herein
as the "Purchasers"). Except as otherwise indicated herein, capitalized terms
used herein are defined in Section 4 hereof.
This Agreement contemplates a transaction in which MergerCo will sell,
and the Purchasers will purchase in the aggregate, 1,943,044 shares of
MergerCo's Class A Common Stock, par value $0.01 per share (the "Common Stock")
and 25,680 shares of MergerCo's Class A Preferred Stock, par value $0.01 per
share (the "Preferred Stock").
This Agreement contemplates that pursuant to the Agreement and Plan of
Merger, dated as of June 23, 1998 (the "Merger Agreement"), by and between Globe
Holdings, Inc., a Massachusetts corporation formerly known as Globe
Manufacturing Co. (the "Company"), and MergerCo, the Common Stock purchased
pursuant to this Agreement shall be converted into Recapitalized Class A Stock
(as defined in Section 2B) and the Preferred Stock purchased pursuant to this
Agreement shall be converted into Recapitalized Preferred Stock (as defined in
Section 2B).
In consideration of the mutual covenants contained herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
Section 1. Authorization and Closing.
1A. Authorization of the Securities. MergerCo shall authorize the
issuance and sale to each Purchaser of the number of shares of Common Stock and
the number of shares of Preferred Stock set forth across from such Purchaser's
name on Schedule A attached hereto ("Schedule A"). The Common Stock and the
Preferred Stock are collectively referred to herein as the "Securities."
1B. Purchase and Sale of the Securities. At the Closing, MergerCo
shall sell to the Purchasers and, on the terms and subject to the conditions set
forth herein, the Purchasers shall purchase from MergerCo the shares of Common
Stock (at a price equal to $8.90256 per share) and the shares of Preferred Stock
(at a price equal to $1,000 per share), in each case in the amounts and at the
purchase prices set forth on Schedule A.
1C. The Closing. The closing of the purchases and sales of the
Securities (the "Closing") shall take place at the offices of Winston & Strawn,
35 West Wacker Drive, Chicago, Illinois at 10:00 a.m. on the date hereof, or at
such other place or on such other date as may be mutually agreeable to MergerCo
and CHS. At the Closing, MergerCo shall deliver to each Purchaser stock
certificates evidencing the Securities to be purchased by such Purchaser, and
each Purchaser shall deliver to MergerCo a cashier's check or wire transfer of
immediately available funds to a bank account designated by MergerCo in the
amount set forth next to such Purchaser's name on Schedule A.
Section 2. Representations and Warranties of MergerCo. As a material
inducement to the Purchasers to enter into this Agreement and purchase the
Securities, MergerCo hereby represents and warrants that:
2A. Organization and Corporate Power. MergerCo is a corporation duly
organized, validly existing and in good standing under the laws of Delaware and
is qualified to do business in every jurisdiction in which its ownership of
property or conduct of business requires it to qualify. MergerCo has all
requisite corporate power and authority and all material licenses, permits and
authorizations necessary to own and operate its properties, to carry on its
businesses as now conducted and presently proposed to be conducted and to carry
out the transactions contemplated by this Agreement.
2B. Capital Stock and Related Matters.
(i) As of the Closing and immediately thereafter, the authorized
capital stock of MergerCo shall consist of 3,500,000 shares of Common Stock, of
which 1,923,044 shares shall be issued and outstanding, and 40,000 shares of
Preferred Stock, of which 25,680 shares shall be issued and outstanding. As of
the Closing, MergerCo shall not have outstanding any stock or securities
convertible or exchangeable for any shares of its capital stock or containing
any profit participation features, nor shall it have outstanding any rights or
options to subscribe for or to purchase its capital stock or any stock or
securities convertible into or exchangeable for its capital stock or any stock
appreciation rights or phantom stock plans. As of the Closing, MergerCo shall
not be subject to any obligation (contingent or otherwise) to repurchase or
otherwise acquire or retire any shares of its capital stock or any warrants,
options or other rights to acquire its capital stock, except pursuant to the
Merger Agreement. As of the Closing, all of the outstanding shares of MergerCo's
capital stock shall be validly issued, fully paid and nonassessable.
(ii) There are no statutory or, to MergerCo's knowledge, contractual
stockholders preemptive rights or rights of refusal with respect to the issuance
of the Securities hereunder. MergerCo has not violated any applicable federal or
state securities laws in connection with the offer, sale or issuance of any of
its capital stock. To MergerCo's knowledge, there are no agreements between
MergerCo's stockholders with respect to the voting or transfer of MergerCo's
capital stock except for the Merger Agreement.
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(iii) Immediately after the Merger (the "Effective Date"), the
authorized capital stock of the Company shall consist of 5,000,000 shares of
Class A Common Stock (the "Recapitalized Class A Stock"), of which 2,179,150
shares shall be issued and outstanding, 350,000 shares of Class B Common Stock
(the "Recapitalized Class B Stock"), none of which shares shall be issued and
outstanding, 600,000 shares of Class C Common Stock (the "Recapitalized Class C
Stock"), none of which shares shall be issued and outstanding and 40,000 shares
of Preferred Stock (the "Recapitalized Preferred Stock"), of which 29,100 shares
shall be issued and outstanding. As of the Closing, the Company shall have
outstanding rights or options to subscribe for or to purchase 67,395 shares of
its Recapitalized Class A Stock and 900 shares of its Recapitalized Preferred
Stock. Except as otherwise set forth in the immediately preceding sentence, as
of the Effective Date the Company shall not have outstanding any stock or
securities convertible or exchangeable for any shares of its capital stock or
containing any profit participation features, nor shall it have outstanding any
rights or options to subscribe for or to purchase its capital stock or any stock
or securities convertible into or exchangeable for its capital stock or any
stock appreciation rights or phantom stock plans. As of the Effective Date, the
Company shall not be subject to any obligation (contingent or otherwise) to
repurchase or otherwise acquire or retire any shares of its capital stock or any
warrants, options or other rights to acquire its capital stock, except pursuant
to the Merger Agreement. As of the Effective Date, all of the outstanding shares
of the Company's capital stock shall be validly issued, fully paid and
nonassessable.
2C. Authorization; No Breach. The execution, delivery and
performance of this Agreement, the Merger Agreement and all other agreements
contemplated hereby to which MergerCo is a party (the "MergerCo Agreements")
have been duly authorized by MergerCo and its stockholders. Each MergerCo
Agreement constitutes a valid and binding obligation of MergerCo, enforceable in
accordance with its terms. The execution and delivery by MergerCo of the
MergerCo Agreements, the offering, sale and issuance of the Securities
hereunder, the adoption of the Certificate of Incorporation and the fulfillment
of and compliance with the respective terms hereof and thereof by MergerCo, do
not and shall not (i) conflict with or result in a breach of the terms,
conditions or provisions of, (ii) constitute a default under, (iii) result in
the creation of any lien, security interest charge or encumbrance upon
MergerCo's capital stock or assets pursuant to, (iv) give any third party the
right to modify, terminate or accelerate any obligation under, (v) result in a
violation of, or (vi) require any authorization, consent, approval, exemption or
other action by or notice to any court or administrative or governmental body
pursuant to, the charter or bylaws of MergerCo, or any material law, statute,
rule or regulation to which MergerCo is subject, or any material agreement,
instrument, order, judgment or decree to which MergerCo is subject.
2D. Regulatory Compliance Cooperation. Before MergerCo redeems,
purchases or otherwise acquires, directly or indirectly, or converts or takes
any action with respect to the voting rights of, any shares of any class of its
capital stock or any securities convertible into or exchange able for any shares
of any class of its capital stock (other than a redemption of Preferred Stock or
a conversion of Class C Stock, or, after the Merger, a redemption of
Recapitalized Preferred Stock or conversion of Recapitalized Class B Stock or
Recapitalized Class C Stock), MergerCo shall give written notice of such pending
action to the Purchasers. Upon the written request of any Purchaser
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made within 10 days after its receipt of any such notice stating that after
giving effect to such action such Purchaser would have a Regulatory Problem,
MergerCo shall defer taking such action for such period (not to extend beyond 45
days after such Purchaser's receipt of MergerCo's original notice) as such
Purchaser requests to permit it and its Affiliates to reduce the quantity of
MergerCo's securities it owns in order to avoid the Regulatory Problem. In
addition, MergerCo shall not be a party to any merger, consolidation,
recapitalization or other transaction pursuant to which any Purchaser would be
required to take any voting securities, or any securities convertible into
voting securities, which might reasonably be expected to cause such Purchaser to
have a Regulatory Problem. For purposes of this paragraph, a Person shall be
deemed to have a "Regulatory Problem" when such Person and such Person's
Affiliates would own, control or have power over a greater quantity of
securities of any kind issued by MergerCo or any other entity than are permitted
under any requirement of any governmental authority.
Section 3. Transfer of Restricted Securities.
3A. Generally. Restricted Securities are transferable only pursuant
to (a) public offerings registered under the Securities Act, (b) Rule 144 or
Rule 144A of the Securities and Exchange Commission (or any similar rule or
rules then in force) if such rule is available, and (c) subject to the
conditions specified in paragraph 3B below and, after the Merger, in the
Securityholders Agreement (as defined in Section 3C), any other legally
available means of transfer.
3B. Opinion of Counsel. In connection with the transfer of any
Restricted Securities, the holder thereof shall, at the request of MergerCo,
deliver written notice to MergerCo describing in reasonable detail the transfer
or proposed transfer, together with an opinion of Kirkland & Ellis or other
counsel which (to MergerCo's reasonable satisfaction) is knowledgeable in
securities law matters, to the effect that such transfer of Restricted
Securities may be effected without registration of such Restricted Securities
under the Securities Act. In addition, if the holder of the Restricted
Securities delivers to MergerCo an opinion of Kirkland & Ellis or such other
counsel that no subsequent transfer of such Restricted Securities shall require
registration under the Securities Act, MergerCo shall promptly upon such
contemplated transfer deliver new certificates for such Restricted Securities
which do not bear the Securities Act legend set forth in paragraph 5B. If
MergerCo is not required to deliver new certificates for such Restricted
Securities not bearing such legend, the holder thereof shall not transfer the
same until the prospective transferee has confirmed to MergerCo in writing its
agreement to be bound by the conditions contained in this paragraph and
paragraph 5B. For the avoidance of doubt, with respect to a transfer of any
Restricted Securities after the Merger, this paragraph 3B shall continue to
apply and "the Company" (or the successor thereof) shall be substituted for
"MergerCo" each place in which "MergerCo" appears in this paragraph 3B.
3C. Registration Agreement and Securityholders Agreement. Each
Purchaser hereby covenants and agrees to execute, as of the Effective Date, a
Registration Agreement substantially in the form attached hereto as Exhibit I
(the "Registration Agreement") and a
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Securityholders Agreement substantially in the form attached hereto as Exhibit
II (the "Securityholders Agreement").
Section 4. Definitions. For the purposes of this Agreement, the
following terms have the meanings set forth below:
"Affiliate" (and collectively "Affiliates") means with respect to any
Person, any other Person controlling, controlled by, or under common control
with such first Person and in the case of a Person which is a partnership, any
partner of that Person.
"Certificate of Incorporation" means MergerCo's certificate of
incorporation as in effect from time to time.
"Person" means an individual, a partnership, a corporation, a limited
liability company, association, a joint stock company, a trust, a joint venture,
an unincorporated organization and a governmental entity or any department,
agency or political subdivision thereof.
"Restricted Securities" means (i) the Common Stock issued hereunder,
(ii) the Preferred Stock issued hereunder, (iii) any securities issued with
respect to the securities referred to in clauses (i) or (ii) above by way of an
interest payment, stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization. As to any particular Restricted Securities, such securities
shall cease to be Restricted Securities when they have (a) been effectively
registered under the Securities Act and disposed of in accordance with the
registration statement covering them, (b) become eligible for sale pursuant to
Rule 144 (or any similar provision then in force) under the Securities Act or
(c) been otherwise transferred and new certificates for them not bearing the
Securities Act legend set forth in paragraph 5B have been delivered by MergerCo
in accordance with paragraph 3B. Whenever any particular securities cease to be
Restricted Securities, the holder thereof shall be entitled to receive from
MergerCo, without expense, new securities of like tenor not bearing a Securities
Act legend of the character set forth in paragraph 5B.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal law then in force.
"Securities and Exchange Commission" includes any governmental body or
agency succeeding to the functions thereof.
"Subsidiary" means any corporation of which the securities having a
majority of the ordinary voting power in electing the board of directors are, at
the time as of which any determination is being made, owned by MergerCo either
directly or through one or more Subsidiaries.
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Section 5. Miscellaneous.
5A. Remedies. The Purchasers shall have all rights and remedies set
forth in this Agreement and all rights and remedies which the Purchasers have
been granted at any time under any other agreement or contract and all of the
rights which the Purchasers have under any law. Any Person having any rights
under any provision of this Agreement shall be entitled to enforce such rights
specifically (without posting a bond or other security), to recover damages by
reason of any breach of any provision of this Agreement and to exercise all
other rights granted by law.
5B. Purchasers' Investment Representations. Each Purchaser hereby
represents that he, she or it is acquiring the Restricted Securities purchased
hereunder or acquired pursuant hereto for his, her or its own account with the
present intention of holding such securities for purposes of investment, and
that he, she or it has no intention of selling such securities in a public
distribution in violation of the federal securities laws or any applicable state
securities laws; provided that nothing contained herein shall prevent the
Purchasers and subsequent holders of Restricted Securities from transferring
such securities in compliance with the provisions of Section 3 hereof. Each
certificate for Restricted Securities shall be imprinted with a legend in
substantially the following form:
"The securities represented by this certificate were originally
issued as of July 31, 1998, have not been registered under the Securities
Act of 1933, as amended (the "Act"), and may not be sold or transferred in
the absence of an effective registration statement under the Act or an
exemption from registration thereunder. The securities represented by this
certificate are also subject to additional restrictions on transfer set
forth in the Purchase Agreement, dated as of July 31, 1998, by and among
the issuer (the "Company") and certain purchasers, as the same may be
amended from time to time. A copy of such Purchase Agreement may be
obtained by the holder hereof at MergerCo's principal place of business
without charge."
5C. Place of Payments with Respect to the Securities. All payments to
be made to a Purchaser with respect to the Securities, including, without
limitation, dividends and redemption payments, shall be delivered to the
respective address indicated on Schedule A or to such other Person or account as
a Purchaser may from time to time specify to MergerCo by prior written notice.
5D. Consent to Amendments. Except as otherwise expressly provided
herein, the provisions of this Agreement may be amended and MergerCo may take
any action herein prohibited, or omit to perform any act herein required to be
performed by it, only if MergerCo has obtained the written consent of each
Purchaser. No other course of dealing between MergerCo and any Purchaser or any
delay in exercising any rights hereunder or under the Certificate of
Incorporation shall operate as a waiver of any rights of any such Person. For
purposes of this Agreement, any Securities held by MergerCo shall not be deemed
to be outstanding.
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5E. Survival of Representations and Warranties. All representations
and warranties contained herein or made in writing by any party in connection
herewith shall survive the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, regardless of any
investigation made by any Purchaser or on such Purchaser's behalf.
5F. Successors and Assigns. Except as otherwise expressly provided
herein, all covenants and agreements contained in this Agreement by or on behalf
of any of the parties hereto shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto whether so expressed or
not. In addition, and whether or not any express assignment has been made, the
provisions of this Agreement which are for each Purchaser's benefit as a
purchaser of the Securities are also for the benefit of, and enforceable by, any
subsequent holder of the Securities.
5G. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
5H. Counterparts; Facsimile Signature. This Agreement may be
executed simultaneously in two or more counterparts, any one of which need not
contain the signatures of more than one party, but all such counterparts taken
together shall constitute one and the same Agreement. This Agreement may be
executed by facsimile signature.
5I. Descriptive Headings; Interpretation. The descriptive headings
of this Agreement are inserted for convenience only and do not constitute a part
of this Agreement. The use of the word "including" in this Agreement shall be by
way of example rather than by limitation.
5J. Governing Law. The corporate law of the state of Delaware will
govern all questions concerning the relative rights of MergerCo and the holders
of its Securities. All other questions concerning the construction, validity,
enforcement and interpretation of this Agreement and the exhibits and schedules
hereto shall be governed by, and construed in accordance with, the laws of the
State of Illinois, without giving effect to any choice of law or conflict of law
rules or provisions (whether of the State of Illinois or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than the
State of Illinois.
5K. Stockholder Approval. Each of the Purchasers, as holders of all
of the outstanding Common Stock and Preferred Stock of MergerCo, agrees that
entering into this Agreement shall constitute stockholder approval of the Merger
Agreement and the transactions contemplated thereby for purposes of Sections 228
and 252 of the General Corporation Law of the State of Delaware.
5L. Notices. All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement shall
be in writing and shall be
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deemed to have been given when delivered personally to the recipient, sent to
the recipient by reputable express courier service (charges prepaid) or mailed
to the recipient by certified or registered mail, return receipt requested and
postage prepaid.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first written above.
GLOBE ACQUISITION COMPANY
By: /s/ Peter M. Gotsch
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Its: President
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CODE, HENNESSY & SIMMONS III, L.P.
By: CHS Management III, L.P.
Its: General Partner
By: Code Hennessy & Simmons LLC
Its: General Partner
By: /s/ Peter M. Gotsch
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Peter M. Gotsch
Partner
/s/ Tracy A. Hogan
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TRACY A. HOGAN
/s/ Marcus J. George
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MARCUS J. GEORGE
/s/ Edward M. Lhee
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EDWARD M. LHEE
/s/ Paige T. Walsh
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PAIGE T. WALSH
BRINSON TRUST COMPANY AS TRUSTEE
FOR BRINSON MAP VENTURE CAPITAL FUND
III TRUST
By: /s/ David S. Timson
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Its: /s/ Trust Officer
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Brinson Trust Company
BRINSON VENTURE CAPITAL FUND III, L.P.
By: Brinson Partners, Inc.
Its: General Partner
By: /s/ David S. Timson
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Its: Executive Director
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Brinson Partners, Inc.
VIRGINIA RETIREMENT SYSTEM
By: Brinson Partners, Inc. as Agent
For Virginia Retirement System
By: /s/ David S. Timson
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Its: Executive Director
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Brinson Partners, Inc.
BANKAMERICA INVESTMENT CORPORATION
By: /s/ Jeffrey M. Mann
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Its:
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MIG PARTNERS VII
By: /s/ Jason A. Mehring
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Its: General Partner
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SCHEDULE A
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(Schedule of Purchasers)
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Purchasers Common Stock Preferred Stock
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Shares $ Per Share Shares $ Per Share
--------- ----------- --------- -----------
Total 1,923,044 $ 8.90256 25,680 $ 1,000
Code, Hennessy & Simmons III, L.P. 1,647,437 $14,666,400 21,999.60 $21,999,600
10 South Wacker Drive
Suite 3175
Chicago, IL 60606
Tracy A. Hogan 1,348 $ 12,000 18 $ 18,000
c/o Code, Hennessy & Simmons III, L.P.
10 South Wacker Drive
Suite 3175
Chicago, IL 60606
Marcus J. George 1,348 $ 12,000 18 $ 18,000
c/o Code, Hennessy & Simmons III, L.P.
10 South Wacker Drive
Suite 3175
Chicago, IL 60606
Edward M. Lhee 1,977 $ 17,600 26.4 $ 26,400
c/o Code, Hennessy & Simmons III, L.P.
10 South Wacker Drive
Suite 3175
Chicago, IL 60606
Paige T. Walsh 1,348 $ 12,000 18 $ 18,000
c/o Code, Hennessy & Simmons III, L.P.
10 South Wacker Drive
Suite 3175
Chicago, IL 60606
Brinson Venture Capital Fund III, L.P. 38,631 $ 343,912 515.87 $ 515,869
c/o Brinson Partners, Inc.
209 South LaSalle Street
Chicago, IL 60604-1295
Purchasers Common Stock Preferred Stock
---------- ------------ ---------------
Shares $ Per Share Shares $ Per Share
--------- ----------- --------- -----------
Brinson Trust Company as Trustee for
Brinson MAP Venture Capital Fund III
Trust 6,300 $ 56,088 84.13 $ 84,131
c/o Brinson Partners, Inc.
209 South LaSalle Street
Chicago, IL 60604-1295
Virginia Retirement System 179,724 $ 1,600,000 2,400 $ 2,400,000
c/o Brinson Partners, Inc.
209 South LaSalle Street
Chicago, IL 60604-1295
BankAmerica Investment Corporation 35,944.80 $ 320,000 480 $ 480,000
231 South LaSalle Street, 12th Floor
Chicago, IL 60697
MIG Partners VII 8,986.20 $ 80,000 120 $ 120,000
c/o BankAmerica Investment Corporation
231 South LaSalle Street, 12th Floor
Chicago, IL 60697